Unlike a lot of people, I like to know where my money goes. I book my expenses month-by-month along with my income and summarize it at the end of the year. In addition to knowing where I am spending money, I also get an idea of how much in taxes I am paying.
The percentages shown are a percentage of gross pay before any deductions. Total Expenses represents all discretionary and non-discretionary expenses to include housing, utilities, gas (excluding taxes), health and dental expenses, life and auto insurance premiums, charity, and special one time expenses.
The issue of taxes has been a heated one lately. I find most folks I talk to who think our current level of taxes is acceptable, really don't understand how much they are paying. My tax and regulatory expenses break down as follows...
Not exactly easy to read, here is a list...
- Federal Income Tax
- State Income Tax
- Social Security (this is tax as the government has violated any Good Faith in the program)
- Medicare (same as Social Security)
- Real Estate Taxes
- Vehicle Registration (thanks former governor Ritter!)
- Gas Tax
- State and Local Sales Tax
In addition to these items there is a list of taxes that are difficult, if not impossible to quantify, that are also paid by me...
- Trickle down costs (SS, Medicare, income taxes, etc) in goods and services
- Special taxes and fees (alcohol, dining out, environmental fees)
- Hospitality and travel taxes/fees
The data shows that I pay 26% of my income to taxes/fees/regulatory expenses, but I would argue with the above, that the real number is closer to a third (33%). But the primary take-away for me is that in 2010 I paid the government more than I paid myself--twice as much!! 26% of my income went to government, only ~11% went to me.
If I break this down by each work day, assuming an eight hour day, I am working 2.64 hours to fund the government. I am able to put 52 minutes of a work day into my own pocket after expenses.
This is forced servitude! As a consumer of government services, and a proud member of the private economy, I do not see the value that should represent 2 hours and 38 minutes which is forcefully taken from me each day. Additionally, I am limited in my ability to reduce my tax and regulatory liability to reflect the value that I am receiving as I can in the Free Market--I live a very conservative lifestyle.
One of the ways the government has incentivized its own growth is via the increase in government employees, whose math is somewhat different. A government employees derives 5.36 hours of benefit for the 2.64 hours he must forfeit each day given the same income and liabilities--a flawed assumption since government workers tend to make multiples of private sector workers.
If the average American would conduct this analysis with his own numbers, we could have much more informed conversation about the size and scope of government. We could also put the situation in Wisconsin, which is spreading to other states, in proper perspective.