Coming into a New Year we all have resolutions related to weight loss and finances. When we think about losing weight, we count calories and schedule workouts. When we think about building wealth we think about saving money, maybe even spending less.
We should be thinking about taxes.
The first tax every citizen pays for most of their lifetime is the income tax. This tax has two parts: the withholding tax and the income tax.
The withholding is taken from your paycheck and the actual income tax is what you deal with on April 15th. Someone once said that election day should be April 16th, so it is fresh in the tax payers’ minds about how much they just paid to the government. Dave Ramsey said that be people would be more outraged by the amount they pay in taxes if they had to go to the tax window and pay them instead of them being deducted before you get your check.
Citizens would be more outraged which is why the government set it up that way. It’s called parentalism and it’s the government’s way of ensuring that when your tax bill comes due, you’ve set aside enough money to pay it. The same practice is in effect in retirement savings accounts where your employer only allows you to choose how much you’ll opt in, not if you’ll opt in at all.
So, after we get our paycheck post taxes and head to the grocery store to buy food, we are taxed up to 9% (depending on state and municipality taxes) in sales tax.
My family and I (James) took a vacation over Thanksgiving. We stayed in a hotel and approximately 11% taxes were added to the room rate. Going to a restaurant for dinner? Be prepared for sales tax, food and beverage tax.. When you’re a tourist in someone else’s town, you’re likely funding civic endeavors like coliseums, mass transit, and festivals. Politicians get voters on board with big ticket expenditures by pinning the bills for those expenditures on people just passing through.
Taxes are wide, varied, and confusing. Your lawmakers are counting on you to not add them all up.
You have property tax to pay on a house or a car. Licensing fees to drive, fish, or hunt. Business licensing for barbers, massage therapists, or beauticians. So-called “sin” taxes on alcohol and tobacco. When products are brought into the state, taxes applied to the distributor are passed on to the retailer and then along to the consumer. The gas tax in our state is 23.5 cents per gallon; that translates to a minimum of 10%. We’re taxed on so many things and in so many ways, it’s difficult to quantify how much you will contribute to the wealth of your local, state, and federal governments.
One thing’s for sure, it’s far more than your April 15th tax bill.
We believe South Carolina should abolish tax withholding practices and income taxation. No level of government should tax the productivity of its citizenry. Take a look at that State withholding tax on your paystub, it’s usually significantly more than the federal withholding. After filing every year, we get nearly all our withholding back. So basically, the state is running a scheme. They force citizens to loan them our money for the short term, earn interest on it, and then give it back. More disturbing is how many people act indebted to the government for so-called “refunds.” It was your money to begin with! Sounds like Stockholm syndrome to me.
The state sales tax, which is currently at 6%, should be abolished. Many items we buy have been taxed more than once before the sales tax is added to our transaction. Things like alcohol, tobacco, and other items gets taxed by the state at the wholesale level, which in turn increases the price and get passed along to the consumer. These three taxes need to be abolished and that would still leave about 60 other taxes that the state levies upon their citizens; with most people not even realizing it.
If weight loss was your resolution, we hope you found a gym and a diet you can stick with. If financial health is on your “to do” list, start with Political Action.
Connect your state Representative and Senator to voice your opinion that our taxes need to be lowered immediately. Be an active participant in the legislation that affects you. Link to find your legislators: https://www.scstatehouse.gov/legislatorssearch.php