This is the time of year I take a real close look at my finances because I'm suddenly aware of pay raises, taxes, performance bonuses — stuff like that.
I know, you're supposed to look at that stuff all the time. But most of us "regular" people are stuck with that evil known as "withholding". That makes things like taxes too darned transparent for our own good.
Generally, I'm not in favor of increasing federal regulations, but I'd like to propose one that may have some merit.
Employers are required to provide an itemized pay stub showing all the deductions every pay period. What if we made a federal requirement that those pay stubs also had to include the percentage of each deduction, when divided into the gross pay?
I think people have become rather immune to the fact that they pay "hundreds of dollars" every week to the government. But they have no idea how much of their pay is actually being taken away. I saw a survey one time that said most people think the number is somewhere around 25% — and they think that's too high.
I just dumped my most recent pay stub into Excel and did some math. My tax deductions equal 34.7% of my pay. I contribute 10% to my 401k, which leaves me with just a little over half of my paycheck remaining.
Printing those percentages on everybody's paystub may be a good "primer" toward getting what we really need — a flat tax.
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