Make it hurt

July 31, 2007

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A recent commenter took offense at my pointing out that the proposed increased funding for the SCHIP program would be paid for by increased taxes on cigarettes (regressive taxation). His point (as I understood it) was that we’re unnecessarily spending billions of tax dollars elsewhere (the war in Iraq) that instead could be used to fund SCHIP.

While I disagree with that logic (just because we have spent X amount on one thing does not mean Y will be shorted by that amount), it got me thinking about how the government collects taxes. When I buy cigarettes, I see the price of a pack of cigarettes and I pay the price plus the tax.  It’s all right there on my receipt.  The tax is obvious.

Compare that to wage earners. When they get a paycheck, what do they look at?  I’ve worked for an hourly wage and my answer was always the amount that came after the dollar sign on the check.  Looking at my pay stub, I shrugged my shoulders and thought “look what the government is taking from me” but in the end, I was always happy when that same government gave me a refund (of the money mistakenly taken from me), my interest free loan to the government.  Now that I no longer pay taxes that way, I think differently.

My point?  Maybe more citizens would be concerned about the taxes they paid and what they’re being used for if they actually had to write a check to the government at the end of each year (or quarter or month) for the amount they owed. 

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