Hidden taxes

Hidden taxes

We all aware of obvious of “upfront” taxes like sales, income, real estate, personal property and petrol taxes. What we many of us do not recognize are what I term “hidden” taxes. In a free market economy (a good thing) prices will adjust according to supply and demand and other market factors. In a competitive environment prices will tend to fluctuate. One example of a “hidden tax” is corporate income tax. Initially this appears as a good thing since companies make a lot of money and they should contribute to the running of the government. However, over time, much of this tax will be passed along to the consumer in pricing. So, who is paying the tax?                                                                                                                                                  My favorite “hidden tax” has to do with the cost of healthcare. Your elected representatives refuse to reduce this tax burden on you and this burden is much greater than the money you pay each year in income tax! Our current system for delivering healthcare is 2 ½ times the average of the EU countries and our overall quality of care is inferior.

“According to the IRS, Americans filed more than 150.6 million tax returns in 2015. During that year they also earned $10.17 trillion in adjusted gross income and had a total tax liability of $1.45 trillion. Some quick division means that the average gross income per return was $67,564 while the average federal tax hit was $9,655. That gives the average American family a federal tax rate of 14.3%.

However, the above figures above can be a bit misleading. Many low-income Americans actually have a negative federal tax bill thanks to the Earned Income Tax Credit. If you remove those returns from the equation then you are left with 99 million Americans who recorded an average federal tax hit of $14,654.” https://www.fool.com/taxes/2017/03/14/how-much-does-the-average-american-pay-in-taxes.aspx

The bottom line is that in 2015 the tax burden on families was $1.45 trillion while we spent $3.2 trillion on healthcare. Cutting this cost in half (which is possible) would more than cover our tax bill!

You ask why our costs are so high? There are several prior posts to this blog which detail the specifics, but to summarize it has to do which the many special interests that are profiting from the massive healthcare industry: Insurance administration & profits, obesity, RX companies (manufacturers & distributors), physician compensation, outrageous hospital charges and litigation.

This issue cannot be resolved by tweaking our broken system. We need to have the courage to admit that there are more effective system models out there and we should look at adopting the best features of systems that are effective and also provide a higher level of care. The only obstacle will be the special interests that are profiting for this massive “hidden tax” and their political influence is massive.