What does government do well? Disguise how much it taxes

February 21, 2013
Charles Biggs

When we started our first business, I bought a copy machine for about $2,000. It was really nice. This was back in 1984 in Glenpool and since no one in town sold copies, we offered that service for 10 cents a copy.

We took the revenue from that copy machine and put in a company savings account. Before you knew, we had several hundred dollars in that account.

I thought we were making some progress.

I had worked for other companies all my life and this was the first time I had worked for myself. We were not incorporated but were a self proprietorship.

My bookkeeper (Susan) informed me that we had to pay quarterly taxes to the federal government. I thought that once a year in April we would figure out much we owed and send in a check by April 15.

No, we had to pay quarterly payments for our estimated federal income tax and state income tax and payroll deductions.

Back then, employers took about 7.5 percent out of your payroll check plus an amount of withholding for income tax. I discovered back then that my former employers also paid in about 7.5 percent in payroll taxes. I think the total of what they paid and what was deducted from my check was about 15.3 percent.

So, we had to dip into that savings account to pay for taxes, with the payroll deductions (Social Security, etc.) being twice what I thought it would be.

Thank goodness we had that copier.

Government expertly disguises the impact of taxation.

For example, if your employer did not withhold for income tax in your payroll check every month, on April 15 you would have to write a check to Uncle Sam for an amount 12 or 26 times larger than your monthly or every-other-week payroll check.

So, if your boss takes out $500 a month now, if you only paid once a year, you would write a check for $6,000 on April 15.

Ouch.

The government softens the blow by taking it out of each check. And get this, if your boss takes out too much money, you get a federal and state refund. That makes you very happy. But if your boss takes out too little, you have to pay in on April 15 and that can make you very mad.

Example: You had $6,000 withheld and your tax liability was $5,500. You get a $500 check back. But let’s say your employer messed up and you only had $5,000 withheld. Then you owe $500. You forget that your monthly check with about $40 more.

In either case, you still owed $5,500.

The government does this with gasoline taxes. You pay the amount on the pump and you have no idea how much the tax is. Oklahoma charges a total of 35.4 cents per gallon of gas. Imagine filling up your tank and the clerk saying, “That will be $60 for 20 gallons of gas plus $7.00 for taxes” instead of “That will be $67 for 20 gallons of gas.”

It’s the same thing at the State Fair or a ball game. You buy a hot dog for $3.00 and they “don’t charge tax.” Well, they do charge tax but they roll it into the inflated cost to make it an even number. The vendors don’t want to charge $3.24 for a hot dog because then they have to make change.

There is a popular among some Republicans that eliminating “tax breaks” is the conservative course of action. They say that it is not fair, for example, that people who go to the Oklahoma City Thunder basketball games don’t pay sales tax on the tickets.

It is not fair. But life is not fair.

And the imposition of sales tax on basketball tickets that are currently untaxed is simply a tax increase. It’s a way to get more money for the government to spend.

If it were an attempt to penalize the Thunder (which it is not), it wouldn’t work because the basketball team would not “eat that tax.” It would be reflected on the tickets and the basketball fans would pay the price.

The same is true of a proposal to tax newspaper subscriptions. Republican lawmakers might want to punish liberal daily newspapers by added a 4-percent state sales tax, but it is the subscribers – not the newspaper that would carry the freight.

If there is a tax exemption that benefits a specific business (like the bankrupt Great Plains Airlines) rather than an industry, that should be changed (probably in court).

Instead of hiding new taxation, state lawmakers could better serve this state by cutting regulations, eliminating the state income tax and focusing on some moral issues. That is true conservatism.

 

• Let me apologize in advance for the following pun – the lowest form of comedy.

•  Two antennas met on a roof, fell in love and got married. The ceremony wasn’t much, but the reception was excellent.

• A jumper cable walks into a bar. The bartender says, “I’ll serve you, but don’t start anything.”

A man walks into a bar with a slab of asphalt under his arm, and says: “A beer please, and one for the road.”

• Two cannibals are eating a clown. One says to the other: “Does this taste funny to you?”

• “Doc, I can’t stop singing The Green, Green Grass of Home.”

“That sounds like Tom Jones Syndrome.”

“Is it common?”

“Well, It’s Not Unusual.”

• An invisible man marries an invisible woman. The kids were nothing to look at either.

• I went to buy some camouflage trousers the other day, but I couldn’t find any.

• I went to a seafood disco last week, and pulled a mussel.

Two Eskimos sitting in a kayak were chilly, so they lit a fire in the craft. Not surprisingly it sank, proving once again that you can’t have your kayak and heat it too.

• A group of chess enthusiasts checked into a hotel, and were standing in the lobby discussing their recent tournament victories.

After about an hour, the manager came out of the office, and asked them to disperse.

“But why,” they asked, as they moved off.

“Because,” he said. “I can’t stand chess-nuts boasting in an open foyer.”

• Mahatma Gandhi, as you know, walked barefoot most of the time, which produced an impressive set of calluses on his feet. He also ate very little, which made him rather frail and with his odd diet, he suffered from bad breath.

This made him a super-calloused fragile mystic hexed by halitosis.

•  A dwarf, who was a mystic, escaped from jail. The call went out that there was a small medium at large.