Taxes are only the most visible form of government’s burden, however. Deficit spending, too, costs people. On top of that comes government regulation of all sorts. Americans for Tax Reform, an activist taxpayers’ group, estimates that it is the first week of July before people start laboring for themselves instead of government. In short, we spend more than half of our working lives financing government.
For believers in limited government, then, there is probably no more important task than constraining the growth of government spending, and that is most achievable by reversing the increase in taxes. What is needed is a threefold strategy of tax reform: reduction, accountability, and simplification.
Most important, Congress should lighten the tax burden, and the best means of doing so is to cut income tax rates across the board. The reason is simple–taxpayers deserve relief.
According to a recent Harris poll, 30 percent of Americans say that their taxes are “much too high.” Another 40 percent believe they are “somewhat too high.” And this huge majority is right.
At the beginning of the century, reports the Tax Foundation, Tax Freedom Day came on January 31. It bounced around March and April during the 1940s, gradually moved to the end of April by the 1970s, hit May the following decade, only to recede for a time, before starting its steady increase in 1993.
In many states the burden is even higher. New Yorkers work for government until May 23. Residents of Connecticut start earning money for themselves only a couple of days earlier. The luckiest taxpayers live in Louisiana, where Tax Freedom Day comes on April 26.
Taxes are the largest single component of the average American’s budget. People spend nearly two hours out of an eight-hour day to pay just Uncle Sam’s levies. Another hour of labor is consumed by state and local taxes. Only housing, at an hour and twenty minutes, comes close to the tax burden. (The costs of deficit spending and regulation are largely hidden from view, raising prices and interest rates.)
Of course, defenders of the expansive and expensive state argue that Americans receive a good return on their money. But today’s welfare/warfare state operates primarily for the benefit of select interest groups rather than the general public. Nearly one-quarter of every tax dollar goes to Social Security, Uncle Sam’s faltering retirement system that is delivering an increasingly negative return while heading toward fiscal collapse.
One-fifth of the federal tax dollar covers health care, particularly Medicare and Medicaid. These programs are not only unnecessarily expensive, but have fueled price inflation in the private sector. Neither is sustainable over the long term. Another fifteen cents goes to interest, the price of past federal extravagance.