We pay a lot of money to just exist within our society. I guess this is part of the price of civilization. What has happened in the last generation or so is that many things that would have angered our forebears have now become ensconced in our way of life. These are Burdens, which we bear to live here in the USA.
This is a refresher – you know much of this, but have simply come to accept it as “normal”.
We have taxes, and then we have “taxes by another name”. Let me say right now that if the government, at any level, assess a fee, requires a license or permit to do something or requires an inspection of an operation or property – this is a tax. It may not be termed a tax, but if you are required to pay money due to a rule or regulation issued by any government – it is a from of taxation.
Capital Gains Taxes – (the inflation tax) You buy a home for $100,000 in 1980 and sell it in 2017.for $296,552. The Federal Reserve’s data says those two amounts of money are equal in purchasing power. But the way the government figures it, you own a capital gain of ($296,552 minus $100,000) $196,552! While it appears you made a large gain, on a Purchasing Power Basis you got your ass kicked. And then you pay the long term gains rate of 15% on the “mythical” $196.552 “gain” or about $29,482. So if you want to NET a breakeven on a purchasing power basis, you need to crank in the long term gain about to your sales price…
Federal Income Tax – we are familiar with this; the only way out is to make less than about $20k a year or stay in permanent debt to offset income
State Income Tax – varies, but most every state has this or higher property taxes
State Property Taxes – in urban Texas, these can be painful
Cable (FCC) Taxes – a fee for the right to pay for your cable service
Cell Phone 911 Taxes – a fee for the right to pay for your cellular service
Electric Taxes – a fee for the right to receive a bill from your electric company
Utility Connect Fees – you pay the electric company to supply them with solar power to sell to your neighbors
Natural Gas Taxes – a fee to allow you to purchase natural gas
Federal Gasoline Excise Tax – a federal fee supposed to support highway maintenance
State Gasoline Tax – same as Federal, but for state roads
Federal Alcohol Tax – a fee on every alcoholic beverage you purchase for the Feds
State Alcohol Tax – another fee for every drink from the state
Federal Tobacco Tax – just like alcohol
State Tobacco Tax – ibid
State (Corporate) Franchise Tax – a fee for owning a corporation in your state
Vehicle (Mandated) Insurance Taxation – required fee to operate a motor vehicle
Vehicle Weight Tax – a higher fee for operating heavier vehicles
Health Care (Mandated) Taxation – required to breath, and rated poorest in the developed world
When you have to have a permit to do business or enjoy an activity, it is taxation. If your work requires a permit or requires a form of minimum insurance, these are taxation. For toll roads; if you happen to use one inadvertently, they have license plate readers and will be sending you a bill plus a fine for not buying your toll permit. In the case of each of these “non-taxes”, there is a fine for failure to comply. Thus any fine assessed to you is double taxation.
Many of these are common, but then again, others are hidden. As an oilfield consultant, if I am supervising a drilling operation, I must have certain safety certifications and a well control certificate. For land operations, these cost about $2500 every 3 years. For offshore, they cost about $5000 every few years.
If a company requires you to have a certification in order to work in an operation with federally mandated safety requirements, the expense of obtaining the certifications are a form of taxation. If federal regulations require you to wear a hardhat, then the cost of that hardhat is a tax on you personally. If your company supplies you the hardhat, then the company is paying a form of tax. These are forms of hidden taxation, and the safety industry, while valuable, only exists because of federal regulations. Imagine – an entire industry is a form of taxation.
Many will argue this, but I can run a drilling operation effectively without these certificates. My peers know this, and they would not hire me if I couldn’t handle the work effectively. But I cannot GET the work without the certificates, because my potential employers would be fined harshly if they allowed me to work without the certificates. Most of you can drive a car – but if you drive a car without a license then you are breaking at least one law and eventually will be caught and fined.
If government requires you to spend money in order to avoid violating a law, then it is a form of taxation.
Vehicle (Mandated) Inspection
Boat Launch Fee
Aircraft (Mandated) Inspection
Building (Mandated) Inspections
Occupational Licenses (electricians, plumbers, oilfield,etc.)
Occupational (Mandated) Insurance
Park Usage Fees
Retail Permits (state/city)
Health Permits (state/city)
State Toll Road Tax
Garage Sale Permit (city)
I probably missed a few that will be obvious to people they affect, but I think I captured quite a few. We quietly pay for the right to do things – for no other reason than the government says we must, lest we be fined even more.
This final one is a huge thing, and yet we sheepishly just STFU and pay it. Every single time you purchase anything, you will pay a percentage of the purchase price to your state, county and city governments. It is the job of retailers everywhere to collect these taxes. If they do not collect them, then their retail permits will be revoked and they will be assessed fines, often egregious fines at that. These taxes are on cash, credit and debit purchases and retailers are FORCED to collect them, report them quarterly and send them in to the appropriate governments.
The retailers are paying a fee to AMEX, VISA and others for the privilege of accepting credit and debit cards These are passed on to you as a cost of doing business. While they are NOT mandated, they are universally applied. So while this isn’t a form of government taxation, it is very much a form of corporate taxation. It is “pay-to-play” or else use physical cash – not convenient when buying a car, house or even a motorcycle.
Another form of corporate taxation is the “transaction fee”. When you utilize a bank via your credit card, debit card or even to deposit or withdraw cash – you are charged a tiny transaction fee. If you think about the number of weekly transactions you have, then multiply that by the population of the country – well, it doesn’t take a big percentage to rack back some serious money.
In some cases, as in my current business, there is a fee for receiving wire transfers through the SWIFT banking system. In my case, it is about $15 every time a get a wire transfer from an overseas client. No human touches these transfers – they are all routed electronically, and the banks just debit and credit the funds. A really sweet deal for the bank, because I need my money and can’t get it unless I pay their fee. So another corporate tax easily visible here.
State – every transaction
County – every transaction
City – every transaction
Bank – every (non-cash) transaction
A personal example from my own records for you: last year I spent $22,700 buying fuel, seeds, plants, tools, equipment and other things for my farm. $1800 of that was retail tax I paid to various governments just to buy things within their sphere of influence. Now, this may seem normal, but it was the source for many revolts throughout history. Many people died to get rid of taxation that was honestly choking the life out of them and their families.
I would venture to say, based on the “Tax Freedom Day” calculations of April 24th last year, that we are rapidly approaching an effective 50% tax rate if we include mandated permits, insurances and certificates. Tax Freedom Day says we have paid all our taxes to every government entity by late April – but only if you use your total income to pay them!!
Seriously – Tax Freedom Day assumes your entire income from January to May goes to pay just taxes. It cannot in the real world, so when is the actual Tax Freedom Day? My bet is that it is near Thanksgiving…
So I reckon a few questions are in order here…
How much of your time and gasoline (which is taxed) do you spend trying to comply with all of these taxes and permits?
After looking at this list, do you feel at least a little like a sheep?
What do you imagine would happen if even 25% of Americans decided to not pay these taxes?
How can you unload these crazy taxes and permits short of breaking the law?
There is no way not to pay without breaking laws. These laws are supposed to be for the people, us – for our common good. Just a tiny bit of critical thinking reveals that this is false in most cases, if not a complete crap sandwich.
There aren’t enough government employees to enforce these laws if people decide to band together and not pay.
While Trump may have said “toss out 2 regs for every new one”, the Federal agencies will simply wait until Trump is gone and then add more regs. Worse, the states aren’t at all bound by Trump and executive orders, nor are counties or cities.
You can write letters, protest, bitch, blog, choose a Republican to toss out the Democrat or vice-versa. None of these things have slowed government taxation.
So when will you feel enough is enough?