5/12/10

Regarding our crushing tax burden

From our nation's most colorful newspaper:
Amid complaints about high taxes and calls for a smaller government, Americans paid their lowest level of taxes last year sinceHarry Truman's presidency, a USA TODAY analysis of federal data found.
...

Federal, state and local taxes — including income, property, sales and other taxes — consumed 9.2% of all personal income in 2009, the lowest rate since 1950, the Bureau of Economic Analysis reports. That rate is far below the historic average of 12% for the last half-century. The overall tax burden hit bottom in December at 8.8.% of income before rising slightly in the first three months of 2010. 


"The idea that taxes are high right now is pretty much nuts," says Michael Ettlinger, head of economic policy at the liberalCenter for American Progress
I've been saying forevers and evers that it's time to raise taxes. An increase to the average tax rate of the last 50 years (properly progressive, mind) would go a long way towards righting our economic boat, especially as revenues are likely to bloom along with the recovering economy.


That's the main point of this post, but let me also register a personal peeve about these kinds of articles. Consider:

Individual tax rates vary widely based on how much a taxpayer earns, where the person lives and other factors. On average, though, the tax rate paid by all Americans — rich and poor, combined — has fallen 26% since the recession began in 2007. That means a $3,400 annual tax savings for a household paying the average national rate and earning the average national household income of $102,000. [Emphasis added.]
Emphasis added. So, aside from my work friends (who are all captains of industry, etc., etc.) I know very few people who have a household income of over $100K. This is a case where "average" really, really, does not mean "typical."


My friends may all be artists, writers, teachers, and other societal misfits, but in terms of income, they are mostly doing better than the typical American family. The typical American family would be thrilled to have their household income skyrocket to $102,000. 


(Of course, if it did, they would immediately start grumbling about taxes and voting Rebublican.) 


6 comments:

  1. Ugh, this new template is ugly as sin, and will require updates.

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  2. It's an ugly template, but good riddance to the-artist-formerly-known-as-haloscan comments.

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  3. I totally agree with the thesis of your post. The trouble with our tax policy is that taxes are rarely popular with voters and anti-tax conservatives campaign hard against politicians who support tax increases. So, politicians avoid them as much as possible.

    So how do we make taxes more popular or provide political cover for politicians who support them?

    Unfortunately our tax policy has left our great nation in disrepair with aging infrastructure and too many underfunded schools.

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  4. The problem with our tax policy is the problem with most of of our policies. We don't really have one.

    Politicians don't want to govern. They just want the job. Not the work, thank you, just the job.

    The false choice that's presented by politicians is always framed as "Tax vs. No Tax." But this question isn't the same as "Strawberry vs. Chocolate" in which both choices are delicious, and reasonable minds could disagree on which was the deliciousest as long as we all get ice cream.

    The question needs to be framed closer to "Bread vs. Rock" in which one is nutritious and the other is useful for throwing at people.

    I would then argue that we desperately need nutrition and rarely, if ever, need to throw anything at anyone.

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  5. Turns out we'll spend about $900 billion on rocks this year. That number depresses me too much to go and look at how much we'll spend on bread.

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  6. Bill, we cannot allow a mine-shaft gap!

    ReplyDelete

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