March 6, 2008 - I tried something new this evening for dinner. Rather than using my usual spices for cooking up filet mignon, I marinated the filets in green pepper, red onion, and olive oil. Then just before cooking I sprinkled on some salt and pepper. I also took the onion and pepper and cooked those on the grill along side the filets. Everything turned out great, but it wasn't noticeably different than my usual technique, so I think I will stick to that. The filets were to celebrate selecting my cousin Mike as my best man for my wedding. We went out to O'Houstons after dinner and had a few beers while playing darts. Usually I suck at darts, but tonight I was on and won against him in Cricket. I want to get back to discussing taxes. I don't think I spent enough time discussing how much the government grabs from us. Let's take a look at a person living in Chicago who makes $1,000,000 a year, working for a company that has earnings of $15,000,000 a year. On the surface, this is a very lucky person, probably in the top .05% of all people in the world as far as income and living situation goes. However, if we dissect his taxes, we'll see that he is also bearing a tremendous tax burden compared to most people. Rather than letting this person spend their money as they see appropriate, the government assumes the person should part with the bulk of their money for governmental use. I'm going to presume that this person does not take advantage of any tax breaks, deductions, write-offs, shelters, etc, to see how much in a worst case scenario they might be taxed. They will pay $30,000 in state taxes, just over $318,000 in federal income tax, and just over $15,600 in "payroll tax". This leaves the person with $636k to spend as they see fit. Let's assume they shop for everything in Chicago, and pay the whopping 10.25% sales tax on everything, and spend every dollar they earn (most people spend MORE than they earn and build up debt, so it's not so unrealistic to envision this). This means that they really only had about $571k to spend, after all those taxes are taken into consideration. But wait!, there's more. Remember that this persons company made $15 million that year. The company has to pay taxes too, and they pay a lot. If the company hadn't had to pay taxes on their income, they could have afforded to pay this person $1.06 million more. So now we've got a person who really should have earned $2.06 million, and only had $571k of that available to spend, or an effective tax rate of 72%. The government gets the difference, to spend mostly on defense and interest payments. That's what is wrong with the current tax system. It is possible to take someone with income of $2.06 million a year and strip from them 72% of that money, in small manageable pieces. If we were able to see it all going out in one big chunk, people would immediately begin demanding that the government cut back on spending. But the way everything has been piecemealed out, we let a dollar here, ten dollars there slide by, until at the end of the year we look back and say, where did all my money go?