Taxes Lowest in 60 years

[MannyIsGod]

Chart of the day: U.S. taxes
DEC 6, 2010 10:44 EST

TAX RATE
Stephen Culp has another striking chart today:


http://blogs.reuters.com/felix-salmon/files/2010/12/US_TAXGDP1210.gif


This chart should be ingrained in the mind of anybody who cares about fiscal policy. The main things to note:

Federal taxes are the lowest in 60 years, which gives you a pretty good idea of why America’s long-term debt ratios are a big problem. If the taxes reverted to somewhere near their historical mean, the problem would be solved at a stroke.
Income taxes, in particular, both personal and corporate, are low and falling. That trend is not sustainable.
Employment taxes, by contrast—the regressive bit of the fiscal structure—are bearing a large and increasing share of the brunt. Any time that somebody starts complaining about how the poor don’t pay income tax, point them to this chart. Income taxes are just one part of the pie, and everybody with a job pays employment taxes.
There aren’t any wealth taxes, but the closest thing we’ve got—estate and gift taxes—have shrunk to zero, after contributing a non-negligible amount to the public fisc in earlier decades.
If you were structuring a tax code from scratch, it would look nothing like this. But the problem is that tax hikes seem to be politically impossible no matter which party is in power. And since any revamp of the tax code would involve tax hikes somewhere, I fear we’re fiscally doomed.

http://blogs.reuters.com/felix-salmon/2010/12/06/chart-of-the-day-u-s-taxes/

[CosmicCowboy]

What exactly are you calling "employment" tax?

[TeyshaBlue]

Chart of the day: U.S. taxes
DEC 6, 2010 10:44 EST

TAX RATE
Stephen Culp has another striking chart today:


http://blogs.reuters.com/felix-salmon/files/2010/12/US_TAXGDP1210.gif


This chart should be ingrained in the mind of anybody who cares about fiscal policy. The main things to note:

Federal taxes are the lowest in 60 years, which gives you a pretty good idea of why America’s long-term debt ratios are a big problem. If the taxes reverted to somewhere near their historical mean, the problem would be solved at a stroke.
I'm not sure where you're going with this Manny. It would appear that today's taxes are near their historical mean...historical as relative to what the chart shows anyway.

Income taxes, in particular, both personal and corporate, are low and falling. That trend is not sustainable.
Employment taxes, by contrast—the regressive bit of the fiscal structure—are bearing a large and increasing share of the brunt. Any time that somebody starts complaining about how the poor don’t pay income tax, point them to this chart. Income taxes are just one part of the pie, and everybody with a job pays employment taxes. Is this a chart of tax rates, or a chart of taxes as a percentage of GDP? They aint the same thing.
Either this chart is fatally flawed, or I'm just not reading it right. I do have a massive case of the flu, taking all kinds of OTC bullshit, so I might not be at my sharpest. But, doesn't it strike you as odd that all the tax curves mimic each other so tightly? Why would, for example, the employment tax mimic the Federal income tax curve? I dunno. I'm gonna back off and think about this...I aint groking something.

There aren’t any wealth taxes, but the closest thing we’ve got—estate and gift taxes—have shrunk to zero, after contributing a non-negligible amount to the public fisc in earlier decades.
If you were structuring a tax code from scratch, it would look nothing like this. But the problem is that tax hikes seem to be politically impossible no matter which party is in power. And since any revamp of the tax code would involve tax hikes somewhere, I fear we’re fiscally doomed.

http://blogs.reuters.com/felix-salmon/2010/12/06/chart-of-the-day-u-s-taxes/

[MannyIsGod]

What exactly are you calling "employment" tax?

Its on the chart.

[CosmicCowboy]

Its on the chart.

OK, had to put the glasses. So taxes paid by the employer and not the employee....

[MannyIsGod]

I'm not sure where you're going with this Manny. It would appear that today's taxes are near their historical mean...historical as relative to what the chart shows anyway.
Is this a chart of tax rates, or a chart of taxes as a percentage of GDP? They aint the same thing.
Either this chart is fatally flawed, or I'm just not reading it right. I do have a massive case of the flu, taking all kinds of OTC bullshit, so I might not be at my sharpest. But, doesn't it strike you as odd that all the tax curves mimic each other so tightly? Why would, for example, the employment tax mimic the Federal income tax curve? I dunno. I'm gonna back off and think about this...I aint groking something.

Just eyeballing it I would say that the mean lies 16-17% of the GDP. Today we're under 15% so I don't think we're anywhere near the mean. You're right about rates and percentage of GDP being different and this is percentage of GDP going to tax revenue.

I would imagine the percentages go up and down as the GDP goes up and down which is why they tend to follow a similar line. Lower GDP and higher unemployment would lower them all a good deal.

I think a good take away from this is the level corporate taxation today compared to yesteryear. That and the obvious thing that most here don't disagree with in that we need tax rate hikes in order to really balance the budget.

[MannyIsGod]

OK, had to put the glasses. So taxes paid by the employer and not the employee....

It does include employee SS and Medicare taxes if I'm reading it correctly.

[MannyIsGod]

Teysha, after thinking about what you posted I do think an actual firm look at tax rates would be MUCH better for my title than Taxes as a percentage of the GDP for extremely obvious reasons.

[DarrinS]

How to Balance the Budget Without Raising Taxes

The 19% solution

http://reason.com/archives/2010/12/05/how-to-balance-the-budget-with/




A value-added tax, a soda tax, a gas tax, banning earmarks, freezing a portion of federal spending at "pre-stimulus" levels - there’s no shortage of ideas being thrown out to fix the country’s disastrous balance sheet, which threatens not just near-term economic recovery but the possibility of long-term growth. Like last week's report from the president's Commission on Fiscal Responsibility and Reform, most of the current plans to fix the country's finances rely more on increases in revenues than on cuts in spending. In part due to its heavy reliance on revenue hikes, the commission, charged with balancing the budget by 2020, failed to win enough votes of its own members to present its recommendations to Congress.

Which raises the question: Can America really reduce its debt and deficit without raising taxes to job-killing rates or cutting essential services to developing-world levels? The answer is not simply yes, it's that we have to.

Raising government revenue - taxes - substantially is not only bad policy, it has proven difficult and ultimately unsustainable for any length of time in the past 60 years. Since 1950, annual government revenue, as a percentage of Gross Domestic Product (GDP), has averaged just below 18 percent despite every attempt to jack it up or tamp it down. Our post-World War II experience shows that if the government is going to live within its means, it can't spend much more than 18 percent of GDP. Period.



http://reason.com/assets/mc/ngillespie/2010_12/revenuegdp.JPG




Which is one reason to be happy that the debt commission's recommendations won't be presented to Congress anytime soon. The report assumes revenue equal to 21 percent of GDP and struggles to get spending to "below 22% and eventually to 21%" of GDP. That’s a recipe for disaster that would guarantee deficits and red ink.

Similarly, former Sens. Bill Bradley, John Danforth, and Gary Hart, working with the Committee for a Responsible Budget, have offered up a plan to balance the budget by 2020 that relies on revenue hitting 20.8 percent of GDP, a level that hasn't been achieved once in the past 60 years. Republicans have not advanced any realistic near-term plans. Rep. Paul Ryan's (R-Wisc.) Roadmap to the American Future does not balance the budget until 2063. The pre-election GOP’s Pledge to America is worthless since it fails to provide specifics (and to the extent it does, it is no good).

The current situation is a bipartisan disaster that requires immediate action. Since Bill Clinton left the White House in 2001, total federal spending has increased by a massive 60 percent in inflation-adjusted 2010 dollars. In fiscal year 2010, which ended September 30, the federal government spent $3.6 trillion, or 25 percent of Gross Domestic Product. That’s the most spending, in terms of percentage of GDP, since 1946. Likewise, last year’s $1.5 trillion deficit, as a percentage of GDP, was the largest deficit since 1945.

Most economists talk about a debt-to-GDP ratio of 60 percent as a trigger point that makes investors very nervous about a country's ability to pay its obligations. The debt to GDP ratio was 63 percent this year and the Congressional Budget Office (CBO) projects it will be 87 percent in 2020. Just three years ago, it was 36.5 percent. Not good signs.

So, what would it take to bring federal spending into line with plausible levels of revenue?

The CBO, the non-partisan agency charged with estimating the effects of legislation on government costs, has produced a long-term budget outlook in which Bush-era tax rates remain unchanged. Their conclusion is that over the next decade, "government revenues would remain at about 19 percent of GDP, near their historical averages." That's actually a bit higher than the historical average, but is within the bounds of reason.

A balanced budget in 2020 based on 19 percent of GDP would mean $1.3 trillion in cuts over the next decade, or about $129 billion annually out of ever-increasing budgets averaging around $4.1 trillion. Note that these are not even absolute cuts, but trims from expected increases in spending.

To get a more concrete sense of what getting to 19 percent means, here is a table of projected major budget expenditures in total dollars, followed by the amount that needs to be cut each year from the expected budget to get an annual 3.6 percent decrease across the board.

Looking at the chart below, the question becomes: Could you, say, find $129 billion dollars of cuts in a 2016 budget that squeezes through the door at $4.3 trillion?



http://reason.com/assets/mc/ngillespie/2010_12/cutsneeded.jpg




Are our leaders willing and able to identify and cut just $25 billion in waste and excess out of more than $700 billion in non-defense discretionary spending? Is reducing the $714 billion the Department of Defense received in 2010 by a paltry $25 billion impossible? Can Medicare and Medicaid, two programs that are infamous for waste and fraud and cost well over $720 billion in 2010, find $35 billion in efficiences? The specific cuts should be open to negotiation, but the historical record shows that the available level of government revenue is fixed.

If these sorts of small but systematic trims are impossible over the next decade, then really nothing is possible and debt, deficits, and despair are here to stay.

It just might be time to start thinking about moving to Greece.

[DarrinS]

In simplest terms, either raise taxes or CUT SPENDING.

[boutons_deux]

taxes won't get raised, Dems will fold like limp dick, so Medicare and Medicaid will be effectively destroyed, denying people medical care, which has been the Repug/conservative plan all along, going back 35 years.

Grayson was right. The inhumane Repug plan to reduce medical spending is not for the health care system to charge less, but for everybody not to get sick, and if you get sick, die young, and fast.

[coyotes_geek]

In simplest terms, either raise taxes or CUT SPENDING.

Option C: All of the above.

[ElNono]

It is all of the above. Just raising taxes won't get it done, and just cutting spending won't get it done. And the reason is that we've been doing the exact opposite for a while now: cutting taxes and granting tax exemptions and at the same time raising the spending.

Unfortunately neither party wants to cut shit, and that's the reality of it. Both red and blue are on the record of not wanting to cut the things that need to be trimmed. And so raising taxes eventually becomes the only band-aid fix. It just won't last, and the cuts will need to happen.

[Winehole23]

http://www.washingtonpost.com/wp-dyn/content/article/2010/12/06/AR2010120607353.html

http://www.bloomberg.com/news/2010-12-07/extension-of-u-s-tax-cuts-will-prompt-congress-to-discard-own-budget-law.html

[DarrinS]

It is all of the above. Just raising taxes won't get it done, and just cutting spending won't get it done. And the reason is that we've been doing the exact opposite for a while now: cutting taxes and granting tax exemptions and at the same time raising the spending.

Unfortunately neither party wants to cut shit, and that's the reality of it. Both red and blue are on the record of not wanting to cut the things that need to be trimmed. And so raising taxes eventually becomes the only band-aid fix. It just won't last, and the cuts will need to happen.



I think one of the biggest problems we're about to face is the fact that baby boomers are retiring and they didn't have as many children as their parents did, so there's a shrinking tax base.

[Wild Cobra]

Shouldn't a proper view of the declining revenue, show how much of it is tax credits?

I'll bet that would show an important trend!

[boutons_deux]

Shouldn't a proper view of the declining revenue, show how much of it is tax credits?

I'll bet that would show an important trend!

you mean tax credits for bottom-income families?

or accelerated depreciations, subsidies, tax credits, etc, etc for corporations?

[Wild Cobra]

you mean tax credits for bottom-income families?

or accelerated depreciations, subsidies, tax credits, etc, etc for corporations?
Meaning that tax credits are something that's not being paid for. To use your own terminology.

[boutons_deux]

Bullshit wars, $1T/year for MIC, Tax cuts for the super-wealthy are not "paid for", but you have no problem with that.

Unemployment benefits for the low-end MUST be paid for, that's your big problem.

The deficit isn't the problem, isn't the priority.

Jobs and their income tax revenue is the priority.

[Wild Cobra]

Bullshit wars, $1T/year for MIC, Tax cuts for the super-wealthy are not "paid for", but you have no problem with that.

Unemployment benefits for the low-end MUST be paid for, that's your big problem.

The deficit isn't the problem, isn't the priority.

Jobs and their income tax revenue is the priority.
God, you are so stupid as to assume what I mean.

Top marginal tax rates have been historical statistical proof that we have better revenue at lower rates.

People like you keep railing about things "not paid for." Why are you such a hypocrite, and not complain about tax credits?

Unemployment insurance is an insurance. paid for by employers, and has a stated time-line for it to end. it is not designed to be endless. It is not a right.

[CosmicCowboy]

Unemployment insurance is an insurance. paid for by employers, and has a stated time-line for it to end. it is not designed to be endless. It is not a right.

Sure about that? They already made it an even three years...at least they were smart enough to have them expire in January next time and not December...That way at least the libs won't be able to use "Christmas" as the tear jerker for further extensions...speaking of Christmas, notice how the libs can forget the "Winter Holiday" bullshit and pull out the "Christmas" weapon when it's in their best interest?

[Wild Cobra]

Sure about that? They already made it an even three years...at least they were smart enough to have them expire in January next time and not December...That way at least the libs won't be able to use "Christmas" as the tear jerker for further extensions...speaking of Christmas, notice how the libs can forget the "Winter Holiday" bullshit and pull out the "Christmas" weapon when it's in their best interest?
LOL...

Good point. I completely missed the "Christmas card."

I'll have to remember that the next time one scoff at Christmas, instead of Holiday.

[ElNono]

Package to Aid Most, Especially Wealthy (http://www.nytimes.com/2010/12/08/us/politics/08impact.html?_r=1&hp)
By DAVID KOCIENIEWSKI

The deal to extend the Bush-era tax cuts for two years includes a bevy of additional credits and deductions that will reduce the burden on nearly all households.

But the tax benefits will flow most heavily to the highest earners, just as the original cuts did when they were passed in 2001 and 2003. At least a quarter of the tax savings will go to the wealthiest 1 percent of the population.

The tentative deal includes a two-year patch for the alternative minimum tax, a reduction in the payroll tax and a plan to reinstate the estate tax with lower rates and higher exemptions than in 2009 — all of which will offer far more savings for high earners than those in the low- or middle-income bracket.

The wealthiest Americans will also reap tax savings from the proposal’s plan to keep the cap on dividend and capital gains taxes at 15 percent, well below the highest rates on ordinary income.

And negotiators have agreed that the estimated $900 billion cost of the cuts will simply be added to the deficit — not covered by reductions in spending or increases in other taxes. That is good news for hedge fund managers and private equity investors, who appear to have withstood an effort to get them to pay more by eliminating a quirk in the tax code that allows most of their income to be taxed at just 15 percent.

In fact, the only groups likely to face a tax increase are those near the bottom of the income scale — individuals who make less than $20,000 and families with earnings below $40,000.

“It’s going to look like the rich are getting richer again,” said Anne Mathias, an analyst for MF Global Inc.

In the agreement, which breaks a campaign pledge to eliminate some tax breaks for the top 2 percent of American earners, President Obama won a few concessions from Republicans, including a 13-month extension in government benefits for the long-term unemployed. After several extensions, the maximum has been 99 weeks.

The administration also succeeded in extending several of the tax credits in last year’s stimulus plan to aid low- and moderate-income Americans: the earned-income tax credit, the child credit, the child and dependent-care credit and the tuition deduction.

As a result, families with an income near the median of $55,000 would owe about $2,700 less in taxes than if the Bush-era cuts had been allowed to expire.

A two-income couple earning $146,000 would owe about $7,000 less than if the tax cuts were allowed to expire, and about $3,400 less than they did in 2009.

The proposal does not include an extension of Mr. Obama’s signature tax cut, the Making Work Pay credit, which provided a credit of up to $400 for individuals and $800 for families of low and moderate income. Instead, the plan creates a one-year reduction in Social Security payroll taxes, which are generally levied on the first $106,800 of income. For an individual earning $110,000, that provision would reduce payroll taxes by $2,136.

Although the $120 billion payroll tax reduction offers nearly twice the tax savings of the credit it replaces, it will nonetheless lead to higher tax bills for individuals with incomes below $20,000 and families that make less than $40,000. That is because their payroll tax savings are less than the $400 or $800 they will lose from the Making Work Pay credit.

“It will come to a few dollars a week,” said Roberton Williams, an analyst at the nonpartisan Tax Policy Center, “but it is an increase.”

To the wealthiest Americans, however, an assortment of breaks is available.

The plan includes a two-year “patch” for the alternative minimum tax, which is now paid by about 4 million taxpayers with income in the mid- to high six figures. Without the patch, more than 20 million additional taxpayers would have been liable for that tax.

The estate tax — which was allowed to lapse this year and was scheduled to resume at a rate of 55 percent on most assets above $1 million — will be reinstated under less onerous terms. Estates over $5 million will be subject to a 35 percent tax.

The proposal will also maintain the current rates on dividends and capital gains, averting scheduled increases to ordinary income and 20 percent, respectively.

The marginal tax rate on high incomes will also remain unchanged. The top brackets had been scheduled to increase to 36 percent and 39.6 percent, from 33 percent and 35 percent.

Under Mr. Obama’s failed proposal, which would have raised the rates on income over $250,000 for families and $200,000 for individuals, the taxpayers at the top 1 percent of the income scale — those with incomes above $564,000 — would have received an average tax break of $28,000. Under the agreement reached with Republicans, the top 1 percent will receive breaks of about $70,000.

[MannyIsGod]

Harry Reid is trying to pass an online poker amendment in the bill. Would be awesome if he succeeded. I doubt it happens.

Would be a fitting way to pass a counter to UIGEA though considering UIGEA's birth as a rider to a port security bill.

[ducks]

file for Bankruptcy
then make a law congress can not spend more money then what comes in

[Wild Cobra]

Anyone know who proposed the reduction of SS from 6.2% to 4.2%?

[Nbadan]

This is a huge indictment on Duncan’s legacy…and once again thanks to Kobe, he seems to love pissin on Kimmy…

Maybe you would have a point if Tim and Kobe played the same position....Look, Tim is a 4 time NBA Champion and Kobe a 5 time champion...put together your own all=NBA team for the last 10 Years and if Kobe and Tim aren't starting ...you know shit about the NBA

[boutons_deux]

Taxes go up on the low-end, for singles @$20K, and couples @$40K.

Trickle down works again! Who woulda thunk it? WC is ecstatic.

[CosmicCowboy]

So Duncan surpassed in scoring one of the most Chicken Shit Centers In NBA History in Captain David Robinson.

In light of this, the 1st question posed by Koolaid is whose scoring feat is more impressive and why?


Duncan scores 20,921 in 13 seasons with 3159 assists along the way and since the Spurs basically have only a couple of ‘elite’ players in it’s history, the only player he really had to surpass was David chicken shit Robinson for the honor. In all-time NBA scoring today Duncan just barely cracks the top 30 in scoring while Kobe is number 12 all-time and getting ready to pass John Havilicek within the next 2 games for the 11th ALL-TIME spot.

Side note Kobe will be 6th all-time after this season.

Kobe on the other hand scores 26351 in 14 seasons ( with 4861 assists) and surpasses the current NBA Logo in Jerry West, along with a number of all-time great players ( such as Kareem, Magic, Wilt, Shaq, Baylor, etc). Now since it’s holiday season let me be generous…I will subtract Kobe’s rookie season numbers ( 539 points and 91 assists) to make the number of years even with Duncan , Kobe still outscores and assists Timmy by a universal light year.

The 2nd question is:


If Kobe is as selfish as Spur fan says then why is it that as a shooting guard ( whose job it is to shoot the ball) all-time Kobe has close to two-thousand more assists than Timmy Duncan. That’s right almost two-thousand more assists. Now we can understand why Timmy trails in points but surely with all the shooters Timmy’s had in his career and as a big man with his great passing ability and likelihood of double teams one would think that Duncan wouldn’t trail Kobe as badly as he does in assists.


I conducted a non-biased poll and at an almost 20:1 ratio people said it should be much easier for a center to rack up the assists.
Therefore the final question and answer would be:


Who’s really more selfish and who’s most productive… The scoring / assist numbers speak for themselves. As a first option of his title teams one would expect Duncan to lead Kobe, if not in points then surely in assists.



This is a huge indictment on Duncan’s legacy…and once again thanks to Kobe, he seems to love pissin on Kimmy…

Because during Duncans career the go-to offensive play has been...

-Ball to Duncan in low post
-Double team on Duncan
-Duncan passes out of double team to open guy
-open guy puts it on the floor, drives or spots up and shoots or passes to another open guy when defense rotates.

Duncan doesn't get the assist but creates the eventual shot by causing the initial double team and forcing defense to continue to rotate/respond till someone gets an open shot.