I remember an old Bob Hope Show when Hope's straight man exclaimed in frustration, "How stupid can you get?" Hope's reply was, "I don't know, I'm not fully developed yet."
As I watch our nation teetering on the fiscal cliff, I feel that we are terminally underdeveloped.
Apparently they don't even teach an understanding of how taxes work in any of the government schools. The colleges and universities also either don't teach it or totally twist it.
All the politicians talk about is income tax or capital gains tax.
What they ignore are all the taxes and fees that are applied at all levels of our social and economic system, to the extent that a retail product's purchase price is half or more taxes.
Consider that a product begins its life in a steel mine. The mine pays property tax, withholding tax, fuel tax, mining permits, inspection fees, etc. All of that is recovered in the price of the ore sold to the steel mill, which also pays all those permits, fees and taxes. Those costs are then passed on to the factory making the product for retail sale. The factory then adds all its fees and taxes to the cost of the product.
We must remember to add the taxes, fees and permits paid by the trucker, the box maker, the advertiser and finally the retailer, who then tacks on sales tax.
Now, 50 to 70 percent of the retail sales price is actually accumulated taxes.
Guess who then ultimately pays all these taxes? You, the buyer.
Well, let's just solve the economic problem by raising the taxes on the rich. But wait a minute. If you raise the taxes on a law firm, they raise their fees and you pay.
Raise the taxes on oil companies and you pay more for fuel. Raise the taxes on your landlord and the rent goes up. You pay.
Every business in existence must, out of necessity, pass its costs on to its customers and ultimately, you pay.
Look at your phone bill and see how many taxes and fees are tacked on. Your power bill is the same way, and the add-ons start way back in the system and accumulate as the process evolves.
That power bill started with the steel mine and the mill, to the equipment for the construction company building the dams and pipelines that feed the generators. Then there are the transformers, power poles, power lines, power company buildings and even the coffee the workers drink.
It all trickles down (or slams down) on the final consumer. You pay everyone's taxes, permits and fees in the final product. You the consumer pay it all.
This process is at work in every facet of our economy.
Let's consider the wheat farmer. He pays property tax, income tax and all the accumulated taxes for the combine manufacturer, tool maker, trucker, elevator, feed mill, etc. Add on the baker, the retailer, advertiser and packager.
When you buy that loaf of bread, you are paying all those taxes and fees.
Every time you buy a product, from a matchbook to a house, stop and think about the process that put it there for you. Everyone in the process was taxed, and they passed it on to you.
And, by the way, you then get to pay property tax, inheritance tax, capital gains tax and income tax. Add to that your license plates, your driver's license and all the other reoccurring charges.
Go ahead; tax the rich more and they will pass it on to you.
I confess that some taxation is essential but it gets way out of hand. There is a point at which increased taxes depress the economy to the point that tax revenue decreases.
Today's version of Bob Hope's "not fully developed" try to correct that by increasing taxes, which further decreases the economy and results in less tax revenue.
I believe we are past that point, and are on a downhill slide into socialism.
Tell me this, if you come home and the sewer is plugged and your house is full of sewage, do you raise the ceiling or drain the sewage?
Those who look at the ceiling, I guess, are "not fully developed yet."
- "Out On A Limb" appears on the second and fourth Tuesdays of the month. Ross L. Talbott lives in New Castle, where he is a business owner.