April 15 is upon us: Tax Day, our national day of introspection about the burden of government. It has been said that if elections were held right after Tax Day, we wouldn’t be in this economy-crushing fiscal mess.
But is that really true any more? Half of us aren’t paying any taxes on April 15. Many Americans receive a tax refund, which they understandably but mistakenly view as a “gift” from the government – a bag of coins tossed from Uncle Sam’s sedan chair to the cheering peasants as he passes among them. People grow positively ecstatic about their tax refunds, which they generally claim long before April 15. Some of them borrow money against the anticipated refund amounts. Retail outlets plan advertising campaigns around the appearance of those magical government checks in our mailboxes.
Thanks to the special sauce of tax credits – welfare pumping backwards through the tax code like feedback through a sound system – some people get a “refund” exceeding what they paid into the system. Even those who made a net income tax contribution over the year don’t fully accept the argument that Uncle Sam is merely refunding money he “borrowed,” without paying interest. They might understand this argument intellectually, but it boils away to vapor when that Treasury check shows up in the mail.
Popular affection for the tax refund check is a frank admission of poor financial self-control: gratitude for Washington running an interest-free savings account, funded by “contributions” the taxpayer never misses, because they’re pulled invisibly from each paycheck through withholding. The tangible outcome matters far more than the unseen input.
And those inputs are a big part of the reason this country is tumbling into a Big Government death spiral. To put it simply: every day is Tax Day.
Most of us receive regular paychecks, from which taxes are painlessly extracted. Young people marvel at the difference between Gross and Net Pay on their first few paychecks, but they quickly grow accustomed to the difference. A sizable part of the burden is further hidden as “employer contributions,” which are most certainly part of our labor cost, but we never really see them at all. Rest assured that if your gross pay works out to $10 per hour, but the employer must kick in another $4 in mandatory “contributions,” then you’re costing him $14 per hour… just as surely as if he paid every nickel of it to you.
Then there are all the levels of taxation built into everything we buy, from property and automobiles, to food and small retail items. Many of these taxes are collected from corporations, who pass them down the pricing chain until they land in the laps of consumers. Capitalists are conscripted into service as the collectors of these unseen taxes, which most Americans end up paying every single day. For this reason, the number of true “free riders” who pay nothing into the system is much smaller than the number of people who pay zero net income tax.
Don’t forget about that mountain of debt the government has been racking up, either. Those debts must be paid someday. The past few months have seen several efforts by tax-hungry Democrats to invoke the very debt they created as pressure for tax increases. That’s the only reason they ever pretend to be concerned about deficit spending. Allow the debt to grow to $20 trillion, $25 trillion, or beyond, and you will soon find those demands for higher taxes impossible to resist.
No one who accumulated the national debt will step forward to claim responsibility on the day the system collapses; none of them will volunteer to forfeit their personal fortunes or lavish benefits to clean up the disaster, and even if they did, such personal sacrifices from the political class would not be enough to make a difference. They will command you to make sacrifices, and you will be called “unpatriotic” if you object. Right now, the government taxes an average of $20,000 each year from every American household… and spends $30,000. You and your children will be expected to cover that spread.
Even this level of taxation is not enough to satisfy the State’s hunger for power, so it doesn’t always seize, or borrow, the money it needs to fund its agenda. Instead, it issues mandates and regulations that cost trillions of dollars to comply with. None of those compliance costs are counted as “taxation,” but all of it joins the invisible waterfall of government burden flowing down to the American family. You see none of it, but you pay all of it.
Tax Day is really a bit of a sham – a deadline for filing paperwork, but no longer of any deeper significance to most of us. According to the Tax Foundation, we’ll finish paying off the burden of government on April 18, five days later than last year. For high-tax states like Connecticut, tax freedom can arrive as late as May 13. If we were actually paying enough taxes to cover Washington’s runaway spending, we’d have to tack a full twenty-one days onto that schedule. But only our accountants, small business entrepreneurs, and self-employed are viscerally aware of this burden, because they’re the only ones writing checks to the Treasury on a regular basis. The rest of us take April 15 to wallow in a bit of hollow self-pity and pretend we remember what it feels like to be independent. The government organisms feeding on us long ago mastered the art of making it painless, every other day of the year.