Here is my tribute to (or rip-off of) Leonard E. Read's brilliant monograph "I, Pencil". I have been distributing this through mailing lists for the past four years.
I was talking to one of my clients who used to be in the tax department of a major US brewery. We tried to come up with all the taxes that were incurred, directly or indirectly, by the act of me driving to the liquor store to buy a six pack of his product.
- Beer is a product manufactured chiefly by certain physical and chemical on grain. So right off the bat, we are dealing with the price being inflated through agricultural subsidies being financed by taxpayers (1).
- The grain needs to be grown somewhere. Property taxes (2) are levied against the land on which the grain and hops is grown.
- The grain and hops don't magically harvest themselves. Some one has to do it, and they usually don't do it for free. Income taxes (3) come into play. The sales tax (4) on the equipment used to harvest the crops, along with energy taxes (5) on the fuel to power the equipment also come into play.
- The agricultural products need to get to the brewery somehow. More income taxes (6), sales taxes (7), licensing fees (8), and fuel taxes (9).
- The brewery has to pay property taxes (10) and corporate income taxes (11). We have not produced a single drop of beer so far in this process, yet we have incurred at least 11 separate taxes. So let's start brewing. In addition to the aforementioned taxes, the brewery must pay for the unemployment compensation (12), social security (13), and other payroll taxes (14). The employees of the brewery also must pay federal (15) and state (16) income taxes, and also social security (17), along with other incidental taxes (e.g., imputed value on life insurance benefits) (18). In addition, the brewery has to pay the people to insure compliance with the plethora of federal rules forced upon employers (19) (I will only count this once, although I could probably ascribe a value of at least 20 instances of taxation).
- Very few people (employees only) actually buy beer straight from the brewery, so the beer must get out to the distributor. See item #4. (20-23). In addition, the brewer must pay an excise tax (24), and the distributor must pay a sales tax on the finished product (25).
- The beer is at the distributor. Guess what? All the taxes of #5 apply to the distributor also (26-35), in addition to the taxes of #4 (36-39).
- The retailer (#5 again, 40-49, and 50 for sales tax) purchases the beer from the distributor.
- Now I get into my car, which I had to pay sales tax (51), registration (52), and fuel taxes (53) to drive to the liquor store. I open up my wallet to exchange some of my after tax money (Social Security, State, and Federal Income 54-56) for the beer. In addition to the other 56+ taxes, I must pay states sales tax (57).
I could go into to even greater detail about the taxes that went into the manufacture of all the equipment involved, and the construction of all the horizontal (roads) and vertical (buildings) structures involved in this process.
It isn't difficult to see how the overbearing and overabundant tentacles of taxation are slowly but surely strangling our livelyhoods, unless you are one of the success stories of the government youth propaganda camps -- a.k.a. public schools -- who think we aren't paying enough in taxes.