USA Today is wrong about taxes
Tax bills in 2009 at lowest level since 1950 – USATODAY.com
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.
Uh, that is complete bullshit. Social Security taxes alone are 12.4% (employer pays half) of up to $106,800 of gross income. Medicare is 2.9% (employer pays half) with no ceiling. If I calculate the tax burden that I personally pay (so not including the fact that everything I buy is price-inflated from upstream taxation), I pay at least 35%. In fact, every dollar I’ve earned so far this year is going to be paid to the government… it is only in mid-May that I’m allowed to start keeping any for myself.
Mark:
Actually, they are correct, but the news isn’t as rosy as they, and many other pundits of a lefty persuasion, would like to make it out to be.
To wit:
So there goes that. They’re also counting the “stimulus” dollars against the average.
Additionally, with ~10% unemployment and many folks with reduced income levels, far more people fall below the “Pay No Taxes Line” and thus bring the average down.
So: yes, by certain measures, Americans are paying less in taxes than in years past. However, the reasons for it are:
a) Higher unemployment
b) Lower median income
c) Several inconvenient taxes are reassigned to a different classification to avoid the “tax” moniker
d) Lower consumer spending
e) Lower levels of overall economic activity
As I said, the article is true, but its base assumptions are non-obvious and misleading. We’re in Mark Twain “lies, damn lies and statistics” territory here.
That’s correct. But their numbers, including the 9.2% number that was said to encompass “Federal, state and local taxes — including income, property, sales and other taxes” were not. They’ve changed the article, so it reads differently now. But it’s still wrong. And as you correctly pointed out, the reasons for the reduction in tax bills are all for really bad reasons: our economy is in trouble. To the extent that taxes are structured to disproportionately rob the successful, receipts suffer when the nation is less successful.
There’s a phrase for a mandatory insurance scheme enforced with threat of physical violence and with no guaranteed payout: a protection racket.
The real kicker is that taxation is so rigged and gamed and loopholed that they couldn’t possibly come up with one number that stands for anything. Many people pay negative taxes. Are you going to average those in with the people who pay 60% or more of their income to the government and expect the resulting number to be in any way meaningful?
All I know is that way more than 9.2% of my income goes to the government. So any news of a decrease in the narrowly-defined Federal income tax portion (less Medicare, less Social Security) is little consolation.
Or, to quote a politician or two: “A rising tide raises all boats.”
Amen, brother. My checking account is still stinging from April 15th.
Also, this passage struck me:
…Wha? They’re using the mean income as an example?
Every. Bleeding. Economist. that you might encounter will always use the median as it’s far more indicative of real income levels, as billionaires tend to skew the mean by a hefty margin.
And Global Warming is a Big Lie too because it snowed a few months ago.
The taxes in Germany are one of the largest in the world. About 30% of the budget is accounted for the population’s taxes. It has its positive sence for the government and the Germans either. So I don’t think that it’s quite a smart thing for US to lower the taxes rate, but I’m not a president)))
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