The Golden Fleece

From Gavin Newsom to Joe Biden, even back to Donald Trump, pandemic related stimulus, payroll protection and unemployment payouts have been so hefty most of us have forgotten how much the state and federal governments fleece us when pathogens from the Far East aren’t trying to kill us or our economy.

I started to think about this a few weeks back, when the state of California invited me to pay $410 dollars for the privilege of legally driving a Subaru Outback for another 12 months. I’m getting fleeced on two counts. First, the fee is absurd and second, it’s my wife’s car and I only get to drive it when she needs gas, a car wash or if we’re traveling on roads she doesn’t care for and only on weekends.

Now NY is no bargain, but when I last registered a car there it cost $32.50. 13 years later it’s up to $52, but that beats $410. Of course, having registered the car I’ll need to put gasoline in from time to time. A gallon is now more or less 4 bucks per gallon. Of that, we were paying 80 cents in state and federal taxes and another 38 cents for assorted fees, a whopping 1.18 per gallon. Highest in the country.

I don’t smoke but if I did I would try to buy my cigarettes out of state. In California, a pack is taxed at $2.87 per pack. Bad as that is, 20 states charge more. In Evanston Illinois, just north of Chicago the tax rate is $7.16 per pack, which might explain why convenience stores keep getting robbed.

Got a job with a W2 paycheck? Here’s where it gets really ugly. For most of us, the federal tax bite is between 20 and 27 percent. Let’s call it 25 percent on average. Add the state tax bite of around 8 percent and the social security withholding of 6-point 2 percent. Add it up, you’re being taxed roughly 40 percent of your wages, which puts your buying and savings power at just 60 percent of what you earn. And when you do spend what’s left, you’ll pay sales tax of between 7 and 9 percent. More for gas and tobacco. Your actual after-tax earnings are down to about 50 percent. Depending on the skill of your CPA or your personal level of larceny, you may get some of it back. And of course, when you invest any of your taxes to the max earnings, any money you make on stocks or bonds, or bitcoin is also taxed.

The Great California taxpayer revolt happened 42 years ago. Might be time for another one. 

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