I recently read Knut Svanholm’s “Bitcoin: Everything Divided by 21 Million” and within the book there is a section that discusses all of the various ways we are taxed on our time.
There are explicit taxes that impact me and my earning potential such as income taxes, property taxes, sales taxes, payroll taxes, state and local taxes. There are also implicit taxes that affect me in ways that are a bit more difficult to quantify like inflation (an invisible tax that diminishes the purchasing power for the dollars I keep) and corporate taxes (revenue that could have all or in part gone into employee salaries).
Months prior I listened to a podcast with Robert Breedlove where he discussed the idea that one’s effective tax rate is a representation of how much a slave one is to the state. A statement I felt was bold, but the argument was interesting: what is slavery if not a 100% tax on your time and energy?
I decided to take the challenge and determine how much a "slave" I really am. I reviewed my paycheck, my property tax bill, my monthly purchases and my state tax rate. The result surprised me to say the least.
Here are the numbers represented as a percentage of my gross income:
- Federal Income Tax: 26.16%
- State Income Tax: 10.66%
- Medicare Tax: 2.16%
- Disability Tax: 1.64%
- Social Security Tax: 9.25%
- Property Tax: 4.94%
- Monthly Expense Sales Tax (@ 7.75% rate): 2.71%
- Total Tax: 57.52%
And that’s just explicit taxes. The latest Consumer Price Inflation print for June 2022 was 8.6%. Simply adding the CPI figure into the sum puts me at a 66.12% total tax rate.
For every 3 hours of work, the value created by 2 is taken from me and given to the government.
I am 66% slave. How about you?