Bread’s major ingredient is… taxes. Every raw material, process and delivery mode is taxed. Income, payroll, property, vehicle, gasoline: you name it. Such hidden taxes really Sock It To Us, don’t they?
Now the new administration is raising hidden taxation to an art form.
This horrendous additional hidden tax burden is being slipped to an unwitting American public. It is covert, exploitive, offensive and damaging to our on-going economic miracle. Hence the vulgar title, “Hide The Salami.”
This has all the earmarks of a Las Vegas magic act or an outright con game. There are set-ups, distractions, then rounds of applause as your wallet goes missing.
First, the set-up: no income tax increases on families earning less than $250,000. Regular folks think they would be better off. However, they will pay much more in taxes in other ways.
Second, the current distraction: AIG bonuses. The Administration has fanned an ember of envy into blazing class hatred. Legislated bonus clawbacks violate the US Constitution. Thoughtful people see Congress as ranting know-nothings. Unfortunately, populist pundits are driving average folks into a frenzy over something neither understands. Even our new President said, “I know a lot of you are outraged about [AIG bonuses] – rightfully so. I'm outraged too." A sorry sideshow.
Finally, the theft of your wallet. Here are the chief culprits:
1. Carbon tax. By taxing politically incorrect sources of energy--high carbon emitters such as coal plants--those sources of energy would have to raise their prices or go out of business. Such pass-through taxes are hidden.
How much would this hidden tax be? Estimates range from $80 to $300 billion a year.
But that is just the beginning. As costs go up in the US, more manufacturing will leave the US for locales without a carbon tax. This is exactly what happened 25 years ago with industries such as foundries. Those jobs moved to South America and Korea and were lost forever. Such job loss is a secondary hidden tax.
2. Green Energy support. This is a related but different energy tax issue. So-called green or renewable energy (wind turbines and solar) requires higher energy prices to survive. In a free market, we can simply chose a lower cost provider and are OK.
However, when the government “anoints” Green Energy as a winner, they jigger the system so Green Energy costs the same. This introduces inefficiencies into the marketplace. Consumers no longer get the best possible price. Instead they pay a hidden “inefficiency tax.” This tax is the difference between the market-determined price and what consumers have to pay. While difficult to determine, I expect our energy bills to go up at least 20%. This is in addition to the hidden carbon taxes, above.
3. Budget. The Administration’s budget assumes ridiculously optimistic economic growth rates. In fact, the nonpartisan Congressional Budget Office just estimated that over the next decade the deficit would exceed Ten TRILLION dollars. That is $33,000 for each US citizen, child and adult. This will be paid for with a combination of inflation and higher taxes. These will be new taxes on top of what we are already paying.
4. Healthcare. Instituting national healthcare will be the greatest bureaucratic change in the history of the US. Yet, the Administration simply adds the cost into their current budget as if every one understands it all and agrees. Absolutely not true!
Worse yet, the current Congress may ramrod through a new healthcare system using a filibuster-proof technique, known as “budget reconciliation.” This would throttle all discussion. The AIG funding distraction was stampeded through the same way. The country as a whole needs to spend months and months having experts and citizens alike--not legislators--hammer out a plan that will work. Otherwise, with a cruel twist of the Target store slogan, plan to “Pay More, Get Less.”
5. Lax enforcement on Illegal Immigrants (II). While special interests tout the contributions of II’s, the reality is that they are a net cost to the rest of us. This cost is their unfunded use of health, education, social services and our criminal justice systems. In California alone, II’s are a $6 billion annual drag on the budget.
Also, there are the remittances. Last year II’s sent almost $70 billion out of the US. Thus, II earnings do relatively little to help the US Economy. In fact, hiring an II is almost as bad as sending a job overseas. As such, II’s subvert the Stimulus Bill’s “Buy American” provisions. Also, every employed II demotes an American citizen to the unemployment line. Increases in US unemployment are hidden taxes.
6. Social Security (SS). I worked since 1957. Am I getting a fair return? To answer that question, let us calculate the current value of my contribution. Using a conservative 5% annual return, my fund was “worth” $455,772 in 2008.
SS was designed as an insurance program, not welfare. As such, there is no “means testing.” It is my money--held in trust--and it should be paid back to me. Assuming I live another 30 years, I should get back $29,649 annually. This assumes the same 5% return and ignores inflation. But I am only getting back $20,916. The difference is $8,733. This amount is my personal hidden tax. Over my (hopeful) 30 years left, that tax will be $261,990.
But wait, there’s more. As a SS recipient, I must also submit a “Social Security Benefits Worksheet.” No benefit to me, of course. The form calculates the amount of my SS benefit that is taxable. Withdrawals from my rapidly shrinking IRA increase my taxes. The form has a design flaw: there is no place to get credit for my $8,733 hidden tax.
This looks like small potatoes next to all those trillions. But these are my potatoes.
9. Medicare Advantage HMO. Here’s another good one. After months of study and help from a trusted insurance advisor, I joined a Medicare Advantage HMO. In effect, I gave up some benefits and personal choice for reduced cost. Apparently 1 in 4 Medicare participants did the same.
But the new Budget Director Peter Orszag wants to end the plan. At current rates that will raise my premiums over $2,000 annually. This increase will be one more not-so-hidden tax on me.
10. Let’s not forget the new Education mandate: college for everyone. Sounds good at a political rally. But remember that the average IQ is 100. This is not Lake Woebegone where everyone is above average.
What would all these heretofore unColleged people learn? What they should have learned in high school? How to fund parties with student loan money? Brain surgery? As with most new current government programs, this sounds attractive in theory and has no details. But I am sure I’ll be paying.
Summary. There are MANY more such taxes being levied on the American public. Perhaps mailing Tax Day teabags to the White House has merit. Personally, my bag will symbolize a hidden tax: it will be used.
Chuck Carroll
Footnote on Global Warming and carbon tax. They are based on an unbroken chain of unproven premises:
a. Manmade carbon emissions are causing global warming, and
b. Such warming is dangerous, and
c. Carbon reduction will “correct” global warming, and
d. Taxing carbon in the US will reduce atmospheric carbon worldwide.
For a carbon tax to work, all of these improbables must turn out to be true. This is statistically unlikely.
Nevertheless, Global Warming True Believers--often called Warmists--claim that this charade is a “risk worth taking.” Why? Because the much-hyped results could end civilization as we know it.
The pendulum is swinging against these “agenda scientists” and other Warmist fear mongers. Regular folks are questioning both the cost and justification. Warmists are nevertheless steadfast with evangelical zeal. Flying in the face of reason, their movement is faith-based.
This is the definition of a religion. Warmists are free to practice a religion. But when the government levies a huge tax--be it “cap and trade” or a “carbon surtax”--on all of us, it funds and therefore de facto establishes a National religion. This violates the First Amendment, which begins “Congress shall make no law respecting an establishment of religion…”
I look forward to the ACLU correcting this.
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