Our Founding Fathers designed a system of government that was dependent on the consent of the governed for its existence. Wary of a strong central government, the Founders created a system where the federal government could not be funded without the authorization of citizen legislators who would serve their country for a brief period of time and then return home to pursue private affairs divorced from and not dependent on the tentacles of government.
One of my favorite quotes (and favorite political theorists) is that of Edmund Burke, the great British Whig ( and perhaps father of modern conservatism) who stated in 1770, “the only thing necessary for the triumph of evil is for good men to do nothing.” Burke also stated that “…people never give up their liberties but under some delusion (1784).” He also stated “… true danger is when liberty is nibbled away, for expedients, and by parts (1777).” Good men of the 21st century should pay close attention to the 18th century British politicist. Let’s begin with the “payroll tax” which has been much in the news the past fortnight.
Washington’s ineptitude to accomplish any act of sound fiscal responsibility is firmly established by its recent action to extend the recent payroll tax reduction for an extra two months. Big Whoop. Social Security, a horrifically bad idea to begin with is bankrupt, so what does Congress do? It reduces the revenue earmarked to support social security by 30% ( from 6.2 to 4.2%). Congress is fiscally retarded. However, what really ought to be debated is the complete elimination of “payroll taxes” and “employee withholding” all together. Edmund Burke would approve. If folks had to write a check to the government themselves for these taxes, there would be an immediate rebellion.
For those of you who have never owned a business, let’s review how payroll taxes work and their history:
No surprise here, but that great man of the people, Franklin Roosevelt (elitist blowhard) came up with the idea of payroll taxes because he felt the American people were too dumb to realize that they would be scammed. Here is the way they work: Joe Sixpack gets a job at Bubba’s Micro- Brewery. His true wage ( cost to Bubba’s) is $31 /hour, but Bubba’s only pays him $ 18.60/hour. Why? Because Bubba’s is required to pay 7.65% of his wages to the IRS for Social Security (6.2%) and Medicare (1.45%). Bubba’s also pays all of Joe’s health insurance at a cost of $6,000/year because the IRS allows Bubba’s to deduct all of these costs, but doesn’t allow Joe to shop for his own insurance, get a better deal and then deduct all these expenses on his tax return. Joe is in the 25% tax bracket ( 35k to 85k). Joe earns $50,000/year and the government takes 25% of this, $12,500 in federal taxes. Joe receives a weekly payroll check of $744. If there were no withholding taxes, Joe would likely receive $ 64,825/year or $1,247/week, 40.44 % more than he does now. ( This does not include any state taxes). The $64,825 is calculated as follows:
$50,000 base salary
$ 3,825 FICA Tax Paid By Employer
$ 6,000 Health Insurance Paid By Employer
$ 5,000 Pain In The Ass Expense
For those who doubt “the pain the ass expense,” you obviously have never run a business. An employer has to make a margin off of every expense line item to stay afloat, the cost of complying with and capital risk identified with federal employment regulations surely exceeds 10% of gross wages.
The real debate in Washington should be “why do we allow the federal government to enslave us?” Rob says LIVE FREE OR DIE!