American Tax Burden Lower Than 1980

[JMHX]

Most Americans in 2010 paid far less in total taxes - federal, state and local - than they would have paid 30 years ago. According to an analysis by The New York Times, the combination of all income taxes, sales taxes and property taxes took a smaller share of their income than it took from households with the same inflation-adjusted income in 1980.

Households earning more than $200,000 benefited from the largest percentage declines in total taxation as a share of income. Middle-income households benefited, too. More than 85 percent of households with earnings above $25,000 paid less in total taxes than comparable households in 1980.

Lower-income households, however, saved little or nothing. Many pay no federal income taxes, but they do pay a range of other levies, like federal payroll taxes, state sales taxes and local property taxes. Only about half of taxpaying households with incomes below $25,000 paid less in 2010.

The uneven decline is a result of two trends. Congress cut federal taxation at every income level over the last 30 years. State and local taxes, meanwhile, increased for most Americans. Those taxes generally take a larger share of income from those who make less, so the increases offset more and more of the federal savings at lower levels of income.

Link

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This plays into one of the great psychological biases - the tendency for people to think that both their overall tax burden and their general share of total tax receipts is higher than in reality. There's an admirable amount of research put into showing that, whether you're looking at something like dividend taxation or capital gains from stock, overall income tax or the number of tax credits a family receives, people are mostly doing better than they have at any time in most of your lifetimes.

There's such a tendency to get caught in the moment, to look at the past two or three or five years and claim some long-term trend, that it's important to step back and remember that the historical data tells a different story. Here's a more interesting point from the article:

The analysis shows that the overall burden of taxation declined as a share of income in the 1980s, rose to a new peak in the 1990s and fell again in the 2000s. Tax rates at most income levels were lower in 2010 than at any point during the 1980s.

Governments still collected the same share of total income in 2010 as in 1980 - 31 cents from every dollar - because people with higher incomes pay taxes at higher rates, and household incomes rose over the last three decades, particularly at the top.

So the biggest contributor to rising tax receipts isn't an across-the-board hike in taxes on Americans -- it's rising PRODUCTIVITY within American households. A family is on average earning more than they did in 1980, especially if that family is already in the upper echelons. The idea that the past four years have been some unholy apocalypse for the wealthy is simply untrue.

Let's try and keep it civil as we collect our thoughts on this.

[leanlifter1]

Whats the point when money has been turned into fiat and not actual wealth like it is supposed to be. In essence paying taxes is just paying back money to the people that gave it to you which so happens to be the same people that created debt.

[JMHX]

At 11/30/12 10:36 AM, leanlifter1 wrote: Whats the point when money has been turned into fiat and not actual wealth like it is supposed to be. In essence paying taxes is just paying back money to the people that gave it to you which so happens to be the same people that created debt.

I had the sneaking suspicion you'd be both the first commenter and the first one to try and derail this from a thread about tax policy over the decades. I'd kindly ask other commenters to pass right over Leanlifter and focus on the actual points raised in the article and the post.

[leanlifter1]

At 11/30/12 10:45 AM, JMHX wrote:

At 11/30/12 10:36 AM, leanlifter1 wrote: Whats the point when money has been turned into fiat and not actual wealth like it is supposed to be. In essence paying taxes is just paying back money to the people that gave it to you which so happens to be the same people that created debt.

I had the sneaking suspicion you'd be both the first commenter and the first one to try and derail this from a thread about tax policy over the decades. I'd kindly ask other commenters to pass right over Leanlifter and focus on the actual points raised in the article and the post.

Why make a big stink about taxation when it is illegitimate to begin with is all I am saying. If you can prove that fiat currency and taxation is legitimate then you have something here but until then we need to highlight the fundamental illegitimacy of the monetary system and taxation rater than just complain about the incidental fallacy's of the monetary and taxation system in question.

[JMHX]

At 11/30/12 10:53 AM, leanlifter1 wrote:
Why make a big stink about taxation when it is illegitimate to begin with is all I am saying. If you can prove that fiat currency and taxation is legitimate then you have something here but until then we need to highlight the fundamental illegitimacy of the monetary system and taxation rater than just complain about the incidental fallacy's of the monetary and taxation system in question.

This is the last I'll say on this line: regardless of your concept of 'legitimacy,' it's the standard by which we pay our tax and debt obligations. There's a massive army of enforcement officials (not to mention a real Army) dedicated to maintaining that. So your personal feelings about fiat currency aside, it seems likely we're going to be using it to pay our public and private debts for a long time coming. You can choose not to pay your taxes in filthy fiat currency. I will send you a gift bag in federal prison.

For the rest of those reading this and waiting to comment - one of the points the article brings up is that payroll taxes, which are paid out of your paycheck to fund Social Security and the like, are rising faster than income taxes. This disproportionately affects the poor, who in some cases do not pay any income taxes. Any thoughts on this are welcome.

[adrshepard]

Interesting, but I don't see its current relevance. To me, it seems to be evidence of a positive trend that shouldn't be reversed, as opposed to a justification for higher taxes because the country coped with it before.

As far as people claiming the past four years have been terrible for the rich, I don't think I've ever heard anyone attribute that to higher taxes. Most of the complaints against Obama have been that his policies would inevitably lead to higher taxes in the future.

[JMHX]

At 11/30/12 11:18 AM, adrshepard wrote: Interesting, but I don't see its current relevance. To me, it seems to be evidence of a positive trend that shouldn't be reversed, as opposed to a justification for higher taxes because the country coped with it before.

The relevance is that both our annual operating deficit and our long-term debt is growing, and as the amount of money we collect in taxes declines, we're less and less able to pay off our obligations. Even as the economy grows and individuals make more money, the declining percentage of tax receipts by the government strains our ability to pay down deficits while still providing a consistent level of service.

[leanlifter1]

At 11/30/12 11:20 AM, JMHX wrote:

The relevance is that both our annual operating deficit and our long-term debt is growing, and as the amount of money we collect in taxes declines, we're less and less able to pay off our obligations. Even as the economy grows and individuals make more money, the declining percentage of tax receipts by the government strains our ability to pay down deficits while still providing a consistent level of service.

It's called inflation and there is absolutely no way to stop it unless you absolutely get rid of fiat/debt based currency all together.

[LemonCrush]

Revenue to the government isn't as high. Revenue to their corporate pals via government action, is.

[Camarohusky]

Goes to show that the level of taxes has very little to do with the actual strength and growth of the economy.

[adrshepard]

At 11/30/12 11:20 AM, JMHX wrote: The relevance is that both our annual operating deficit and our long-term debt is growing, and as the amount of money we collect in taxes declines, we're less and less able to pay off our obligations. Even as the economy grows and individuals make more money, the declining percentage of tax receipts by the government strains our ability to pay down deficits while still providing a consistent level of service.

But you're assuming that the level of service has been consistent when it has actually expanded. Federal education and health care spending are probably the two biggest examples in which spending growth has rapidly surpassed the inflation and population growth rates.

Using statistics from over 30 years ago to justify higher taxes works just as well to justify reduced spending.

[JMHX]

At 11/30/12 12:43 PM, adrshepard wrote:
Using statistics from over 30 years ago to justify higher taxes works just as well to justify reduced spending.

Well, to start, those "statistics from over 30 years ago" constitute what's called a trend line, and the information it provides is valid to a country currently talking about the 'crippling tax burden' faced by Americans. But I agree with you on the core of your argument - spending on education and healthcare has gone up markedly over the past 30 years. This is one of the main arguments for a higher effective tax rate coupled with targeted spending cuts, since current levels are no longer meeting the demands of the system. We're finding the difference in payroll tax increases, which harm the middle and lower classes and still fail to plug the gap in spending.

[adrshepard]

At 11/30/12 12:52 PM, JMHX wrote: Well, to start, those "statistics from over 30 years ago" constitute what's called a trend line, and the information it provides is valid to a country currently talking about the 'crippling tax burden' faced by Americans...This is one of the main arguments for a higher effective tax rate coupled with targeted spending cuts, since current levels are no longer meeting the demands of the system. We're finding the difference in payroll tax increases, which harm the middle and lower classes and still fail to plug the gap in spending.

How is it any more of an argument for higher tax revenues than it is for decreased spending? You're implicitly assuming that the vast majority of government spending is essential and cannot be cut. If the levels of taxation aren't meeting the demands of the system, then perhaps its demands are too high.

[JMHX]

At 11/30/12 03:47 PM, adrshepard wrote:

At 11/30/12 12:52 PM, JMHX wrote:

How is it any more of an argument for higher tax revenues than it is for decreased spending? You're implicitly assuming that the vast majority of government spending is essential and cannot be cut. If the levels of taxation aren't meeting the demands of the system, then perhaps its demands are too high.

Because you're conflating future spending with past spending. The debt and deficits we've already accumulated can't be met with the current level of taxation, to say nothing of future spending on defense and social programs. As both the sequester and the current debt reduction talks make clear, it's going to take both a series of cuts and a series of revenue increases simply to corner our already existing financial burden.

[SmilezRoyale]

My guess is that tax hikes are always going to be more noticeable than tax cuts, especially if people end up taking whatever monetary gains they get from the taxes and end up losing it on other things, like gasoline and health care.

[leanlifter1]

At 11/30/12 05:05 PM, SmilezRoyale wrote: My guess is that tax hikes are always going to be more noticeable than tax cuts, especially if people end up taking whatever monetary gains they get from the taxes and end up losing it on other things, like gasoline and health care.

Ya it's called inflation.

[JMHX]

At 11/30/12 05:10 PM, leanlifter1 wrote:

At 11/30/12 05:05 PM, SmilezRoyale wrote: My guess is that tax hikes are always going to be more noticeable than tax cuts, especially if people end up taking whatever monetary gains they get from the taxes and end up losing it on other things, like gasoline and health care.

Ya it's called inflation.

LeanLifter only remembers that one day of lessons from high school, so he's going to throw that word around until it falls apart. Every discussion, every thread, every possible topic will come back in some way to inflation.

[Feoric]

At 11/30/12 05:10 PM, leanlifter1 wrote: Ya it's called inflation.

Inflation is part of any normal healthy economy. The rate of inflation is what matters.

[leanlifter1]

At 11/30/12 05:12 PM, Feoric wrote:

At 11/30/12 05:10 PM, leanlifter1 wrote: Ya it's called inflation.

Inflation is part of any normal healthy economy. The rate of inflation is what matters.

Well I can understand that the koolaid would make one think like that no offense intended toward you. US has no room to be inflating the economy as that's all they have bloody well done since as far back as I can remember. Inflation is the delusion that everything is peachy and deflation is the reality that it isn't.

[Warforger]

At 11/30/12 11:26 AM, leanlifter1 wrote: It's called inflation and there is absolutely no way to stop it unless you absolutely get rid of fiat/debt based currency all together.

Inflation is good when it's controllable around 2-3%, deflation is always horrible. Besides, there's inflation under gold, there's also alot more deflation which is a much worse problem than inflation.

[leanlifter1]

At 11/30/12 06:31 PM, Warforger wrote:

At 11/30/12 11:26 AM, leanlifter1 wrote: It's called inflation and there is absolutely no way to stop it unless you absolutely get rid of fiat/debt based currency all together.

Inflation is good when it's controllable around 2-3%, deflation is always horrible. Besides, there's inflation under gold, there's also alot more deflation which is a much worse problem than inflation.

You are misinformed as inflation is never good as it further debases the dollar and undermines true tangible value which are the people. Inflation is a temporary patch to a permanent problem and is also can be considered as passing the buck. Why paint a sinking ship ?

[Feoric]

At 11/30/12 06:36 PM, leanlifter1 wrote: You are misinformed as inflation is never good as it further debases the dollar and undermines true tangible value which are the people. Inflation is a temporary patch to a permanent problem and is also can be considered as passing the buck. Why paint a sinking ship ?

I don't know how many times I and other have explained this to you. You have absolutely no fucking clue what you're talking about when it comes to economics.

[Warforger]

At 11/30/12 06:36 PM, leanlifter1 wrote: You are misinformed

lulz.

as inflation is never good as it further debases the dollar and undermines true tangible value which are the people.

Inflation is good because the economy is constantly growing and thus you need more money to meet more people. Inflation on a small scale isn't that big of a deal because the money gets through the economy fast enough to not be that big of a deal, it's just when it gets out of control.

Inflation is a temporary patch to a permanent problem and is also can be considered as passing the buck. Why paint a sinking ship ?

No it's not, why do you bother posting your nonsense? People just start outright ignoring you because it's no use trying to preach facts to you.

[leanlifter1]

At 11/30/12 07:48 PM, Warforger wrote:

No it's not, why do you bother posting your nonsense? People just start outright ignoring you because it's no use trying to preach facts to you.

The fact is economics is Bullshit and inflation is never a good thing as it just postpones the inevitable reality that the economy is broken due to debt based fiat currency not in control of the people and backed by nothing but ignorance and lies. Inflation equals buy now pay later with interest.

[Feoric]

At 11/30/12 08:23 PM, leanlifter1 wrote: The fact is economics is Bullshit and inflation is never a good thing as it just postpones the inevitable reality that the economy is broken due to debt based fiat currency not in control of the people and backed by nothing but ignorance and lies. Inflation equals buy now pay later with interest.

A low amount of inflation creates an incentive to either spend the money or invest it. Inflation lowers the purchasing power of a dollar, it is a period when prices go up. So, money is more valuable in the form of investments due to investments performance versus inflation or versus bank interest rates. Inflation encourages investment as a value saver and investment fuels economic growth. Growth means the possibility of more jobs, more positions, more mobility, and it expands the economy. Too much inflation, and people's purchasing power drops to the point to where it reverses the expansion.

[leanlifter1]

At 11/30/12 08:28 PM, Feoric wrote:

At 11/30/12 08:23 PM, leanlifter1 wrote: The fact is economics is Bullshit and inflation is never a good thing as it just postpones the inevitable reality that the economy is broken due to debt based fiat currency not in control of the people and backed by nothing but ignorance and lies. Inflation equals buy now pay later with interest.

A low amount of inflation creates an incentive to either spend the money or invest it.

It's a question of where the currency is coming from to fuel inflation that makes it highly illegitimate. To think that private owned debt based fiat currency and fractional reserve lending is in the leased bit legit is just down right delusional no matter how much you juggle the numbers. Throwing fuel on the fire when you are trying to stop the flames is not a good measure of logic.

[SmilezRoyale]

At 11/30/12 08:28 PM, Feoric wrote:

At 11/30/12 08:23 PM, leanlifter1 wrote: The fact is economics is Bullshit and inflation is never a good thing as it just postpones the inevitable reality that the economy is broken due to debt based fiat currency not in control of the people and backed by nothing but ignorance and lies. Inflation equals buy now pay later with interest.

A low amount of inflation creates an incentive to either spend the money or invest it.

At this point the paralysis of private investment makes me skeptical of this. It seems that now the only thing investors do with their money is lend it back to the federal government.

[Camarohusky]

At 11/30/12 11:17 PM, SmilezRoyale wrote: At this point the paralysis of private investment makes me skeptical of this. It seems that now the only thing investors do with their money is lend it back to the federal government.

Because government bonds are considered safe, but still have a high enough interest rate to encourage investment.

When the economy stablizes the rate on government bonds will go back to being much lower than other relatively safe options and people will begin to invest elsewhere again.

[leanlifter1]

At 12/1/12 11:45 AM, Camarohusky wrote:

At 11/30/12 11:17 PM, SmilezRoyale wrote: At this point the paralysis of private investment makes me skeptical of this. It seems that now the only thing investors do with their money is lend it back to the federal government.

Because government bonds are considered safe, but still have a high enough interest rate to encourage investment.

When the economy stablizes the rate on government bonds will go back to being much lower than other relatively safe options and people will begin to invest elsewhere again.

LOL at an IOU promissory note ROFLMAO at people that trust in corrupted Government owned by the like of the Rockefellers.

[JMHX]

At 12/1/12 11:50 AM, leanlifter1 wrote:

LOL at an IOU promissory note ROFLMAO at people that trust in corrupted Government owned by the like of the Rockefellers.

The thing I like most about reading Leanlifter's posts is how they've essentially been batter-dipped and deep fried in smugness. Here's this young guy posting on a small politics forum, who in a matter of one sentence and some leetspeak has convinced himself that the entire system of international finance is a big shell game created by a clique of conspiracy overlords in charge of the New World Order, and that the concept of the government-issued bond (one of the cornerstones of economics and banking since the days of Egypt) is some kind of shell game perpetrated on people by the elite.

But that's not enough. At the SAME time, the entire international monetary system is a lie which could easily be fixed by turning our object of idolatry from the paper currency into gold, which as we all know has never been responsible for inflationary or deflationary insanity (except for all of those examples where it HAS been the lead cause of both). It just fucking kills me. You read about people like this in the comments section of Glenn Beck articles, but you never expect to meet them.

So just a reminder:

Bonds = lies
paper money = lies
Inflation = lies
Gold under the World Trade Center = stolen by the NWO