We paid a third of our income in taxes and all we have to show for it is this lousy sandwich!
Well at least we get a sandwich… 🙂
Today is Tax Freedom Day, and Subway restaurants are celebrating all week. On April 16, when you buy a foot-long Subway sandwich in the Washington metro area, you’ll get a second one free. It’s Subway’s Customer Appreciation day, Subway’s way of giving “customers a ‘tax break’ to show appreciation to loyal customers by offering its newest special during the final days of tax season.”
Tax Freedom Day is the first day in the calendar year when the nation has paid enough to fund its annual debt burden. Everything you’ve earned up to this point goes directly to the government. A free sandwich is as good a way as any to celebrate finally arriving at the point in the year when you can spend what you earn on things you actually care about. But the level of the nation’s tax burden is nothing to celebrate.
The average effective tax rate for American households is 26.9 percent. To put that in real-world perspective, let’s see what that actually costs a farily average worker earning a $50,000 salary. Having worked these first 15 weeks of the year, every penny of the $13,450 that worker has earned goes directly to the government.
But that’s not all. Those tax dollars contribute to keeping the price of that sandwich higher than it should be. How does that work? When you pay Subway for a sandwich, embedded in the price are costs from agricultural subsidies that have been passed on to consumers. Consider wheat subsidies, which are price floors. Under the 2002 Farm Bill, for every bushel of wheat sold the government gave farmers an extra 52 cents and guaranteed a price of $3.86 per bushel during 2002–2003 and $3.92 during 2004–2007.
That means that if the price of wheat is $3.80 per bushel, the government gives farmers an extra 58 cents—the subsidy plus the difference between market price and the guaranteed price floor. For sandwich-craving Americans, that means that they are paying twice for that soft bun – once at the Subway cashier and once through the complicated web of subsidy dollars.
If you want dessert after your sandwich, remember that today is Ben & Jerry’s (non-tax related) Free Cone Day! But don’t even get me started on how many of your taxpayer dollars go to sugar subsidies or corn subsidies.
