Your 2001 Taxes
Calculate Your Taxes For Last Year
How would you like some help figuring your taxes for last year?
That would be great, wouldn't it?
Read on to find out how to calculate how much you paid in income tax last year, but the amount you paid may be more than you think.
I am writing this because it has repeatedly and painfully been brought to my attention that the vast majority of people are totally unaware of the fact that all taxes are ultimately paid by them. Most people still do not realize that the income tax on business must be taken into consideration by the business as a cost; in other words a business expense.
Since every business that hopes to show a profit had better figure in all associated costs when determining the final price of their service or product, we see that taxes and the cost of complying with those taxes is nothing more than a cost of doing business. Any business that fails to calculate in all business expenses is inviting certain bankruptcy.
So, taxes must be included in the formula when figuring the price of all products and services. Therefore it is the customer, not the business, who really pays the tax bill for the business. This is a fundamental rule and basic axiom of taxes.
But, we still witness people of all persuasions attempting to subvert this principle by creating new ways to tax businesses, all in the name of 'fairness'. "We must have an income tax on business so that they will pay their fair share", the experts and politicians declare.
The public, uneducated in the basic principles of taxation, is fooled once again into demanding that these businesses 'pay their fair share', not realizing that it will be them, the public, who will pay the total cost of any tax on business.
Ask any of the 100 United States Senators or the 435 United States Representatives this question: "Do businesses pay taxes?" The chances are your Senator or Representative will answer: "Yes!"
Most politicians are unaware of the fact that businesses do not pay taxes. Some of them do understand this fact, but they do not want you to know the truth. If the citizens of this great country ever found out how much they are really paying in taxes there might be another revolution.
Of course, many of those in government don't want you to know these fundamental laws of taxation. They are busy trying to confuse the matter by creating more and varied types of taxes so that you will always be in the dark as to how much your tax burden is as a percentage of your total income.
Now we get to the part where you can estimate your total tax bill for last year.
Leading economists agree that federal taxes today increase the cost of all products and services by between 20-35 percent - the so-called "hidden tax". State and local government taxes further raise that share to between 38-48 percent.
Keep in mind, these taxes are paid by all consumers and are in addition to the almost 35 percent tax rate most families pay in income and payroll taxes already.
Get some paper and something to write with and do this simple exercise:
1. Write down your last-year before tax income.
2. Subtract how much you paid in taxes.
3. Next, subtract your total savings (410k, savings, etc.) The remainder should be what you spent last year.
4. Now, multiply that amount by 25% (the approximate hidden tax in everything).
5. Last, add that figure to the amount you thought was the total you paid in taxes from #2 above.
Example:
1. Joe A. Citizen made $50,000 last year.
2. He paid $5,000 in taxes.
3. Joe saved $5,000 in his 401k.
4. Twenty-five percent of the remaining $40,000 that he spent is $10,000 (the hidden tax).
5. Added to the visible tax paid, Joe now sees his federal tax paid is $15,000, not $5,000, as he previously believed.
But remember, this does not even take into consideration state and local taxes, fees, property taxes, etc. Figure in those taxes and it's enough to make anyone ill!
Being sick will not accomplish anything, though. It's time to get MAD! When we become outraged enough over this injustice we will insist something be done about it.
Only when people learn the true cost of a bloated and inefficient government and how they have been fooled into paying invisible taxes on every purchase, will they become angry enough to demand a change.
Consider it our duty - you and I - to educate the public, and those who represent us in government, regarding how much we really pay in taxes!!
Now, what does all of this have to do with the proposed national retail sales tax (NRST)? Plenty! Under a NRST businesses are not taxed. This eliminates the necessity of passing those costs along to the consumer.
But, will prices go down? In answer to that we ask: "Are businesses competitive?" Think about it. Businesses are extremely competitive. Prices will go down. At the very least with a national retail sales tax you will be able to see how much you are truly paying in taxes with every purchase made.
Don't you think it's time to change to a tax system that reflects the true cost of government? A tax system that is simple, fair, and most of all...visible to all. So do I!
So, what should we do? I don't know about you, but I for one would like to see how much I am actually paying in taxes. Sure it may come as quite a shock, but the only way you and I will realize how much of our money goes to support government is for all taxes on businesses to be abolished.
That way, the cost of taxes and complying with them will never be entered into the equation of figuring the price of any product or service. This is our only hope to get rid of these insidious 'hidden taxes' and to thereby know the full amount that we pay.
There are those of us who would like to simplify matters by changing the form of taxation over to a sales tax, i.e., a consumption-based system. If we got rid of most of these various taxes and in their place had a simple, fair, broad-base sales tax on all goods and services, both at the federal and state level; we could then see the true cost of having a government.
But, you might ask, why tax all goods and services?
Well, since in reality you are paying these taxes anyway on all goods and services in the form of the above mentioned 'hidden taxes', why not have a tax system that truly reflects that fact.
Remember, you are paying this 'hidden tax' on everything. You are already paying these invisible taxes on food, clothing, shelter, transportation, utilities, doctor's visits, prescription medicine, etc., etc., etc. On everything you buy. Even business-to-business transactions contain this added cost!
Some will say that sales taxes are 'regressive' and hurt the poor and those on fixed incomes. But ask those same people to explain what is fair about a tax that increases the price on the very necessities the poor and those on fixed incomes need to survive. If you examine the income tax in this light you will see that it is actually income taxes that are 'regressive'.
Personally I do not mind paying taxes, but I do mind the fact that I can only see, and take credit for, some of them. For once, let the people see the genuine cost to them of having a government.
If you have done the exercise above you now know how much you truly paid in taxes last year and how much of your money is being taken by the government.
Now that you know how much you paid in taxes last year, I ask: "Are you mad enough to keep calling and writing your elected representatives until something is done about this?"
If you are not mad enough now, you never will be. And the majority of taxes you pay will remain "hidden" for the rest of your life.
In conclusion, I submit that we must first do away with any and all taxes on business. Then we shift over to a broad-based national sales tax and eliminate all income taxes, both at the federal and state level.
Let the true cost of government be clearly seen by all.
OUR GOAL: Get the IRS completely and totally out of the individual lives of every American by replacing the income tax code with a national retail sales tax.
Quotes
"When there is an income tax, the just will pay more and the unjust less."
-- Plato's Republic, c. 355 B.C.
The Worst Terror Organization in the World
"Asked which they worried about more, receiving anthrax in the mail or receiving an IRS audit notice, half of Americans feared the IRS more, while 32 percent said anthrax."
-- Recent poll results from Andres McKenna Research, "Asides, 12/6/01
An Insider's Viewpoint
There's an old Arabic saying, "hold your friends close, but hold your enemies closer." In order to fully understand the workings of the Internal Revenue Service, the United States Senates held hearings on very well publicized IRS abuse. One particularly enlightening testimony came from a collections agent, who gave this account:
"I work at the IRS and I have reviewed some of the abuse stories. While I must try to collect unpaid taxes, if possible, I try to treat taxpayers as human beings. I also do not assume that they are liars and cheats until it becomes a solid fact. Management doesn't appreciate me because I don't fit the agency 'norm'. The agency has become bigger than its mission, and I believe the Congress wants it that way. It is a power system that the Executive and the Legislative Branches can use for their own purposes. The Examination Division is virtually an entity without reporting responsibility to anyone. We, in collections, are given the task of collecting from individuals and businesses that never knew they were being audited. Examination correspondence records are not available to any other division in the agency. It is common practice to correspond with the taxpayer by using an old address when there is a new address on the system. They use the address on the return in question. Throughout the agency, Tax Examiners are on a quota or measured production system that invites errors by not allowing time to accurately complete a case. In fact, any employee that takes time to try to clear up any questionable items will be given poor performance evaluations. Only blind loyalty to the management clones will be rewarded. I cannot relate any stories that I have personal knowledge about but I can verify that testimonies before this hearing are no surprise."
One "good" apple could spoil the whole bunch! The IRS cannot have that now can it?
