Like many of us I struggle with having to pay taxes each year. I often wonder why I put aside more and more each year to pay the government yet get lesser and lesser services.
For instance, I’m drawing social security. I get about $20,000, yet nearly half of that goes to pay Medicare. I was under the false impression once you turned my age Medicare was essentially free since you had been paying for it forever. I asked my tax preparer why I was still paying in to social security when I was past the age and wasn’t seeing any return. She said that’s the way it is, deal with it.
But enough about me. I believe many of us think we have had to pay the tax rates we are now subjected to for decades. That’s simply not true.
Over time income tax has increased as more and more departments and bureaucrats were added to our government. New types of taxes, such as taxes on tobacco and alcohol were initiated. Then there are estate taxes, property taxes and sales taxes.
Everywhere you turn and everything you do involves a tax of some type. I understand the government needs our money to function, but how much and for how long? I’m not advocating this but our leaders, in the 18th Century revolted and won the Revolutionary War, primarily because the Brits and King George were taxing the new American colonies heftily. Maybe our modern-day leaders should take note.
Beyond income tax, which rates vary depending on your income, the federal government has created several additional taxes. Estate taxes were implemented in 1916, followed by the gift tax in 1924. Franklin Roosevelt created the Social Security Act in 1935, which began to take a large slice out of our paychecks.
In 1932 Herbert Hoover implemented the Revenue Act, which meant the government could now tax gasoline. In 1932 that rate was a penny a gallon. By 2023 the rate had risen to eighteen cents per gallon. The states decided to get it on the gas revenue and levied their own gasoline taxes. In 2023, California leads with a 68 cents per gallon rate. Alaska was the lowest at 15 cents per gallon.
In 1978 the alternative minimum tax, a type of federal income tax, was enacted in 1978.
And then there are the state taxes, the largest being the sales tax. Depending on the state you may pay from four to ten percent on each item you purchase. States also levy property taxes, and they vary greatly from state to state. Most states also levy their own income tax.
Let us not forget what are commonly called the “sin taxes.” All states slap a tax on cigarettes with the highest being New York, where a pack is taxed at $5.35. Alcohol is also taxed heavily. A gallon of spirits in Washington is taxed at $36.55. Those in Missouri only pay $2.00 per gallon.
I haven’t even touched upon taxation at the local level. A third income tax is levied by most cities and of course there is all sorts of taxes to operate schools, police, fire, libraries, etc.
Whew, my head is doing a Linda Blair Exorcist turn. One wonders how we make it in this world with all these taxes we must pay.
Mike is right on. With respect to the premium, half could include the supplement and the Geo. W. Bush part D pill plan – plus co-pays and donut holes. If Mike gets increased social security benefits the Government will take more. A retired worker & saver gets much higher premium costa PLUS more income taxes. FDR’s plan will run dry if changes are not made and guess who will pay more dollars?
He is talking about taxes – not copays, etc. If you wish to have separate Plan B, Supplement and Part D then that is your decision. Not the governments. I have no idea what you mean when you say “A retired worker & saver gets much higher premium cost PLUS more income taxes.” If Mike makes so much that he has to pay the maximum amount then I have no tears for him.
Even at the highest rate out there for Part B it would only be around 30% and at the current $174 about 10%. Exaggerating to make your point is kind of sleazy.