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The taxes you see are just the tip of the iceberg
Washington, DC,
April 1, 2010
Each year many different kinds of taxes siphon away your money. Some taxes come straight out of your paycheck–these taxes are the proverbial tip of the iceberg. Other taxes are hidden away in the costs of the products or services you buy.
Impending tax hikes threaten to destroy jobs By Congresswoman Virginia Foxx One hallmark of a free and democratic society is a well-functioning government. And to have a well functioning government requires some form of taxation, which even staunch conservatives understand. Of course, the challenge is that everyone must recognize that the money earned belongs to the worker, not the government. While our duty to pay taxes is a reasonable one, it is not unlimited. That’s why we should take pains to hold ever-larger government and ever-higher taxes at Each year many different kinds of taxes siphon away your money. Some taxes come straight out of your paycheck—these taxes are the proverbial tip of the iceberg. Other taxes are hidden away in the costs of the products or services you buy. Taken together it takes about 100 days each year before you’ve earned enough to pay for all the taxes levied by government, according to the Tax Foundation. Your income taxes take the longest to pay each year. Federal, state and local income taxes, take an average of 32 days' work to pay off. Payroll taxes like Social Security and Medicare eat up another 25 days' work. These taxes are withdrawn from your paycheck before your money sees the light of day. It’s a clever way of masking the true burden of income and payroll taxes. Taxpayers used to have the choice of paying taxes either out of each paycheck or once at the end of the year. A bill I introduced, called the Federal Withholding Tax Repeal Act of 2009, would restore that choice again, so you could pay weekly or annually. But let’s not forget about the rest of the taxes out there. If you look past income and payroll taxes—the tip of the tax iceberg—there are sales and excise taxes levied by states and localities. These consume another 15 days of your livelihood. They are often less noticeable, since they are included in the price of your purchases. There are also business income taxes. These taxes take their hidden toll through higher prices, since businesses pass this cost of operating along to customers. It’s one more hidden tax and it takes another 8 days to pay up. Then add in property taxes at 12 days and miscellaneous taxes for another 6 days, and the next thing you know its April and the tax man still hasn’t been satisfied.
That’s the case with the health care bill that became law last month. It is chock full of taxes, many of which float just beneath the surface. It will further delay your freedom from taxation each year thanks to its $570 billion in new taxes. These taxes fall on those who do not buy government-approved health insurance ($2,000 or more per family), on employers who don’t provide government-approved insurance (a hidden tax of $2,000 per employee) and on those who have health insurance that costs “too much” (new 40 percent tax on expensive health plans). There’s more: a quiet and costly hidden tax on all medical devices, which will now be subject to a new $2.2 billion national sales tax. New pacemakers? More expensive. Knee replacements? More expensive. Of course, this new hidden tax gets passed along to consumers like you, taking another subtle bite out of your income. There is even a tax on using tanning facilities. Unfortunately, these new taxes are just the tip of the tax hike iceberg. Unless Congress acts in the next several months, everyone’s taxes are going up across the board at the end of the year. That’s because many tax cuts are slated to expire. The $1,000 child tax credit is set to be scaled back to $500—which would cost most North Carolina families $500 in higher taxes per child. The 10 percent income tax bracket is also scheduled to disappear. This low rate tax bracket—first put in place in 2001—benefits every single taxpayer in North Carolina, since it applies to the first $16,700 of taxable income. It left untouched it will rise to 15 percent, raising most North Carolina families’ taxes by more than $800. Other scheduled tax increases include an expansion of the death tax—which threatens to crush many family-owned small businesses—the restoration of the reviled marriage tax penalty and huge investment tax increases on capital gains and dividends. Now, more than ever, America needs investors and entrepreneurs willing to take risks by investing in the companies, the technologies and the workers of tomorrow. Increasing taxes on these critical investments will do more than just plump up federal tax coffers. It will also deal a severe blow to future job creation. As tax day approaches, Congress needs to get taxes right. Slapping new or higher taxes on employers, workers and investments is a policy of job-destruction. By preventing future tax increases on hard-working North Carolinians, Congress can help get our economy on solid ground and spur the creation of new jobs for those looking for work. It’s quite simple and I hope my liberal-leaning colleagues who have passed numerous tax increases already this year can get behind this common sense approach for renewing prosperity and creating jobs. Read more: |
bay, lest government slowly drain away your earnings.
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