It takes $30,000 to pay cash for a $20,000 car.... : LUSENET : TB2K spinoff uncensored : One Thread

The Cost of Buying A Car Orange County Register


Democrats in Washington, D.C., have told the average American that we don't need to have our taxes lowered. I am puzzled by this, so I have a riddle for them: How much does it cost to buy a $20,000 automobile?

I realize that this is an unfair question put to them since they are chauffeured to and from work every day and probably haven't set their hand on a gas pump in decades. The quick answer would be $20,000, but they would be wrong. They would be wrong because they don't have any idea what the average American pays in taxes. If they did they would not be telling me, my wife and my son that the amount they tax us is just right and not a burden. So how much does it cost to buy a $20,000 automobile? Let's do the math!

You and I know that you can't just walk into a car dealer and put down $20,000 for a $20,000 car and drive away, but the Democrats in Washington don't know that. We know that the $20,000 must be earned first and must be after-tax dollars. So we need to account for the average tax rate for Americans and the average state tax rate also. We also need to consider the sales tax and licensing fees and other income taxes. For simplification we won't consider gasoline fees and dealer fees.

If the sales price of automobile is $20,000 and sales tax is 7.75 percent then we will spend $1,550 in sales tax. The state licensing fee is 2.5 percent of the sales price, or $5OO, and we will have to pay this tax also. This means that full price of our automobile is $22,050.

In other words we need $22,O50 just to drive the car off the lot, but we first must earn enough to provide $22,050 in spending income, and there is host of income taxes applied to the average American.

We first must earn enough to pay for the income taxes that are taken out of our paychecks before we get to spend the $22,050 we need to buy our automobile. Social Security withholding is 6.1 percent, Medicare is 14 percent and Disability Unemployment withholding is .5 percent. Then, of course, there are state and federal income taxes. For simplification, we will assume that the federal tax bracket after adjustments, is 17.75 percent and the state income tax bracket paid is 5.75 percent. Therefore, the income taxation totals 26.5 percent.

So, roughly, we must earn 26.5 percent more than $22,050 to pay for all the income taxes assessed on our paychecks before we receive the $22,050 we need to spend on our automobile -- or an additional $7,950. In other words, we need to earn $30,000 in gross income.

To summarize, to purchase our automobile we will spend $4,750 in federal income taxes, $1,344 in state income taxes, $1,432 in Social Security taxes, $313 in Medicare taxes, $111 in Disability and Unemployment, $1,550 in sales tax and $500 in state licensing fees. We will pay a total of $10,000 in taxes alone to purchase a $20,000 automobile.

It is astounding when one-third of the purchase of an automobile is needed just for taxes. Its even more astonishing to realize that we have Democrats in Washington, D.C., who have the audacity to tell us that a tax cut is not needed. Democrats in D.C. are clearly out of touch with the average American. They obviously have no concept of how we average Americans live our lives, or of the struggle we face with the tax burden they strive to continue to impose upon us. Their lifestyle in our nation's capital must be very easy for them, but for the average American in the heartland, taxation is the bane of our existence.

If the Democrats in Washington knew how the average American lives, I believe that they would be in favor of the tax-reduction plan that has been proved by Congress. But since they have no concept of how we average Americans live our lives, they are emboldened to say that we don't need a tax cut.

And they call it a representative government.

Mr. Yarbrough is correct in his mathematics but to heap all the blame on the shoulders of the crooks, cowards and criminals who wear the mantle of Democrat isn't being truthful. Since the Republicans took control of Congress in January of 1995, the government has grown in size, taxes are still out of control and they have withered under the watchful eye of Janet Waco Reno and Mr. Clinton. And, if you've read the investigative reports by Capitol Hill Blue, you will see that the Republicans have been getting away with criminal activities that would have put you and I in jail a long time ago.

There is only one solution for the problem with the IRS and that is a total, lawful tax revolt by following the law as it is written and don't volunteer. What's going on now is NOT what the Founding Fathers wanted for America. It's a national disgrace.

The real question remains: Are the people ready to finally just say No? When will enough be enough? Only a full tax revolt will force both the Democrats and Republicans in Congress to confront the world's powerful bankers who are charging ahead with the destruction of America and bringing our Republic to her knees as part of a one world financial and "moral" order.

-- boo boo (, May 13, 2000


And that's only part of the story. Some of the 20K that does go to the car mfr will be reported as profit and so taxed again. Some of the after-tax profit will be paid as dividends to stockholders and will be taxed again. Some of the money you paid for the car will be sent directly to the government for SS. Then there are property taxes and local and state income taxes. I am not a tax lawyer; I'm sure there is much more.

BUT, what is the tax revolt that you want? Do you simply want lower taxes or do you deny that the government has any legitimate expenses that must be funded by tax revenues? (National defense for example?) Do you want a "more fair" tax plan? Now there's a can of worms. Don't tax you; don't tax me; tax the fellow behind the tree.

Seems to me that any tax reform must be incremental. Please, the world has been bedeviled by too many revolutions. How about creeping capitalism. How about Fabian capitalism? How about term limits?

-- Lars (, May 13, 2000.

Well, where I be, In Ohio they just stated last night on the news we are in 4th place and pay 25% in taxes for a family w/$60,000 Income.

In my city alone, well, I wont EVEN go there...

Our Governor is now being told it isnt legal to tax homeowners to fund the public schools.

We started a lotter, dont know HOW many years ago, supposed to fund schools.

Who's hand is in cookie jar? I dont know, but what I do know, is our schools are rated amongst the worst.

-- consumer (, May 13, 2000.

We DO have a form of representative government (or is it reprehensible govt?)...the problem is not the FORM, but rather WHO they actually represent. Certainly not US!

-- (, May 15, 2000.


-- tguk (q@q.n), July 07, 2000.

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