Tax bills in 2009 at lowest level since 1950 -

[JohnWxy]

http://www.usatoday.com/money/perfi/taxes/2010-05-10-taxes_N.htm


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.
Some conservative political movements such as the "Tea Party" have criticized federal spending as being out of control. While spending is up, taxes have fallen to exceptionally low levels.

Federal, state and local income 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.
(MORE)

INTERACTIVE TAX TRACKER - shows where tax money goes in Fed Budget also shows changing rates over the last several decades.

[slackmaster]

1. My federal and state income taxes for last year worked out to about 16.1% of my income

I pay more than 8% sales tax on most of the stuff I buy, in addition to the income tax.

Either the USA Today writers and editors are smoking crack, or there is a higher percentage of people who pay no taxes at all than there was in 1950 (which would not surprise me).

Frankly, I think the working class is carrying water for a larger group of people now than it was 60 years ago (when there was no welfare, no food stamps, no subsidized housing, no Medicare, no major war in progress, World War II veterans were still working, etc.). Please don't assume I'm saying that's only a bad thing, but it would tend to skew the numbers to allow the creation of essentially meaningless statistics like the one cited in the OP.

[sinkingfeeling]

2. I can remember when federal and state income taxes ate up 32% of my income in the late 1970s and I

was a single mom without any child support.

[slackmaster]

3. Wow, that's terrible. I take it you didn't own a home or have any other major deductions.

Things got a lot better for me when I bought my house.

[sinkingfeeling]

4. Yes, I owned a home . What I'm saying is the effective rates being paid today are a

fraction of what was expected of individuals several decades ago. I have every single tax return I've ever filed as references, going back to 1964. When I went online to search for those 'ancient' tax tables, I only found them back to 1991.
So, using an adjusted gross income of $48,000 a married couple filing jointly in 1991 would have paid $9027... last year (2009) that same income would have paid $6369. For singles with the $48K income, taxes due in '91 was $9898 and only $6859 last year. The effective rate for the couple in '91 was 18.8% and this year it was 13.2% That's a reduction in effective rate of 29.8%. For the single person, the rates would be 20.6% and 14.2%. That amounts to a 31% reduction in taxes.

If I could locate the tax tables for the 1970's, you'd see a much greater percentage in the reduction of rates.

[slackmaster]

5. Weren't food, housing, and other necessities relatively cheaper in the past?

IIRC my parents' house, the one we lived in in 1970, cost my mom the outrageous sum of $30,000 when she bought it in 1966. Their monthly mortgage payment was something like $150. My dad was making about $37,000.

By contrast, the price my then-wife and I paid for a house in 1994 was about twice our combined annual income.

I remember a rapid inflation in the price of food in the '70s. I'm wondering if a tax burden of 30-ish percent in 1970 was really more of a burden on people than are present-day tax rates, given that prices of food, fuel, and housing are so much higher (even after compensating for inflation).