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Monday, 28 September 2015 10:49

As We Grow Older Must of Us Learn to Accept That All Things Are Not Always What They Seem

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As we grow older most of us learn to accept that all things are not always what they seem. When it comes to government promises and the intervention of the tax man, this lesson can be particularly acute. This was brought home rather strikingly for a Lotto Jackpot winner last week. Dale Summey, a North Carolina handyman, won a scratch-off for $10 million dollars. Yet after choosing a lump sum payment and paying the IRS, Summey was left with $4.1 million.

Now $4.1 million is still a lot of money and some might argue that is was free money. But a commentator who responded to the news story had a really good point inspiring this week's editorial comment.

"Hey guess what? You just won 10 million dollars! Well actually the government won 6 million and you get to keep 4 million as a finders' fee. As a bonus you get to pay taxes on every dollar of that as you spend it."

It was the part about "paying taxes on every dollar as you spend it," that interested us. We weren't alone, further down in the comments we found this simple take:

"I know nobody really cares, because most of us aren't millionaire capitalists or lottery winners, but people should be grossed out by the number of times the government dips their hands in other people's wallets. You earn money, it's taxed. You spend money, it's taxed."

Well, here at the Sun Bay Paper we do care. And it is gross how often we are taxed on money. It's one thing to pay taxes on money earned; living in a great country with fantastic security and services, we should all be proud to pay our fair share. It's one of the reasons we are so rich as a Nation.

But it's the DOUBLE TAX problem that bothers us the most. And sometimes we think it should be called a NEVER ENDING TAX.

Here's a great example. Let's say you buy a new car. It costs $20 thousand dollars. You pay a hefty sales tax on the auto. Five years later, you sell it for $10 thousand dollars. Then the buyers pays another tax. He sells in two years for $5 thousand and finally it gets resold twice more, once for $3 thousand and in the end for $2 thousand. All together the government will collect tax on $40 thousand dollars; more than double the initial worth of the car.

To add injury to insult, even when the car is reduced to parts the sellers and/or buyers of the parts will continue to pay tax, and if they are installed, more taxes are paid on the services. As you can see, we never seem to escape the paying on things even long after they enter the public domain with taxes paid as a form of "entry fee."

Let's take one more comment from the article to wrap up this point.

"It's a shame that the Feds and State take so much in taxes. Lottery tickets are purchased with post-tax income. The lottery ( a government agency) takes a large percentage and keeps it, then they pay out less than what is shown ($10 million dollar ticket, but if you want it now, it's only $6 million), then they get taxed by the Feds on top of that, it's a complete scam. Lottery winnings should be tax free like it is in Canada. The proceeds from the lottery should go into school budgets ONLY, not the General Fund of each state. That was the reason for the lottery in the first place."

Why is it our government is never satisfied with a big bite of the apple? Or even two bites? No, it appears to us that even when all that is left is the core, the tax man even wants to tax us to throw it in the garbage in the form of "disposal fees."

Deficits in the U.S. are so large they will never be repaid. Tricks are frequently played with how they are reported and at times headlines make it appear an administration is actually lowering the deficit but if we count unfunded liabilities or underfunded commitments like Social Security or government pension, it is clear we will never pay off the debts our government has pledged to pay.

Yet, through it all, taxes are raised on existing channels and new ones are constantly being invented. To us, it's a shell game but without a pearl or oyster inside for taxpayers.

Now if only we had bought that winning ticket, we could have paid off our taxes. Smile!

Read 1863 times Last modified on Monday, 28 September 2015 11:04

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