Taxes and You

I chuckled as I read the following clip on a Facebook post:

I used to work at Walmart as a cashier. During tax free weekend, the place was a mad house. The lines were long and the customers were non-stop. That being said, I can say that at least 80 percent of customers would point out to me, quite angrily, that their total was still including the tax. For example, if their purchase was $148.67 they would wonder why the tax of .67 was on there and why it wasn’t an even total, like $148.00 even. I had to repeatedly explain that’s not what tax is. – magicsparkleprincess

Was this fictitious or actual I do not know but a couple things I do know are 1) taxes take a huge chunk of an American’s income and future wealth and 2) Americans know little about taxes.

A recent article by Brook Seaman, tells that Americans spent more money on taxes than they did for food and clothing last year. I’m not sure that the article really gives the full picture. It focuses on income tax alone and leaves out the mind blowing list of everyday taxes we encounter. Just read through the following for starters.

FEDERAL INCOME TAX● SOCIAL SECURITY TAX● STATE TAX● CITY TAX● COUNTY TAX● PROPERTY TAX● PERSONAL PROPERTY TAX● SCHOOL TAX● LONG CAPITAL GAINS TAX● SHORT CAPITAL GAINS TAX● SALES TAX● ESTATE TAX● GASOLINE TAX● WATER TAX● SEWER TAX● TAX ON ENERGY – GAS● ELECTRIC● HEATING OIL● BUSINESS TAX● AIRPORT TAX● TELEPHONE TAX● LICENSE PLATE TAX● HOTEL TAX● CABLE TV TAX● USER TAXES● UNEMPLOYMENT TAX● WORKERS COMP. TAX● 100’S OF REGULATORY FEES● CIGARETTE TAX● CORPORATE INCOME TAX● INHERITANCE TAX● ACCOUNTS RECEIVABLE TAX● INVENTORY TAX● MARRIAGE LICENSE TAX● LIQUOR TAX● BUILDING PERMIT TAX● MEDICARE TAX● FISHING LICENSE TAX● REAL ESTATE TAX● FOOD LICENSE TAX● FUEL PERMIT TAX● HUNTING LICENSE TAX● ROAD USAGE TAX (TRUCKERS)● LUXURY TAX● RECREATIONAL VEHICLE TAX● UTILITY TAX● SEPTIC PERMIT TAX● WELL PERMIT TAX● ROAD TOLL BOOTH TAX● VEHICLE SALES TAX● WORKERS COMPENSATION TAX● TRAILER REGISTRATION TAX● WATERCRAFT REGISTRATION TAX● LONG TERM CAPITAL GAINS TAX● SHORT TERM CAPITAL GAINS TAX● TELEPHONE FEDERAL EXCISE TAX● TELEPHONE STATE AND LOCAL TAX● TELEPHONE USAGE CHARGE TAX● TELEPHONE FEDERAL UNIVERSAL SERVICE FEE TAX!

Some more Tax Facts provided by Wealth and Wisdom Institute,

– In recent years personal taxes increased 42% faster than personal income

– 5.1 months of the year is worked by the average citizen to pay for government spending

– We have an extra $3,300 each of “hidden” taxes in the price of goods for the cost of regulations.

– Recent years marked the highest inflation-adjusted taxes ($22,000) ever paid in history for a medium-income dual-career family, and new records have been set each year since 2000.

Do you have to pay taxes? Well yes, to the extent of the law and usually not as much if you are aware of the law or have a tax professional that really understands tax law and works for you and not the IRS. A word of caution: Just because someone is a “CPA” does not mean he know tax laws as good as you need them to know.

In a conversation about taxes with a family member I was at once saddened and enraged. Saddened that he felt so helpless and paid such a huge tax bill and enraged as he intimated that my not having a huge tax bill was somehow illegal. As I have reflected on that incident it occurs to me that he like so many others suffer from being overwhelmed by a complex system of taxes and too unwilling to seek the best solutions. I know that tax law is not easy to understand but there are those who do, find someone and use their help. A MUST read in my opinion is Tax-Free Wealth, by Tom Wheelwright.

Understanding and reducing all taxes and applying the re-found money in favorable ways will make your lifestyle more comfortable now and can bless generations to come.

Questions to consider: