Death and Taxes

Welcome to 2026!

You’ll be getting a W-2 from your employer soon in the mail. It’s an annual reminder of what you made and what the government took in taxes. You might owe the IRS (like me) or you might get a refund (like many), but either way it’s still sobering to think how much we have to fork over for the privilege of being a citizen.

The biggest line item is federal income tax. You’ll also see deductions for payroll taxes for like Social Security and Medicare, quietly withheld every pay period. It is mysteriously labeled FICA (Federal Insurance Contributions Act) and trust me it’s not a contribution… it’s a tax.

Then there’s state income tax, where the Commonwealth’s top rate of 5.75% isn’t especially low or high, but it’s another layer on the stack. (Expect this to go up in the next 4 years)

Next comes sales tax. Every little thing you buy, every Amazon order, every trip to the store, is subject to sales tax. Virginia’s combined state and local rate averages just under six percent, but some localities add much, much more like Richmond’s hot meals tax – where you pay 13.8% to eat out. In some areas you pay higher rates for transportation, hotel stays, admissions to events, or extra tax if you own a business. BPOL Tax (Business Professional & Licensing Tax) was adopted after 1812 to pay for the war of 1812 – and it never went away.

Property taxes on your home and the things you own get paid once or twice a year. Virginia has the 4th highest tax on cars in the country. People in New Jersey pay such a high real estate rate that if you stayed in your home 30 years, you will have paid twice for your home – once to the lender and the other to the state.

Layer on car registration fees, title fees, inspection fees, tolls, park fees, and assorted “user fees” that sound optional unless you live without a car, electricity, or a driver’s license. And excise fees – hidden in the cost of alcohol, gas, diesel, tires, airline tickets, sport fishing equipment, archery equipment, and tobacco – push the total tax you pay even higher.

When all federal, state, and local taxes are combined, the average American sees 37% of their income taxed before a single dollar is saved or spent freely. If you buy stuff, eat at a restaurant or drive a car, then count on paying 40% or more in total tax.

Interestingly enough when Benjamin Franklin spoke of “death and taxes” in 1776, American Colonists were paying about 1.5% of their money to the Crown in taxes. I do not believe the Founding Fathers would have ever imagined an America where its citizens – politely and dutifully – handed 40% of their money to the government. It’s revolting.