So I can watch the Presidential “debates”, albeit basically for no other reason than Ron Paul. But I still can’t bear things like “The State of the Union” address.
Luckily, I don’t have to. You can always count on Cato for the Cliff’s Notes…
(and as a bonus, Reason did a really great edit showing Obama’s Doublethink doublespeak that year)
Regarding the “Buffett tax”, Buffett actually paid a higher percentage than his secretary if you include corporate taxes, right?
Yes. Plus, he chooses to not take a salary.
Peter Schiff has taken this one on almost as a hobby…
http://www.youtube.com/watch?v=4ia1xw2Uhus
Caught a piece of it where he made the pro-Israel and “we will stop at nothing to make sure Iran doesn’t get hold of a nuclear weapon [just like we did to Iraq]” stance. Take credit for the good, ignore the shit he didn’t really do that he said he would, and ignore doing things that contradict what he said he’d do in his campaign, and so on and so on.
Checkout that doublespeak link. It’s insane.
Ha, it’s so blunt I don’t see how more people don’t realize it.
So the main reason taxes are higher now than they were in the fifties is due to state and local taxes? Were there major increases at the federal level? All we hear about in the mainstream is the fall in federal income taxes over time.
Huh? Did you view the videos?
I watched the video. That is a horrible medium for presenting the argument, so I had a hard time following it. Statistics don’t work well over audio. I also didn’t like the fact that he used household income instead of individual. In addition, he made an unsubstantiated claim that “there were more loopholes back then.” OK? How about some evidence to back this up, Pete?
EDIT: I just relistened to it. It is incredibly confusing. He says that it is for households, then says its for individuals. Since you seem to understand it so well, how about summarizing the argument and telling me where the flaw(s) is in the typical view that we’re paying lower taxes now than in the fifties?
I’m sorry you’re so confused. A textual format would help, I presume?
Don’t Be Fooled by Political Posturing:
The new political spin echoed in Democrat talking points in coast to coast is that the rich are paying the lowest taxes since 1950. The bogus statistic results from the meaningless fact that federal tax revenues currently “only” constitute 16% of GDP. However this figure is rendered meaningless when considering the inflated nature of today’s GDP figures, and the exclusion of rising state and local taxes. When it comes to tax burdens**,** GDP means nothing. What counts is what percentage of income taxpayers actually fork over. Those numbers tell a different tale.
Today a married couple with a combined income of $250,000 (assuming each spouse earns 125,000) will pay about 40% of their combined incomes in Social Security, Medicare, and federal taxes, if they take the standard deduction. (I have included as part of their incomes and taxes the Social Security and Medicare taxes paid on their behalf by their employers – which in reality are borne by the employee anyway. I then added that figure to their incomes, and divided the total tax paid by that higher income. I did not factor in this year’s one time 2% payroll tax holiday.)
Compare that to a household in 1950 that earned $25,000 per year (the approximate equivalent to $250,000 today). Assuming all the income was earned by the husband, which was the norm at the time, the total tax take using the standard deduction and including both the employee and employer social security taxes, would have been just below 22%. In other words, despite claims that taxes are at their lowest levels in 50 years, today’s high earning couple pays over 80% more in federal taxes than their 1950 counterpart! [continued…]
And it’s not just Schiff. Here’s more data for you:
First, the lowest tax rate in 1950 was $4,000 or $38,421 in today’s dollars. In 2011 the lowest tax bracket is $17,000. A $21,421 difference in those eligible to be taxed. This is more than 20% of the population eligible to be taxed today that were not subject to federal taxes in 1950. […]
Second, in 1950 the top tax rate was $400,000 or $3,842,000 in today’s dollars. The top 5% today made $180,001 in 2009. The top 1% earned $380,354. I guess there is someone out there who makes $3.8 million a year but they certainly are a rare species. The point being the top tax rate was 84% in 1950. Does anyone think someone, anyone, paid 84% of their marginal income to the IRS back then? Do we have any records of this occurring? Maybe a handful of Hollywood stars?
Most likely if anyone was close to that tax bracket they would take generous vacation, medical, real estate, business travel, and other deductions to get in a lower bracket. One assumes the select few who had that type of earning ability in the 1950s were talented enough to avoid the tax man.
Third, if you take Obama’s definition of “rich” to be $250,000 in today’s dollars that would translate to about $26,027 1950 dollars. The tax rate in 1950 for $24,000 to $28,000 was 39.13% with zero deductions. The average total deduction reported as a percentage of adjusted gross income in 1950 was 12.2%. This would move the income taxed to $22,852 or a tax rate of 34.58%. Today someone making $250,000 would pay 33% or $82,500. In 1950 the household would pay $7,902 or $75,899 in today’s dollars. Assuming the same deductions the taxpayer today would pay $72,435. Some economist like Peter Schiff of Euro Pacific Capital have researched this more extensively and have stated that the deductions from 1950 were far more generous than today. Still the similarity in tax rates from 61 years ago to today is amazing.
Fourth, the percent of consumption by the federal government of the GDP, according to the White House budgets own numbers, was 15.6% compared to 25% today. State, and local consumption of the GDP was 3.7% and 5.8% respectively compared to today’s numbers of 9.7% and 10.82%. Our government, at all levels, spends over $6.4 trillion or 45.5% of the GDP and compared to 25.1% back in 1950.
Fifth, Social Security consumed 1.6% of the GDP in 1950 and 6% today. That figure is scheduled to grow significantly as baby boomers born between 1946 and 1964 retire and draw benefits.
Finally it is important to understand the relationship between the size of government and economic growth. Robert Reich, former Clinton labor secretary and University of California professor, even admitted that annual economic growth between 1950 and 1981 averaged 3.7% and growth between 1986 and today has averaged 3.0%. Reich falsely attributed it to the “low” tax rates we have today. He choose 1986 for his comparison because that was the year Reagan lowered the top rate from 70% to 50% and finally 28% in 1988. He confused tax rates and percentages with actual taxes collected as a percentage of the GDP.
[And it goes on…]
Does this help? Or are you still scroogy?
Would you like 11 ways Warren Buffett is lying about Warren Buffett?
Thanks for the text. What do you make of this: http://the-american-catholic.com/2011/01/28/rewinding-taxes-to-the-good-old-days/