Where did my paycheck go? Have you ever stopped and asked yourself that question? I wish I could use that excuse when I can't pay a credit card bill and they call me at dinner time. "I'm sorry I can't pay that this month the government ate my paycheck!" Have you ever looked at your W2 and wondered where your money went? From income tax, gas tax, meals tax, sales tax, excise tax and in some states a tobacco tax, the list goes on. It's no wonder the disposable income of many Americans is dwindling. I looked at an average salary of an accountant, living in a suburb in New England, with an average life just to see where your money goes.
Lets take a single individual making $ 94,000
The tax breakdown would look like this:
- Social Security Tax ($ 3948) Lets hope social security will still be around to see this.
- Medicare Tax ($ 1363)
- Federal Tax (assuming average deductions) ($ 13537) This is likely to go up in the future
- State Tax ($ 4982)
The Government Ate My Paycheck! This leaves disposable income at $ 70170. BUT WAIT !!!!! It doesn't stop there!
Now lets look at all the other taxes that the government likes to stick to us:
So "Average CPA" buys an "average" car for $ 20,000 Sales Tax is ($ 1300). Excise tax on this vehicle ($ 400). It costs Average CPA $ 40 a week to fill this car for his commute to work. Gas Tax both Federal and State ($ 464 / yr). Your disposable income has dwindled to $ 68006. Add in a Road Toll Tax and you are down to $ 66966. God help him if he has to renew his license ($ 60) … leaving Average CPA with $ 66906. YIKES !!!!! The Government Ate My Paycheck!
Are things starting to look a little bleak? It gets better. Average CPA owns a small townhouse. He pays $ 4200 for property tax. His taxes on cable, telephone surcharges, universal surcharges, electric delivery tax, dog permits etc … Have you ever looked at your phone bill and wondered what the heck a governmental surcharge is or a usage surcharge? All these little unknown and often "hidden" taxes may run you ($ 540 + / Yr.) Lets not forget the water tax and sewer tax ($ 820). The government wants a piece of the action every time you flush the toilet! Disposable income: $ 61346.
I feel my pockets getting smaller and smaller. Now let's get into the micromanagement of taxes as I like to call it. Taxes on stupid stuff. Average CPA has a couple of bad habits and smokes a pack of cigarettes a day. Cigarette tax runs him ($ 1281) a year !!! Maybe he should try to quit! But there is a tax on Nicorette Gum as well. Once in a while Average CPA likes to have a cocktail ($ 211). The occasional beer or glass of wine ($ 100). Lets not forget that Average CPA loves to go out to eat sometimes ($ 488). This Average CPA's paycheck was almost cut in half … leaving a total of $ 59266 in disposable money or $ 4938. This does not even take into consideration a mortgage, car payment, student loan, credit card payments etc … My point is that almost half of this scenario resulted in taxes. $ 34734 !!!!!! of basic government taxes that we pay day in and day out and often not even knowing we do it. The Government Ate My Paycheck!
So you can see and understand the arguments around tax reform and tax increases. Since the rollback of the payroll tax people paychecks have taken a hit. 40% of Americans live paycheck to paycheck and many seniors are on a fixed income. Therefore, ANY tax increases or new taxes create and have a tax for the American people. To take it a little further this article does not cover the new taxes that have come about with ObamaCare and the excise tax that will begin around health insurance or lack there of. Yes we all enjoy the luxuries of paved roads and other federal and state benefits. But, with governments frivolous spending when is enough, enough? I believe if people began to see an increase in their disposable income then maybe the economy will grow and move forward. Taxing the American people over and over again, adding new taxes and increasing others will only create an angry and unappealing America.