We can have our cake and eat it too. Despite an explosion of services and federal spending, individual taxpayers are paying the lower level of taxes as % of income since 1958. Combined with corporate taxes that are at the lowest level as a % of GDP in generations, it's good times in America. I will be very interested if the 2% payroll tax holiday instituted at the end of 20101 will be allowed to vaporize Dec 31st, or if we throw this one under the barrel of can't raise taxes in this environment! as well.
Via USA Today:
- Americans are paying the smallest share of their income for taxes since 1958, a reflection of tax cuts and a weak economy, a USA TODAY analysis finds. The total tax burden — for all federal, state and local taxes — dropped to 23.6% of income in the first quarter, according to Bureau of Economic Analysis data.
- By contrast, individuals spent roughly 27% of income on taxes in the 1970s, 1980s and the 1990s — a rate that would mean $500 billion of extra taxes annually today, one-third of the estimated $1.5 trillion federal deficit this year.
- The latest dip in the tax burden came from a Social Security tax cut included in a December budget deal between Democrats and Republicans. It will reduce taxes $100 billion this year.
- We have a 1950s level of taxation and a 21st-century-sized government, says Robert Bixby, executive director of the Concord Coalition, a deficit-reduction advocacy group.
- Federal, state and local government spending hit a $5.6 trillion annual rate in the first quarter. That's the highest ever.
- USA TODAY examined the full range of taxes that individuals pay to all levels of government. That includes income taxes for Medicare, property taxes for schools and gas taxes for roads.
- At the national average, a person with an income of $100,000 would pay $23,600 in taxes today vs. $28,700 in 2000 and $27,300 in 1990.
- The recession of 2001 and tax cuts championed by President Bush started a decade-long trend of taxing less income. The 2007-09 recession and new tax cuts in Obama's stimulus effort accelerated the change. The one-year Social Security tax cut reduces the worker's rate from 6.2% to 4.2% — or $2,000 a year on a $100,000 income.