Anyway, in the spirit of the The FairTax Book, I decided to document what I paid this year. One of the many excellent points made in this book is that hardly anybody knows how much tax they pay. Ask just about anyone and they'll likely tell you, "Oh, I didn't have to pay—I'm getting a refund." Or ask them how much income they earn. If they're willing to tell you, they'll almost certainly say something like, "I take home..." and the number they give you will not be what they earn, but the portion the government lets them keep. The trick is by taking our money before we even see it, it's harder for us to muster up enough outrage to act. And then by taking more than they should and giving us refunds once a year, we're mollified into thinking how generous Uncle Sam is.
One of the great things about the FairTax (HR 25) is that it would eliminate the payroll tax. No more withholdings. Instead there would be sales tax on ALL retail items. Now before you get all apoplectic about regressive versus progressive taxes, go read the book—there's a lot more too it. I'm simplifying becuase I need to get to bed soon. The point is that by having a more obvious sales tax as opposed to a sneaky withholding system, we'd be more aware of what the government is taking. Every single time you purchased anything, you'd know. And if you're constantly aware of how much money the government is taking from you, you'll be more likely to care and to keep your leaders accountable.
So, in the spirit of knowing what the government is taking from me:
Federal Income Tax: $4,634.00
Social Security Tax: $1,951.73
Medicare Tax: $456.45
California State Income Tax: $979.10
Pennsylvania State Income Tax: $144.96
Patton Township Local Tax: $171.23
Totat Federal, State and Local Tax: $8,337.47
That's a lot of money in my book—especially considering I was a student for most of 2005.
Posted by Hey Paul
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Sunday, April 16, 2006
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