"Tax bills in 2009 at lowest level since 1950"

#1
Velo Vol

Velo Vol

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#1
The USA Today today:

Amid complaints about high taxes and calls for a smaller government, 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.
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Yet another example of how--especially on talk radio--rhetoric and reality are often miles apart.
 
#2
#2
when you have 50% of this country not paying taxes yes it can be pretty low for a lot of people. the working rich on the other hand are getting massively screwed.
 
#4
#4
unemployment, tax credits, falling home values, etc.

none of these are the way to lower tax burdens in a sustainable way.
 
#5
#5
I will be the first to admit I do not understand the tax code and economics as well as many others here but would a decline in tax revenue possibly be linked with people in this country overall making less money on average?
 
#6
#6
volinbham said:
unemployment, tax credits, falling home values, etc.

none of these are the way to lower tax burdens in a sustainable way.
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capital losses work just like capital gains and they offset enormous amounts of income over the past couple years. That's being reflected in these numbers, nothing else. Total hasn't gotten better.
 
#7
#7
KB5252 said:
I will be the first to admit I do not understand the tax code and economics as well as many others here but would a decline in tax revenue possibly be linked with people in this country overall making less money on average?
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Less on average because the number of high earners, those in the egregious marginal tax brackets, thinned dramatically as small businesses took a beating and capital losses were almost universal.
 
#8
#8
BigPapaVol said:
what? Why do you think the tax receipts have been so low? Remember, tax bills are about income, which includes losses and loss carry forwards.
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So would you say americans lost the most income on average since 1950?
 
#9
#9
rjd970 said:
So would you say americans lost the most income on average since 1950?
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the tax credit stuff makes a diff. too - throwing 4k - 8k tax credits at the population makes a huge difference in one's tax bill.

I'm getting the Energy credit for putting in a new furnace (1500). Last year I got the sales tax deduction for a new car purchase (equivalent of about $600 in tax liability).

These aren't real tax cuts.
 
#10
#10
rjd970 said:
So would you say americans lost the most income on average since 1950?
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I would say we had the largest number of non-taxpayers in our history and the smallest percentage in the higher brackets, resulting in more paying lower rates. It wasn't tax changes that made it happen.
 
#11
#11
I'm about 95% right now ready to hop on board a flat tax system. Not sure if I want it as a sales tax or an income tax. If it were income, I'd be even happier if it were in fact tiered, but not with all the deductions. I might even favor a system that flat taxes at a specific rate capital gains but insulates those dollars from being taxed again, either when counted as income or spent.

Edit: maybe I'm thinking more in terms of predictability and ease of reference than I am truly flat.
 
#12
#12
Consumption taxes are the most efficient and tax wealth, which is untaxed today. I'm not advocating it necessarily, but it's much harder to call that unfair and it's much more difficult to avoid.

Droski always points out that a black market would arise for high dollar goods, which might be true, but that market wouldn't eliminate as much tax as accountant fronted evasion does today.
 
#13
#13
volinbham said:
the tax credit stuff makes a diff. too - throwing 4k - 8k tax credits at the population makes a huge difference in one's tax bill.

I'm getting the Energy credit for putting in a new furnace (1500). Last year I got the sales tax deduction for a new car purchase (equivalent of about $600 in tax liability).

These aren't real tax cuts.
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I know. But I am trying to understand the numbers. This isn't real dollars, it is percentages. 9.2% of income was gobbled up by taxes, lowest since 1950. Taken as a whole...tax credits, deductions, etc...made a difference. While they may not be real tax cuts, the tax burden on average for everybody went down last year. It doesn't make much since to me about this talk of taxes being to high when we were paying on average 12% for the longest time and then it drops to 9%.

I don't know, the taxes are too high, tea party crowd view would hold more water if it jumped to 15% or something. But last year, the tax liability on average went down.

I'm probably not understanding something, but that is the way I see it.
 
#14
#14
i don't think many here is arguing taxes are too high for the 47% of this country who aren't paying them.
 
#15
#15
It's more about spending than absolute taxation levels.

We have trillion dollar deficits as far as the eye can see. Policy decisions continue to pile more auto-pilot, entitlement spending onto an unsustainable pile. To pay for what government is "giving" us, taxes have to skyrocket.

To me, that's the underlying complaint. Government is continually expanding both in absolute size and in intrusion into our lives. It is unsustainable.
 
#16
#16
rjd970 said:
I know. But I am trying to understand the numbers. This isn't real dollars, it is percentages. 9.2% of income was gobbled up by taxes, lowest since 1950. Taken as a whole...tax credits, deductions, etc...made a difference. While they may not be real tax cuts, the tax burden on average for everybody went down last year. It doesn't make much since to me about this talk of taxes being to high when we were paying on average 12% for the longest time and then it drops to 9%.

I don't know, the taxes are too high, tea party crowd view would hold more water if it jumped to 15% or something. But last year, the tax liability on average went down.

I'm probably not understanding something, but that is the way I see it.
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Our tax policy hasn't been overbearing of late. We've simply borrowed the money to support profligate spending and the spending just got worse as tax receipts have been diminished by the economy and stimulus gifting policies.

I would guess the TP issues are about pending tax bills, because someone and some point is going to have to pay the piper.
 
#17
#17
volinbham said:
It's more about spending than absolute taxation levels.

We have trillion dollar deficits as far as the eye can see. Policy decisions continue to pile more auto-pilot, entitlement spending onto an unsustainable pile. To pay for what government is "giving" us, taxes have to skyrocket.

To me, that's the underlying complaint. Government is continually expanding both in absolute size and in intrusion into our lives. It is unsustainable.
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agreed. these tax levels are still relatively sustainable for future growth and investment. the problem is the more the spending continues the higher we need to raise taxes and clearly no one wants to do this on anyone but the investor class.
 
#18
#18
rjd970 said:
I know. But I am trying to understand the numbers. This isn't real dollars, it is percentages. 9.2% of income was gobbled up by taxes, lowest since 1950. Taken as a whole...tax credits, deductions, etc...made a difference. While they may not be real tax cuts, the tax burden on average for everybody went down last year. It doesn't make much since to me about this talk of taxes being to high when we were paying on average 12% for the longest time and then it drops to 9%.

I don't know, the taxes are too high, tea party crowd view would hold more water if it jumped to 15% or something. But last year, the tax liability on average went down.

I'm probably not understanding something, but that is the way I see it.
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1. Lower incomes are subject to a lower tax rate at the federal level and at many states as well. Very many high-income people (primarily small business owners) saw a substantial drop in the their income for 2009.

2. Several last-minute tax breaks were passed at the last minute in the name of saving the economy that were for 2009 only (which of course many were reenacted for 2010).

3. Don't discount how much a $8,000 tax credit for buying a house can lower a tax burden for a typical middle-class and lower taxpayer.

4. If you were a corporation paying taxes last year....i tip my hat to you for being able to do so.

Four of several reasons.

I am still waiting for when DC can no longer afford to patch the AMT. That will be fun.
 
#19
#19
BigPapaVol said:
Our tax policy hasn't been overbearing of late. We've simply borrowed the money to support profligate spending and the spending just got worse as tax receipts have been diminished by the economy and stimulus gifting policies.

I would guess the TP issues are about pending tax bills, because someone and some point is going to have to pay the piper.
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I haven't kept up with the TP protests because I don't have the pornographic fascination with it that LG does, but if it is about future taxes then that makes sense.
 
#20
#20
lawgator1 said:
I'm about 95% right now ready to hop on board a flat tax system. Not sure if I want it as a sales tax or an income tax. If it were income, I'd be even happier if it were in fact tiered, but not with all the deductions. I might even favor a system that flat taxes at a specific rate capital gains but insulates those dollars from being taxed again, either when counted as income or spent.

Edit: maybe I'm thinking more in terms of predictability and ease of reference than I am truly flat.
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Do a web search of the "Fair Tax". Excellent idea IMO.

I would favor a combination of that and reciprocal tariffs based on the standard of living in an industrialized population. Nations that use virtual slave labor should not get to dump their goods on our markets without paying a penalty.

I would be considered conservative to libertarian politically but am very skeptical of the modern conception of "free trade".

In history, a country that sends raw goods to another country and gets finished goods back... was typically a colony.
 
#21
#21
rjd970 said:
I haven't kept up with the TP protests because I don't have the pornographic fascination with it that LG does, but if it is about future taxes then that makes sense.
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Taxes make up a fraction of our gov't expense. Regulation/Compliance is a whole subject in itself and at least doubles the expense of gov't to businesses.

Obama's massive deficit was funded effectively by printing money. When you supply more of something to a market, its real value goes down. That value loss is basically a tax against current AND future taxpayers. The gov't gets to double dip. Debt paid back to bond holders will be in devalued $. The gov't gets to spend money basically at past value. Once they spend it once, it is devalued.

Much of the recovery is an illusion. Obama's policies coupled with Fed rates should be producing inflation. The fact that they aren't means that they are still playing a shell game hoping that somehow the Golden Goose will lay another egg and save them.

The free market in the past has been able to overwhelm the stupidity of big gov't statists and keep the country afloat. There's only so much burden the system can carry though.

FWIW, there have been signs that the economy was ready to make a strong come back for awhile... But the Dems keep doing stupid stuff to suppress it.
 
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#22
#22
rjd, the reason young (I'm guessing) college age and 20 somethings should care AND reject the progressives and liberals is pretty simple. Your future depends on it.

It sounds great to have gov't provide all kinds of benefits until you realize how poorly gov't does almost everything it does. Today's progressives/liberals believe in massive gov't but also know that the country will not stomach the massive taxes to pay for them. In a very cynical game, they have gone from buying votes with taxpayer $ to buying votes with FUTURE taxpayer $... and that's where you come in. You probably do not pay much now so you might be tempted to buy into the "tax the rich" mantra... but one day, you will be the "rich".

The 20 somethings better wise up and they better do it quick. They better become very, very economically libertarian and say NO to virtually all new gov't programs. It is your future income that is being spent.
 
#23
#23
sjt18 said:
Taxes make up a fraction of our gov't expense. Regulation/Compliance is a whole subject in itself and at least doubles the expense of gov't to businesses.

Obama's massive deficit was funded effectively by printing money. When you supply more of something to a market, its real value goes down. That value loss is basically a tax against current AND future taxpayers. The gov't gets to double dip. Debt paid back to bond holders will be in devalued $. The gov't gets to spend money basically at past value. Once they spend it once, it is devalued.

Much of the recovery is an illusion. Obama's policies coupled with Fed rates should be producing inflation. The fact that they aren't means that they are still playing a shell game hoping that somehow the Golden Goose will lay another egg and save them.

The free market in the past has been able to overwhelm the stupidity of big gov't statists and keep the country afloat. There's only so much burden the system can carry though.

FWIW, there have been signs that the economy was ready to make a strong come back for awhile... But the Dems keep doing stupid stuff to suppress it.
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This sounds crazy. Printed money? Deflated dollars when we're supposedly paying Rf, which includes inflationary expectation?
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#25
#25
BigPapaVol said:
This sounds crazy. Printed money? Deflated dollars when we're supposedly paying Rf, which includes inflationary expectation?
Posted via VolNation Mobile
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The ONLY thing buoying the dollar from a free fall right now is the mess in Europe... their socialism and pervading sense of entitlement is more advanced than ours.
 
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