Guest Column: Dan Gaeddert on Taxation, Part 2
First District Coordinator Dan Gaeddert has written for the LPKS blog on several occasions, including his essay "Crony Capitalism and Lemonade." In 2021, he began dissecting his personal tax withholdings for the year, to find out where Kansans' income actually goes when they pay into the state. Below is the sequel to his first write-up, which you can read here.
Here a tax, there a tax. It seems like every time you turn around, there’s another tax that pops up somewhere. When you look at each one individually, it really doesn’t seem too bad. But just like those weekly trips to Starbucks or stops at your favorite fast-food joint, it all adds up a lot quicker than you think.
Even the things that the government taxes can really make you pause and think. From the arguably reasonable “sin” taxes on liquor and tobacco, to taxes on necessities like food and water, there’s almost nothing you can do anymore without the government getting a cut of the profits. I started to wonder what all those taxes really added up to. Beginning January 1st, 2021, I recorded every tax I paid, for an entire year. I saved receipts, calculated hidden taxes (such as gasoline tax) and kept track of everything in a spreadsheet. Finally, after filing my 2021 income tax return (and making the last payment), I had a pretty good idea of what a solidly middle-class couple in rural Kansas pays in taxes. I bet that number is a lot higher than you’d think. $22,664.87. Without context, that number could mean a lot of different things. A down payment on a nice house, a quality used vehicle, or even modest gameshow winnings are all things that come to mind with a number that large. Unfortunately, in this case, that is the amount my wife and I paid in taxes in 2021. With an average of almost $1,900 a month, my monthly tax bill was not only my largest expense, but it was also bigger than all my other bills combined! With that amount, I could easily afford to pay my mortgage on 2 different real estate assets, city bill, electric bill, cell phone bill, and internet bill, plus have a good chunk left over for basic expenses. In fact, due to my affordable-cost-of-living area, I could live very comfortably on just the money stolen from me by the government this year. But what is almost as alarming as the total amount, is where all that money came from. Obviously, federal income tax was the biggest offender. This is the easiest one to see and hate, as it’s the big number you see at the end of the year when you file your taxes. For me, that number was $7,075.32, or less than 1/3 of my total taxes. State income tax came in at about half of the federal tax, to the tune of $3,552.10. Sales tax also took a pretty big chunk, sitting at just over $1,500 for the year. One of the biggest shockers, however, was how much tax I paid on necessities. I separated out taxes on food from other general sales tax, and ended up paying the government a whopping $563.24 for the privilege of eating in 2021. In fact, when you include taxes on water, natural gas, cell phone, and other “necessary” living expenses, I paid almost $1,000 in 2021. It’s taxes like these that are not only unavoidable but hurt disadvantaged Kansans the most. Some people like to say that “taxes are the price we pay to live in a civilized society.” I would like to think that getting your water and gas shut off because you can’t afford to pay taxes doesn’t sound very civilized. Overall, this experiment has been quite taxing (pun intended). I think we all know that we pay a lot in taxes, but even I didn’t know that it was going to be this much. I think it’s also important to realize that this number hasn’t changed much as the political pendulum has swung from red to blue. For decades, Republicans and Democrats alike have held hands and laughed all the way to the bank with your paycheck. Albert Einstein once said, “The definition of insanity is doing the same thing over and over again and expecting different results.” For generations we have voted either Democrat or Republican, and for generations taxes have only gotten higher and government spending has only increased. When we head to the polls this November, I hope we all remember how much we really pay in taxes and vote accordingly.
To contact Dan directly, email dan.gaeddert@lpks.org or firstdistrict@lpks.org.