Do you remember getting your first paycheck? It’s an exciting moment for most of us.
But it can also be a hard, cold slap of reality. I’ll never forget earning mine.
Your paycheck is validation that your time and work are worth something. It’s the story of your success.
The numbers on my first paycheck told a story that made me feel like my time and labor already belonged to someone else -- like I had just worked hard for money that had already been spent by someone else.
Federal tax. State tax. Social security. Medicare. On and on.
By the time all the taxes were subtracted, I was left with very little. Where was I in this story? Most Americans have had a similar experience.
Hey guys, I’m Kristin Tate -- author of Government Gone Wild and analyst for Capitalism.com -- and today we’re talking about… you guessed it, taxes!
Excessive taxation makes American workers frustrated and discouraged, and hinders business growth. Yet the United States has a federal income tax that can be as high as 39.6 percent, and is home to the highest corporate tax rate in the industrialized world.
President Ronald Reagan once said, “If you want more of something, subsidize it. If you want less of something, tax it.”
Think about it: why would you punish someone for working hard? Why would you penalize a company for expanding and making more money?
Not only are high taxes burdensome and discouraging -- they are also difficult to understand.
The IRS has made our taxation system so complicated and confusing, that most Americans aren’t even able to file taxes on their own without hiring an accountant. The federal tax code is over 70,000 pages long and 10 million words long.
And that’s just what the Feds do -- state and local government add more.
The result is complete confusion and insanity. Is it any wonder that Americans spend 6.1 billion hours and $233 billion complying with the tax code annually?
Of course, the complicated nature of filing taxes hurts the poor more than the rich -- a few hundred dollars to get your taxes prepared at H&R Block is small beans to someone making six figures, but that really hurts for a minimum wage worker.
And that’s just income tax. There are lots of other sneaky “hidden” taxes that affect all of us during our day-to-day lives.
For example, every time you buy alcohol or fast food you pay a “sin tax.” There’s a 17 percent hidden tax in your cell phone bill every month. Every time you travel, you’re being stuck with hidden flight fees, hotel-occupancy taxes, and passport fees.
And there’s more. There’s always more.
High corporate taxes have been a hot topic in this past election cycle. And high taxation on businesses are just as, if not more, burdensome.
Currently, the US corporate tax rate is 35 percent, which is far too high compared to corporate tax rates around the world.
Why would a large company invest -- and create jobs -- in the United States when they could go to any other nation in the industrialized world and pay a lower tax rate?
In the end, it’s American workers who get hurt most.
President Trump has said that he will lower the corporate tax rate to 15 percent. This would go a long way toward improving the job market and encouraging growth and investment in the U.S.
We hope he delivers on that promise as soon as possible.
And, in his newly rolled out Trump Tax Plan, the president outlines steps that would radically simplify individual taxes.
We hope that the new administration gives this issue the attention it deserves. Our current taxation system is far too complex and expensive.
Tax policy should be simple, fair, efficient, neutral, and transparent. We need a simplified system and lower tax rates across the board in order to encourage growth, prosperity and entrepreneurism!
Thanks so much for watching!
MORE GREAT VIDEOS FROM KRISTIN TATE ON CAPITALISM.COM:
• Busting Myths About Gender Equality in the Workplace with Kristin Tate
• Why the Sharing Economy Gives Workers More Flexibility to Make a Living
• Why School Choice is An Important Business Issue