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Is tax bite keeping Americans from saving?

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Gathered in Washington this week are members of the money establishment, the big brains of the banking, insurance and mutual funds, summoned by a government concerned that Americans aren't saving enough for retirement.

It's true, Americans aren't saving enough, and delegates to the National Summit on Retirement Savings, including those from federal government offices and Congress, are agreed on that. That's not the issue. The issue is how to get people to save more.It provokes an interesting question: Why not ask the people who aren't doing the saving?

So-called experts, peering down from their often narrowly focused perspective, have failed miserably in finding the solution. The failure isn't because they haven't offered ideas in the past but probably because the ideas originated in top-down thinking.

Bottom-up explanations, arising from would-be savers, might reveal many people simply haven't enough left after deductions from paychecks. And that perhaps the main reason their paychecks fail to meet the need is that government, sponsor of the summit, grabs so much.

Taxes in relation to total income are now about 35 percent compared with 29 percent in 1960 and 22.5 percent in 1947, and even less during the costly years of World War II. Income and payroll taxes take the big bites, but the number of nibblers has been growing.

The hunger for tax money isn't limited to the federal government. In Connecticut, according to the Tax Foundation, Washington will collect $l0,518 for every individual, but state and local units will add an additional $5,007 to the bill. That's 39.8 percent of income.

Connecticut might be the most heavily taxed state, but the foundation, which claims to be nonpartisan, says several others are in the running: Wisconsin at 37.3 percent, for example, and New Jersey at 37 percent. But topping all is Washington, D.C., at 41 percent.

An analysis by Dean Stansel of the Cato Foundation, a Libertarian think tank, puts it this way: The average manufacturing worker costs his employer $14.89 an hour, not including fringe benefits. But the worker's take-home pay is only $10.79 an hour.

Other statistics also suggest that governmental hunger for taxes has pre-empted the saving ability of at least some Americans, and probably a large percentage of them. But it is sometimes argued that Americans asked for this state of affairs.

The reasoning behind the latter claim is that voters expressed their desire for more and more benefits from government, including those involving health, environment, national defense, workplace safety, and the disadvantaged. These are costly; taxes pay for them.

But can the same defense be used to explain corporate welfare, or payments under various federal programs that benefit businesses.