|Federal income tax
||Tax paid to the federal government, based on a percentage of
||This has been as high as 70 percent of gross income, before
Reagan reduced the rates in the 80s, causing an explosion of growth and
tax revenues (yes, double the revenues with a top rate less than half of
it's peak). Unfortunately, the tax is creeping back up to where it was,
and guess what's happening to the economy in the process?
|State income tax
||Tax paid to the state government of your residence, based on
a percentage of your income.
||Liberal states such as California and New York impose the
highest state taxes, sometimes in the double-digits.
|Local income tax
||Tax paid to the city or municipality of your residence,
based on a percentage of your income.
||This often becomes a permanent fixture in a city due to a
supposedly one-time expense, such as to build a stadium for the local
|Social security tax
||Tax paid to the federal government that is supposed to be
returned to you in your retirement, based no a percentage of your income
up to a capped amount. Note: your employer matches the percentage you pay,
which amounts to a double-reduction of your take-home pay. If your
self-employed, you have to pay twice the social security tax.
||The government doesn't actually save or invest this money
for you; it spends ALL of it! It's basically a ponzi scheme like Madoff
ran, where money from new investors (taxpayers) is given to seniors that
are collecting benefits. When current taxpayers retire, the only
source of funds to pay for the benefits will come from new, younger
taxpayers. Unfortunately, due to longer life spans and the baby boom, the
ponzi scheme is headed for bankruptcy within a couple decades. The
most common liberal "solution": remove or raise the cap on the
tax, so the percentage applies to a larger piece of income.
Basically, it's another way of raising taxes without the government saying
it's raising taxes.
||Tax paid to the federal government in the same way as the
social security tax, except there is no cap.
||Medicare, which pays for senior health care, is yet another
government entitlement headed for bankruptcy in a couple decades.
The current health bill making it's way through Congress plans to cut
Medicare benefits by hundreds of billions of dollars over the next
decade. In other words, benefits will be cut, but taxes won't.
|Capital gains/Dividends tax
||Taxes paid to the federal, state, and local government;
based on a percentage of your income.
||Dividend taxes amount to a form of "double"
taxation. Corporations must pay a large percentage of their income,
even before they distribute their earnings to actual taxpayers. So
the income is taxed first on the corporation, and then a second time on
the actual taxpayer.
||Tax paid by the final consumer to the state; based on a
percentage of the purchase price of an item.
||This applies to virtually all items your purchase.
Cars, restaurant food, TVs, computers, clothing, books, sports equipment,
and on and on.
||Federal or state taxes imposed on the manufacturer or
distributor of "non-essential" consumer goods; based on some
measurable unit, such as a gallon of gas.
||Oil, gas, environmental output, communications, etc.;
consumers are hit with these taxes directly or indirectly through higher
||Special taxes imposed on consumers of certain items that
usually are discouraged.
||Alcohol, tobacco, gas-guzzling cars, and (coming soon)
high-fat/high-sugar foods & drinks.
||Tolls, permits, fees, licenses, and other government charges
that aren't called "taxes".
||Bridge or road tolls, car license, marriage license,
national/state park permit, hunting license, fishing license, parking
meters, bike trail permit, dog license, court filing fee, and on and on.
||A tax levied on imported goods.
||This is a double-edged sword: it raises the cost of imported
goods (since prices are typically increased to cover the tax), and foreign
governments usually retaliate by taxing imports of our products sold
overseas, meaning a loss of profits and jobs in America.
||State taxes charged to people who own real property; usually
charged as a percentage of the tax-appraisal value of the property.
||Personal residence, vacation home, rental property, land,
and other real property.
|Special "one-time" surcharges
||Special one-time taxes that are levied at the
federal, state, and local levels; they're often attached to a new law,
budget bill, or special government project.
||Sports stadium tax; new elementary school assessment;
bridge/road repair assessments; tax to pay for a war (often clouded in
language such as a "patriot tax"). Many of these
supposedly one-time charges become permanent fixtures of the tax
system. For example, the new health reform bill includes a special
"surcharge" on millionaires to pay for it.
||Federal and state taxes that are charged to corporations
themselves (as opposed to the owners of the business...who are taxed
||This can amount to almost half of all earnings. Every
dollar taken from a corporation is a dollar that can't be distributed to
owners or used to expand & hire new workers. Alternatively, it
might just be added to the price of the good or service provided by the
corporation, which means the consumer absorbs the tax.
|Other business taxes
||Additional payroll and operating expenses charged to all
||Federal & state unemployment tax, operating permits,
||This is an increasingly popular kind of tax that is assessed
on businesses that are thought to be earning "excessive"
profits. An objective measure for "excessive" is rarely
cited, but it allows the government to tax a target of populist anger.
||Taxes on oil companies, pharmaceutical companies, health
insurance companies, etc.; do you think these taxes have any effect on the
prices of gas, prescription drugs, or health insurance?
||A one-time tax assessed as a percentage of a person's estate
when they die.
||This can be as high as 50 or 60 percent of everything a
person owns, taken in one swoop.
|Cap & trade taxes (coming soon)
||A tax assessed on companies that are engaged in an activity
that negatively affects the environment (such as power plants, waste
incineration facilities, etc.).
||This coming legislation may amount to the biggest tax
increase in history, as virtually every manufacturer or energy-producer
could be hit, with the costs being passed on to consumers.
|Internet taxes (coming soon)
||A tax on web transactions, emails, interstate purchases,
||The internet currently doesn't generate tax revenue, despite
it's widespread use. Don't think politicians haven't noticed.
It may start out as something tiny, such as 1 cent per $100 spent on ebay-type
But remember, the federal income tax also started out as 1 percent of the
richest 5 percent only.
||Taxes charged to the recipients of gifts.
||This was originally put in place as a safeguard for the
inheritance tax, so that a person couldn't "give" their whole
estate to others the year before they died. It's ensnared those
people plus many other generous citizens.
|Special penalties and charges
||This is another play on words, using "penalty"
instead of "tax".
||For example, the current health reform bill levies a "penalty"
of several thousand dollars on anyone who doesn't buy
||There are so many other types of government taxes, seen and
unseen, that it's impractical to list them all. This a final
||Hotel charges (which are sometimes 20 percent of the room
charge!), government agency charges (check your cable or cell phone bills
for examples), plastic surgery tax, medical product tax, medical research
tax, pharmaceutical tax (these latter examples are part of the health
With a $14 trillion dollar deficit that is projected to double in 5-10 years, and a ridiculously-expensive health "reform" bill on the
way, the government will use every method possible to come up with new ways to steal money from citizens. Keep in mind all the taxes above
along with other underhanded ways to raise taxes (e.g. letting tax cuts "expire", removing tax deductions,
taxing the "rich" without making the cutoff inflation-adjusted, etc.).
To put the deficit in perspective, know that in 2008 the federal government
collected only $2.5 trillion in tax revenues, and it will likely be
substantially less in 2009 due to the recession. With a debt projected to
hit $20-$25 trillion in 5-10 years, and a government that isn't even trying to
curb spending, does anyone see a problem?
For an alternative to various forms of proposed government-controlled health care, see my
20-pt plan for
solving the problems.