I make $100 and my taxes are:
$32.00 in federal income taxes.
$15.30 in self employment taxes.
$7.25 to the State of Maine.
With the $45.45 left over I purchase a 5 inch wedding cake from a great vegan baker to celebrate my third wedding anniversary.
I pay another $3.64 in Maine sales tax.
Now the baker has charged me $41.81 for her cake. Her costs which include everything from flour to oven gas adds up to $20.91 leaving her with a profit of $20.90 on which she pays:
$4.60 in federal income taxes.
$3.20 in self employment taxes.
$1.41 in state income taxes.
Total taxes on my $100 earned selling my services and buying a five inch wedding cake are $67.40 and I would argue the cost, pain and hassle required to figure this out and the angst not knowing if you figured it out correctly makes our whole system unbearable and yet we Americans, like the proverbial dog lying on a nail moaning, are doing nothing about it.
In the early 90's there was a organization that was hell bent on repealing the 16th Amendment. Although supported by John McCain, Fred Thompson, Mike Huckabee, Bill Archer, Tom Tancredo, Duncan Hunter, Mike Gravel, John Lindner, Saxby Chambliss, etc... the repeal movement only gained marginal traction. Looking back it's obvious that those in power DON'T want to see any change to the income tax system. The current system absolutely hides the real cost of government and allows those in power to pick winners and losers.
Major tax reform is rarely possible. The Tax Cuts and Jobs Act of 2017 did many things including limiting the state income tax deduction to $10,000. This resulted in high taxed (typically democrat controlled) states crying foul. They have done everything they can to have the tax cut changed while low taxed (typically republican controlled) states cheered.
I'm absolutely for the repeal of the 16th amendment and using a National Retail Sales Tax (NRST) to fund the Federal Government. Many believe this is too radical, but since 1776 we have had a "legal" income tax for only 106 years. I say it's time that we once again align our nation's revenue system to what our founding fathers argued was best.
Note - The taxes continue as the baker buys products and services and those people make profits, etc... Furthermore, this example doesn't include property and personal property taxes which for many add up to thousands of dollars. As with an iceberg much of the true cost of taxation is hidden:
