As the year’s midpoint approaches, it’s good to assess your earnings. Trouble is, a lot of the money went to the government. How much, exactly?
The Tax Foundation calculates that April 21 was 2014’s Tax Freedom Day. In other words, the earnings of the 2,654.4 hours of the first 110.6 days go to the government. Then our earnings can finally be our own.
For every eight-hour workday, we labor for two hours and 26 minutes to pay federal, state and local taxes. Without taxes, you could leave your job every day at 2:34 p.m. and earn the same salary.
One hour and seven minutes goes to corporate and personal income taxes, which were unconstitutional until 1913. Ending this tax on productive earnings would eliminate 46.24 percent of the tax burden. It would also allow us to keep our finances private.
If the American people could keep these earnings, instead of turning them over to the federal, state and local governments, they could pay for almost all of their housing costs. They currently have to work for an additional one hour and nine minutes just to afford them.
A total of 35 minutes of the eight-hour workday pays for Social Security and Medicare. If Social Security was privatized, instead of constantly decreasing benefits, personal retirement accounts would be overfunded. We dedicate an average of 20 minutes of our labor to personal savings. It should be more like one hour and 12 minutes.
An additional 19 minutes goes to consumption taxes like excise and sales levies. Some people suggest our country could operate on a “fair tax” of entirely sales taxes. But such a method of taxation has its own problems. Critics counter that a national sales tax is regressive, favoring the rich (although this depends on how you measure “rich”). They claim foreign companies would have an unfair advantage in the international market over their domestic counterparts.