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My Humble Opinion |
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| Hard work is good for you. It is
better for the government. Here is the scenario: A musical composer applied for a job with a theatrical production company to write the music and lyrics for a new stage production. The arrangement was, lyrics and music and all artistic rights in return for a compensation package of $100,000. The composer agreed, thinking this would give him an opportunity to purchase that very special collector’s automobile he had been dreaming about for years and is now available for $95,000. At the end of his contract the production company was happy with the composer’s work and wrote the promised check to the composer's financial manager. Upon the manager's presentation of the composer's paycheck, the composer became very angry and retorted “They promised me $100,000 and this check is for only $49,560 what happened to the rest of the money.” The financial manager replied, “The rest of the money went for taxes. Your government has determined they are entitled to share in the fruits of your labors. You were paid $100,000 and that placed you in the federal 28% tax bracket so that left you with $72,000. Then we had to withhold federal self-employment FICA taxes of 12.4% and medicare taxes of 5.8% and those taxes totaled another 18.2% or $18,200 so that left you with $53,800. And, the State of Arizona’s share of your labors and profits is another 4.24% or $4,240 so that left you with $49,560. Here’s your check, go spend it wisely.” Well, there goes my dream of the special collector’s car so I guess I will have to settle for a new Cadillac that I can purchase in these troubled times for $45,000 and I will have nearly $5,000 left over which will be enough for my wife and me to drive from Phoenix to San Diego in our brand-new car and purchase a cruise on the Mexican Riviera. Wine, dine and sunshine. Life is good. Off to the Cadillac dealer and after selecting the model and options and negotiating the price to $45,000 the composer said “I’ll take it. Hooray!” The dealer handed the bill to the composer for $49,503. The composer shouted “What? We agreed on $45,000. There goes my cruise” The Cadillac dealer said “Arizona is entitled to share in the fruits of your labors and profits and their share of your purchase is State, County and City sales taxes of 8.3%, or $3,735 and Registration and License fees of $768 for a total Arizona share of $4,503 and the dealer charges $50 as a documentation fee bringing the total purchase price to $49,553. Here is a check for $7.00 as change for the $49,560 check you gave us. Go spend it wisely.” This might be a true story. Somewhere in this vast country a similar scenario has happened. Now, let’s look at the big picture. A man worked and earned $100,000 and governments took $50,440 right off the top leaving the worker with $49,560 to spend. When he spent it, governments grabbed another $4,503 in additional taxes. This is a total of $54,947 (or 55%) of this worker’s earnings. Plus, do not forget, to have $4,500 left over to pay the state governments their share of his purchase, the worker had to earn $9,000 BEFORE income taxes. Should you wish to purchase a $45,000 automobile, you must earn $100,000 to do so. Your governments tax you when you earn money and tax you when you spend money, and, if you do not spend it, they will tax your estate when you die. When the George Bush tax cuts expire next year and the Death Tax returns to 55%, your government will have taxed the first 50% when you earned it, and then grab the remaining 50% when you die. And the Obama Democrats want more! It never occurs to the government to stop spending. That’s the way I see it. David July 17, 2009 |
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