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May. 11 2010 - 8:51 am | 797 views | 1 recommendation | 32 comments

No wonder this country is going broke

Seal of the United States Internal Revenue Ser...

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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.


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  1. collapse expand

    All the stimulus money went to schools, cities, states to buy off public employees…..the people who are bankrupting the local and state government with excessive pay and pensions

    If you want to end Obama’s wars, go have a chat with him….see how close you get before the secret service shoots you

  2. collapse expand

    Great point. Of all the insanities of neo-con philosophy, the military hegemony is pure evil. Now, we need our Nobel Peace Prize Laureate in the White House to get with your program. As with meaningful health care and financial reform, the nation hold it’s breath again. Will we be disappointed a 3rd time?

  3. collapse expand

    I’m so sick of the popular meme that we pay too much in taxes. No, we don’t, not if we expect decent public services like education–both K-12 and college, roads, transportation, and research projects to encourage energy independence. We have become so insanely short-sighted. Instant gratification of “toy lust” has become more important than paying taxes for the greater good. The Howard Jarvis/Prop. 13 nutbags are at it again here in California, endorsing Meg Whitman as their gubernatorial candidate. That’s pretty much all I needed to hear to run completely in the opposite direction.

    Our schools have been gutted by the lack of revenue, and Joe Republican would rather use that money to buy another BMW. Not only is that despicable, it’s downright unpatriotic, despite claims to the contrary.

    • collapse expand

      I agree with you. I’m afraid ignorance is often at the root. What comes to mind is the angry citizen who told either Obama or his congressman, “don’t take away my Medicare.” He apparently wasn’t aware that was a government-supported program. And like others, such a program has to be paid for. I would have liked to see three things. 1. A stimulus that went to public works and created jobs. Our highways, building, water works are falling apart and rebuilding them is precisely the kind of constructive work that would rebuild this country, produce income and bring the unemployment rate down. 2. As more people are put to work, we could return the income tax to historical levels, but not by rewarding the super rich as the last administration did. The key is a graduated tax. 3. We could turn toward domestic priorities such as education if we could only stop growing our military budget.

      In response to another comment. See in context »
      • collapse expand

        I think ignorance explains some of this irrational behavior–think Tea Party–but the rest, particularly among the very wealthy, is calculated. If you’re rich enough to opt out of public services, e.g. health insurance, private schools, who gives a damn whether the rest of the country sinks?

        Some will tell you they’re giving their money away to charity–and some do, that’s great–but funding pet projects doesn’t keep roads paved or homeless people off the streets.

        In response to another comment. See in context »
  4. collapse expand

    Leftwingnut Propaganda:

    taxes are to low….total BS

    Obama has opened a trillion dollar line of credit to europe from OUR federal reserve…obama is a raving lunatic

  5. collapse expand

    I’m not against taxes. I’m not for them. I’m in favor of getting my money’s worth for from the government I pay for. I’m in favor of maximizing revenue with a reasonable tax structure that doesn’t inhibit businesses.

    If we tax too much, business suffer, so less tax will come in. If we tax too little, business will do great until the infrastructure and support for them dies.

    Looking at one side or the other is the mark of an ideologue, not a pragmatic citizen who knows why government exists.

    • collapse expand

      I’m not sure I follow your point Jake. It’s true that the solution to all ills is not to tax. But the point of the USA Today piece is that we are taxing at a far lower rate than in the past. That’s interesting, particularly given the unrelenting cries on the right that Obama is taxing us to death. It simply isn’t true.

      In response to another comment. See in context »
      • collapse expand

        The rate rates may be lower. So what?

        My argument is that we should be maximizing revenue, not tax rates. If we are taxing at lower rates, how are we doing for revenue? Does our government have more or less income? We may be getting enough additional revenue that we wouldn’t have received if we raised rates; in which case, raising rates is probably not a good idea.

        And then again, if revenue is down, would raising tax rates fix it, or ruin a potential economic recovery?

        Again, I don’t think you’re looking at the big picture.

        In response to another comment. See in context »
  6. collapse expand

    USA Today says I only paid 9.2% of my income in taxes? Bull! I paid 19% to Federal taxes in 2009. 6% went to the state of Georgia. And FICA, Medicare and Social Security took more.

    9.2% my ass.

  7. collapse expand

    Interesting that this USA Today article failed to mention a rather shocking article reported in February that the top 400 US taxpayers made an average of $344 million each and paid an effective tax rate of 16.7%. In the 1950s, this group would’ve paid around 90% and in the 1960s around 60%. This data also was deliberately suppressed by the Bush Administration (no surprise) for a number of years. Warren Buffet was right when he said he pays less taxes than his assistant.

    Even more surprising is that, without taxpayer funded investments in infrastructure like courts, roads, education, research, police, fire, there is zero wealth. You can’t make money if you can’t enforce a contract. Or your workers are uneducated. Yet the wealthiest, those most capable of contributing to funding the infrastructure that made their wealth possible, they pay almost nothing in taxes.

    And it’s more than greedy for someone who makes $100 million in a year to complain that taking home $20 million after taxes is unacceptable. That paltry $20 million, at 5% return, would generate $1 million a year or $84,000 a month for breathing. More if they pay only 50% in taxes. Nice work if you can get it.

    You can’t fund infrastructure for wealth on the backs of $30,000 a year secretaries.

    • collapse expand

      The super rich don’t pay much in taxes because the majority of their wealth comes in the form of capital gains, not salary. Buffet pays himself only 100k a year in salary. And nobody actually paid an effective tax rate of 90% in the 1950’s. Tax shelters were plentiful and widely used. The whole point of tax reform in the 1980’s was to reduce marginal rates while at the same time reducing loopholes that encouraged wasteful allocation of money. Effective rates weren’t that different in the end.

      In response to another comment. See in context »
  8. collapse expand

    I am 27 and can’t for the life of me figure out why my generation isn’t pissed at what is going on. Maybe we are, a lot of us voted for pres Obama, you just don’t hear as much frustration as you should. I am pissed at the baby boomers. Especially old white poeple, and I am white, who are statistically resposible for most of the elected officails from 80 thru 06 or so. Because in that time they ran up OUR debt from 800 bil. to 12 tril. Then they have the balls to complain when MY president passes a stimulis to keep us out of a depression and try to stop the bleeding of this pathetic economy they created. I could go on with this but I don’t want to write a book.

    So I feel that we need to make the baby boomer practice some personal responsability for once, especailly the republicans. Raise taxes on rich old poeple they have gotten a free pass for to long. Soon they will be retired and I will be paying for the social security and medicare that they were to irresponsible to properly fund. So we need to do it now before they are all retired.

    But instead they clog up downtown on 4/15 with their unpatriotic, misinformed, hatefilled, rascist, pathetic rally. They bring ignorant to a hole new level. Shame on you

    • collapse expand

      As a late boomer, be careful how you describe people. I never voted for Reagan, Bush, or Bush II. I regret voting for Clinton and Obama because they turned out to be corporate tools like any moderate Republican. While I’m not above voting Republican, in 30 odd years of being able to vote, I’ve not seen one Republican who supports working people who was on a ballot in front of me.

      I’ve consistently voted for fiscally sensible people who support the needs of the majority of our country. Yet I don’t run the country and my point of view has been marginalized for decades. Should I be held responsible?

      The real problem is not boomers versus whatever the current generation is called. The problem is the political, media, and economic elites, of any era, who support the interests of giant corporations and the super-wealthy at the expense of the 99% of us who are neither yet need help from the government, our government, to build and sustain a fair society. This dichotomy exists at all times in history, regardless of generation. It is an eternal struggle.

      In response to another comment. See in context »
  9. collapse expand

    My taxes have increased it seems so I don’t know where this crap is coming from. If they raise my taxes any further, I stop working. And I work part-time and make less than $100 K annually.

    • collapse expand

      Sans,

      “My taxes have increased it seems” it seems. wow that was thoughtful. It seems, well everybody we were misled by the USA today with all there fancy facts and studies and all that other elitist, socialist propoganda because this guy said ” it seems”. It seems, ha well shouldn’t you know. Its not hard to looks at your tax returns from the last couple of years grab a calculater and with some simple math figure it out. I’m going to go on a limb hear and assume that you watch Fox News. You post sound a lot like what you here from them everynight.

      “If they raise my taxes any further, I stop working. And I work part-time” Wow what a patriotic comment. Did I type patriotic I meant idiotic, my bad. So you are lazy and only work part time good for you. If your taxes go from the lowest levels in 50 years back to average levels you are going to stop working because? So what will you do? Collect food stamps and unemployment as a protest that sounds real consevative. Maybe you should just stay on conservative sites were nothing makes sense were you will fit right in.

      In response to another comment. See in context »
      • collapse expand

        Wrong! I am not a FOX News fan, so you prejudgment of me is another instance of pure crap. I have looked at my pay stubs for the past year and my taxes have increased – no matter how you rationalize it. And my expenses keep going up. So regardless of the tax argument, lower taxes (which I haven’t seen) is outweighed by higher costs and I don’t mean luxury items. So cut the bull and stop pedalling your holier than thou BS. Perhaps I should have written a treatise to explain every nuance of my comment. You have no idea how old I am, where or when I work or how long and you make a friggin’ judgement. So what do you watch or read: Pravda?

        In response to another comment. See in context »
  10. collapse expand

    Jerry, your tax increase you want is on the way

    • collapse expand

      Any,
      I have no problem with that as long as it’s in the context a graduated tax so that the highest percentages are paid by the 1 percent in this country who hold something like 20 percent of the wealth. My income is high enough so that I do pay substantial taxes. The only thing I resent is when the super rich get all kinds of breaks because they’re the big contributors to BOTH parties.

      In response to another comment. See in context »
  11. collapse expand

    Jerry,
    Thanks for the article and interesting numbers and percentages on our tax situation. Our 2 party system, in my opinion, has evolved into a punching contest where the 2 contestants are so punch drunk they simply punch back at any and everything without even a thought at what they are punching at or it’s impact. Most of our legislation becomes so watered down by self interest and opposition by the other party that by the time we have a bill, it’s a shell of what it began as and ineffective at what it was intended to fix.
    We are a very uninformed country right now, but this is simply because there is so much noise from both sides on every issue from the minor to the most important issues that unless you have a lot of time on your hands, it’s very difficult to have a grasp on what’s really being debated. Being from the left, I blame much of this problem on the right (I’m sure those on the right, blame the left) for using the Lee Atwater model of creating wedge issues to divide us all. Recently, C. Rove pushed that model to it’s most credulous levels. This great divide has totally made us enemies rather than partners with divergent views looking to build consensus on bills that serve all of us. The right has been well served by this model as the power behind the scenes is very well monied and constantly pass laws to protect their money with less and less taxes, while at the same time keeping the majority of their party happy by fighting for wedge issues, like pro-life, anti-gay, pro-gun issues that have little to do with the financial welfare of the majority of their constituents or the party on the left.
    Not surprising that most people would have no idea that comparatively our tax rate of today is so low. Like our recent Tea Party movement, you cannot get your hands around what they actually represent or on issues you have a sense of what they want, how they would make changes to enact them.

    • collapse expand

      I hear and to a large extend share your sentiment about too much noise and spin and too little integrity and well-conceived legislation. I do believe, however, that there are some things in the world that are facts.
      And while both parties use them selectively, I for one don’t believe they abuse them equally. The job of journalist and citizen journalist alike is to shine a light on factually based knowledge so that it can’t be distorted based on the political whim of those making a point. It become very difficult in today’s world.

      In response to another comment. See in context »
      • collapse expand

        Jerry,
        Thanks for the comment back. Like you, I’m from Massachusetts. I agree with your reply but take a harder view on facts carrying much weight. My view is that the divide is so great right now that most folks on either side of the spectrum simply do not listen to most that the other side has to offer. This is true for our politicians, but unfortunately, more so with the voters. This has been the great success of the rights wedge issue mentality. They have created an environment where there is simply no room for dialogue or compromise. Even more damaging on the right, their party is going thru a purging scheme to oust their own that are not right enough. Add to this the willingness of the fox network to not only attack the left with less than facts, it makes it difficult to move in positive directions.
        The right is, by nature, sure they are right about everything, where as the left, by nature, willing to have a broad perspective, further creating a playing field that fights on even turf.

        In response to another comment. See in context »
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    About Me

    I teach journalism at Emerson College in Boston. I've coached writers at a dozen newspapers, blogged, written a couple of textbooks and a few columns. I'm also a former editor at the San Jose Mercury News before Knight-Ridder's demise. My passions are politics, travel, music, most things French, and the outdoors.

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