Our single largest family expense is taxes.  For 2008:  Federal Income Tax: 12.2%; Social Security and Medicare: 7.65%; California Income Tax: 4.3%; Disability Insurance: 0.9%.  Total: 25.05%. 

This excludes our employer’s payment on our behalf of more than 7.65%. Further, it excludes property tax, gas tax, and sales tax. 

Critically, it also excludes taxes hidden in the cost of goods and services.  An example: When you buy a loaf of bread, the price includes part of the taxes paid by the farmer’s employees and the farmer, the fertilizer company and its’ employees, the bakery and its’ employees, and the grocery store and its’ employees.  Total hidden taxes are set by some at 20% of prices.   That is just for federal taxes.  The hidden cascade into consumer prices is also true of state taxes. 

Half of our income, or more, is confiscated by force. 

Our daughter is in college and our son is fighting autism.   Taxes take more than college (10.2%) and autism (21.4%) combined.   (We receive no government help for either expense.)  1998 was our last full year “before autism” and we gave nearly 4% of our gross income to charity.  2008 contributions to charity were 0.6%.  Did spending on autism (21.4%) or taxes (more than 50%) crowd charity out of our budget?  It was taxes.

Taxes hurt our family, but we are blessed.  The poor are hit hardest by these facts.   They spend almost all of their income to live.  As outlined above, 20% of their income is confiscated by hidden taxes.  Even if they pay no income tax, they pay Social Security and Medicare taxes (our most regressive taxes) of 7.65%. That is 27.65% of their income.  Their employers match their Social Security “contribution” for another 7.65%.    That is a lot of food or rent. 

New taxes in California, “cap and trade”, “universal healthcare”, and massive federal and state deficits must increase taxes, direct and hidden, substantially.  New taxes hurt my family but, undeniably, hit the poor the hardest.