Hidden taxes cost families thousands

Published 10:23 pm Friday, April 15, 2016

AP

Income tax and sales tax are the most visible forms of taxation we’re subject to, but they’re not the only forms. While many of us are focused on federal income taxes this weekend – thanks to the Washington, D.C., holiday that pushed Tax Day from April 15 to April 18 this year – the Heritage Foundation has published a list of some hidden taxes we should all be aware of.

“Thousands of federal regulations raise the prices of goods and services that Americans buy,” Heritage wrote. “Just six of these regulations raise prices enough to cost the average American household $1,005 per year. Consumers pay hidden taxes when they buy a new or used car, fill their gas tank, and pay for their groceries.”

Eliminating fuel economy regulations on cars and trucks could save families $448 per year, Heritage found.

“Corporate Average Fuel Economy (CAFE) standards add $3,800 to the cost of an average new car, and the cost is rising every year,” Heritage reported. “For the average household, this works out to $448 per year. For a family with several drivers, however, the savings from repeal would be significantly larger. As a percentage of income, the potential savings are greatest for low-income families who rely on car transportation to get to work. These costs already take into account gasoline savings from greater fuel economy, refuting the argument that greater regulation will save consumers money at the pump.”

The ethanol mandate – which has been proven to have no environmental advantages – should also be abolished. Corn doesn’t make good gasoline.



“Two studies have found that the RFS raises the price of gas by about 19 cents per gallon,” Heritage noted. “Over the course of a year, the extra gas and food costs add up to $255 for an average household. Repealing the mandate would save American households money and would save lives in poor countries where the increased price of grain has pushed the world’s poorest to the very edge of their budgets.”

Corporate tax reform could save American families hundreds of dollars.

“Corporate tax reform would simplify the code and lower the tax rate without changing total revenue,” Heritage wrote. “If such a reform cut compliance costs in half, and if half of the benefits were realized as lower prices, prices would fall and save consumers $230 a year. Workers and investors would also benefit, especially in future years as new investments raised labor productivity and thus increased wages.”

Smaller savings – but larger principles – could be found in reforming the sugar industry.

“Crony capitalism is at work in the sugar industry, where trade restrictions allow U.S. sugar growers to charge higher prices, thereby hurting American consumers and the rest of the food industry,” Heritage said. “Sugar is a small enough part of American budgets that the savings are relatively small: $29 per year for the typical household, or $3.6 billion for consumers nationally.”

No one likes paying taxes. But any discussion of tax reform must begin with an accurate picture of when and how we are taxed.