No wonder this country is going broke
Death and taxes, the saying goes, are the only sure things in life. But while many Americans don’t feel as if they’re getting off easy — 48 percent say their taxes are too high, a recent Gallup poll found — a new analysis by USA Today finds taxes in this country at their lowest level in 60 years.
The study flies in the face of the rhetoric of the Tea Party Right, which insists Barack Obama is turning this country into a socialist state and taxing Americans at unprecedented levels.
Reports USA Today:
Americans paid their lowest level of taxes last year since Harry 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 liberal Center for American Progress.
The paper says several factors account for the drop in taxes: A third of the $862 billion stimulus went to tax cuts, sales taxes collected have dropped along with consumer spending, and progressive tax laws have lowered rates for the middle and lower wage earners.
If Republicans are perpetuating a weary line when they trash Democrats as the “tax and spend” party, one rather sizable problem with government’s balance sheet remains. Deficits have soared to $8.4 trillion because spending has continued to increase as tax revenues decline. Sometime soon, we as a nation either have to agree to pay more taxes or spend less.
My vote for a good starting point would be to extricate ourselves from our two endless wars before they hit their 10th anniversaries. According to the National Priorities Project, Congress has already allocated $1.05 trillion to the wars in Iraq and Afghanistan since 2001. That does not take into account, among other things, the ongoing costs of treating veterans who return from the war zones with chronic physical and mental disabilities.
I know. All these numbers are eye-glazingly huge. Which is why the National Priorities Project offers a nifty interactive “tradeoff” system that allows visitors to see how much their towns and state have paid toward the war effort and what the money might have gone toward instead. In my state, Massachusetts, for example, the $29.6 billion taxpayer burden for war since 2001 would provided nearly 2.5 million scholarships for college freshmen.
Or, of course, it could also have gone toward bringing down that astronomical federal deficit.