Deadweight Loss of Taxation

Your first job. Yay-ish. It pays $12 per hour, part-time 20 hours per week while you're still slogging it out at school, waiting to be discovered by that modelling agent (you have awesome feet and that's like...your thang.) You calculate that you should be able to afford those new LeBron sneakers after your first week, since you'll receive in gross pay a total of $240. You get your first paycheck and, to your shock and horror, after taxes, you realize that you are only taking home $202.51.

Welcome to the world of Deadweight Loss of Taxation. It is a calculation for the inefficiency of government taxation’s effect on the potential sales of a good or service. You and thousands of others who may have wanted to buy those LeBron sneakers will have to delay another week or month or year...

The tax of $38 ish goes, in theory, to run our government. But if you think about it holistically, in a Blue State, a senior secretary-office manager makes $100,000 a year. She costs the company $135,000 to employ, given that they have to pay benefits like healthcare and pension contributions and that really nice glow-in-the-dark parking space bollard.

Well, after her taxes on the $100,000 she's earned, she keeps something like $70,000. So what just happened here? The company had to pay $135,000 for her to keep like $70,000 (and yes, she has a bit more than that via forced savings.) The bottom line is that a huge slice of dough has been taken out of these 2 simple transactions to pay taxes which were almost certainly not spent...efficiently. A large part of them is just a dead weight loss to society.