Jewish World Review May 15, 2013 / 6 Sivan 5773
Today on NPR: The smothering tax burden
By A. Barton Hinkle
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AUDIE CORNISH: Good afternoon. This is "All Things Considered," from NPR News in an Alternate Universe. I'm Audie Cornish.
MELISSA BLOCK: I'm Melissa Block. We begin this hour with a look at the nation's tax burden.
AUDIE CORNISH: You've probably heard a lot about the effects of the sequester on various government programs and the people they serve. We thought it was time to look at the other side of the coin.
MELISSA BLOCK: Joining us now is NPR's Pam Fessler, who has spoken with a couple of taxpayers about the painful tax burden they bear. Pam?
PAM FESSLER: That's right, Melissa. I first spoke with a man named Chipper Wilson, who runs a plumbing-repair business in Fredericksburg, Virginia. Wilson says the combination of federal, state and local taxes makes it pretty tough for him to make ends meet.
CHIPPER WILSON: It seems like they always got their hand in your pocket. It's not just the income taxes. They nickel-and-dime you to death. I got to pay sales taxes and business taxes and property taxes and on and on. It just seems like they never cut you a break.
AUDIE CORNISH: And Virginia is actually a pretty low-tax state, isn't it Pam?
PAM FESSLER: Right, Audie although some might say that's like being the shortest player in the NBA. The state's top tax rate of almost 6 percent starts at an income level of only $17,000 a year. For Chipper Wilson, a divorcé whose children are grown, that goes on top of his 25 percent federal tax rate, plus his local real-estate tax.
CHIPPER WILSON: Cost me more than a grand a year for a 1,500-foot rancher. Plus you got your car tax. And I got to pay tax on my business van, not to mention the gas tax.
PAM FESSLER: Last year Wilson paid almost $2,600 in taxes on fuel for his personal vehicle, a Chevy Metro, and his Ford Econoline van.
CHIPPER WILSON: I got to pay the business-property tax. I got to pay the BPOL tax.
PAM FESSLER: That's a gross-receipts business tax. In Virginia, companies have to pay taxes on the revenue they collect, not just the profit they make.
MELISSA BLOCK: Wait, wait so somebody like Chipper Wilson can end up with a big tax liability even if he has a loss for the year?
PAM FESSLER: It sounds incredible, but it's true. That tax actually dates back more than two centuries; it was originally passed to help finance the War of 1812.
AUDIE CORNISH: I thought that war was over by now.
PAM FESSLER: Well, it is. It is. But remember what Ronald Reagan once said: "Government programs, once launched, never disappear," and that apparently goes for taxes, too.
I also spoke with Abigail Ferschleiser of Bayonne, New Jersey. She and her husband David are trying to save up enough money to put their daughter Claire through college.
ABIGAIL FERSCHLEISER: It's hard, you know? We scrimp and save, we don't go out to eat, we buy in bulk, we do Redbox instead of going out to the movies.
PAM FESSLER; David Ferschleiser runs a chain of dry cleaners with several locations and just over 60 employees. He worries about what will happen when health care reform takes full effect.
DAVID FERSCHLEISER: We've always provided our workers with a small mini-med health plan. It just seems like the right thing to do. But with the new Obamacare mandates, we'll be teetering on the brink, you know. We run a thin margin as it is. We just can't afford it.
ABIGAIL FERSCHLEISER: I added up all our taxes last year federal and state and everything and it's the single biggest expense we have. We pay more in taxes than we spend on our mortgage and our grocery bill.
PAM FESSLER: I checked with The Tax Foundation's Michael Huntington, and he confirms that Americans pay more in taxes than they do for food, clothing, and shelter combined.
MELISSA BLOCK: I'm sorry, could you repeat that? That can't be right. I'm I'm just having a hard time wrapping my head around it.
PAM FESSLER: Well, here's what Huntington had to say.
MICHAEL HUNTINGTON, THE TAX FOUNDATION: For most of the 20th century and up to today, Americans have paid more in taxes than they do for those three life essentials, except for one brief period in the 1980s. The biggest disparity occurred in 2000, when Americans paid almost a fifth more in taxes than they spent on food, clothing and shelter combined. The gap has narrowed since then, but we still have a long way to go to conquer the tax monster.
AUDIE CORNISH: But it seems like we're going in the wrong direction, doesn't it? Obamacare will impose $1 trillion in new taxes, we just had another $600 billion tax hike in the fiscal-cliff deal at the beginning of the year, and now Congress is talking about imposing taxes on internet sales. All that has to act as a tremendous drag on the economy.
PAM FESSLER: Every serious economist I've spoken to would agree with that assessment.
AUDIE CORNISH: OK. Pam Fessler, thanks very much. We'll be right back with more of "All Things Considered" from NPR in an Alternate Universe.
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A. Barton Hinkle is Deputy Editor of the Editorial Pages at Richmond Times-Dispatch Comment by clicking here.
© 2011, A. Barton Hinkle