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.Obama. Cut. Taxes. On. 95%. Of. Americans. This is fact, folks. You're paying the lowest taxes in sixty years, on average. no wonder we can't afford social programs. All that money's been freed up to give to the rich, and they promptly went to the Wall Street casino and screwed all of us. We have room to raise taxes on the folks making the million-dollar bonuses for betting the economy will fail.
"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 real problem is spending,counters Adam Brandon of FreedomWorks, which organizes Tea Party groups. "The money we borrow is going to be paid back through taxation in the future," he says.
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.
This tax drop has boosted consumer spending and the economy, which grew at a 3.2% annual rate in the first quarter. It also has contributed to the federal debt growing to $8.4 trillion.
So yeah, like it or not, somebody's going to have to cough up more. Nobody likes paying more taxes. But fiscal conservatives who say that you can never raise taxes are unserious, and should be dismissed. Can't balance a budget without tax revenues, folks.
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