PonkaBlog

Nothing is Free

I’m always amazed when I hear people talk about free health care or free cell phones or any one of the other government programs designed to give people things they haven’t had to earn. 

What many people don’t seem to realize is that nothing is free.  It might be free to you but someone, somewhere is paying for it.  And that someone is the people who pay taxes and buy things.

Tax Freedom Day is a term coined by the Tax Foundation (taxfoundation.org) and refers to the day of the year when taxpayers will have paid their tax burden for the year.  In other words, it represents how many days you have to work before you’re earning money for yourself and not for the government. It includes all federal, state and local taxes, including local sales tax.

Tax Freedom Day varies from state to state with Alaska having the earliest* (March 25th) and New York having the latest (May 3rd).  In other words, if you live in Alaska, you’re going to work for 84 days (23% of the year) before you’ve earned enough money to pay all of your taxes.  In New York, you have to work for 123 days (34% of the year) to pay your tax burden.

* Data for the year 2019

You can find the Tax Freedom Day for your state here: https://taxfoundation.org/facts-and-figures-2020/

The more “free” stuff the government gives away, the more taxes they’ll need to collect to pay for it.  And that means you’re going to have to work longer to satisfy your tax debt.  While politicians are quick to tell you how much free stuff you’ll get if you vote for them, they neglect to tell you how much they’re going to need to increase your taxes for you to pay for it.

I’m sure you’ve heard them say that they won’t increase your taxes, they’ll increase taxes for businesses instead.  But, there’s a problem with that.  Businesses are in the business of making money. 

When the taxes on businesses increase, they’ll just pass along the cost to consumers in the form of higher prices.  This means that the public is still going to pay for the “free” stuff.  Maybe your taxes won’t go up but your buying power will certainly go down.

Another example of this “free money” delusion is when people claim it’s OK to loot and burn down businesses because the insurance company will pay for it.  That may sound fine to the uninformed, but ultimately, we all pay for it.  Insurance companies, like all other businesses, need to make money for their investors.  So here’s what happens. 

Let’s say that a bunch of businesses get burned down by rioters in Minneapolis.  If they’re insured, the insurance companies will write them some checks.  The more checks that the insurance companies write, the more money they lose.  But, their investors don’t like it when they lose money.  So, the insurance companies are going to raise their rates to cover their loss.

But, raising the rates in Minneapolis won’t be enough because they don’t have enough customers in Minneapolis to offset their losses.  So, they’ll eventually raise insurance rates everywhere.  This means that everyone’s insurance rates will go up just because some idiots in Minneapolis decided that burning down businesses was OK because “the insurance companies will pay for it”.

Nothing is free.  Eventually someone has to pay for it and that “someone” will probably be you.  When politicians tell you something is free, what they’re really saying is that you’re going to be paying for it anyway, they’re just not telling you how you’re going to pay. Don’t be fooled by anyone trying to convince you otherwise.    

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Mike is just an average guy with a lot of opinions. He's a big fan of facts, logic and reason and uses them to try to make sense of the things he sees. His pronoun preference is flerp/flop/floop.