Tax Curiosity

When filling out your taxes, have you ever noticed some of the strange things that can be deducted from your taxes? Ever think about what that means? Basically, the government is saying that these are things they won't tax.

Interest on your mortgage, tax free. Interest on a student loan, tax free. Do you rent? Rent-payments, tax free. Charitable donations? Tax free. Putting some money away for retirement? No tax on that.

Ok, charitable donations I understand. I do not benefit from that money in the slightest, thanks for not taxing it. I also understand not taxing the money I put in my 401K (which doesn't have anywhere near $401K in it!) You want to be able to tax it when I take it out and you are at least decent enough not to tax the same money twice. Or are you?

Why do you tax the money that I pay in taxes? In CT, if I buy a $1 item, I pay $0.06 in taxes. That's money that's already been taxed! If I get an income tax refund, I have to declare that on my next year's taxes as though it's new income! I don't think so! It's not new income, you just took out too much of what I already earned! You taxed me on that last year, and now you are going to tax me on it again! (I won't even go down the road of if I pay you late I owe you interest but if you hold my money for the better part of a year you keep my interest!)

Here is what I propose: Provide everyone with an individual tax ID number (We can call it our TIN). Embed it into our credit cards, debit cards, put it on our drivers' licenses. It records the total amount of taxes paid throughout the year: Sales tax, entertainment tax, luxury tax, death tax, airport tax, tourism tax, car registration fees, property tax, etc etc etc etc etc (there are lots of taxes) etc etc. This amount gets deducted from our taxable income. Therefore, I'm no longer sending $0.20 of every dollar to the Feds plus at least 5% of every dollar I have left that I spend. I'm no longer paying taxes on money on which I've already been taxed.

Can anyone tell me why the government has decided that the money I give to my mortgage company isn't taxed but the money that I give to my credit card company is? Why is the money that I use to buy and education not taxed, but the money that I use to buy electricity or heat is? I really have a hard time making sense of much of this.