About Taxation

This certainly seems the way the federal government and many local municipalties spend money, like toilet paper.(Picture: dqydj.net)

    

 This is a second post in a series which concerns factors which discusses different aspects of what may be an impending financial collapse.


          For those of you who live in other nations, or for those of you who live in a state which is administered differently than mine, I would like to talk a little bit about taxation.   When I, and my husband receive a paycheck, certain amounts are withheld from it.   Federal tax, state tax, social security tax are all withheld. In some places, there are additional local taxes withheld.  If we are incredibly lucky, the following year, we have our taxes done, and we get some of these withheld funds back.  More often than not, we owe more, and need to write an additional check, as I did for our home state, this year.  You would think then, that our taxes are paid, but that would not be true.  Next, I have to put aside funds to pay our Property Taxes on our home which is also a farm.  Many people pay property taxes in tandem with their mortgage, but we do not.  We save money monthly in order to pay our property taxes twice yearly.   Our state also has something called "Personal Property Tax" on cars, boats, recreational vehicles. This is such an expense for people now , that the once annually tax, has now been split into two payments, like the property tax, so fewer people are delinquent on the taxes on their cars, trucks, recreational vehicles, etc. If one does not pay one's personal property tax to our state, then you will find yourself unable to renew your registration at the Department of Motor Vehicles.     On a farm, we have a number of vehicles for different purposes. We pay personal property tax on each.    When I go to buy food in a grocers or grocery store, in this state,  I also pay tax on the food that we eat.  We no longer pay taxes on prescription or non-prescription medication.   On the rare occasion that we go out to eat, we pay an additional  "Meals Tax" at many of the small towns or cities in our state.  We also pay additional tax for each gallon of fuel we buy. (Whether gasoline or diesel)   Whenever I buy a car, an item to repair it or anything else, I pay Sales Tax.        When I purchase a secondary home, have it repaired, redecorated, and re-landscaped, and then sell it, I pay Capital Gains Tax on the profit. (If there is any.)  If I inherit something, over a certain value, I pay tax on that also, and it can be a chunk !
            The other things that we pay occasionally, which in point really are taxes, are annual licensing fees for our dogs. I approve of this particular "tax" because in our our local community, the licensure money goes to the care and support of homeless animals. Rabies immunization monitoring is done in other ways, through our vets here.  Professional licensure, which although expensive for me, is a necessity.
           A county near Richmond has started ticketing not to ensure the safety of citizens, but in order to generate funds, as tax revenues have fallen so rapidly.  I try not to visit there.

               I have been thinking about taxes a fair bit lately, as we are part timers in Canada.  In Canada, we pay property tax, and harmonized sales tax  (HST)  on our purchases.  On larger purchases, this can add up to a lot of money.   The taxes in Canada are certainly the results of our own choices to be there, but there is very little we could do in order to pay fewer taxes here in the US.  Most of us, as we drive have seen the bumper sticker, "My Take Home Pay Won't Take Me Home".  In Nova Scotia, for example, this is the official word on HST:

  " Effective July 1, 2010, the Harmonized Sales Tax (HST) rate in Nova Scotia will increase from 13 to 15 percent, 5 percent of which is the federal portion and 10 percent of which is the provincial portion."

Goods Exempted from the Provincial Portion of the Nova Scotia HST

The province of Nova Scotia has expanded its list of goods that will be eligible for a point-of-sale rebate of the provincial portion (10 percent) of the HST. The list now includes:

• children’s diapers;
• children’s clothing;
• children’s footwear; 
• feminine hygiene products; and
• books.

The complexity in our taxes is so great now, that I must pay someone to file our taxes. Either this, or take a chance on a costly and stressful audit.

   This is a PARTIAL listing of some of the other taxes which Americans pay:

Accounts Receivable Tax

Building Permit Tax

Capital Gains Tax

CDL license Tax

Cigarette Tax

Corporate Income Tax

Court Fines (indirect taxes)

Dog License Tax

Federal Income Tax

Federal Unemployment Tax (FUTA)

Fishing License Tax

Food License Tax

Fuel permit tax

Gasoline Tax (42 cents per gallon)

Hunting License Tax

Inheritance Tax Interest expense (tax on the money)

Inventory tax IRS Interest Charges (tax on top of tax)

IRS Penalties (tax on top of tax)

Liquor Tax

Local Income Tax

Luxury Taxes

Marriage License Tax

Medicare Tax

Property Tax

Real Estate Tax

Septic Permit Tax

Service Charge Taxes

Social Security Tax

Road Usage Taxes (Truckers)

Sales Taxes

Recreational Vehicle Tax

Road Toll Booth Taxes


General Road Tax

School Tax

State Income Tax

State Unemployment Tax (SUTA)

Telephone federal excise tax
Telephone federal universal service fee tax
Telephone federal, state and local surcharge taxes
Telephone minimum usage surcharge tax
Telephone recurring and non-recurring charges tax
Telephone state and local tax
Telephone usage charge tax

Toll Bridge Taxes

Toll Tunnel Taxes

Traffic Fines (indirect taxation)

Trailer registration tax

Utility Taxes

Vehicle License Registration Tax

Vehicle Sales Tax

Watercraft registration Tax

Well Permit Tax and in some places, Septic Tank Taxes
Water Tax (mostly in some suburban and urban settings)

Workers Compensation Tax

(The taxes listed above, were all instituted within the last 100 years)

and I haven't even touched on the taxes Mr. Obama's plan collects, long before anyone gets health care through his program.

            My point is that the money we receive in our paychecks has been taxed, and then when we do anything else, it is also taxed. We are therefore being taxed multiple times on the same money. No wonder our salaries as Americans are badly eroded.

            I realize that other nations pay higher taxes, and have additional taxes. I am thinking about Britain's television tax, for example.  Layered and generous taxation is one of the factors which make it difficult for us to save for an adequate retirement.  It is also one of the things which makes it difficult for young families to feed their children.  Excessive taxation makes it hard for people to save, invest, start new small businesses, and avoid asking their governments for money for needs which could probably be best met by the families themselves, once the government gets its hand out of their wallets.    Perhaps a dial down on some of the interventions and wanton spending on the part of the politicians, and allowing the people who earned the money to determine how it is spent, would be beneficial in terms of the general direction of the nation overall.  Perhaps the nation should stack the deck in favor of its citizens, rather than against them.  Excessive taxation from all sides may reach a point where larger amounts of citizens decide that they do not consider their local government to be a lawful entity and they do not intend to pay their taxes.  Does anyone know where the tipping point is ?  Perhaps refusal to pay taxes, or an inability to do so, will be a factor in an impending financial crash, in the US, or even elsewhere.