THE LAST time there was a debate about taxes, Democrats wanted to make sure "the rich" paid their "fair share."
As usual, Republicans lost the debate because they could not counter the presupposition that government, no matter how big, is good, and that those who want to keep more of what they earn are greedy and lacking compassion.
The debate about taxes (which should begin now and continue through the 2000 presidential election) should focus on what is fair about big government's demands for our money.
Is it fair that tenacious and gifted workers must hand over more than half their income to grasping government? Is it fair that middle-income people pay more than one-third of their earnings to government?
We need someone to stand up for the taxpayer. The place to begin is with legislation that requires full disclosure of how much of our money government takes. If we can have truth in labeling and truth in lending, why not truth in taxing?
The fact is that while the economy booms, real wages have been stagnant for 20 years because hidden taxes have absorbed pay. The Cato Institute finds that more than one-fourth of every dollar employers pay for average manufacturing-wage workers goes to government. The government tax bite amounts to $4.10 per hour for such a worker, but only about half of the real deductions are listed on the worker's pay stub.
Cato analyst Dean Stansel offers this example: "Assume that you're an average manufacturing-wage worker who receives a paycheck twice a month. Your gross earnings cost your employer $1,133.33 per pay period, but when the employer's share of the payroll taxes is included, your employer spends $1,289.76. But your take-home pay is only $934.73."
If the current withholding system didn't exist, you would get the entire $1,289.76 and have to go to seven different windows to pay your tax obligation. You would pay $86.70 for the employer share of Social Security and Medicare; another $86.70 for the employee share of Social Security and Medicare; $56.12 for workers' compensation; $9.28 for state unemployment insurance; $2.33 for federal unemployment insurance; $85.31 in federal income tax; and $26.59 in state income tax. That totals $353.03, only half of which appears on your pay stub. Your pay has shrunk 28 percent.
Out of the remaining take-home pay comes property taxes, sales taxes, gasoline taxes, cigarette taxes, alcohol taxes and more. Other hidden costs of government include complying with the impossibly complex 10,000-page tax code and complying with government regulations
Today, the total federal, state and local tax burden in America is at an all-time high. According to the Tax Foundation, a median-income, two-earner family pays nearly $23,000, or roughly 38 percent of its income, each year in federal, state and local taxes. That is more than most families pay for food, clothing, housing and transportation combined. The question is not how much government "needs," but how much we deserve to keep.
The bigger government gets, the more it suppresses freedom, real growth and opportunity. It isn't fair when we are required to turn over so much of our money to a system that claims to be better and more "compassionate" at spending it than those who earn it.
The next presidential campaign should feature at least one candidate who will fight class warfare and envy head-on. That candidate should pledge to put more of our money back in its proper place: our pockets. Charity and compassion should begin at home, not with government.
Cal Thomas is a syndicated columnist.
Pub Date: 4/15/98