A couple of the things that I've enjoyed doing while being in between seasons in the US recently is getting my daily dose of liberty from two of my favorite truth-tellers and liberty lovers, Peter Schiff and Tom Woods. Peter Schiff has a daily radio show from 10am-noon every weekday and Tom Woods has just started his own radio show in the last month which airs directly after Peter's; best 150 minutes of my day! Normally when I'm abroad, either the internet connection is too slow, non-existant, or I'm too busy to listen in to the shows during the day, so I've really relished this opportunity these last 2 months to regularly get information on current events from people I trust.
The other day on the Tom Woods Show, he hosted WWE wrestler "Kane", real name Glenn Jacobs, who has recently become more and more vocal about his libertarian viewpoints, appearing on radio shows and writing op-eds in newspapers, most notably on the subject of the Internet Tax Mandate, known elsewhere by the Orwellian title of the Marketplace Fairness Act.
As most of Woods's interviews are, this was engaging and enlightening with well thought out questions which were answered intelligently by Jacobs. They covered much of the usual ground, including how Jacobs became a libertarian and what his colleagues in the locker room thought of him and his view points. About midway through, Jacobs touched upon an important point that resonated strongly with me and with Woods as well. He mentioned that as part of the WWE he is employed as a subcontractor and not as an employee of the company and as such is not subject to tax withholding. Tom mentioned that he is in a similar situation since he has no set income stream like wage workers and salaried employers have and therefore has to file quarterly taxes like many other self-employed workers have to.
I count myself in this group. My husband and I have our own S-corporation and are employed as subcontractors to our boss. We formed this business a little over two years ago once we got married since my husband is Australian. Previously, I was issued a 1099 by my employers and paid taxes that way. My husband was not required to pay US tax.
Jacobs mentioned in his interview that if he ever were elected to be President or, more appropriately, Dictator for a day, the first thing he would do would be to eliminate federal tax withholding. If you get a regular paycheck from a company or corporation, your paycheck is automatically deducted a certain amount for Social Security, Medicare, and various other taxes. If you're making $48k/year, you don't get $1000/week as a paycheck (for the sake of simplicity let's assume only 4 weeks in a month). You probably only get about $800 of that. But you don't even notice the amount that's taken away from you. Psychologically, it was never yours to begin with so you don't even miss it. Maybe you never even see a paycheck, you just get a direct deposit.
Now imagine getting your entire $1000 paycheck every week like clockwork. Instead of $3200/month, that's an entire $4000/month, wow! That's almost an entire extra mortgage payment per month! You see your bank account accumulating quickly, you see those student loans getting paid down, you see a nice beach vacation in your future with the kids, you see trading in the car you've had since college for a newer model, you see being able to help your brother with a small loan, you see putting down an appropriate 20% down payment for a new home. Oh but wait, March comes around and June and September and December and greedy Uncle Sam needs his handout. But instead of just $200 dollars that you give each paycheck, you realize that those little $200 increments that you might not have noticed too much when it was getting taken out of your paycheck every week and was never "yours" to begin with have now added up to $2400, which you noticed very much as it sat in your bank account and were mentally imagining how you could spend it. But <poof!> just like that it's gone, never to be seen again! Beach vacation, gone! New car, gone! college loan payments, never-ending! New home, not in this decade!
I should know, this is what happens to me four times a year. I've joked to numerous friends and family how I could single-handedly support the economy if I were allowed to keep that money myself. We wouldn't have needed to bailout Detroit and the auto giants over there if I and everyone else like me had those several thousand dollars per quarter back in our bank accounts with which to spend how we see fit (possibly on new cars).
When Jacobs and Woods were both talking about mandatory withholding, I was standing there with my earbuds in my ears, hands in the air, shouting "Preach!" Can you imagine how pissed people would be if they saw that huge chunk of change leave their bank account four times a year? And yet nobody bats an eye when a small portion is taken every week or two weeks. Trust me, psychologically it makes a HUGE difference when you see how much you could have had, what you yourself could be doing with your own money, and then you have to give it away to anonymous bureaucracies for unknown purposes. If you'd never questioned the system before, it might seriously give you pause for a second to wonder if the government really knows better than you do how to spend your money. You might recognize and realize a) how much they're actually taking from you and b) what you could have spent that money on yourself if the government hadn't decided it was more important for them to have it. Maybe, just maybe, if people were able to keep their whole paycheck they would have enough money to save for their own retirement and wouldn't be forced to pay for someone else's. Maybe, just maybe, if people were able to keep their whole paycheck we wouldn't have had to force banks to make subprime loans to questionable buyers who couldn't afford to put a down payment down on a house because those people might actually have had the money with which to put a down a reasonable down payment. But our government thinks we're all too stupid to be trusted with our own money.
Yes, safety nets, yes roads, blah blah blah. But what about all the useless bullshit that we have to pay for? Bridges to nowhere, corporate subsidies, illegal wars, bogus university "research" studies, 800,000
If it were up to me, I'd have a bubble sheet like they do with private sector fundraisers where you can direct where you want your money to be spent. I'm betting that most people would not elect to have their hard-earned money going towards the studies of duck genitalia or training Chinese prostitutes to drink more responsibly. But as soon as you start talking about cuts in government, you immediately get accused by both politicians and citizens alike of hating the poor, wanting to throw granny off the cliff, or wanting terrorists to attack America. We the People have been fooled into thinking that our federal government only has 5 programs, Medicare, Medicaid, Social Security, food stamps, and defense, and that any proposed cuts in government will automatically leave any or all of those programs vulnerable. They've fooled us, with the help of our complicit media, into thinking that every dollar we send to the federal government is sacred and if we spend even .50 cents less than what we're spending now, the country will self-implode. In other words, no vacation for you, citizen! If you'd rather take your money and go on vacation than send it to the federal government, you're just a greedy, heartless SOB who hates poor and sick people. That's just a fact.
I'll tackle more on taxation in another article. In the meantime, do a little experiment yourself. If you actually get a paycheck, a physical paycheck where you can see what they're withholding from you, do the math yourself. Figure out how much money gets withheld per paycheck, then figure out how much money gets withheld over a 3 month time frame (quarterly). And then ask yourself if you think it would make any difference seeing this money in your bank account month after month and then having to write a check and send it all away. Or does it not make a difference to you one way or another? Let me know in the comments below!
In case you missed it above, here is the link where you can listen to the Tom Woods interview with WWE wrestler "Kane".
1099 is not all it's cracked up to be. I just got tired of celebrating St.Stealings Day 4 times a year.
ReplyDeleteSt. Stealings Day, haha, I like that!
DeleteWe need the Fair Tax. Then you could keep what you make and have more control over what taxes you pay. For example, if you buy a new car, you pay a tax. If you buy a nice, but used car, pay no tax(things are only taxed once). In addition to that that new car will probably cost less because all the embedded taxes that the manufacturer built into the price, are gone. Fair tax is what we need. Demand it!
ReplyDeleteI would definitely prefer to have the Fair Tax over our current system. I do see a few issues with it, though, such as it would still allow for a huge amount of tax revenue going to the government that wouldn't really shrink it as much as it should be, but I do concur that it would be infinitely better than our present day IRS leviathan.
Delete