COLUMNIST: Every day is tax day

The deadline for filing federal income tax returns is later than usual this year. Tax Day has been pushed back to today to avoid coinciding with the District of Columbia Emancipation Day.

However, Americans don’t just pay taxes one day a year. Taxes are part of our daily lives, whether we realize it or not. Many politicians prefer that we don’t notice how taxed we are. So taxes are often buried in the cost of products or subtly taken from our paychecks.

The largest and most recognized US tax is the personal income tax.

For young adults entering the labor market, the first tax they can collect is the payroll tax. Looking at their payslips, they are often shocked to see that 6.2% is deducted for social security and 1.45% for health insurance.

What they may not realize, however, is that their employers also paid the same amount in Social Security and Medicare taxes. As it is part of the cost of hiring someone, this amount is also rolled into the salary, in the form of lower wages. Indeed, the federal government takes 15.3% of most workers’ wages just to fund entitlements, double what appears on their pay stubs.

When workers go to spend that paycheck, they may have to pay sales tax of 9% or more, depending on the state. And while general state sales taxes are usually visible, other taxes are better camouflaged.

At the gas pump, for example, we will pay combined state and federal gasoline taxes of approximately 31 cents per gallon in most states. In California, it’s about 67 cents per gallon.

And the tenants? Many don’t realize they are paying property taxes, since homeowners write those checks. But these checks are financed by the rent.

After paying all these taxes, some people may still have savings to invest. Suppose you buy shares of an American company. The company will use these funds, and whatever profits it makes, it will be subject to corporation tax at a federal rate of 21% and a typical state rate of 5%.

But for the government, why tax something once when it can tax it twice or three times?

After taxing corporate profits–not to mention the wages invested in the investment–the government will take a share of the same profits when they are distributed to shareholders.

Ultimately, these taxes don’t just hit investors. Corporate taxes notoriously lower the real wages of workers.

However, perhaps the most damaging hidden tax in the government’s arsenal is inflation.

Compared to the same period last year, consumer prices increased by 8.5%.

Between the Federal Reserve, Congress and the White House, the government’s strategy over the past two years has been to print money and pour it into the economy. Spending with reckless abandon, the federal government racked up more than $6 trillion in new debt during this period. The Federal Reserve holds most of this new debt. After flooding the economy with dollars, it’s no wonder that every dollar has less value.

Whether financed by taxes or deficits, American workers – past and present – ​​ultimately pay a high price for unbridled public spending. And we pay for it every day.


Preston Brashers is a senior policy analyst at the Heritage Foundation’s Hermann Center for the Federal Budget.