Welcome Back! I have another thought exercise to present you with… You’ve all probably figured me out already, right? I spend altogether to much time – THINKING! It’s really not that I’m always trying to come up with some scam to buck the system…  Actually, on second thought, that is a fair assessment of what I’m doing. I don’t like the system we find ourselves in currently! If we can each find creative ways to save our money from being sucked up by the irresponsible bureaucracy, then let’s do it!

 

   How hard do we each work to make our money in the first place? At first thought we could all say, “We just go off to work everyday and get paid our negotiated wage on payday”… I think that it goes a bit deeper than that, when we factor in all that gets wrapped up in that statement.

 

   Many of us start the earning process before the sun comes up each morning and don’t get back home until after it goes back down in the evening. Day after Day, usually at least 5 days a week, we pursue the needed funds to keep life as we know it moving in the right direction…

 

   Alright, so we can all agree, first we must go earn the money in some fashion. What happens then? I’ll tell you what happens then – we pay taxes! For this illustration, let’s accept an average income tax rate of only 20%, I know that many of you are paying closer to 30%, maybe even more but for today lets just say 20%. Not bad enough? Add in the 7.5% we all get to pay toward social security and its various other satellite taxes… We’ll keep it simple and not include the other 7.5% that the government requires our employers to pay into that system on our behalf.

 

   So there you are, happy as a clam with 72.5% of that paycheck you earned still intact, when it reaches you on payday! Wait – there’s more! Better stop off at the store to pick up a few things on your way home with your after tax income… Whatcha gonna spend it on? I only ask because that will determine what tax you can pay out next… Maybe you head for the grocery store, possibly you can even dodge the tax bullet for a few items in the cart that qualify as food. Thankfully the government gifts us with tax free “Food”. I don’t know about anyone else but I still pay a lot of tax at the “Grocery” store. That’s right, groceries aren’t tax free, only “Food” – whatever that is these days?

 

   It’s probably a good idea to head for home after you leave the grocery store. If we don’t get those monthly bills paid they might shut off the power or something… Not really, we’re not that close to the edge but sometimes it feels like those bills just keep coming, so let’s just pay them quick and get it over with for another month! Phone, electric, garbage, internet and all the other  in-sundry dollar snatchers. Have you ever looked at the that stack of paperwork that comes in the monthly bills? There’s a small novel in most of mine… That pile of paper tells us a sad story, the story of where our money went.

 

   Open all those pages up and read all the line items that get tacked on when you’re not looking. Everything from surcharges to per “line” fees and access duties? I see lots of .04 cents here and $1.59 there – these add up folks! I had a cellular phone bill that I finally stopped to figure out what all of the nickels and dimes actually added up to… Drum roll please… 11.5% in added taxes, fees and charges… WOW!

 

   Hold on though, we need to stop and fill our gas tank up before we get home too. Give me a second to calculate the numbers for that little government cash cow… I read recently that the average state gas tax at the pump is .63 cents per gallon. This of course doesn’t include whatever we’re paying in federal gas taxes, I didn’t uncover that particular number in my brief search. Let’s all agree that it would be at least whatever the state was getting if not more… Just the state level gas taxes are in the range of 22%! Not a bad racket, almost as good as say a government run lottery…

 

  With just the few stops we’ve made on this payroll robbing shopping trip, our income has been lightened by another 9-22%, depending on where you spent the particular dollar. This on top of the 27.5% haircut we all take on payday.

 

   I know what your thinking and yes, I am keeping this a little on the simple side. Remember, I just want to get your mind thinking about these little taxes that seem to find their way into every corner of our financial life. Is there anything we can do to stop this insidious theft?

 

   I’ll be the first to admit that I don’t yet have all the answers. I will say that I’ve come to this conclusion. If I want to make a transition away from the city and out to the countryside, some cost cutting measures will probably be required, at least in the beginning. When I work the budget frontwards and backwards each month, I see that one of the single biggest expenses we all pay has to be TAXES! Other than with sales tax, we seldom have the opportunity to see our money being taken. In large part the taxing authorities have come up with a real painless way to steal our money, they just take it before we get our hands on it or just wrap it into the cost of a gallon of gas. If we don’t specifically see the tax amount then maybe we won’t specifically understand that we’re paying it!

 

   It would take a much longer article to really cover all of the ways that we, the good tax paying Americans, are being soaked! What I was hoping I could bring to your attention was how large a part of our income is basically evaporating before our eyes and certainly before we get to utilize its spending power.

 

   This topic sheds light on the old idiom our Grandmothers used to use – “A penny saved, is a penny earned”. In this case, each of our pennies is so excessively taxed, we might actually have something whenever one is saved. In addition to doing our part to starve the beast of our hard earned money, we can make a pretty nice return on every penny of ours that doesn’t get lost to the tax system, easily in the neighborhood of 10-30%.

 

   As these “Saved” pennies add up, we’ll have them to spend when a real opportunity presents itself… Maybe we’ll end up paying the tax on them at some point in the future when they’re spent and maybe we won’t. We’ve discussed in the past the possibility of dealing in the barter and second hand markets. If I need a product that you happen to have, we might strike a deal where I exchange some of my saved pennies for your product and neither of us lose any of our spending power to the tax man.

 

   Let your mind run with this topic and see what creative things you might come up with! Many business people would be very happy with a profit return of far less than that of the potential money saved by lowering our own tax burdens. Let me encourage all of you to bring your ideas to the group and we can all get further working together than we can individually!

 

 

Prepper