Here’s the heart of the big New York Times story on taxes:
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.
1. Now some people, like Business Insider’s Henry Blodget, and former White House economist Jared Bernstein, thinks the data make the case for tax hikes. Maybe I’m crazy, but I think the reduction in the tax burden — staring with the Reagan tax cuts — has been a huge competitive advantage for the U.S. We should keep that edge. Check out these numbers. In 1981, France’s per capita GDP was 81% of U.S. per capita GDP, Germany’s 83%, Italy’s 81%, Britain’s 69%.
In 2010, France’s per capita GDP was 73% of U.S. per capita GDP (down 8 points), Germany’s 81% (down 2 points), Italy’s 68% (down 12 points), and Britain’s 76% (up 7 points).
Old Europe rapidly caught up to American wealth from 1960-1981. But in the two decades after that, the Great Closing stopped or reversed as America got its policy house in order. Tax cuts. Deregulation. France, Germany, and Italy went backward vs the much larger U.S. Britain, thanks to the Thatcher Revolution, eventually shook off the 1970s. Anyway, rather giving away our tax advantage, we should reform the tax code so that it is even more pro-growth and pro-family.
2. As the NYT put it, “Congress cut federal taxation at every income level over the last 30 years.” But liberals keeping telling me that only the rich get tax cuts! Anyway, here’s an interesting statistic: Federal tax revenue as a share of GDP from 1954 through 1980 averaged 17.8%, while from 1981 through 2007, it averaged 18.1%. Lower taxes but more revenue. Hmmm ….
3. The NYT does point out how payroll taxes have risen, which especially affects middle-class households:
More evidence for the need to address tax relief to middle-income families whether through an enlarged child credit that could be applied to payroll taxes or reducing them on a per child basis.
4. Another bit: “Economists agree that taxes on business are passed on to investors, reducing profits, and to workers, reducing wages. Upper-income households bear the brunt of these taxes, and corporate tax collections have fallen sharply.” That is right. Taxes matter.
Funny, the NYT never mentioned this widely known economic fact when Mitt Romney was attacked for saying “Corporations are people.”
Where’s my man LarryG on this one? Was this the point you were trying to make.
there is NO competitive “advantage” when you irresponsibly implement a tax policy that starves the beast and sends the country into deficit and debt.
Reagan cut taxes but he also raised them when he saw the budget going into deficit.
the folks who cite Reagan ignore the second part.
It is much more example to build a beast so large that no amount of food will satiate it. The levels of revenue necessary to pay for the Government we have and Liberals want (minus the Military) is only possible at continuous high growth rates which is never going to happen even if we cut back all the Obama and Bush regulations and return back to the Clinton years.
Some of Europe realized this and started making amends to their welfare-states.
are tax revenues are 1.5 Trillion. right?
Morelike $2.1 Trillion. In 2007 it was $2.57 Trillion.
The total gross income of the top 1% of Income Earners is about $1.3 Trillion.
Our current deficit for Fiscal Year 2012 was estimated at $1.1 Trillion.
$16+ Trillion in debt.
Any more questions?
I’m thinking maybe going back to the Eisenhower/Kennedy years before the onset of the massive entitlement programs and bureaucracy build that started with LBJ…
http://dailycaller.com/2012/06/06/ronald-reagan-raised-taxes-11-times-the-real-story/
“When Democrats or media embrace Reagan for “raising taxes X number of times,” they are usually engaging in willful obfuscation. This is because they know that when most people hear the words, “tax hike,” they naturally assume you mean raising income taxes. But tax rates (both nominal and effective) dropped dramatically across-the-board during Reagan’s tenure.
Not only did the top individual income tax rate go from 70 to 28 percent! — but the tax code was also indexed for inflation (this is a big deal, because inflation had heretofore pushed people into higher tax brackets — a double whammy.)
Yet the notion that Reagan was a tax-hiker has persisted. In recent years, Republicans ranging from former Sen. Alan Simpson to Reagan aide Bruce Bartlett have been cited noting that Reagan raised taxes (he did.) But their statements are often taken out of context — as if to muddy the waters — to make it appear that Reagan was a fan of tax hikes.
The typical tactic is to say Reagan raised taxes 11 or 12 times (the exact number depends on whom you ask.) But it’s unhelpful — in fact, it’s a bit misleading — to talk about how many times Reagan raised taxes. That’s because (as noted earlier) tax increases are not created equal. Some are much worse than others. And many of Reagan’s so-called “tax increases” were actually examples of ending deductions.”
Bruce Bartlett tends to be the lefties ‘go to guy‘ for the Reagan tax increases…
re: “Reagan calls tax boost “the price we had to pay”
http://news.google.com/newspapers?nid=2209&dat=19820805&id=GqIrAAAAIBAJ&sjid=lfwFAAAAIBAJ&pg=6919,945985
poor little Reagan – the tax-cutting, supply-side hero of the right – KNEW ahead of time that he could not get a deal without a tax hike – as opposed to him being “surprised”.
Besides.. isn’t the claim that tax revenues went up?
sure enough:
http://www.whitehouse.gov/sites/default/files/omb/budget/fy2013/assets/hist.pdf
larry g babbles: “poor little Reagan“…
You should be so poor numb_nutz…
I thought eliminating deduction wasn’t a big deal? Or is that only because Romney was arguing that it was?
Anyways, you’re trolling a little excessively and unfortunately missing the mark. Pretending that Reagan increased taxes significantly should be beneath anyone trying to have a serious conversation.
re: eliminating deductions – is a good thing unless of course you use the savings to lower the marginal rate and the net effect is revenue neutral and the budget deficit is unaffected.
Reagan used the increased revenues to buy down the deficit, as a principled fiscal conservative would.
Romney appeared to be claiming that a revenue-neutral tax reform would spur “growth”.
never understand that… since lowering the marginal rate was achieved by tax increases on those who previously benefited for tax loopholes.
how was that supposed to work?
Hey Larry – Reagan cut a deal to raise taxes in return for some spending cuts because the defecit was not caused by tax rate cuts, it was caused by an explosion in spending. Alas, the cuts never came. Sound familiar? Just what Obama wants now – raise taxes and cut later. The official flag and mascot of the dems should be changed to a picture of Lucy VanPelt holding the football. Unfortunately the dumb republicans, just like Charlie Brown, will probably end up on their backs again listening to a lecture from Lucy.
re: increases in spending.
Reagan would have had to sign them right?
and when he did sign them he had the backbone to arrange for payment, right?
that’s responsible fiscal conservatism.
Nice try – you don’t remember the press conference where he took the passed budget, a half-ton tome, and dropped it on the podium and told the American people that he had to sign the whole thing or shut down the government. He tried to get the line-item veto but was shut down by political hacks.
You’re showing yourself to not really know much at all about the Reagan years. As I said before, he made the arrangements to ‘pay’ for it by making a deal with Tip and the dems to get cuts along with those tax increases. The dems lied and never implemented the cuts.
Go to the back of the class.
The top marginal income tax rate in China is 45 percent. The corporate rate is 25 percent. China has some taxes that can be called confiscatory, such as the top rate of 60 percent on raw land appreciation. (China ramped up real estate taxes to nosebleed levels to pierce its real estate bubble. China pretty much scoffs at the notion that we have anything to teach them about economics.)
The real estate crackdown has lowered 2012 GDP growth to 7.5 percent.
Yes, comparing emerging economies to mature ones is apples and oranges. Right, Mr, P? Taxes are one factor among many, and not the important one at the moment in China or the US. What China has that America lacks is DEMAND.
And more recently…
Since the respective recoveries began, Reagan policies generated near 6% GDP growth versus Obama’s 2% for the comparable period. 1984 saw GDP surge 7%, twice Obma’s single best quarter. In addition to some tax cuts, Reagan rolled back many expensive, unnecessary and hostile regulations–Obama created them at a record pace. Reahgan launched this success from an economic terrain that included 21% interest rates versus 0% today. He launched from an environment that vaporized the S&L industry versus the bailout cadavers that exist today. Reagan accomplished all this success without plssing away $5.5 trillion taxpayer dollars.
Can you imagine what today’s unemployment rate might be if Obama inherited 21% interest rates and double-digit inflation? 25%…30%? Maybe more.
Are you implying that the Stimulus didn’t work?
Aren’t there tens of thousands of ‘shovel ready jobs‘ just everywhere you look?
locally, we have more than 60 million dollars in road projects that were previously cancelled until the stimulus was enacted.
“locally, we have more than 60 million dollars in road projects that were previously cancelled until the stimulus was enacted“…
Well good deal larry g, now you have somewhere you can go play…
I saw a bunch of signs that said there were.
“I saw a bunch of signs that said there were“…
Yeah robert but I didn’t happen to catch anyone with a shovel in his/her hand, did you?
Umm, the thrift crisis happenedd on Reagan’s watch although both parties pretended it didn’t exist in the 88 election. In his 1993 book, Full Faith and Credit, Bill Seidman, head of the cleanup RTC, blamed Don Regan, Reagan’s treas secy and chief of staff, for clinging to antiregulation dogma in the face of considerable evidence that allowing builders to run thrifts was in fact as dumb as it sounds.
Nor are the recoveries comparable. Reagan’s problems lasted as long as it took Volcker to dampen inflation expectations, after which interest rates fell and life resumed. Burnt creditors and debtors tend to have longer memories, as evidenced by the fact that four years of negative interest rates by the Fed have done little.
Hmmm, the “thrift crisis”. Remind us all again, wasn’t that solved by a trillion dollar plus “stimulus” package and over 6 trillion dollars of deficit spending? Or, am I thinking about another crisis?
Here is the New York Times write up on the “thrift crisis”:
Who to Thank for the Thrift Crisis, New York Times, June 12, 1988
Scanning the article, I don’t see the name Ronald Reagan, or Donald Reagan mentioned even once. Go figure. There is this, however:
“Although some candid lawmakers blame themselves for insufficient action in the late 1970′s and 80′s, some analysts believe the roots of the crisis lie deep in the structure of the industry, established by Congress in 1932.”
I think that Bill Seidman was a brilliant guy, but when you cant even get the New York Times to throw a little mud Ronald Reagan’s way, well, …
Just kidding larry g about where to play…
Stay out of the roadways…