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Liberals keep saying they want to raise middle-class taxes. Maybe we should start believing them

Image Credit: Leader Nancy Pelosi (Flickr) (CC BY 2.0)

Image Credit: Leader Nancy Pelosi (Flickr) (CC BY 2.0)

I think this is good news. From the New York Times:

 … 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. …

– A household making $350,000 in 2010, roughly the cutoff for the top 1 percent, on average paid 42.1 percent of its income in taxes, compared with 49 percent for a household with the same inflation-adjusted income in 1980 — a savings of about $24,100.

– A household making $52,000 in 2010, roughly the median income, on average paid 27.7 percent of its income in taxes, compared with 30.5 percent in 1980, saving $1,500.

– A household making $22,000 in 2010 — roughly the federal poverty line for a family of four — on average paid 19.4 percent in taxes, compared with 20.2 percent, saving $200.

The reduced level of taxation, particularly marginal rates, has been a huge competitive advantage for the US, and a reason why it has grown faster than other advanced economies. But liberals see things just the opposite:

Jared Bernstein, who served as chief economist to Vice President Joseph R. Biden Jr., said the Times analysis highlighted the need to raise taxes on the affluent and cut taxes for the poor. He cautioned that the middle class most likely would need to pay more, too.

“When you look at these numbers, you understand why we’re not collecting the revenue we need to support the spending we want,” said Mr. Bernstein, a senior fellow at the Center on Budget and Policy Priorities, a liberal research group. “We’ve really gutted the system.”

Bernstein assumes growth would have been just as strong if we had keep the pre-Reagan tax system. Talk about static analysis. More importantly, Bernstein is clearly telling America that liberals are going to raise middle-class taxes to pay for “the spending we want.” Maybe Americans should start believing them.

6 thoughts on “Liberals keep saying they want to raise middle-class taxes. Maybe we should start believing them

  1. we pay LESS taxes and as a direct result we have a trillion dollar deficit and 16T in debt.

    Ronald Reagan was smart enough and principled enough to deal with the realities when the budget went into deficit.

    He gets credit for the tax cuts he did early on but the same people who tout those tax cuts ignore what he did later on when the budget headed into deficit.

    He increased taxes to keep the budget balanced.

    somewhere along the line the GOP has forgotten the second part.

    • If you call the Tax Reform Act of 1986 increasing taxes, I think you should make the circles of Democratics chat rooms and encourage them to call Boehner’s bluff and see how much we could raise today by reforming the tax code. Also, you should ask them how many dollars of spending cuts (even if they relate to future spending) they will give for each dollar of revenue raised.

      • ” encourage them to call Boehner’s bluff and see how much we could raise today by reforming the tax code. Also, you should ask them how many dollars of spending cuts (even if they relate to future spending) they will give for each dollar of revenue raised.”

        if Reagan did that and it generated revenue then, why not now?

        re: spending cuts

        I’d like to see the GOP list of “cuts” since they have spent 4 years blathering about “cuts” but have never produced anything of substance other than Ryans bogus effort that does not reach balance until 2030 and by that time the 16T will be 30T.

        let’s see the proposed cuts from the folks who say we have a spending problem and need to “cut”.

        you know this is totally bizarre.

        the GOP says we need to cut but they won’t say what and instead claim it’s up to Obama to name the cuts.

        now how bizarre is that?

  2. No, Reagan naively thought the dems would keep their end of the bargain and cut spending. The deal was 3 in cuts for every 1 in tax increases. He would later rue that the dems in Congress were unscrupulous in their deceit, calling it one of his greatest mistakes.

    Obama isn’t even offering 1 to 1. We have a spending problem buddy. The GOP has forgotten that, even if they are a bunch of whimpering curs.

  3. http://gregmankiw.blogspot.com/2012/11/the-gray-ladys-misleading-headline.html Over my coffee this morning, I read the following headline on the front page of The New York Times: “Complaints Aside, Most Face Lower Tax Burden Than in the Reagan ’80s.” Below it was a graphic comparing average tax rates for various income groups in 1980 and 2010.

    The problem is that Reagan did not become president until January 1981, and his tax policy was not fully implemented until a couple of years later (and arguably not until his second term, when we got very significant tax reform). So the headline should have read, “Complaints Aside, Most Face Lower Tax Burden Than in Carter’s 1980.” That makes the story very different, as 1980 was the year the incumbent Carter was defeated by the challenger Reagan, who was proposing significant tax reduction as a key part of his campaign.

    By the way, the online version of The Times omits the mention of Reagan in the headline. There, the headline is the more accurate “Complaints Aside, Most Face Lower Tax Burden Than in 1980.” If fauxcahontas’ lips are moving she is lying.

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