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Taxed in Fort Bragg

November 16, 2009

Last Thursday my wife and I drove up from our home near Point Arena to the towns of Mendocino and Fort Bragg. I had finished a major project a week earlier and was feeling I deserved a vacation day. Jan needed to visit the Mendocino Art Center to restock her crafts there (see PeacefulJewelry.com for examples). We ate a delicious and yet inexpensive Chinese lunch at Lee's in Fort Bragg. Then we stopped at what is now CVS (formerly Longs) to shop. We were surprised when we got to the check-out counter and found that the items we had picked up because they had special sales pricing were only available at the sales price if we became CVS members. We consider that fraud. There was a time when if a store advertised a price and then tried to make you pay a higher one, that was indeed a form of fraud, but I suppose the gruel of law has found a way around that. It is not very different than Costco, where you need a membership to get in. We bought only the non-sale items, then shopped some more at Rite-Aid, where the prices were just as low and they treated all customers as valued.

But my main point is that at home I looked at the receipt and noted that the sales tax rate was 8.75%.

Since Jan and I each own our own tiny businesses, and have no employees, we can offer a rather stark picture of the tax burden on Californians.

At the federal level, we pay 15.3% "self employment tax" on income, which combines the employee part of the Social Security and Medicare taxes with the employer part. Then, depending on how lucky of a year we are having, we may pay quite a bit in federal income tax. Because of the exemptions and standard deduction, in a bad year we don't pay much income tax, but in a typical year we are taxes at a rate of about 15%.

In California we are just under the level where the state income tax really begins to hit. Much as we would like to make more money and be at that higher level, usually a couple of hundred dollars covers that for us.

We now pay, rounded, $2000 per year in real estate taxes to Mendocino County. That is roughly another 5% of our income.

There seem to be plenty of nuisance taxes outlined in our electric and utility bills as well, plus gasoline tax, etc.

Despite our modest, hard-earned income, all told the governments takes about 40% it. In a good year, when we are in higher tax brackets, they may take over 50%. We get nothing directly from the government in return, unless you count the fact that our driveway is conveniently located on a paved county road, and the county comes by and whacks the weeds along the road once a year. Sometimes they even fill potholes.

Which is only one of the reasons we shun both the Democratic Party and the Republican Party. The Republican Party appeals to us by braying "no new taxes." But the Republicans are actually responsible for the lions share of government spending, including money we feel is wasted on the war on drugs, on subsidies to corporations, on military spending, and on the current stupid version of "three strike you're out."

We are a bit more sympathetic to some of what the Democrats spend money on, but a lot of graft seems to be involved. On the way and back we saw Highway 1 being repaired by Granite Construction, whose owners are major donors to Congressman Thompson, who voted for the worst-designed stimulus package in U.S. history. You figure why.

I would like to see smaller, more efficient governments on the county, state, and federal level. I believe tax rates should be progressive, and I believe government programs should exist only when there is a compelling need for them that is not being taken care of by the citizens themselves. I am for social programs kept within reasonable bounds. I think crime, and the extraordinary expense of dealing with crime, would largely go away over time if we had better education and economic opportunities for economically disadvantaged children, and if we stopped rewarding it by creating black markets with our anti-recreational drug laws.

But few people will look at political candidates at that level of detail. Donors in the major parties almost always determine who wins party primaries. By the time you choose between a Democrat and a Republican on election day, you will be choosing between candidates who have both been vetted by the party machines themselves, the real-estate industry and the military-industrial complex. No one is going to rock the boat.

And this boat is in serious need of rocking. If something does not change soon, we will have a second-rate economy and be racing towards a third-rate economy. With all of the misery that implies.

William P. Meyers