The other day my daughter and I were walking through the grocery store when she saw a pencil. She asked me if she could have it. Normally I like that kind of “toy” request; I can make the deal contingent on a poem, a math problem or a little story.
But this day I said “no”.
But daahhh-ad! It’s only a dollar! How long does it take you to earn a dollar.
So I bought her the pencil and when we got home I taught her about taxes.
It turns out that just accounting for my portion of the North Carolina sales tax, my federal income tax and then North Carolina income tax, the cost of that $1.00 pencil goes to $1.68.
I didn’t bother to go through the FICA, the gas tax, and the tax on the car that drove us to the grocery. Just the three.
Think of that, 40.48% of my income, just accounting for those three taxes, are consumed to buy a simple pencil.