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Sunday, October 26, 2008

A Taxing Issue

My family has discovered a bit of a problem with our current American government's system of taxing. Earlier this year I was teaching at a local college, and my wife was working as a bank teller. With our combined income we were making considerably less than when I was a practicing veterinarian. However, we still managed to make ends meet by scrimping and saving every penny. For a number of reasons, I left teaching to go back to practicing medicine and my wife quit work to stay home with the kids. In doing this, our household income jumped by around $10,000 annually. Pretty good, right? Obviously we're doing much better, right? Well, wish I could say that was true. Actually, we're bringing home (net income) about $500 less than when our gross income was lower! Now how in the heck can that be right? I make a lot more money, yet our take-home pay goes down!

It comes down to two factors....taxes and insurance. Previously, I was working for the state university system, so my health insurance was really good and really inexpensive. Now that I'm with a private (though very large) practice, my insurance costs more. Secondly, we are now in a higher tax bracket, and therefore pay more in taxes. And we're not high enough in that new bracket for the higher pay to offset the taxes. How is that right and fair? To us, that shows how the current system punishes initiative, education, and hard work. Our family would actually be better off financially if my wife and I were both working, making lower salaries, and relying on family to take care of our kids. What kind of a messed-up system encourages this kind of family lifestyle????

So, this being an election year, I decided to look at the candidates. John McCain doesn't have a tax calculator on his web site, so I can't figure out how much savings I would get if he becomes president. Barack Obama has one of these calculators on this site, and according to it, under his plan, I would save $1800 in taxes and McCain's plan would save me $122. Now, I'm going to take that with more than a few grains of salt, as I don't know how realistic his plan is. Sounds good, but I'm not sure how it will be paid for, and I'm not a fan of overly taxing wealthy people (that gets back to my beef with a system that punishes and discourages people from making more money).

For well over a year I've heard about the FairTax proposal. So I decided to check out their site (, and I went through their calcuator. According to it, I would pay $9170 less in taxes per year! Sounds pretty good. And everything I've read and heard makes the FairTax system seem very appealing. And frankly, I'm sick and tired of our current way of raising money for government (my problem with what the government then does with the money is a whoooole 'nother issue!). I think that we need to completely re-think our way of handling the money going from us to our governments, and start putting pressure on our legislators.

Take a look at your next or most recent paycheck. Look at the lines for your FICA and other income taxes. Now look at your gross pay. Sit down and pretend to write out a check to the federal government for the amount of taxes. What would it be like if you had to actually write out a check yourself for that amount on every paycheck? Would you be pretty upset about having to write a check that large? Then why in the heck are we all sitting down and doing nothing simply because it automatically comes out and all we really see is the final net income?

This is an election year, and a very important one. The approval ratings of Congress and the President are at historical lows. People are pretty darn fed up with both Democrats and Republicans. Well, why are we going to take it? WE have the power to make the changes! Don't let 545 people make the decisions for 300 million! Instead of simply voting for a party, take a really good look at the candidates. I mean a really good look, not simply watching or listening to their advertisements. And when it comes to tax situations, start to look at candidates that support the FairTax. I know I will.

We can make a difference in this country. It's not up to our President, Senators, or Representatives. It's up to us.