Occasionally when I overhear tax discussions, I inevitably hear someone ask, Don't you use X that is paid by your taxes?
Or, We wouldn't be able to have X if we stopped paying taxes.
Lets clear that up...your taxes go to DEBT...thats it. Kinda like when you have a maxxed out credit card and make a minimum payment. Lets take a look at some services that people often think are paid by our income taxes.
- Roads. Perhaps you haven't noticed, but much of all major new road construction is for TOLL ROADS. These are not temporary tolls, it is a permanent toll (that will probably increase) to be a source of continued profit for the State. For our convenience, they are placing automatic toll readers that will just bill it to your credit card. Its really nice because if you forget to pay, it is a crime...not a late fee like on a cell phone bill. But the BEST part about it, is that we pay for roads with the gas excise tax! Did you know the government collected close to $37 Billion in 2006 from the excise tax? http://www.taxpolicycenter.org/taxfacts/displayafact.cfm?Docid=401
- Schools, firestations, police, etc. Your federal income tax does not pay for these, it is paid by property taxes. If you rent, you may not know that you ARE paying property taxes; you just don't see it because its part of your rent. The MEDIAN property tax is about $5,750 PER YEAR or around $478/mo. So you see that quite a bit of your rent is going to property taxes, without it, your rent would be hundreds of dollars cheaper each month! Oh don't forget sales tax. Texas alone pulled in close to $2 Billion in sales tax last year. http://www.window.state.tx.us/news2008/080711-salestax.html
- More about schools. Did you know that schools make alot of money through other means besides property taxes? Perhaps Coke bought an exclusivity agreement for the school that only allows coke products to be sold there. Many school supplies are not included, and must be purchased elsewhere. The school can also rent out its facilities when classes are not in session. Summer school is another money maker. Most sports events have gate fees, concession stands, and more. Yes, although you THOUGHT you were paying for schools with your income tax, you are actually paying for them with your other property tax, and then even more from all the other revenue generators of the school.
- Courts, judges, etc. I was the lucky winner of a speeding ticket a while back. Guess what, all the deals they presented to my lawyer included some lovely COURT FEES. Local police districts love to pass out moving violations to generate revenue for their precinct. Isn't that great? The more tickets they give out, the more money they make! On the other hand...catching criminals does not produce revenue that revenue- so perhaps it makes more sense for those to be priority 2.
- Ambulances. Someone told me this, and I was absolutely stunned. If you are taken by an ambulance, it is NOT a free service. Typical costs are around $750 for a ride. You will get the bill in the mail a few weeks after the ride. This made me think...wouldn't it be great if there were user fees for Fires? "Sir, you have a 1,000 SF home, and the fee is $10/SF, bringing your total to $10K. Sign here to approve the charges, or we can sit here and watch your house burn down."
- Military. This may be changing due to recent EXCEPTIONAL increases in military spending. But the military is actually paid by CORPORATE TAX. Take Dell Computers for example. Their revenues are $42.5 billion. After costs, they have a profit of close to $3 billion. This means they will pay over $1 billion in taxes to the IRS alone. Overall, corporate taxes result in hundreds of billions of dollars in revenue for the federal government...historically an amount EQUAL to the military budget. Of course the current president, and likely the next, won't give a damn about budget...in which case we pay for it through INFLATION (the system that has caused us to lose 95% of the value of our money since 1917)
- Social security. If you're my age, you are probably already aware that social security is NOT part of your income tax, but is actually an additional deduction from your paycheck. You may also be aware that our generation probably won't see a dime of that money.
- Health care. You should also notice that there are additional fees on your paycheck for medicare, medicaid...this is what pays for these...not federal income taxes. But wouldn't we all love to see another 10%-20% of our paycheck start disappearing and going to socialized health care! I think that would be great, because instead of having the option to pay $100 a month to an insurance company...I could have the luxury of being forced to pay $300 MORE a month to the government to give me FREE health care. Oh I CAN'T WAIT!
- National and State parks I absolutely love these places. If you haven't visited a national park any time recently, you should. An when you do - I guarantee you will be charged an admission fee. This fee covers their operating expenses, and since the trees, mountains, wildlife, scenery etc are free, the fee usually isn't too expensive. Never the less, your income tax does not pay for these.
My question to you is...if federal income tax doesn't go to roads, schools, police, fire, courts, health care, emergency response, social security, parks, or the military. WHY ARE WE PAYING?
I would love to hear your educated responses.
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