Taxes Keeping Workers Poor
By RALPH REILAND
"Forget the minimum wage," says Nate, a dishwasher and
cook's helper at our restaurant. "It's taxes that are killing
me." He is a college student by day, washes about 1,000
dishes during the dinner rush, and stuffs and rolls grape
leaves until midnight.
Nate makes $6.50 per hour and is proud of what his hard
work buys. Aside from college textbooks, he drives an '88
white Dodge Daytona, eats out at Bellisario's Pizza Palace
and the South Hills Village food court, plays some golf, and
has a $30 Silver Arowana splashing around in his tropical
fish tank.
If he works 40 hours a week for 52 weeks, the government
grabs $2,889 out of his $13,520 paycheck, a hefty 21
percent. The Federal bite is $2,103 -- $1,069 in income
taxes and $1,034 for social Security and medicare that he
says he'll never receive. Then, Pennsylvania snatches
$379 in income tax and $18 for unemployment tax. Finally,
the city of Pittsburgh takes another $369 in income taxes
before Nate sees a dime.
On top of the 21 percent deducted from his paycheck, Nate
pays a seven percent sales tax on almost everything he
buys: six percent state sales tax and one percent Regional
Assets District Tax for the zoo and opera house. That's an-
other $600 in annual taxes.
When he fills up at Dom's Gulf he pays 42.98 cents a
gallon in taxes -- 18.4 cents Federal, the rest to
Pennsylvania. That's $400 a year if he fills up once a week,
and the governor is seeking an additional 6.5 cents a gallon
for unrepaired potholes.
When he pays his rent, Nate is hit for his share of es-
calating real estate taxes funneled into Pittsburgh's public
schools. Another rent hike is on the horizon with the school
board spending $9,000 per student and $31 million a year in
the red.
Excise taxes, Federal and state, add $6.60 to every carton
of cigarettes, then, as a tax on a tax, seven percent sales
tax is added to the higher retail price. That's $300 if he
smokes a pack a day. If Nate buys beer, the Federal govern-
ment grabs 80 cents per six-pack in excise taxes. To
purchase a $30 concert ticket, he pays seven percent sales
tax plus five percent amusement tax.
Government takes more than 30 percent of Nate's pay.
He's washing dishes from January until May for no pay. If
any business made a kid wash dishes for four months for
nothing Reno would be gassing up the tanks. Ironically,
politicians who keep piling taxes on Nate paint themselves
as compassionate.
The story isn't much different for someone earning
minimum wage. On an annual wage of $8,840 a minimum-
wage employe has to kick in $1,1524 in payroll taxes, 17
percent right off the top; $335 in Federal income taxes; $676
for Social Security and Medicare; $248 in state income tax;
$11 for unemployment tax; and $254 in city income tax.
The rest -- gas tax, concert tax, sales tax, etc., -- is the
same as Nate's with one exception. For a single, full-time
minimum wage worker, the government returns $31 at the
end of the year as Earned Income Credit. Nate, making
$6.50 an hour and turning over a third of his income to the
government, doesn't qualify for that. He's too rich.
Why shouldn't low-wage workers be exempt from Federal
income tax? Nate would pocket an extra 50 cents an hour of
his own money. Who can say Leviathan needs money more
than Nate? Besides, he would still pay a fourth of his in-
come in taxes. That same hike of 50 cents per hour pay can
be provided to minimum wage workers by exempting them
from FICA and Federal income taxes. Tax exemptions re-
ward the work ethic, improve the fairness of the tax system,
mandate efficiencies in government, and let people keep
more of the money they've earned.
But it doesn't do what politicians want: bring in
contributions from well-heeled unions.
Ralph Reiland owns a restaurant in Pittsburgh and teaches
economics at Robert Morris College
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Christian Coalition Lawyer Says Lawsuit An Attempt To
Intimidate Churches
According to James Bopp, attorney for the Christian
Coalition, the Federal Election Commission's lawsuit against
the organization is a gesture probably intended to intimidate
churches into refusing to distribute the Christian Coalition
voter guides
The FEC charges the Christian Coalition violated Federal
election laws because the group's voter guides, phone
banks and mailings helped Republican candidates. Spe-
cifically, the government charges the Christian Coalition
aided former Pres. George Bush, Sen. Jesse Helms, Senate
candidate Oliver North and Speaker Newt Gingrich.
However, Bopp said, the complaint fails to identify actions
or statements that were supposedly helpful to these
candidates.
Press account shave noted that the governments actions
could cause churches that usually distribute the CC voter
guides to decline out of fear of losing their tax exemption.
The voter guides, Bopp said, are not partisan and the
lawsuit has nothing to do with tax status or with churches
distributing the voter guides. But, he said, pastors may
decide to play it safe and not distribute the guides. There is
reason to believe, he said, that is the real purpose of the
lawsuit.
Bopp emphasized that the lawsuit poses no threat to
churches that distribute the Christian Coalition's voter
guides. Regardless of how the FEC suit against the Christian
Coalition is resolved, he said, churches could not lose their
tax exemptions for distributing the voter guides.
He said it will be necessary to "jump through some hoops"
to get the suit dismissed. There needs to be discovery and
interrogatories to force the commission to specify what the
Christian Coalition actually did that was partisan. When the
answers are not forthcoming, or are inadequate, he said, a
motion to dismiss could be made. That, however takes time
and cannot be accomplished before the election.
The FEC is going to lose this case. he said, and in the
meantime, "People need to have heart and not be
intimidated by the Big Censors from Washington."
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Fuels Treaty "Devastating" To U.S. Economy
A proposed treaty would obligate the U.S. to reduce carbon
dioxide emissions by 10 percent by the year 2010 according
to Texas Citizens for a Sound Economy.
The reduction, TCSE explains, was agreed to by Tim Wirth,
U.S. Undersecretary of State for Global Affairs at a recent
U.N. sponsored meeting in Geneva. The intent is to reduce
the amount of so-called greenhouse gasses released into
the atmosphere in order to retard global warming.
The Bush administration had been pursuing a voluntary
program of emissions reduction, but the new agreement
commits the U.S. to impose mandatory limits through a
variety of methods including taxes and regulations.
The Clinton administration's intent to change this policy to
mandatory limits was announced at a news conference in
Geneva where it received less press attention than if it had
been announced in Washington.
The methods reportedly being considered for reducing
emissions include imposing a $200 per ton tax on the
carbon content of fuels. This would result in a tax of about
60 cents per gallon on gasoline. Studies by two economic
research firms, DRI/McGraw-Hill and Charles River Assoc.,
in-dicate that a tax of half that amount ($100 per metric ton)
would reduce U.S. Gross Domestic Product by 2.3 percent by
the year 2010, destroy 500,000 jobs each year and cost
every American adult $852 annually.
In addition to the burden of higher taxes on gasoline,
consumer will face higher taxes for nearly everything they
buy -- reflecting the higher cost of energy used to produce
and transport goods.
Opposition to these policies is based partly on the fact that
there is no consensus that a problem even exists. While
some maintain that industry and other human activities and
contributing to the level of so-called greenhouse gasses in
the atmosphere other scientists dispute this connection.
Texas Citizens for a Sound Economy point out that World
Climate Review, a journal published e scientists, contends
that computer models used to predict global temperatures
have consistently overestimated the amount of warming in
the atmosphere.
Additionally, Congress' Office of Technology Assessment
reports that 90 percent of greenhouse gases are produced
naturally. OTA also reports that most of the observed
temperature increase occurred before 1940 while most man-
made gases in the atmosphere were produced after 1940.