Let's Talk Taxes

We are almost to the end of the year and although we are preparing for the merriment of Christmas some are looking at their tax situation. Making adjustments to your 401k and donations to adjust your year end tax exposure are on the minds of many. You will notice the heavy holiday push for donations. Many charities make the bulk of their income during the last month of the year.

I have been thinking about government spending and our obligation to the debt our government places us under. Most of us are aware of Tax Freedom Day, that is generally celebrated around the middle of April. This year Tax Freedom Day was generally recognized on April 13th even though each state has its own tax variations. This was eight days sooner then 2008 with April 22 being the recognized day. This is a little misleading because it doesn't include many taxes and fees that we pay. This event is directly attributed to income taxes while failing to recognize various user taxes like phone, cable, electricity. It even fails to account for property taxes and licencing fees. We also don't see any allowance for the vast debt our government has racked up and expect us to pay.
If we were to change the name to No Longer Paying Government Obligations day, what day would we actually start working for ourselves?



We can now see taxation holding our wages until June.

In doing my research and reading I ran across a section that gave me great pause.

Nevertheless, in 2009, Americans will pay more in taxes than they will spend on food, clothing and housing combined.

Go back and read that again. Americans will pay more in taxes than they will spend on food, clothing and housing combined.

People are often asking why we have to have two incomes to survive. I hear people wishing to spend more time with their family but we are seeing government mismanagement of our money forcing these things upon us. It is time for there to be a change in philosophy in every government office across the land. We need leaders who are willing to review and judge each program as worthy or worthless. We need a serious look at downsizing government.

Let's look at tax history. Here is the tax obligation broken down in ten year cycles. I will include all years since 2000.
1900 5.9%
1910 5.0%
1920 12.0%
1930 11.7%
1940 17.9%
1950 24.6%
1960 27.7%
1970 29.6%
1980 30.4%
1990 30.4%
2000 33.6%
2001 32.6%
2002 29.8%
2003 29.0%
2004 29.3%
2005 31.1%
2006 31.7%
2007 31.8%
2008 30.4%
2009 28.2%

We no longer have a government that reflects our founders mistrust of the government and the original intent of keeping government small with the power base held by the people. We have a continuously growing government that seems to have a ravenous appetite for taxation. The first 150 years we had a government who taxed at less then 5% allowing for the growth and incredible innovation that made America great. We now have a stifling government with business taxes that average 42% and personal taxes that hover near 30%.
Even with these facts easily obtainable people are still acting as if businesses pay nothing.

If we want to return to prosperity and bring back jobs to America perhaps changing our obese government is the starting place. It's time to put congress on a diet.