So here's what I think. America has one of the lower tax rates among the developed nations. What does this translate to? Several things:
- Poorer labor standards, lower wages
- This results from a stronger position of big business with respect to the government and labor unions, which is made possible by excess capital saved by paying lower taxes
- Weaker environmental regulation / other types of regulation
- This results from inability of regulatory agencies to keep up with various violations and fight big business in court
- One example of this is the inability of S.E.C to effectively follow up on many cases similar to the Enron scam
- Weaker consumer protection
- This is tied in with the weakness of regulatory agencies that are supposed to protect consumers rights, such as the FDA
- Poorer infrastructure for healthcare, education, public transportation
- There is simply less money in the public sector, so this directly follows
The last two points are most visible because, they translate to REAL expenses, or what I will call a mandatory business tax. This is the tax businesses are able to impose on consumers because the former are in charge of the infrastructure. Consumers are forced to shell out for various essential items, such as healthcare / childcare, etc. in a society with a poor public infrastructure and weak consumer protection. You pay this tax to business, as a penalty for not having paid enough to the government (or to a government that represents its people). To figure out exactly how large this tax is, I tallied the expenses for the last 3.5 years (that's as far back as my records go), and calculated how much money I spend on things that should be free.
Here are the main portions of the mandatory business tax, about which I know a thing or two thru experience:
- Transportation (car)-
- I never wanted to have a car. It is possible to not have a car in a mid-sized city like Columbus, but it is extremely trying to live without one. You end up either relying on other people who have one or spending exorbitant amounts of time for getting to places inaccessible via public transportation. So your choices are
- Don't get a car and be miserable / dependent / limited in job options / limited in shopping options
- Get a new car and pay "out the ying-yang" for the car itself and especially insurance
- Get an old car and pay "out the ying-yang" for the repairs, and still thousands for insurance
- Additional expenses include towing, tickets, parking permits, registration fees
- Healthcare -
- As we all know, healthcare in America is not free, so this entails:
- Paying a lot for health insurance
- Paying a lot in co-payments / deductibles
- Waiting in long lines to have a 15-minute appointment, and being charged for 1 hour of the doctor's time.
- In case something happens, where serious medical treatment is needed, paying a certain percentage of the enormous bill(s) you receive in the mail
- This includes
- Fighting with your insurance company over every penny
- Fighting with your provider over services you didn't ask for and didn't need, but that were performed on you because you were unconscious
- Handling dozens of pages of paperwork and as if you were a full-time accountant
- In the meantime you familiarize yourself with
- deductibles / co-deductibles / co-payments
- in-the-network providers and who's out-of-network providers
- all kinds of other fancy insurance terminology
- If you're organized enough and have enough time on your hands, you can beat back half of the charges
- If you're poor enough, you can have some of the charges written off.
- If you're neither, you're fucked, because your choices are:
- Pay now and be broke
- Wait for collection agencies to make your life a living hell and pay later, after you can't take it anymore
- Wait for collection agencies to make your life a living hell and still don't pay, in which case you ruin your credit
- Housing (Rent & landlords) -
- I lost at least some money to every landlord I've been with except one. This is very typical in college, and happens frequently because:
- Landlords have more money and legal resources and thus have an easier time going to court
- Students typically have neither the time nor the money nor the legal expertise to go to court
- There are laws on the books regarding landlord-tenant relations of two types
- Laws designed to protect the tenants, but are hard to enforce because
- The tenants don't have the time or resources to find out about their rights
- The tenants don't have the time or resources to fight for their rights, even if they know them
- Laws designed to protect the landlords, in which case
- The landlords know their rights or have lawyers that do
- Will have an easy time with using the law to their advantage because of the resources they possess
- Local phone service -
- This is a travesty, because in reality local phone service is so basic it doesn't cost but several cents a month to maintain.
- However, every time you move into a new apartment, you're charged a "connection fee", as if somebody needs to actually install a new line in your house.
- Also within each regular bill you're charged
- a "local number portability fee"
- a "Network access surcharge"
- a "federal access charge"
- a "line charge" in the amount of 1/3 of the bill
- Pardon my french, but what the fuck is a line charge? Or can I get a "local service" and without actually having a phone line?
- Deregulated utilities -
- Utilities, such as electricity and natural gas, which are often deregulated by state and local governments, even if there is a near-monopoly in the area
- As a result, the prices initially drop to make consumers feel that they made the right choice, but soon they slowly creep up.
- In times of crisis (drought, severe heat, prolonged cold) the prices go up
- After the crisis is over with, the prices stay high anyway
- Overpriced textbooks -
- Due to a monopoly of publishers and / or exclusive deals with universities, college books are very expensive in America.
- Since students are required to buy certain books for certain classes, textbooks prices should certainly be regulated
Overall, across the first 3 categories, I paid 23% of my income in mandatory business tax. I did not include the expenses from the last two categories, because it is hard to estimate exactly how much one overpays for deregulated utilities and overpriced textbooks. I estimate this would make the total mandatory business tax at least 30% in my case.
| Local phone service | $1,000 |
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| Automobile | Car insurance | $3,200 |
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| Maintainance | $2,000 |
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| Car payments | $800 | (excluding 2 cars from my parents for $5000) |
| Gasoline | $716 | (could have been much more, but I drive little) |
| Towing | $370 |
|
| Parking permits | $338 |
|
| Parking tickets | $385 |
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| Registration fees | $263 |
|
| Subtotal automobile | $8,072 |
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| Healthcare | insurance | $2115 | (not including me being covered under my parents insurance for a while) |
| copayments of all sorts | $730 |
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| prescriptions | $850 |
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| eyecare | $300 |
|
| deductibles | $270 |
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| hospital copays | $200 |
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| Subtotal other | $2,350 |
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| Subtotal healthcare | $4,465 |
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| Housing | money lost to landlords | $80 | in 1999 for unclean carpet |
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| $200 | in Sep 2000 for misc items, which were simply normal wear and tear |
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| $300 | in Sep 2000 for not being able to prorate the rent (2/3 of the month for free) |
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| $200 | in Sep 2001 (deposit for an apartment for which I never signed a lease) |
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| $385 | in Sep 2002 for failing to give 30-day notice |
| Subtotal housing | $1,165 |
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| Total lost over 3.5 years | $14,702 |
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| which is | $4,200 | per year |
| My annual income is | $18,150 |
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| percent mandatory business tax = | 23.1% |
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