Harvard
University’s motto, Veritas, is Latin for
"truth." Harvard’s Alumni magazine
(Jan-Feb 2006) featured an article, “The
Middle Class on the Precipice,” which
revealed an important truth: The problem with
the home economics of Middle America is taxes.
Taxes
are why the average family – even with two
parents working outside the home - has less
left over at the end of the month than 30
years ago – when the average family had one
wage earner. Families have less because taxes
take away more.
The
article compares the average American family
in the 1970s to 2004. The same average family
makes more money but has less to spend freely
at the end of the month. In fact the average
family, 50th percentile-median, has $800 less
a year.
The
average family, two parents and two kids, in
the 1970s made $41,670.00 – adjusted for
inflation to today’s dollars. There was one
wage earner in the family. The average family,
two parents and two kids, in 2004 made
$73,770.00 in current dollars. So, where did
the money go?
The
percent of money spent on food, clothing, and
major appliances went down. The cost of
entertainment (including computers), housing
and health insurance went up. Others washed
out, like more on pets and less on tobacco. But
the loss of money based on personal choices wasn’t
the cause of this losing balance
sheet. It was taxes.
Harvard
Magazine blithely commented that the rate
of taxation from all sources increased from 24
percent to only 30 percent. Stop. Do the math.
Here’s the truth the Harvard authors
revealed even though they didn’t revel in
it. If the tax rate had stayed at 24 percent,
then the average family would have kept
$4,426.20 more of their own money. They earned
more, but kept less because of government
greed.
Let’s
see it again: 24 percent of $73,770.00 is
$17,824.80; 30 percent of $73,770.00 is
$22,131.00. That’s $4,426.20 lost to taxes
– for the same income. That’s $368.85 a
month the average family is spending on
reliable, sustainable revenues --
"investments" -- for vital
infrastructure and public services. Uh-huh.
Bull. Ask the family of firefighter married to
a teacher with two kids what an extra $368.85
a month means to them.
The
average family’s taxes didn’t increase to
pay the salaries of the teachers and
firefighters on the government payroll. Those
meager increases were covered and surpassed by
inflation. The growth of local, state and
federal governments exceeds inflation.
The
additional money the family spent on cars,
insurance, dry cleaning, etc. is a function of
two parents working outside of the home. The
Mom and Dad feel like they both have to work
just to keep up. Not to get ahead of their
parents. Just to keep up. Yet, they are
both working to support government.
Suppose
only one person worked. Say the average real
wage hadn’t increased a penny, so the income
for a family of four is $41, 670 in the 70s
and now. If the average tax rate is 24 percent,
then the family paid $10,000.80 in taxes. The
same family, same wage, pays $12,501.00 when
the taxes are an average of 30 percent. The
difference is $2,500.20 or $208.35 @ month.
Two
hundred dollars more money at the end of the
month for a family earning under four thousand
a month is a lot of money. It means a vacation
for the family. It means saving for college or
retirement.
Yet,
family needs count little against government
greed. Are governments doing so much more,
better, in 2006 than in the 1970s to increase
their wealth on the backs of working families?
What government services and products make up
the money lost to the average family? What
government good is so great that it’s worth
this burden?
This
price, the soaking of the average, let alone
the so-called ‘rich’, Americans is lost on
the Big Government Republicans and Socialist
Democrats. President George Bush doesn’t get
it either, or he would have vetoed the budget-busting,
tax-feeding programs from his two terms.
To
his, and other Republicans’ credit, Bush
supports federal tax cuts. But he hasn’t
served the American people rightly when he
fails to serve them well with forcing enough
real spending cuts - beyond the bogus cuts in
the rate of growth.
It’s
even worse in my Virginia. In a Republican
majority state Republicans are the problem.
So, Republicans may lose some elections in
‘06 and ‘07. So what? Republicans better
fix the problem before ‘08.
--
March 20, 2006
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