USAToday wrote recently about the escalating cost of food, and how food is the third largest expense, after housing and medical care. Does anyone notice an important component left out here? Taxes. I checked the last three years of my accounts, and taxes are far and away the highest expenditure that I have each month.
What’s that, you say? Taxes aren’t an expense? You bet they are. Just because you don’t ever get that money doesn’t mean you don’t pay it. A frequent quote says that the greatest trick the devil pulled is convincing people he doesn’t exist. Believe that or not, the greatest trick our government ever pulled was the invention of tax withholding.
Financial advisors often say that to save money you should take it out of your check before you even get the check – use direct deposit or other means to get it into savings before you have a chance to spend it. Tax withholding is the same – you never see the money, so you don’t miss it – yet you don’t get any benefit of seeing your savings grow.
Somehow the media of this country blatantly ignores taxes when it comes to expenses. According to my files, I spent nearly 40% of my income on taxes last year – federal and state income taxes, social security, medicare and sales taxes. Only 5% on housing. About 3% on medical care. Call it 1% on food. Yet they point out the rising costs of food. Does anyone else notice that something is wrong?
Rather than pointing out how the farmers are going to gouge us, how about letting the government take a few for the team. Instead of regulating how much this should fit in that, back the heck off of the taxes. At the very least, let’s abolish the gravy train that is withholding. If people actually had to write a check each year to cover their taxes, do you think everyone would take it so lightly? I sure don’t.