We all cringe while being extorted by the state when we see the damage done with the income tax and sales tax. I call that direct taxation, but have you ever considered what you as a consumer are being suckered out of indirectly?

Some of you reading this may already know where I'm going, but many people haven't come to realize the full amount they're being swindled out of by the state.

See, People go into business to make money. Successful businesses have a amount of profit in mind, they would like to have after all their costs are paid. That includes taxes and compliance costs (what they pay for licenses, tax people, complying with regulations, ect.). Businesses don't pay those taxes and compliance costs. Just like the cost of material that went into making the product, they pass the taxes and compliance costs on to the consumer. Makes sense, if they ate all that cost, they would go out of business, right?

Here is where it gets crazy.

Businesses are another sort of consumer. They buy products from other businesses to make their own products, and they pass along their taxes and compliance costs as well all the way back to the raw materials! (If you haven't read "I, Pencil", I highly recommend you do. From here on out I'll just refer to both taxes and compliance costs as "Taxes" for sake of reading, so understand when I say "Taxes" from here on out, I'm referring to both

Lets look at a loaf of bread for example.

To make a basic loaf of bread, A baker needs,

• Yeast:

The yeast maker passes his Taxes along to the whole seller who passes along both their Taxes to the retailer who passes along all three of their Taxes to the baker.

• Water

The supplier passes along their Taxes to the water company who passes along both their taxes to the baker.

• Flour

The farmer passes along his Taxes to the mill who passes along both their taxes to the whole seller who passes along all three of their Taxes to the retailer who passes along everybody's taxes to the baker.

• Charcoal for the oven

The logger passes their Taxes to the lumber mill who passes along both their Taxes to the Charcoal maker who passes all three of their taxes on to the whole seller who passes all their Taxes on to the retailer who passes all their taxes on to the baker.

So, the baker is paying ALL the tax and compliance costs of,

-The yeast maker
-The water supplier
-The water company
-The farmer
-The mill
-The logger
-The charcoal maker
-Three whole sellers
-Three retailers

...And out of necessity, the baker passes all that plus his own Taxes along to you.

How much less would that loaf of bread cost if both the direct AND indirect taxes weren't tacked on to the price of your loaf of bread? What about more complex things that require a much larger distribution system to produce?

The direct taxation you see like income tax and sales tax at the store are bad enough, but that's just the tip of the iceberg. Whats underneath is robbing you of your hard earned money just as much, if not worse than what you see! So next time you buy something, think about all the things it took to make that one item, all the way back to the raw materials, and ask your self, "How much less would this cost if the state wasn't extorting every business every step of the way?"

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