As we approached Tax Day, April 15, there was increasing conservative rhetoric about the unfairness of US taxes. A typical lament came from conservative ideologue Grover Norquist, "The tax burden is too high. Americans should not (on average) work 3 plus months a year to pay taxes." Knowing that conservatives habitually lie about important political issues, why should we believe what they say about taxes?
We shouldn't. Tax rates have fallen. Fifty years ago, the top marginal tax rate was 91 percent and the bottom rate was 20 percent. In 1960 the median family income was $5600 and the average family paid $1232 in Federal taxes. Last year, the Obama Administration lowered taxes for 95 percent of Americans. Today, the top marginal rate is 35 percent and the bottom is 10 percent. In 2010 the median family income is approximately $50,000 and that would require roughly $7500 in Federal taxes. Over the past 50 years, while median family income has increased ninefold, their taxes are only six times greater.
Tax revenues as a percentage of GDP have also plummeted. A chart from the conservative Heritage Foundation indicates that since 1945, Federal tax receipts as a percentage of GDP have averaged 18.2 percent. In 1960 they were roughly 17 percent and in 2010 the Heritage Foundation expects them to be 14.8 percent - the lowest rate since 1950.
While our taxes are considerably lower than they were fifty years ago, conservatives such as Grover Norguist contend taxes are still too high because government is inefficient. But conservatives forget the US operates in a global economy. So another way to consider US taxes is to compare them to those of our competitors. Writing on his FiveThirtyEight web site, statistician Nate Silver compares US total tax revenues, as a percentage of GDP, to those of the other 29 members of the Organization for Economic Cooperation and Development (OECD), which includes Canada and Mexico, Australia, Japan, Korea, and New Zealand, and the members of the European Union. Mexico was the lowest with 20.6 percent and Sweden was the highest with 49.1 percent. The average was 35.9 percent. The US was the fifth lowest with 28 percent (which includes federal, state, and local taxes.)
When confronted with these facts, conservatives change their argument; they contend the richest Americans pay too much. Writing in USA TODAY, conservative analyst Jonah Goldberg asserts: "60% of American families already get more from the government than they pay in taxes (and the top 10% of earners pay more than 70% of taxes)." "Low-income families tend to benefit most from social services and welfare programs such as food stamps, subsidized housing, Medicaid, and unemployment insurance."
But America's tax/service distribution is similar to those in the OECD countries. Nate Silver observes: "The [before taxes and transfers] maldistribution of income here is about the same as for comparable nations... [But] after-tax-and-transfer income distribution [is considered], of the 26 OECD countries the United States has the most maldistributed income of all 26." In America, the rich do less for the poor than do their counterparts in other developed countries; the US system is unfair, because the top 10% don't pay enough taxes.
When confronted with this evidence, conservatives play their trump card, the claim that taxing the rich hurts the economy. Jonah Goldberg contends: "There's also the simple fact that taxes impede growth, and low economic growth curtails the pursuit of happiness for everyone." Goldberg cites a 2006 study by a conservative think tank. Their ideas were heavily influenced by the discredited Chicago School of Economics, whose notions about the proper relationship between government and the market produced 2008's financial meltdown and The Great Recession.
In reality, there is no persuasive statistical evidence that tax increases have a negative economic impact. Moreover, there's little evidence that tax cuts spur growth. The 2001 Bush Tax cuts - coupled with the wars in Afghanistan and Iraq - depressed the economy.
Conservative models of the economy fail because they assume that average consumers - many of whom belong to the "60% of American families [who] already get more from the government than they pay in taxes" - can borrow indefinitely to maintain a comfortable lifestyle. But 2008's financial meltdown proved this to be false.
Economist Joseph Stiglitz contends that the debt-based consumption model of the US economy is broken. Writing in his most recent book,Freefall, Stiglitz observes: "For total American consumption to be restored on a sustainable basis, there would have to be a large redistribution of income, from those at the top who can afford to save, to those below who spend every penny they can get."
Once again, conservatives are lying. The tax burden isn't too high on the rich; it's too low. Tax fairness requires the US to increase taxes on the richest 10 percent of Americans and cut taxes for working families.
i'm so sick of you selfish tax whiners. taxes are the price we pay for a civilized society. of course, we all know you tea partiers don't give a damn about having that.
The top 5% of US taxpayers pay 61% of all Fed income taxes.
The bottom 50% of US taxpayers pay 3% of all Fed income taxes
38% of 2008 taxfilers had no income tax liability (paid $0 in Fed income taxes)
Tell me again how upper incomers are not taxed enough?
They don't want to talk about all the other myriad of taxes out there, most of which are highly regressive.
"Why do you recycle the tired Replutocratic talking points?" - I was unaware that data from the IRS and the Tax Policy Institute we're "talking points"
"The top 0.5% are the only Americans to benefit from Reagonomics, which has created the greatest wealth differentials since the Gilded Age." -That's patently false- care to back up that assertion with facts?
At what point do facts matter to the left? Or do facts simply get in the way of emotional rhetoric and ad hominems?
The reality is, the most likely tax reform that could happen would be a 'flattening" of both individual and corporate rates, with an elimination of (non-income determing) deductions - i.e. the schedule A deductions, the targeted tax credits and other "rent seeking" giveaways in the tax code.
What B.S.
The class war was started by the right wingers 30 years ago.
A full scale, balls to the wall, counter attack is long overdue. ,
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is always the answer. correct?
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Posish!
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R/ PRONESE.
There was one thing different back then however.If you refused to work you got hungry!
Now we have nearly more people in the wagon than we have pulling the wagon.
I can only pray that this is followed by the top 1% of the elites "going Gault" and starting their own Shangra-La like society somewhere in the mountains of the northwest U.S.
Those two events occuring in the same year would be a double burden lifted from the backs of hard working Americans.
B) Why shouldn't every American be paid the same exact amount per hour for the work they do no matter what it is?
Any other way is truly un-American, unfair, and divisive.
We're getting to the point, with 25 percent of GDP going to government spending and 19 percent of GDP coming in as taxes, where the people who want to benefit from new government programs will need to step up and pay for them.
Is it time for a "no representation without taxation" philosophy to kick in?
Soaking the rich is a fool's game - if you aren't giving at least 10 percent of income to charity to help the poor and needy (and I note that Joe Biden gave only about 1.5 percent of their last year's income to charity - way to step up for the poor, Joe) then you aren't really serious about anything other than having others pay for what you want.
NOT TRUE! This is true only for FEDERAL income tax. The majority pay payroll taxes and various state taxes.
he says he cant raise the billionaires taxes over 20% because they are investors
Obama pays more than the hedge funders and bankers who caused the meltdown
Can't you people make a point without trotting out garbage talking points from discredited clowns? Do you have anything independent, original or realistic to say?
HOW EXACTLY DO YOU CUT TAXES ON WORKING FAMILIES WHEN 50% OF AMERICANS AREN'T PAYING ANY FEDERAL INCOME TAX?
However, if I were dictator everyone would pay something.
I'd start out with 10% for those at the very bottom and work up to a 90% rate at the top.
And I'd take away all the loopholes.
Everybody would fill out a 1040-EZ.
There would be no deductions.
Increase the number of brackets from 6 to 12. Brackets 7 through 12 would
begin after the current top bracket, and progress upward to a top rate of 48% at $900K.
The great majority of citizens, who make less than $350K per year, would see no change
in their rates.
Certainly a great deal of detail would need filling in, but that would be the core idea. Any takers?
So the liberals want the rich to pay 105.33%.
Interesting