Thursday, June 28, 2012

Part one. Tax Freedom is a Misnomer


Part one. Tax Freedom is a Misnomer
Tax Freedom Day is the day when Americans have earned enough money to pay off their total tax bill for the year; symbolically of course. Tax Freedom Day represents payment of all taxes, Federal, State, Local, and corporate; for example, FICA, income, sales, property etc., at all levels. 

In 2012, New Jersey taxpayers worked until May 1 (ranked 2nd nationally) to pay their total tax bill. The Tax Freedom Days of neighboring states are: Connecticut, May 5 (ranked first); Delaware, April 17 (ranked 17th); Pennsylvania, April 18 (ranked 14th); and New York, also May 1 (tied with New Jersey). (1) Connecticut, New York, and New Jersey have had the highest tax burdens in the country for some time.   

So, although I never would have guessed it, our tax burden is just as bad as New York’s, and that’s saying something, especially if you’ve driven on their roads.  At least NJ has good roads for the most part, and our sales tax is lower. Another way to visualize Tax Freedom Day for New Jerseyans is to say you worked 121 days, or 33% of the year, to pay all your taxes. Of course, we pay taxes every day in some form or another, so Tax Freedom Day is just symbolic. But as we all know by now, our vaunted American society couldn’t get far without taxes.    
 (1) Source: the Tax Foundation.
 
As a society, spreading societal dollars around to those who need it, and paying for good education and government services, whether State or local, will always be needed. Taxes are essential to government and order. Laws are needed, hence the lawmakers and enforcement agencies. Standards are needed, hence the standards making bodies like ANSI, the American National Standards Institute, responsible for tens of thousands of standards from the size of pipe threads, to computer languages.

Also there’s IEEE, pronounced “eye-triple-e,” which is the Institute of Electronics and Electrical Engineers, the world’s largest professional organization.  Or even UL, Underwriters Laboratories, which promotes product safety among other standards. All of them promote commerce and enterprise to an extent not possible without them.
Regulation is needed as well, just like the corner traffic light, a combination of standards and regulations, or obtaining a driver’s license for the privilege to run through one. Standards and regulations are all necessary until circumstances change and they can be amended to conform to the exigencies of the time. Take the worst example, legal slavery, now universally banned and condemned. Britain banned it in 1833, a law of the best kind.

Yet slavery is worse than it’s ever been because of illegal trafficking, slave labor, forced labor, and pittances for wages in many countries. So laws, regulations, and standards are only as good as the people that make them and adhere to them. Yet the crime rate in the US continues to decrease. Are we getting better? Not according to the evening news we’re not. More on New Jersey taxes in Part two, Paying Taxes.

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