taxes

Where does the money come from?

Today I was listening to the radio and heard an insane conversation regarding taxes and oil companies and profits and I really could not understand why the guest could not understand where money comes from.

So I then thought about some of my friends that don’t understand this either and so I realized this must be a widespread problem.

People do not understand how our money system works as far as business taxes and individuals and our government.

First, I’ll answer the question.   All the money comes from you and me, the consumers that buy the food or the gasoline, or whatever the consumable product is.

Think about that for a moment.  Consumers are what we are called because we are the end users of a consumable product.

Take gas for example.  You spend 60 bucks for 15 gallons of gas priced at $4.00.  Out of that $60, comes the wholesale price of the fuel and the taxes that are collected including sales tax, county taxes and federal taxes.

Also out of that $60 comes the wages of the employees, including the taxes that come out of his paycheck. There’s also the property tax bill for the gas station, and the various business taxes that the owner has to pay.

Of course the gas station bought the fuel from someone else (a wholesaler) who has employees and they pay taxes just like the gas station owner did.  And depending on how many hands that gas (or the raw oil) went through, every time each company had to pay various taxes just like the gas station did.

Where does the money for these taxes come from?  Like I said, you and me. Out of that $60 tank of gas.

There is no where else for it to come from.

Because our combined local, state and federal governments are all demanding their share of taxes all through the supply chain, it is nearly impossible for us as consumers to know with complete accuracy, how much of our income is going to taxes.

This is why we need to overhaul our system of funding our government and simplifying our tax collection process.

Your comments are welcome and I’ll write more on this in the future.