One of the most useful bits of mathematics I ever learned was imparted, almost in passing, by a Cal Engineering professor I studied with. He was constantly checking his work on the back of loose envelopes on his desk by jotting down approximations of formulas. He called this method "Back of the Envelope Calculation," and I have been using it ever since to check whether or not certain things make sense.

For example, let's say you're trying to decide whether to lease or buy a new car. You know the car will cost you $30,000 new but the salesman enticingly offers a $500 a month lease. Looking at the terms of the lease you realize that it's for 48 months. Quick back of the envelope calculation shows you that the lease will cost approximately $24,000 (500 x 48), and that buying it will cost approximately $625 a month (30,000 / 48). Is the extra $125 a month worth it? Well that depends on a lot of other factors, but now you're comparing apples to apples.

The other day I received my yearly property tax assessment from the Los Angeles County Tax Assessor and I started doing some back of the envelope calculations of my own. Most Americans take it for granted that we pay far less in taxes than many of the "socialist" European countries. Most of our taxes, however, are somewhat hidden in the form of fees and other "built-in" costs. I started thinking: Just how much of our income do we pay in taxes?

"Back of the Envelope" calculations are all about keeping things simple so that you can calculate quickly and get a basic idea of what's going on. There will always be details and subtleties that you will not compute, but they are usually irrelevant to the big picture. In order to keep things simple, let's take a look at an above average couple living in Los Angeles and earning approximately $100,000 a year (median joint income in California is $61,084).

Our couple will expect to pay approximately $18,115 in Federal Income Taxes (~ 18.1%), and approximately $9,300 in California state income taxes (~9.3%). Add to that another approximately $7,650 in Social Security and Medicare Taxes (~7.65%).

If our couple owns their own home, they can expect the following: The median home price in Los Angeles in 2005 was $540,000. In West L.A. that number jumps to $837,000. Let's use an easy number in the middle: $700,000. Californians pay 1% of their home values in property taxes, however bond measures and special assessments have virtually doubled that to between 1.5% to 2% depending on your district. At 2%, our couple will expect to pay approximately $14,000 in assorted property taxes, or an additional 14% of their income.

For those of you keeping track, our erstwhile couple has now allocated about 49% of their income to the 4 largest taxes and we haven't yet begun to talk about the smaller taxes. In L.A., sales tax on any goods you purchase (after being taxed on your income and property) is an additional 8.25% on practically everything you buy. Add additional taxes for your car(s), cigarettes, alcohol, gasoline, road tolls, and any government permits you might need and you've got quite a bit more. Rounding to make things even, it's fairly safe to say that about 60% is spent on assorted taxation.

So our quick "back of the envelope calculations" tell us that our couple that earned $100,000 actually kept about $40,000 (or $3,333 a month) to pay for their mortgage, home owner's association fees (another tax?), food, entertainment, etc. If they've managed to save or invest any of that left over money, that is taxed again either as income or capital gains. Of course, anything left over at the very end of the day will be taxed again as "estate tax" before it can be willed to children or any other dependents.

Using our earlier figure of $700k for this couple's home, if we assume they put $200k down (a rather optimistic 28%) and mortgaged $500k, then they can expect to pay approximately $3,000 a month in mortgage (for a 30 year fixed at 6%), leaving our couple with less than $350 a month to live.

Sound unrealistic? Back of the envelope calculations are necessarily approximations. There are, of course, certain things that we left out like a fairly substantial home mortgage deduction from income tax. For our couple this actually amounts to a deduction of about $19k a year, putting an additional $5k back in our couple's pockets, but even that only helps with about $400 more a month. Clearly our "above average" couple cannot afford their "average" home.

So back to our previous question of do Americans pay far less in taxes than our European counterparts? The answer is a resounding "No." The average European tax rate in the original EU-15 counties was approximately 52.4%. This is supposedly as compared to an average American tax rate of 34.6%, however that only takes into account Federal taxes and not the state and local taxes. As we have seen from our previous calculations, those state and local taxes can easily be as much as our federal taxes, especially in urban areas of the country.

This did not used to be true. The current American system of taxation by payroll deduction and then a yearly "filing for refund," was not instituted until World War II and was the brain child of the Nobel-prize winning economist Milton Friedman. Prior to that time, Americans were quite literally sent a tax bill in the mail each year. Imagine our couple receiving a tax bill for $60,000 in April? In fact, prior to 1913, it was unconstitutional in the United States to tax individual incomes at all. That was changed with the 16th amendment to the constitution and the Federal government grew significantly in importance with it.

Are we being overtaxed in America? Perhaps we are, and perhaps we are not. The answer to that question depends on how well you think your tax money is being spent and how well you think the burden is distributed on the population (two interesting questions in their own rights). With mid-term elections coming up all over America in the next few weeks, you need to ask yourself these questions when asked to approve the litany of tax hikes, fee increases, and bond measures (hidden tax hikes) that pepper your ballot. Hopefully some quick "back of the envelope" calculations of your own can help you make a more informed choice.

Do you remember the late 1960's series "Get Smart," starring Don Adams as a bumbling secret agent working for a shadowy government entity known as "CONTROL?" Adams' Agent 86 was constantly trying to thwart his nemesis, a group known only as "KAOS," who's "Vice President of Public Relations and Terror," was constantly trying to kill him. How naive and simple the late 1960's look to us today now that the major threat of the time, Soviet Communism, has faded into history. Ironically, the subject of Get Smart's satire has become all too real in our 21st century world as nations of law and "control" fight to maintain freedom in a world increasingly overrun by chaos.

The particularly insidious type of jihadi terrorism and armed insurgency that we are threatened by today is born and bred from chaos. Weak governments such as Afghanistan, Sudan, Yemen, and the Palestinian territories have allowed terror groups to flourish in areas far from the control of any real authority. Other countries have allowed whole regions to fall outside the control of their governments, virtually ceding them to terror groups, such as Hezbollah's autonomous region in South Lebanon, or the "tribal ruled" areas of Waziristan in Northern Pakistan.

This is not to say that chaos alone is behind global terror. Clearly money, supplies, and support from organized states is crucial. Saddam Hussein used to send $25,000 -- an incredible sum -- to the families of each Palestinian suicide bomber. Hezbollah could hardly exist without money and arms from Iran. Even the insurgency in Iraq is increasingly being funded illicitly by Iran and Syria. Rogue nations fund and support terror not to create chaos per se, rather to battle perceived opponents that they could not afford to take on directly.

Iran would not dare take on the United States in open warfare; yet supporting anti-American interests brings about 3 important policy goals for the mullah's: 1. a weakening of American and Western hegemony creates opportunity for the strengthening of Shia-Islamic dominance in the region. 2. Continued instability keeps the price of oil (Iran's number one export by far) artificially high, allowing the regime to continue policies that would be untenable at lower prices. 3. Continued clashes around the world keep the international spotlight away from Tehran allowing continued intransigence on nuclear, human rights, and other issues.

Modern, Western societies, can thrive only through order and stability. The very institutions of law that define the West are what allow the free market to operate and innovate, creating greater success for each subsequent generation. Witness the havoc in the financial markets over the events of Sept. 11, 2001 or current mid-East instability and it is clear that much wealth can be quickly erased by global chaos.

The precursor to all Western societies, the Roman Empire, despite its many problems, brought unprecedented wealth and technological innovation to the ancient world. When it finally collapsed, the chaos ushered in by violent tribal conflicts throughout the old empire quickly brought about a "Dark Age" and an end to the general prosperity of much of the population. It would take almost 1,000 years for Europe to recover in terms of wealth and population to Imperial Roman levels. Not until the enlightenment and rise of the sovereign nation-state would any similar order rule throughout the West.

Much like the collapse of Rome bringing chaos to the old West, the collapse of the Islamic Caliphate has brought much chaos to the old East. The last Caliph, or supreme Islamic ruler, died with the Ottoman Empire amidst the ruins of World War I in 1924. The subsequent carving up of Ottoman lands in the image of European nation-states, has led directly to the instability throughout the Arab world we see today. Briefly administered by European imperial caretakers, the Middle East was largely abandoned to "self-rule" by an exhausted Europe, following World War II. Unaccustomed to the idea of nation-states the largely feudal, tribal regions that made up the Middle East suffered through a series of dictatorial monarchs and despots whom the Capitalist and Communist worlds courted for favor throughout the twentieth century.

Unfortunately for us, the result of dictatorial rule in the Middle East for nearly a century is manifesting itself today in the form of resurgent Islamic fundamentalism and related chaos of jihadi terror. Long repressed societies are showing signs of shedding their despots, however, in favor of what yet remains to be seen. From our perspective in the West, guiding these frustrated societies towards Democratic ideals is imperative if we are to maintain the prosperous order and increasing globalism that sustains our way of life. Can Democracy bring order to a Middle East that has seen little since the Caliphate?

Unfortunately, the Democratic ideal that is so important for the West as well as the societies suffering from the current chaos is diametrically opposed to the interests of many elites of the old order; elites grown fat and lazy by easy petro-dollars. It is this "marriage of convenience" between old order dictators desperate to deflect popular anger away from themselves, aligned with violent, yet popular Islamic movements offering the seductive return to a simpler time that we see allied against us. Many forces currently vie to reestablish the old Caliphate from Shias in Iran to Sunnis in Saudi Arabia and Egypt. Their vision of a new Islamic empire clearly runs counter to a Western vision of prosperous, peaceful democracies.

The disunited forces of order in the West are behaving much like the bumbling Maxwell Smart, stumbling into one political and diplomatic mess after another. Despite his antics, agent 86 always managed to triumph over "KAOS" on television. Unfortunately, the West doesn't have the luxury of Hollywood screenwriters' penchant for a happy ending. If we truly want order to triumph chaos, we're going to have to work much more together and much harder at it. The stakes could not be any higher as we can hardly imagine living in a modern, nuclear, Dark Age.