|Lesson 2: YOU are paying the bill.
Rhode Island is one of the highest taxed states in the nation, paying an average of 10.2% of
their income in state and local taxes .* The vehicle excise tax is unique as one of the only fees
over which Rhode Islanders made such a fuss that it was actually repealed. What was special
about it? It was a large sum of money for which people actually had to sit down, write a check
and mail it to the government. It wasn't buried in a mortgage payment, like their 7th highest
property taxes. It wasn't added to a purchase, like their 7% sales tax or their 31 cents/gallon gas
tax. It wasn't gradually deducted from their paychecks, or added to their phone bill, electric bill
or cable bill. You see, Rhode Island is a heavily Democrat state. Democrats don't mind paying
taxes. They just want to pretend that they're not. But pretending doesn't make them happy,
because they're still poor. They just can't figure out why.
Poor? Americans? But we have cell phones and plasma t.v.'s, and we get fatter every year.
But we don't have something that our parents and grandparents had: time with our families.
Over 40% of our income goes to funding the direct and hidden costs of government that have
metastasized over the last 2 generations. That means that both spouses must work full time: one
spouse to pay for 4 million federal employees and annuitants, for Grandma's social security and
Medicare, Medicaid for the poor, Disability, Unemployment, pet projects, and capitalizing
interest on all of it. Many of these things sound honorable, but we were able to care for each
other on one income before government got involved.
Now we need two incomes, so we turn to government to help us compensate for that lost time:
after-school programs and daycare for our unattended children, nursing homes and daycare for
our unattended elderly. Public school teachers are increasingly asked to play a parental role.
All of this costs more money, which costs more taxes, which takes more of our time...and the
Don't pretend. Remember 4 things:
1. Your employers don't pay any taxes for you. They have a certain amount they're willing to
pay for you, and that doesn't change. How your payroll tax is split up is just a game on paper.
You lose the full 13%.
2. People don't go into business to lose money. If a tax goes up, the business raises its prices to
compensate. A tax on a business is really a tax on you. The hidden cost to you from so-called
business taxes is enormous.
3. Government doesn't buy anything for you. It only spends your money for you... for a fee.
4. Your tax burden has been designed to be sneaky: gradual, many sources, and much of it via
automatic withholding. The Rhode Island vehicle excise tax was merely an oversight.
* The Tax Foundation
Next lesson: Cut out the Middle Man