Free Minds & Free Markets

Stossel: The Great American Tax Ripoff

The many taxes you pay without knowing.

Tax Day gets a lot of attention, but John Stossel says that attention is misleading, because the April 17 deadline is only for income tax. That's just a fraction of the taxes that Americans pay.

You probably know about property, payroll, and sales taxes, but there are also lots of hidden taxes. Kristin Tate reports on them in her new book, How Do I Tax Thee? A Field Guide to The Great American Ripoff.

Tate found a hundred hidden taxes—a rifle tax, airplane and hotel taxes, dog license fees, a blueberry tax in Maine, a sliced bagel tax in New York City (whole bagels aren't taxed), and so on.

Our camera followed her as she asked people if they knew about these taxes. Few did.

When people did know about them, like the dog license fee, they assumed it went to cover the public costs of dogs. But, Tate says, "in most cities it doesn't go to dogs. It just goes to the general fund like all of these other fees."

Stossel assumed 911 fees went to maintain the emergency system. But Tate says they usually don't.

"In most states and cities the 911 fees just go to general funds," she said. In Chicago, "they hiked their 911 fee in 2008. The reason for the hike was to fund their Olympic bid."

But when Chicago lost its Olympic bid, the 911 fee hike stayed in place.

"Once they put [taxes] there, they almost never go away," Stossel suggested.

"Absolutely not. Government only grows," Tate said.

The views expressed in this video are solely those of John Stossel, his independent production company, Stossel Productions, and the people he interviews. The claims and opinions set forth in the video and accompanying text are not necessarily those of Reason.

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  • Just Say'n||

    "The views expressed in this video are solely those of John Stossel, his independent production company, Stossel Productions, and the people he interviews. The claims and opinions set forth in the video and accompanying text are not necessarily those of Reason."

    Why is this disclaimer sometimes applied to Stossel videos? Is it just when he strays too far into an actual libertarian position that makes you guys so uncomfortable?

  • Scarecrow Repair & Chippering||

    Maybe it's for tax purposes, to emphasize that Stossel is not an employee.

  • Just Say'n||

    But it doesn't appear on every video he produces

  • NotAnotherSkippy||

    When it interferes with the fiscal convenience.

  • Scarecrow Repair & Chippering||

    Local, state, and federal governments spend roughly $8T a year (but that was before trump's budget upped the ante). That's $24K per person. If you deduct the deficit spending, which is not collected in real time, it may only be $20K collected per year per person.

    Probably triple that for per-household numbers.

    That's all you really need to know about how high taxes are.

  • NotAnotherSkippy||

    I thought state and local weren't spending at the same rate as the feds, but 8/19 is 42% so I really can't argue with that.

  • BigChiefWahoo||

    It's also worth remembering that most of those taxes don't require individuals to file a return. Payment of the tax is just included in some other transaction so as not to stick out in the taxpayer's mind and possibly influence his/her behavior in the voting booth. You can say they aren't "hidden", but the intent is definitely to encourage people not to give much thought to how much tax they are paying.

  • loveconstitution1789||

    Try arguing with a business about itemized tax collection and how you can pay that to the state yourself.

    These customer service people think their companies are doing God's work.

  • Citizen X - #6||

    Note: by "arguing with a business," lc most likely means "yelling at a minimum wage register biscuit."

  • loveconstitution1789||

    I am not that cruel. I meant employees on customer service phone calls trying to talk to me.

    I have gotten a food item that was not supposed to be taxed changed to tax free food item.

  • Get To Da Chippah||

    Would, but there'd be a tax I'll bet.

  • loveconstitution1789||

    If your not paying 50%+ of your income in fees, local taxes, sales taxes, state tax, federal tax, bend-over tax, etc. you are an American't not an American.

  • loveconstitution1789||

    Stossel: Good thing there is no mustache tax.

  • Rhywun||

    sliced bagel tax in New York City

    Actually, it's the same sales tax charged on all prepared foods in New York State. It's not hidden, either. Everybody knows about this. IOW there's no separate "sliced bagel tax".

    All these taxes are ridiculous enough without resorting to silly "fake news".

  • T. Lord||

    Your comment reminds of a moment in "Life of Brian" (and I heard it in this voice):

    Whether "everybody knows about this" isn't the point (it's been a long time since I briefly lived in NYC, and didn't remember it specifically) but rather that the tax is part of the grey goo of taxation at every turn. And arbitrary! Just because a legal distinction exists -- or a tax -- doesn't mean that it should, or that it should forever.

    Would make a funny cartoon. One bagel, obviously sliced, but with halves together, to another: "But for tax purposes, I'm unsliced."

  • Agammamon||

    Its still idiotic that you can be sold a bagel and a tub of cream cheese for one price, but if someone slices the bagel for you then its another.

    That's what is meant by 'sliced bagel tax'.

  • Rhywun||

    I dunno... I just don't like silly words games I guess.

    BTW, if I'm buying that bagel from a dude behind a counter at a deli, it's still prepared food and they're still going to charge sales tax. I'm pretty sure the situation is the same in many other states.

  • Rhywun||

    Gah, I meant to say "unsliced" from a dude behind a counter at a deli

  • loveconstitution1789||

    Aren't bagels prepared foods since the dough is rolled and cooked?

    I get what you are saying but not categorically making fun of any of these kinds of taxes seems like you're giving politicians a pass.

  • vek||

    God, I always wondered why bags of bagels that are sliced 90% of the way through aren't cut entirely... I wonder if it's to avoid this tax in some parts of the country?

    I always hate to have to cut that last little bit before throwing them in the toaster!

  • Rossami||

    About a year after I moved to Ohio, I started adding up all the taxes I paid, either directly or indirectly. Federal and state income taxes were easy to see. Local was a little trickier to since my job involved work in multiple jurisdictions. Sales tax, renters tax weren't too bad but all the different taxes just kept piling up. When my running total broke 50%, I decided that I couldn't handle the answer and stopped looking.

    To this day, I don't know what my total tax burden really is. I did learn that while income taxes are progressive, most of the other taxes are highly regressive. About the only thing I know for sure is that none of us are getting our money's worth.

  • loveconstitution1789||

    Yup. Sales tax, fees (license plates, drivers licenses, etc), gas tax, tax on cell phones, tax on landlines, tax on cable, tax on internet in some locales, TSA tax on flights, capital gains tax, FICA, SS tax, fed income tax, state income tax in most states, animal license tax, court fines, licensing costs, permit costs, unemployment tax, excise tax on health plans, excise taxes in general, alcohol tax, cigarette tax, sin taxes in general, garbage taxes, gift taxes, estate taxes, tolls, local income taxes, local fees, sewer and water taxes, electricity taxes, E911 taxes, tire (recycling mostly) taxes, workers com taxes, water craft taxes, Fed Universal Service Charge tax, and more....

  • ||

    These hidden taxes may be regressive - but only if you consume the product / service being taxed. Payroll related non-income taxes, FICA / Medicare, only apply if you are employed - I'm retired. Sales associated taxes are 'progressive' based on the amount you spend. From a libertarian perspective I can sort of accept them as they can be minimized / avoided.

    Some of the add-on fees mentioned I have more of a problem with. In particular, the 'Universal Service Fee' added on to my 'phone bill which paying for freebies such as 'Obamaphones' (Trumpphones?)

  • loveconstitution1789||

    Of course, you can avoid quite a few of them by being retired. Young people can avoid some of them by living at home and not paying rent.

    Point is that there are too many taxes that people can avoid but are still there or the products or services they cover get changed.

    Too many taxes to fund too large of a federal government. States too.

  • ||

    Thanks Love.. It appears you are age shaming me. I agree there are too many taxes. I have paid my share, I have a fixed income and am not prepared to spend my old age paying more to pay for 'phones.

    But these are not Federal; one can avoid State anything - including Amendment 2 violations and fixed income tax penalties - by moving.

    Yes these taxes are imbedded in the products / services. So don't consume them.

    And fuck you Love and your assumptions.

    I followed your comments .... until now !

  • Mark22||

    Well, income taxes make up most of my tax burden.

  • loveconstitution1789||

    I wouldn't be so sure.

  • NotAnotherSkippy||

    I am.

    Top 3 expenses:
    Fed Income Tax
    Mortgage (gone in 5 months)
    State Income tax

    After that everything is a rounding error.

  • Rossami||

    I submit that you have probably not tallied it properly. Yes, I believe that your top three are probably right - and that individually, the rest of the taxes are small. But when you start adding them all up together, well it depends. For me, the aggregate was larger than state income tax and larger than my monthly rent, though not yet larger than my federal rate when I stopped counting.

  • Mark22||

    I am. The math isn't hard to do.

  • Flaco||

    The so-called bagel slicing tax came out of a court case a few years ago. IF you accept the law in NY that in general, supermarket food is not subject to sales tax, but prepared or ready-to-eat food is subject to sales tax, it makes sense. Unsliced bagels are equivalent to buying a loaf of bread in the supermarket, but sliced bagels are equivalent to eating them in a diner, which would definitely be taxed.

    Taxation is still theft though.

  • Tionico||

    did the high and mighty bought off judge presiding in that case make a distinction between whole loaf bread and sliced bread bought by the loaf in a bag, just like the unsliced loaf? If not, he's raised a distinctioin that is not a distinction.

    Why should ANYTHING we put into our mouths be taxed anyway?

  • EscherEnigma||

    Why should ANYTHING we put into our mouths be taxed anyway?
    Because we should legalize and tax prostitution.

  • Mark22||

    Unsliced bagels are equivalent to buying a loaf of bread in the supermarket, but sliced bagels are equivalent to eating them in a diner, which would definitely be taxed.

    Both bread and bagels come in unsliced, machine sliced, and manually sliced varieties. So care to explain why the law should treat these things differently?

  • Tionico||

    Some years back we the voters of Washington State decided we'd had done with the insane "excise tax" collected annually at gunpoint for the priviledge of using our cars for getting about on publically owned and paid for roads. We told them from henceforth and forevermore ALL vehicles shall be charged an annual registration fee of $30 or less. Once that passed into law, we began to learn where that money used to go.. Libraries, parks, transit, law enforcement, county health departments, city and county government, I can't even remember them all but I DO remember feeling highly abused at the charade that these fees were for our cars and the roads.

    That was then, though.. in the years since they've managed to add quite a few other taxes..... all a mandatory part of vehicle licensing renewals annually. My tiny little ancient pickup cost me $114 to register it last fall. My big van was about $150. THey'ef also raised the fuel tax twice since then, and are threatening to do so again. They're even floating a plan to tax us by the mile we drive. Yet these same cretins lift nary a finger to do a thing to reduce the increadible waste and padding everywhere their grubby fingers can reach and many they cannot.

  • Inigo Montoya||

    Did she study ventriloquism? Her speech doesn't seem to correspond to lip movements. Still, she make a valid point.

    But what's often missed in the whole "taxes are too high" is the actual quality of what's being paid for. Let's just say if government performance was a car, you're paying brand new Rolls-Royce prices for second hand Yugo results.

  • prediksi singapore||

    D'fhéadfadh na cánacha i bhfolach seo athbhrú - ach amháin má itheann tú an táirge / an tseirbhís atá á gcáin. Ní bhaineann cánacha neamh-ioncaim a bhaineann le párolla, FICA / Medicare, ach amháin má tá tú fostaithe - tá mé ar scor. Tá cánacha a bhaineann le díolacháin 'forásach' bunaithe ar an méid a chaitheann tú. I bpeirspictíocht saoirseachta is féidir liom glacadh leo a ghlacadh mar is féidir iad a íoslaghdú / a sheachaint.

  • prediksifajar||

    tax tax tax


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