This fact may not sit well: Americans are under-taxed

[Donnachaidh]

http://www.mcclatchydc.com/2011/05/05/113759/this-fact-may-not-sit-well-americans.html

WASHINGTON — Here's a dirty little secret that most Americans don't want to hear: We're under-taxed.



That may sound like heresy; nobody wants to pay more taxes. But by historical standards, what we pay in federal taxes — rich, poor and everyone in between — has gone down.

At a time when Washington is wrestling with how to end federal budget deficits and trim the national debt — huge questions that are expected to dominate the nation's politics through the 2012 elections — the fact that Americans are under-taxed compared with U.S. historic norms is central to the discussion.

This fact is separate from the politically charged questions of whether government spends too much, the fairness of who pays how much and what we value or don't in government spending. It's simply that our tax burden is low in the long view of U.S. history, and there are many ways to measure that central truth.

Read more: http://www.mcclatchydc.com/2011/05/05/113759/this-fact-may-not-sit-well-americans.html#ixzz1LZtQgrlV

[fascisthunter]

1. yup... and with it Prosperity which puts a hole in the theory of less taxes=prosperity

[trotsky]

2. I think we frame this not that we are "under-taxed" but...

that taxes are lower than they have ever been - and according to the vaunted supply-side economics, this SHOULD mean that we have super revenue and a kickin' economy. We have neither. How much longer can anyone push supply-side with a straight face?

[Name removed]

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[Rebubula]

13. Uhhh...

...how about no???

I agree that we should raise taxes and close loopholes for people making large sums of money - but to tax in the 90% range or higher is simply stupid. It will not work for many reasons - the LEAST of which being that the people that make tax laws earn more than 200k and tend to be fairly wealthy.

[Name removed]

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[hack89]

14. And reduce tax revenue?

If if was making more than $200,000, I would simply cut my hours and reduce my income to exactly $200,000. I would have a less stressful life and you would have less income to tax.

[Name removed]

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[hack89]

21. So there will be no limits on corporate incomes to ensure job growth?

What if I run a small company? Perhaps the easiest way to decrease my income is to downsize by laying people off.

[Name removed]

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[hack89]

25. Landscaping company, realty company, successful restaurant

small ISP, small IT security consulting company, private high end grocery store, yacht brokerage.

Just looking at people I know in my town, that is the list I came up with. They all make at least $200K, have expensive homes, cars and boats. Send their kids to private school. All the indications of high income.

An they all employ at least 5 to 10 people.

[Capitalocracy]

3. We're undertaxed, assuming we want the gigantic military we have...

I really don't.

Raise taxes on the rich. When I get rich (haha) I'll be happy to pay more.

[hack89]

4. The fact that government spending is at historic levels

doesn't sit well with me. I will support raising taxes to normal levels only if spending is brought down to normal levels.

[Taitertots]

12. Define "normal levels". I think that government spending is unacceptably low....

In every area other than war spending.

Normal levels =
Fully funded universal single payer health care
Fully funded public K-PHD education system
Fully funded 21st century infrastructure.....

[Taitertots]

5. Pandemic wealth and income distribution equality has left only the rich able to afford taxes

So it doesn't really matter whether they are paying a lower marginal income tax rate (not counting regressive taxation systems) because they are unable to bear the burden of higher taxes. The only solution is to increase taxes on the wealthy.

It is not fair for people making below a minimum reasonable living wage to have to forgo basic necessities to pay taxes. It is not fair that the people who profit of the labor of others refuse to pay taxes at a level which will ensure that those people can live in a functioning society.

[Name removed]

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[sinkingfeeling]

11. Not the tax rates. It's we're spending a lesser percentage of our income on taxes. See post below

from USA Today story.

[Taitertots]

19. That article was not accurately interpreting the reality of the situation

Rich people pay less taxes and "we're spending a lesser percentage of our income on taxes". The only problem is we are not a part of the "we" they are talking about.

Tax rates for high income persons are at historic lows. While taxes for middle tax workers are a significant daily burden, especially when regressive non-income taxes are considered. Millions of people can't maintain basic minimum reasonable living standards while a tiny cabal of billionaires pay historically low taxes. The problem isn't that "we" are not paying enough, it is that they are not paying enough.

[sinkingfeeling]

24. "We" is the total taxpaying public. I paid a significantly higher percentage of my income into

taxes in the 1970's than I do today. Back then when I was a single mother (no tax credits for child nor child care), and making less than $30,000, I paid something like 34% in total taxes. In 2010, I paid around 23% of my income in state, local, and federal taxes.

[Taitertots]

26. Exactly, it becomes misleading and inaccurate when you try to aggregate between rich and poor

You saved next to nothing, while Warren Buffet saved millions.

You pay 25% of your income to Warren Buffet paying 17%. The problem is that the wealthy are not paying their fair share. Not that people living near poverty need to pay more.

[seabeyond]

6. i agree. i was all for my taxes to go back up, especially in order for the rich taxes to go up, too

i think it is atrocious they are talking further reduction

[hakko936]

7. Unemployment

With unemployment being through the roof, would that account for the drop in income tax revenue which according the article accounts for 80% of the revenue?

Fewer people working would certainly take a bit out of the revenue.

Is the problem the tax rate or the fact that a lot fewer people are working and the ones who are have seen their pay reduced?

[sinkingfeeling]

9. Combining state, local and federal taxes, we're paying the lowest % of income since the 1950's.

http://www.usatoday.com/money/perfi/taxes/2011-05-05-tax-cut-record-low_n.htm

[Tracer]

10. They may be "undertaxed" at the Federal level...

... but surely not at the local level.

I can handle my Federal and State taxes, but I definitely have a hard time coming up with nearly $6000/yr in property taxes (for a small house, on a small income).

[ieoeja]

23. I believe higher local taxes was actually part of the Reaganomic plan.

Democrats had a stranglehold on most state legislatures. So Reagan cut taxes at the federal level - making Republicans popular at that level - forcing Democrats at state levels to increase taxes to make up the lost revenue from federal grants - making Democrats unpopular at that level.


Politics aside, it increased the balkanization of the United States. Previously, state taxation was not much of an issue. Now it is. States have to compete against one another.

Indiana gave United Airlines a tax exemption to move their maintenance from Chicago to Indianapolis. Illinois lost the tax basis of United Airlines and their employees. Indiana gained the tax basis of the employees, but not United Airlines. Combined, there was a net loss.

[ananda]

15. Me personally.

I am not undertaxed.

It's the ones making serious money who are undertaxed.

[earthside]

16. It's complicated.

I suspect that middle and working class Americans are not under-taxed.

Special districts, county, city, state taxes have gone up for most people ... and fees for government services have gone up. Then there is the increased costs for college tuition at public institutions ... all while our wages have been stagnant and unemployment has be grown (up to nine percent today).

On the other hand, there is absolutely no doubt that the $100,000 plus folks have seen their tax burden decline as a percentage of their income and/or wealth accumulation.

[Scuba]

20. Yeah, but if you keep cutting taxes, revenues will go up. The problem...

...is we haven't given this strategy enough time. Four or five more decades should do it. Then the "trickle down" will start, and the few remaining survivors have bread again. This is happening right now in Somalia. See?

Damn liberals want every problem to be solved overnight.