June 21, 2011
NY Times: Taxes Are the Lowest They've Been Since the 1960sFollowing up on my previous post, U.S. Has Lowest Corporate Tax Burden of Any Western Nation: Bruce Bartlett has an op-ed in today's New York Times, Are Taxes High or Low? A Further Look:
A couple of weeks ago, I discussed the low level of federal taxes as a share of the GDP in the United States, both historically and in comparison with other developed economies. I noted that total federal revenue — income, corporate and payroll taxes combined –– has been below 15% of GDP for three years in a row, its lowest level since 1950 and well below the postwar average of about 18.5% of GDP. ...
A common criticism of my earlier point about federal taxes as a share of G.D.P. is that I ignored marginal tax rates — the tax on each additional dollar earned. ... The Tax Policy Center annually calculates average and marginal tax rates for four-person families with the same relative income. It starts with the median income. ... It then calculates tax rates for those with half the median income, a common definition for the working poor, and twice the median income, which would represent the reasonably well-to-do. The table below shows the average and marginal tax rates for each of these families since 1955, including both federal income taxes and the employee share of payroll taxes.
[I]t is clear that federal taxes have not been rising and are, at least in historical terms, lower for most taxpayers than they have been since the 1960s. Those who assert that taxes are rising or are at confiscatory levels simply do not know what they are talking about.
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Tracked on Jun 21, 2011 6:13:27 PM
Bartlett: "Those who assert that taxes are rising...simply do not know what they are talking about."
Taxes have risen substantially since Obama became President. It's just that the bills for these taxes to cover his wild spending haven't been printed yet. They are taxes deferred, but are very real. As evidence is today's call by Geithner for “revenue increases through tax reform,” which is his fancy term for tax increases.
The chart showing decreases in current taxes paid is not a result of this administration doing something good but because it is doing things so badly that people are losing jobs, making less taxable income, and falling into lower brackets. Whatever reduction comes from the two percent reduction in the employee share of FICA taxes (not the employer share) will expire in six months.
It's funny that the box next to Bartlett says, "The biggest Republican tax lie," when it is he who is intentionally deceptive.
Posted by: Woody | Jun 21, 2011 11:41:36 PM
@Woody. Oh please.
Posted by: Publius Novus | Jun 22, 2011 10:19:30 AM
Woody, deficits are deferred taxes. On that, I agree. Where you and I part ways is the fact that the Democrats have been fairly good stewards of the national economy.
Ronald Reagan exploded the deficit from one trillion to four trillion and GW Bush who exploded it from four to eight. In all that time, everyone believed that the economy was doing great while our manufacturing base was hollowed and Wall Street exported jobs. That level of mismanagement should (in a rational world) get the Republicans fired for incompetence and treason.
Obama has an excuse for his deficits. He has tried to avert a second Great Depression in the face of Republican obstruction like death panels, more tax cuts, and relentless Fox News propaganda.
In reality, the Republicans ran up the bill and left it to everyone to pay after the debt-fueled economy of the last 30 years tanked. It's like a coke-fueled orgy and we are now paying the piper. If you believe the Republicans are correct, have some more coke. The Chinese are offering some low-interest coke for your delusions.
Posted by: Anonymous | Jun 22, 2011 10:24:41 AM
Reagan submitted balanced budgets to the House every year, and the House, run by Democrat Tip O'Neill, declared them dead on arrival. Then, it was the Democratic Congress that ran up the deficits -- not Reagan, who wanted a line-item veto to curb their wasteful spending.
In addition, Reagan had a much worse economy that he inheritied from Carter, and he got it fixed quickly with tax cuts, while, today, Obama is doing everything opposite of Reagan with terrible results. To say that Obama avoided a second great depression is a made-up joke with no substantiation.
Also, Reagan was trying to rebuild a military torn down by Carter and was fighting a cold war, which he won and which allowed Clinton to benefit from the "peace dividend."
Really, you guys read "The Nation" and "Mother Jones" too much.
But, I see that you let my arguments against Bartlett stand.
Posted by: Woody | Jun 22, 2011 1:01:08 PM
You won't find this in "The Village Voice."
Did Obama Really Prevent A Second Great Depression?
By John Merline, "Investor's Business Daily, 06/20/2011
It has become a common refrain at the White House and among administration supporters that President Obama's aggressive efforts to stimulate growth prevented an economic catastrophe.
"We had to hit the ground running and do everything we could to prevent a second Great Depression," Obama told supporters last week.
Politically, the claim makes sense. Casting the challenge Obama faced as immense can help explain the economy's lackluster performance in the two years since the recession officially ended.
But is it an accurate portrayal of what really happened?
IBD reviewed records of economic forecasts made just before Obama signed the stimulus bill into law, as well as economic data and monthly stimulus spending data from around that time, and reviews of the stimulus bill itself.
The conclusion is that in claiming to have staved off a Depression, the White House and its supporters seem to be engaging in a bit of historical revisionism.
Economists weren't predicting a Depression. ....
The argument is often made that the recession turned out to be far worse than anyone knew at the time. But various indicators show that the economy had pretty much hit bottom at the end of 2008 — a month before President Obama took office. ....
When the recession officially ended in June 2009, just 15% of the stimulus money had gone out the door. And that figure's likely inflated, since almost a third of the money was in the form of grants to states, which some studies suggest they didn't spend, but used to pay down debt.
Other programs Obama often touts — Cash for Clunkers, mortgage help, homebuyer tax credits, the auto rescue plans — either came as the recession had ended or was ending or were widely deemed to be busts. ....
Obama himself admitted last week that the stimulus was too slow-acting, saying at his Jobs and Competitiveness Council that "shovel-ready was not as shovel-ready as we expected."
Also often overlooked is that a tremendous amount of stimulus already was in the economy when Obama took office, including President Bush's $150 billion stimulus, two unemployment benefit extensions and $250 billion spent on "automatic stabilizers."
More importantly, the Bush administration pushed through the controversial $700 billion TARP program (which Obama sustained), while the Fed pursued an aggressive anti-recession campaign by, among other things, effectively lowering its target interest rate to zero. ....
While the economists credit Obama's stimulus for helping end the recession when it did and keeping unemployment lower than it would have been, they concluded that TARP and the Fed's actions were "substantially more effective" at saving the economy from ruin.
Posted by: Woody | Jun 22, 2011 1:17:59 PM
Well, lesson learned here. For Democrats, it's not enough to be bipartisan. The Republicans must own lock, stock and barrel, the failure of their economic policies. In 1932, FDR refused to talk with Hoover about coordinating economic policies. The economy worsened and Hoover was tagged with failing the economy. And FDR subsequently got the credit for resuscitating the economy via the New Deal.
Taking a lesson from FDR, Obama shouldn't have lifted a finger and let Bush and the GOP twist in the wind and let the country go to ruin so that he could push through his socialist proposals.
Is that what happened? No. Instead, Obama took a Rockefeller Republican approach and gets called a socialist and worse.
Moral of the story? Let the other feller finish hanging himself so that we won't have to hear armchair strategists and blowhards about there was no possibility of a second Great Depression. I'll bet Dick Fuld, Hank Paulson, and other Wall Street titans would disagree with you.
Posted by: Anonymous | Jun 22, 2011 2:59:31 PM
The moral of the story is that by trying to come up with a moral, Anonymous has avoided giving any evidence that we were headed towards a second Great Depression.
Posted by: Woody | Jun 23, 2011 12:49:22 AM
The moral of the story is that you don't try to explain the real world to someone who has blinders on.
Don't worry, be happy, vote Republican. Ignore the national train-wreck because it's all the Democratic Party's fault!
P.T. Barnum's adage is proven every time.
Posted by: Anonymous | Jun 23, 2011 9:36:36 PM
All of you guys are drinking the cool-aid. While we argue with each other on whether it was the Republicans or Democrats, they collectively have driven up the deficit and taxes (don't count payroll taxes....they're totally different and distort the charts terribly). What I do know is that I make less money, while I pay fewer taxes because Washington politicians have screwed us while pointing fingers at each other, then they go partying together and conspire on how to screw us some more. A pox on both their houses and everyone of you who can't stop the finger pointing and start insisting on accountability by every damn last on of them.
I'm old enough that it probably won't matter but you younger ones had best figure out how to fix the problem or you'll be drinking more Kool-aid on putpose (how do your spell it?)
Posted by: Shotgun | Jun 27, 2011 8:24:04 PM