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Who Pays For Government?

It’s Tax Day, a time when Americans briefly think about how much their government costs, instead of daydreaming about all the wonderful things it promises to do for them. 

Who pays for government?  The Evil Rich provide the lion’s share of the income taxes.  According to the Tax Foundation, the top 5 percent of income earners bring home about 35% of the nation’s income, but pay 59% of federal income tax.  The Super Evil Rich – people who earn over $6 million per year, a new category the IRS has been tracking recently – earn 10% of the income, but pay 18.5% of income taxes.  Meanwhile, the bottom half of earners account for roughly 13% of our national income, but pay only 3% of the federal income tax. 

We are constantly told none of this is “fair,” because the Evil Rich need to pay more than 59% of the income tax.  Liberals never tell us what a truly “fair” percentage would be – they always just complain that the current rates are too low, and persist in the absurd and easily debunked belief that taxing the heck out of rich people can fund their insane government spending.  Perhaps if the Evil Rich paid 70%, which would be double the 35% of national income they take in, we would achieve “fairness?”  You already know the answer to that.

Don’t worry, because even if you’re in the lower half of wage earners, you still pay plenty for government.  For one thing, you might be anticipating a nice tax refund this year.  That’s all money you loaned the government interest-free.  This is not just sour grapes, for you could have earned interest on that money by investing it, or placing it in a savings account.  Perhaps more importantly, you could have used it to pay down your own debts.  If you get a $1000 refund from the IRS, that’s a thousand dollars you could have knocked off your credit card balances this year.  What interest rate did you pay Visa or Discover on that thousand bucks?

You’re also paying for government every time you fill your gas tank.  As you may have noticed, that costs a lot of money these days.  Much of this goes to the government, in the form of gas taxes.  The federal gas tax is 18.4 cents per gallon.  States add an average of 20.6 cents to that total.  More significantly, the high cost of gas is a direct result of deliberate Obama policies, including a refusal to allow the exploration of American oil resources. 

You are funding this exercise in environmentalist ideology, and you pay for even more of it through EPA regulations that increase the cost of energy generation.  The EPA has been working to quietly enforce the “cap and trade” concept – defeated by the representatives of American voters in the Congress.  It already imposes fantastically expensive “climate change” ideology on Americans, many of whom correctly see “climate change” as an international fraud.  Regardless of your income level, you pay for all that.

These energy policies contribute to the rising cost of almost all goods, as do high corporate tax rates.  Corporations do not pay taxes.  They pass them along to their customers.  You’ll have a hard time finding an example of an industry whose profit margins were reduced in equal proportion to rising taxes and regulatory costs.  They correctly, and ethically, view rising taxes as an increase in the cost of goods, and recover most of that cost through rising prices or diminished quality.

You pay for government through the cost of opportunities it forecloses, and jobs it eliminates.  Obviously the vast ranks of the unemployed are paying most directly.  True, they receive unemployment benefits – which cost the rest of us a fortune to fund, as the government keeps expanding them – but these benefits are a fraction of what they could be earning in their chosen professions.  Further, the people who are still employed suffer from lost advancement opportunities.  When your company hires people, your chances for promotion are increased.  The reverse is equally true when staff is downsized.

And, of course, don’t forget about all the money government is sucking out of your paycheck, before you ever receive it.  The entire point of the exercise is to prevent you from noticing the extraction of these funds.  You’re pouring a lot of your regular paycheck into a Social Security fund that absolutely will not be there when you retire – President Obama and the Democrat Party work tirelessly to thwart any real attempt to save it.  That money is not being put into some kind of “lockbox.”  The government spends it immediately. 

Rest assured, we are all paying for government.  Few of us will ever really know exactly how much we paid.  As the size of government increases, and the termite State burrows into every inch of our economy, its true cost becomes harder to account for.  You don’t know exactly how much you’re paying, any more than you know exactly what Washington does with all the money.  This is by design.

Written By

John Hayward began his blogging career as a guest writer at Hot Air under the pen name "Doctor Zero," producing a collection of essays entitled Doctor Zero: Year One. He is a great admirer of free-market thinkers such as Arthur Laffer, Milton Friedman, and Thomas Sowell. He writes both political and cultural commentary, including book and movie reviews. An avid fan of horror and fantasy fiction, he has produced an e-book collection of short horror stories entitled Persistent Dread. John is a former staff writer for Human Events. He is a regular guest on the Rusty Humphries radio show, and has appeared on numerous other local and national radio programs, including G. Gordon Liddy, BattleLine, and Dennis Miller.

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