I’m Not The Only One

You’re sure to get a different answer depending on who you ask.  People don’t argue very much about who pays taxes as much as about who doesn’t pay taxes.  Illegal immigrants, criminals, people on welfare and the unemployed are the usual scapegoats blamed for getting an easy ride on the backs of the taxpayers.

Bullshit.

The truth is, between both levels of government (three if you live in an urban area), there are so many different taxes, everyone pays them.  In fact, it’s almost impossible to pay no taxes in America.  What are a few of these taxes that everybody pays?

• Sales tax
• Property tax (even if you rent, your landlord passes the cost of his tax bill to his tenants)
• Taxes on specific items (varies depending on where you live) such as on prepared meals, hotel rentals, gasoline, software and file downloads, massages, movie tickets, served alcohol, gambling winnings, and filing your taxes with a paper form as opposed to via computer.
• “Sin” taxes on things deemed unfavorable by the state such as cigarettes, alcohol, tobacco of all kinds, soda, candy, or a carbon tax on companies that pollute or on drivers of automobiles that emit a (subjectively) large amount of pollutants.
• A “jock tax” on people (usually pro athletes) who live and work in one state but earn money for a short period in another state (like when one team travels to play against another team in their opponent’s home turf) in addition to their general income tax.  Guess who the team passes the tax to!  Remember the jock tax the next time you pay $30 for official team merchandise, a $9 domestic beer at the stadium concession stands or buy overpriced tickets to a game.
• Utility taxes on such things as electricity, telephone, gas, cable, Internet service, water/sewer service, etc.  Some private-sector service providers even charge their customers a fee reflecting the cost of having to comply with government regulations.
• Corporate income taxes which are often passed on to the consumer in higher prices or to the company’s employees in the form of lower wages or lower wage increases.  Depending on the state, corporations may also have to pay taxes on capital gains (profits earned through the sale of company assets), taxes on their inventory, and many cities levy their own corporate income tax on top of the state and federal income tax.  In New York state, businesses who fail to report their income on time must pay a $50 fine, even if they have no income to report!  Of course, corporations don’t pay their taxes, their customers and employees do.
• Taxes on dividends which means if you own preferred stock your dividends will be smaller than they should be.  This is of course on top of the income you must report every year from your investment.
• Taxes on imported goods called tariffs.  If you buy a product that came from another country, the retailer of course passes the tariff on to you.  The rate of the tariff depends heavily on at least two factors: (1) the relationship the U.S. has with the particular country from where the product originated and (2) whether labor unions or corporate interests have lobbied Congress to raise tariffs on certain items in order to “protect” American jobs by making foreign products more expensive.
• Road tax paid by motorists in exchange for a license plate.
• Inheritance tax/estate tax on wealth (in the form of either liquid or fixed assets) passed on from a dead person to a beneficiary, usually the children and spouse of the deceased.  Don’t worry about the Rockerfellers or the Hiltons; their tax attorneys will see to it that their descendants pay as little of that tax as possible.  For those who own property (like the home in which they reside) but cannot afford a tax attorney or an army of accountants, their descendants will have to pay the full tax.  Luckily, with many Americans losing their homes to foreclosure, fewer people will have to worry about the inheritance tax.
• A gift tax for when a living person gives, not sells you, a piece of property.

There are many other hidden taxes, but I wanted to keep this list short.

Now, it could be argued that employed people (people working on the books) pay more taxes because they pay payroll taxes on top of all the aforementioned taxes.  While it’s true that employed people do pay more taxes, they don’t pay a whole lot more.  Think about it.  At the end of the year, employed people get back some of the money that was withheld in the form of a tax refund.  So depending on how many deductions a person declares on their income tax forms and whether they are subject to local and/or state income taxes, employed people may not pay that much more in taxes than unemployed people.  Try getting a refund on any of the taxes mentioned above.

People try so hard to exclude themselves from those they believe to be “non-taxpayers” in the form of homeowners’ associations and taxpayers’ associations.  But these efforts are more about xenophobia, prejudice against renters, poor people and plain old scapegoating then anything remotely related to taxation.

This entry was posted on Sunday, September 26th, 2010 at 10:47 pm and is filed under Government Corruption, Labor, Economics. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.