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How much are you really paying?
by Dave Soulia, for FYIVT.com
Most Americans understand the taxes they see: income taxes deducted from paychecks, sales taxes added to purchases, and property taxes billed annually. What they don’t see, however, are the numerous hidden taxes and regulatory costs that quietly take even more from their income. These invisible costs add up to a staggering financial burden, particularly for Vermonters.
Visible Taxes: Just the Tip of the Iceberg
The taxes we recognize are already significant. For instance, the average American family in the middle-income bracket pays over $10,000 annually in federal income taxes. Add to that state and local taxes, and the numbers grow dramatically. Vermonters, with a state income tax rate ranging from 3.35% to 8.75%, face even higher burdens depending on their earnings (NerdWallet).
This doesn’t include payroll taxes for Social Security and Medicare, or property taxes that are among the highest in the nation for Vermont. Yet, even these visible taxes pale in comparison to the hidden ones lurking beneath the surface.
Hidden Taxes: The Costs No One Talks About
Hidden taxes are embedded in the cost of nearly everything we buy and use, making them harder to notice but no less real. For example:
- Excise Taxes: These taxes on specific goods, such as gasoline, alcohol, and tobacco, significantly inflate prices. For a six-pack of beer, taxes can make up to 43% of the cost (IPI).
- Corporate Tax Pass-Throughs: Businesses don’t truly pay taxes—they pass those costs on to consumers in the form of higher prices. This includes costs from federal, state, and local taxes, as well as compliance with regulations.
- Regulatory Costs: Federal regulations alone impose a massive financial burden, totaling over $2 trillion annually, which equates to roughly $15,000 per U.S. household (CEI).
These hidden taxes and regulatory costs disproportionately affect lower- and middle-income households, who pay a larger share of their income toward essentials like fuel, utilities, and food.
How Much Are You Actually Paying?
When visible and hidden taxes are combined, the average American pays a shocking amount of their income to the government. Estimates suggest that taxes and regulatory costs consume over 50% of the average person’s income (IPI). For Vermonters, this figure may be even higher due to aggressive energy policies and additional state-level fees.
For example, utility bills in Vermont include surcharges for energy efficiency programs mandated by the state, significantly raising costs. These fees, while intended to fund environmental initiatives, act as a hidden tax on every household.
Why Hidden Taxes Are a Problem
Hidden taxes allow the government to raise revenue without increasing visible tax rates, making it easier to mask overspending and avoid public scrutiny. This system creates multiple problems:
- Lack of Accountability: Most taxpayers have no idea how much they’re truly paying to fund government programs and services, making it harder to hold officials accountable.
- Inflated Prices: Taxes and regulatory costs are passed on to consumers, driving up prices for goods and services.
- Reduced Wages: Businesses facing high tax burdens may suppress wage growth or reduce benefits to offset expenses.
- Economic Drag: Hidden taxes discourage investment and innovation, slowing economic growth and reducing opportunities for workers and entrepreneurs.
A Path to Transparency and Reform
The solution lies in simplifying the tax system and making all costs visible. Here’s how:
- Consolidate Taxes:
- Replace hidden taxes, fees, and surcharges with straightforward taxes like income or property taxes. For example, instead of embedding energy program costs in utility bills, fund these initiatives through a clear and direct tax line.
- Increase Transparency:
- Implement tools that allow taxpayers to see the total amount they pay in taxes, including regulatory costs. Public reporting of government spending should be accessible and easy to understand.
- Streamline Regulations:
- Simplify compliance mandates to reduce costs for businesses, which would lower prices for consumers.
- Cap Spending:
- Limit government spending to prevent excessive tax burdens and ensure programs are efficient and necessary.
Why This Matters
A transparent and simplified tax system would expose the true cost of government, empowering taxpayers to demand accountability and better services. Lowering hidden taxes and regulatory burdens would reduce prices, stimulate economic growth, and increase disposable income for families.
Most importantly, such a reform would end the government’s ability to quietly grow its spending without public awareness. By making the tax system open and honest, we could foster trust in public institutions and create a fairer economic environment for all.
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Categories: Commentary, Legislation, News Analysis, State Government, Taxes
Surely you jest, Montpelier couldn’t possibly be mismanaging your funds or state. They don’t need to fund an ethics commission in Vermont, because our leaders are so upstanding. We will all die if any money is cut from the budget, our entire state will starve and go homeless.
Try to choke on the extreme sarcasm.
Would you please stop shining that spotlight, all the people in Montpelier are scattering around the floor, having to hide, this is totally unnecessary. Please stop shining the light, it’s way too bright, and way too many facts. Can’t you hear the click, click on the floor and fear? Please for the love of God, stop shining that light!
If taxation is reformed through transparency, how will our disindenuous taxation machine in Mount Peculiar be able to hide it’s own wish list for a socialist agenda ? Until they are dealt with, this is DOA. Vote them all out, and insist on term limits !
It’s actually much worse than this. There is also the inflation tax (increase in the money supply), where one of the many side effects is an increase in price of goods and services. The rich government cronies get to spend the money first when it’s worth more, but then as it makes its way into the market, the supply of money vs the supply of things people wish to spend that money on loses parity, making poor people suffer the most. It’s a good scam, because if instead of directly taxing the individual where they can see and understand what’s going on, the political class pulls a rabbit out of a hat from thin air, and people think they are performing magic.
Another way they scam you is by hiding half of your payroll taxes. In order for a business to hire you, the business has costs imposed by government, that are actually part of your pay that you don’t see. The labor market follows the same supply and demand principles, and instead of you getting that money directly, it’s hidden where most people don’t even know it exists because it goes directly to the government before it even hits your paycheck.
More on those “regulatory costs”. The costs are much more than just *direct* increase in prices passed onto the goods. These increase in prices are exacerbated by the barriers to entry for competing products that otherwise would exist, and that would create a more competitive price market if they were allowed to exist. Big corporations love regulation because their lawyers and lobbyists write all the rules to keep the competition from existing in the first place. This has the same effect as a tax.
Overall this is a big destruction of wealth system that is a 100% proven failure. These scams brought to you by the vicious violent government are the number one biggest contributor to every ill of society. The number 1 biggest contributor to pollution, poverty, waste, mental illness, crime, illness, hatred, and anything else negative you can think of. This is evil, and the devil God warned you about. We are doing nothing to learn how we are being tricked by the devil, so we will suffer.
Despite all of this we are doing amazingly well considering, because of hard working people that innovate and outgrow the destruction. If we continue to lose innovators and hard workers at the current rate we are losing them, we will be on a very dangerous path. The best we have is Trump, and you can guarantee the government will once again break spending records like never before seen over the next 4 years, just like in the last Trump administration. Controlled opposition.
Inept agenda-driven fools, they just don’t care about you or your financial burden !!
Wake up people.
If only Woodrow Wilson hadn’t signed over control of our monetary system to the Central Bank. If only America wasn’t leveraged to the hilt to foreign interests. If only Blackrock, Vangard, and State Street didn’t own and control an extraordinary amount of real assets through leveraging. If only our currency actually had value backed by real tangible assets and GDP rather than through global blackmail and extortion. If only our Constitution was followed to the letter and swearing an oath to defend our Republic was legitimate and absolute.
For well over 100+ years, the debt is an asset delusion, created by the robber barons, banksters, and colluding “representatives.” They loaded the chamber of the gun held to the heads of the American people. They have spun that chamber over and over again, papered over our eyes and minds with Acts of indebted servitude to the point now the vicious, sinister game of roulette they designed is coming to an end. One more spin? Two more spins?
One thing is for sure, the wealth transfer and great reset is happening – it has to happen. The only thing no one is sure of who will survive and who will not. Not everyone owns a remote island or fully stocked, multi-level bunker.
Thank you, once again, Mr. Soulia, for writing and sharing such a well-written, concise, and wonderfully informative article. What an excellent resource VDC is, and articles like yours only continue to make it more outstanding.
FYIVT.com as well