Sunday, January 25, 2009

Are taxes taking more than your employer?

I doubt it.

I know people who begrudge every dime of taxes they pay. But while they whine up and down about all the taxes that government takes out of their paycheck, they don't seem as upset about what their employer takes out of their paycheck. Of course, what the government takes is clearly visible on the paycheck, while what the employer takes is not nearly so visible. For example, I work for a CPA firm that charges $75/hr for my work. I only receive about a third of that. So one could argue that my employer is keeping 67% of the money that I'm earning for the company.

Of course that would be absurd because my employer has to pay all sorts of overhead...advertising, office space, insurance, etc. etc. Plus my employer also pays me for many hours that aren't billable. But really, is that so different than the government providing the overhead that makes the economy possible? The government pays most or all of the cost of our education. The government provides nearly all of the transportation and communication infrastructure that makes commerce possible. The government maintains order. It seems to me that government does just as much to provide me with gainful employment as my employer does. Why should I begrudge the government taking far less than a quarter of what I earn when my employer keeps about 2/3 of what I earn?

It's unfortunate that people don't recognize this obvious truth. Maybe if the government was able to take taxes from us before our wages show up on paychecks there wouldn't be so much resistance. Maybe this would allow us to raise the necessary funds for government to operate and get our nation out of massive debt.


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