Craig Baltz's Blog

Craig's personal ramblings

Tax, tax, tax

Posted by craigbaltz on March 30, 2009

I haven’t written anything in awhile. I’m very busy with a new job which carries with it a lot of responsibility and my mother has been very ill. It is part of the new America, with many children helping take care of the aging parents. Luckily I love my mother dearly which makes a little sacrifice easy. What has been bothering me lately, actually for many years – is the total amount of tax we pay. Unfortunately the government has hidden the amount of tax we actually pay. They do this partially by separating the taxes, and partially by hiding many taxes from us. There are things we know are taxed, but for example do you know how much you pay a year in gasoline taxes? I don’t think many people actually do. I have said for years that if it was known how much of our money actually goes to the government there would be a revolution in America. That may be a stretch, but the backlash would be huge. I barely researched this and I came up with quite a few things that include taxes or fees that go directly to the government, along with a couple of relatively new government “fundraisers.” Our politicians have gotten used to controlling our lives. They are used to having power and access to millions, billions and trillions of dollars. They would rather control it than let us keep our money.

Gasoline Tax – varies by state but is somewhere in the vicinity of 40-50 cents a gallon. In “Where Your Gas Money Goes” from the April 27, 1998 issue of Fortune Magazine, for each dollar’s worth of gasoline sold, 34 cents goes to those drilling crude oil, six cents goes to the refining process, five cents goes to wholesalers, twelve cents goes to the service station, and 43 cents goes to the government. Taxes rise, I’m sure the numbers are worse now than they were eleven years ago.

Airfare/hotel/rental cars – many local governments choose these type of taxes at is it seems easy on their local voters – “let’s tax our visitors!” Of course, you pay the same fees if you go anywhere so it all comes out even in the end.

Cigarette/Alcohol/gambling – The fees on these items are substantial, and the government benefits. Like the lottery the government likes to act like it disapproves, but they will happily take the proceeds.

Guns/ammunition/fishing – Licenses, fees, that all go to state or federal agencies.

Auto registration – It happens every year, for every car. It’s a tax. Drivers license fees are a tax. And a HUGE bee in my bonnet (not that I wear bonnets) is the sales tax on resold vehicles. There is NO reason to re-tax used vehicles other than they are expensive and a large source of income for…our government.

Utilities – phones/cell phones/energy/cable/etc. There are so many fees on a utility or phone bill that most of them are unrecognizable.

Lottery – Plain and simple the lottery is a tax on poor people. Rich people don’t play. People wanted lotteries, so what did the government do? They said fine, but we are going to tax them! The money in most states is targeted for education, but I know in California education has never seen a raise in funds, as the state just redirected funds they had planned for education and used the lottery funds to replace them.

Police tickets – seatbelt violations, cell phone usage tickets, etc. Last year I got a seat belt ticket in Fresno. $100. I didn’t do anything wrong, no driving violation at all. I was pulled over as I pulled out of a parking lot. I hadn’t driven a hundred yards. $100 straight to the local government. For no good reason. Now cell phones are illegal in California, soon to be followed by hands free devices. As somebody pointed out to me what’s next? Eating in your cars? Talking? Stereos?

I never see it getting better. It only gets worse. They tax more things at a higher rate. When I was in Alaska I read they instituted a $5 per tire tax to improve some specific roads. They collected the money, never improved the roads, but refused to return the money to the people that paid the fee. I believe it was Sarah Palin that wanted to return a portion of a $5 billion surplus to the taxpayers of Alaska. There are only 600,000 residents so it’s more significant than say a $5 billion surplus in California. Anyway, state politicians shot her down – they wanted to spend the money themselves. Tax and spend. Overtax and overspend. If they come up short – tax more things. It’s the new American way. And it didn’t start with Obama, no matter how much Rush Limbaugh wants you to believe that.

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5 Responses to “Tax, tax, tax”

  1. Brian S. Lumberg said

    If the California State Governor’s official web page is to be believed, spending on education has increased.

    Specifically the Governor’s education budget:

    - Brings total education funding, including California State University and University of California funding, to more than $62 billion, the most ever spent on education in California.

    - Invests nearly $50 billion in Proposition 98 funding into education, an amount that’s more than 50 percent of the state’s general fund budget.

    - True to the Governor’s May budget proposal, provides K-14 education a $3 billion increase, $736 million beyond Proposition 98 requirements.

    - Increases state per pupil spending by $379 and brings total per pupil spending to an all-time high of $10,325.

    - Keeps University of California and California State University student fees at a lower level than comparable universities across the country.

    - Maintains California Community College fees at the lowest level in the nation.

  2. Brian S. Lumberg said

    One of the big bees in my bonnet (I rarely wear bonnets) is the capital gains tax. Let’s say I take a portion of my take-home pay (which has already been taxed at many levels), and invest in a company I believe can expand, thrive and employ many more people. If that company does well, and I am rewarded for my investment in them, I am punished to the tune of 15-20% of my returns from the investment. As this tax is increased, fewer people invest in businesses, since they can find better returns elsewhere. If this were eliminated, you would not only see more investment, but an immediate influx of cash as people sell for gains. As in your used car example, the money invested has already been taxed. Don’t disinsentivise investment by individuals.

  3. Lottery has been in effect for 20 years, many of which there was ZERO increased spending on education.

  4. Very good point about capital gains taxes. Gotta love the multiple layered taxes where they tax the same dollar time and again.

  5. Brian S. Lumberg said

    Craig, Thanks for the clarification on the education spending. I thought you meant education spending in general, not specifically from the lottery funds. In Colorado, I believe the lotto funds are earmarked mostly for improvements to parks, trails, etc. Lots of outdoor projects that help tourism. I have no problem with the state lottery, or how they spend it.

    For the record, I know of one rich guy that plays the lotto. He was rich before he played, and won it twice. I’m sure that’s a serious statistical outlier though.

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