A Loaf of Bread

It seems as if every president proposes a "tax relief plan," which plan is used to gain election, or at least make a wonderful campaign promise. Taxes are levied on virtually everything besides income. There are taxes on every morsel you eat, and every drop you drink, although few ever think about it, and no candidate mentions it when he stumps for votes. There are multiple taxes on every phone call you make, every kilowatt of electricity you use, every gallon of gasoline you purchase, every BTU of gas you burn in your furnace, and everything you purchase at any and all retail and wholesale outlets, shops, stores, warehouses, or discount clubs. One cannot stay at a motel of hotel without paying huge taxes, often as much as 15-20%. Every item you use has multiple taxes added.

Not only that, but every manufactured, shipped, wholesaled, retailed, ordered, rebuilt, engineered, installed, guaranteed, repaired, grown, delivered, or imported, to name all I can think of now, are taxed by close to 50% in addition to the taxes added, which are visible. How? Simple. Every employed man, woman, or child in America must have a Social Security Number, which means that the person writing the paycheck must deduct, or contribute an equal amount, bringing the total to, 18.2% of all salaries, whether income tax is paid or not. This is just for Social Security and Medicare, and no one is exempt. In addition, there are state income taxes and federal income taxes, which are paid by workers. All workers. Assume then, that 18.2% for obligatory, and another 30% for other taxes on wages are paid to various governments, and this is not including sales and real estate, gasoline, and other taxes. This does not include property taxes paid on all buildings, including railroads, China marts, wholesale warehouses, factories, retail stores, and even the homes everyone lives in, regardless of their occupation. Apartment buildings have their property taxes added to the rents, as are the taxes on fuel, water, etc.

Taxes on property, wages, etc. are added to each item bought, regardless of the level. This means that when you go into a store and buy something, the entire labor chain's taxes are added to the cost of that item. Taxes on the labor and property of the manufacturer of the trucks that delivered the merchandise, as well as the labor and property of the plants that manufactured the parts of the truck even! The driver of the truck that did the delivery, has his close to 50% of his labor taxes added to the cost of all merchandise. There are places, especially in the east, where property taxes for a rather small, ordinary home, are over $300 per month. I can only imagine what the property taxes are for a department store or movie theatre. In Cripple Creek, Colorado, which legalized gambling a few years ago, the property taxes on a run down, ancient, poor condition store front, are over $20,000 a year, since it is in the "gambling district."

Imagine the taxes on the natural gas burned in a large, wholesale bakery, which bakes bread for grocery store sales. Imagine the property taxes on that bakery, the license plate taxes for the trucks that deliver the bread, and taxes on fuel that the trucks burn. Imagine the taxes on the salaries of the bakers, delivery men, janitorial personnel, bookkeepers, executives, and order takers, which are close to 50%. These taxes are added to the cost of that loaf of bread. The repairmen for the factory and its equipment, and the taxes on the phone lines, all go into that loaf of bread. The market employee taxes, property taxes, and taxes on the utilities the market uses, plus its phone lines, are added to the loaf of bread. The taxes paid to the employees of the manufacturer of the computers used in the chain, ovens, light bulbs, fixtures, building materials, telephone home office and switchgear, miles of copper wire, phone poles, power generating plants and their employees, and even the blacktop on the parking lot, are added to that loaf of bread. The farmer paid property taxes on his farm, taxes on his trucks, combine, thresher, barn, and everything that goes into wheat production are taxed. The beginning of the chain isn't at the farm. The property and labor taxes on the steel mill that made the steel that went into all of the various pieces of equipment from the tractors to the ovens, buildings, etc. There were taxes on the steel workers' pay and the mine that the iron ore came from. There are taxes on the John Deere factory and all its workers. Taxes on fertilizer plants and transportation of everything that goes up to make a loaf of bread, bushel of wheat, and the irrigating items to water the fields. Taxes, taxes, taxes, on everything and all labor. The chain is endless, and every single item in the chain of everything from the various factories, to the retail outlets are all added to the cost of everything.

Are the taxes on a loaf of bread 95%? Are the taxes on everything we consume, 95%? Think of the huge taxes on the oil refineries, pipe lines, and even taxes levied for removing the oil from the ground. Think of the wages taxed on the oil chain from well to pump. Think of the chain on electricity from the coal mine, which is taxed, to the railroads that carried the coal, the manufacturer of generators, distribution equipment, high tension lines, transformers, breakers, etc. All labor and property taxes go into the cost of electricity. Is electricity taxed by 95%? Is gasoline taxed by 95%? Probably, because at the pump there are usually close to fifty cents direct taxes, not counting the property taxes and wage taxes paid to the entire chain.

I sell Johnson-Mathey 100 ounce silver bars, and a lot of them. They run from 50 cents over spot to 47 cents over spot, and I deliver them for a 1.5% commission, including delivery. Think of the property taxes on the Johnson-Mathey plant at Salt Lake City, and its employees. It's a wonder they can do it for that price, and especially when one thinks of distributing costs and property taxes and labor taxes on that chain. We indeed are being taxed to death…literally.

Is it any wonder that manufacturers go overseas? Is it any wonder that we make only 16% of what we consume? Can you imagine the labor and property taxes in China and Mexico? Little to none, I'll bet. How can America compete? We can't, unless we eliminate about 90% of the federal government and 50% of local, county, and state governments, which are sucking the very life's blood out of us in a massive transfusion from the producers to the non-producers.

As if that weren't bad enough, the various pollution laws and regulations, zoning regulations and prohibitions, and other bureaucratic mistakes, malfeasances, and utter stupidity, costs us even more. Is it any wonder the American economy seems to this rogue, to be doomed? One must protect ones self, but I have no idea of how to protect ones self from the taxes that siphon dollars and pennies into every governmental orifice known to man.

The taxes, regulations, and bureaucratic nonsense have strangled us into a situation where we are unable to move, but are forced to buy from foreign nations, because our factories are closed or arsoned in many cases, and their machinery has been sold for scrap. We claim to be the world's only "super power," but are economically destroyed, and are living on borrowed time. If the dollar's burgeoning numbers cannot be stopped, and they can't, and if foreigners cannot be stopped from removing their investments in the US, and they continue to do so, and if taxes cannot be reduced at all levels, and they won't, we will economically die. Our consumer debt is larger than the GDP, and printing checks and bills will not inject life into a dying economic body. Protect yourself!

Don Stott has been a precious metals broker since 1977, has written five books, hundreds of columns, and his web site is www.coloradogold.com