image missingTrue Value Metrics (TVM)
Meaningful Metrics for a Smart Society
image missing Navigation ... HOME
HOME SN-BRIEFS PROBLEMS
POSSIBILITIES
SYSTEM
OVERVIEW
PROGRESS
PERFORMANCE
STATE
CAPITALS
FLOW
ACTIVITIES
FLOW
ACTORS
EFFECTIVE
MANAGEMENT
PETER
BURGESS
SiteNav SitNav (0) SitNav (1) SitNav (2) SitNav (3) SitNav (4) SitNav (5) SitNav (6) SitNav (7) SitNav (8)
Date: 2020-09-26 Page is: DBtxt001.php txt00000150

USA Today
US Tax bills in 2009 at lowest level since 1950

Tax bills in 2009 at lowest level since 1950

This article notes that rates of US Federal Income Tax paid is low ... but this is not the way it feels. This is because there are also States and City taxes of various sorts which reduce discretionary disposable income, and there has been little increase in invome while a lot of essential expenditures have increased.

Tax bills in 2009 at lowest level since 1950

A drop in income can trigger big tax breaks and sharply lower rates, sometimes falling to zero.

IMAGE ... TO THE TAXMAN Share of Americans' income paid as taxes: Source: Bureau of Economic Analysis

Amid complaints about high taxes and calls for a smaller government, Americans paid their lowest level of taxes last year since Harry Truman's presidency, a USA TODAY analysis of federal data found.

Some conservative political movements such as the 'Tea Party' have criticized federal spending as being out of control. While spending is up, taxes have fallen to exceptionally low levels.

Federal, state and local income taxes consumed 9.2% of all personal income in 2009, the lowest rate since 1950, the Bureau of Economic Analysis reports. That rate is far below the historic average of 12% for the last half-century. The overall tax burden hit bottom in December at 8.8.% of income before rising slightly in the first three months of 2010.

'The idea that taxes are high right now is pretty much nuts,' says Michael Ettlinger, head of economic policy at the liberal Center for American Progress. The real problem is spending, counters Adam Brandon of FreedomWorks, which organizes Tea Party groups. 'The money we borrow is going to be paid back through taxation in the future,' he says.

Individual tax rates vary widely based on how much a taxpayer earns, where the person lives and other factors. On average, though, the tax rate paid by all Americans — rich and poor, combined — has fallen 26% since the recession began in 2007. That means a $3,400 annual tax savings for a household paying the average national rate and earning the average national household income of $102,000.

This tax drop has boosted consumer spending and the economy, which grew at a 3.2% annual rate in the first quarter. It also has contributed to the federal debt growing to $8.4 trillion.

Taxes paid have fallen much faster than income in this recession. Personal income fell 2% last year. Taxes paid dropped 23%. The BEA classifies Social Security taxes as insurance payments and excludes them from the tax calculation.

Why the tax bite has eased:

• Stimulus law. One-third of last year's $862 billion economic stimulus went for tax cuts. Biggest reduction: The Making Work Pay tax credit reduced income taxes $800 for married couples earning up to $150,000.

• Progressive tax rates. Presidents Clinton and Bush pushed through a series of tax changes — credits, lower rates, higher exemptions — that slashed income taxes for poor and middle-class families. A drop in income now can trigger big tax breaks and sharply lower rates, sometimes falling to zero.

• Sales tax. Consumers cut spending sharply in this downturn, thereby paying less in sales taxes.

A Gallup Poll last month found that 48% thought taxes were 'too high' and 45% thought they were 'about right.' Those saying taxes are 'too high' remain near a 50-year low.

The lower tax burden should last at least through 2010, says Roberton Williams of the Tax Policy Center, a think tank in Washington, D.C. 'Virtually all the stimulus tax cuts expire at the end of the year,' he says. 'So the key decision is whether to extend them into 2011.'


By Dennis Cauchon, USA TODAY
Updated 5/12/2010 5:16 PM
The text being discussed is available at http://www.usatoday.com/money/perfi/taxes/2010-05-10-taxes_N.htm

SITE COUNT<
Amazing and shiny stats
Blog Counters Reset to zero January 20, 2015
TrueValueMetrics (TVM) is an Open Source / Open Knowledge initiative. It has been funded by family and friends plus donations from well wishers who understand the importance of accountability and getting the management metrics right. TVM is a 'big idea' that has the potential to be a game changer leveling the playing field so the wealth and power is shared on a more reasonable basis between people who work for a living and those that own the economy and the levers of power. In order to be effective, it cannot be funded in the conventional way with a for profit business plan, but absolutely must remain an open access initiative.
WE WANT TO MAINTAIN AN OPEN KNOWLEDGE MODEL
A MODEST DONATION WILL HELP MAKE THAT HAPPEN


The information on this website may only be used for socio-enviro-economic performance analysis, personal information, education and limited low profit purposes
Copyright © 2005-2020 Peter Burgess. All rights reserved.