U.S. Tax Revenue Historically Low
by gradycarter
Thank you Danny D. for sending me this video.
I first want to say that I understand that people are very scared about the government being too involved in spending of the people’s money, but there are two different aspects of governmental intervention with people’s money.
1. The government can use tax payer dollars to pay for things that it finds necessary.
2. The government can make rules for how people can do business with one another, that are intended to have the most reasonable system to represent fairness.
The first one is the more widely debated issue for average people, but the second one is the one that is actually the most frightening to the people with the most money. As a mater-of-fact, for most of the people with the largest amount of wealth the first one is not so bad because they are often given huge subsidies and and/or tax cuts, and sometimes even governmental contracts that ensure them business sponsored by tax dollars because they have enough influence and money to make sure that this happens.
So while we hear people on the conservative side at the top acting like they are very upset about the government spending all of our money they are at the same time accepting BILLIONS of dollars in our money. They actually portion of governmental intervention that they are most against is the most essential, that being the part about making rules so that people aren’t cheated or taken advantage of.
So, this video that I’ve posted is about the nations Tax Revenue being historically low, and somehow we aren’t taking any of the subsidies away from the people who are crying wolf… I do think that we should eliminate some government spending, the National Debt is honestly potentially one of the most terrifying things I can think about for this world… I have written about that a few times. And If you want to find someone who actually cares about that on the conservative side of things look at Tom Coburn, a lot of people in this country don’t like him, and he might say some controversial and sometimes maybe missinformed things, but he is very real about the national debt and government spending, he asked to get rid of the Bush Tax Cuts!!! (See previous post about Bush Tax Cuts to know how I feel about that)
Having said all of this I would like to share this video by The Young Turks, who are little bit more liberal than I find myself to be, or at least not quite as open to another side of things, but they also might know a bit more than I do about how this stuff really functions in the working world, so I do respect their opinions.
And by the way, I know that I have some run-on sentences on my blog, but I’m ok with that because it is my blog and the message is not lost.
Ok, enjoy this clip, and let me know what you think.
Grady,
While I appreciate your view on subsidies for the top earners in the country and rules and regulations, I feel that it is also essential to highlight the amount of lost tax revenues yearly from people not paying their taxes. If you look at the percentage of families in the United States that DON’T pay federal taxes and how much that costs I think you will find the statistic startling. Yes, top earners enjoy certain subsidies that should probably be reviewed and revised, but at least they ARE PAYING TAXES!
As far as the national debt is concerned you are absolutely right. It’s terrifying. However, the problem is not a revenue problem, it’s a spending problem. We are not going to grow our way out of this debt, nor are we going to be able to tax our way out. If congress does not grasp the simple fact that you cannot spend more than you make we will not be able to balance a budget. The gap between revenue and spending is too large to even dent with revenue increases. Our country is bankrupt. The people that make the budget and spending bills also voted to shorten Pi to 3.0 in many states so it’s easier to remember. Chew on that a while.
I don’t disrespect you for having that view point, but your conclusion in the first paragraph is just not true… The wealthy DON’T pay taxes, that is the point of this conversation, and the video almost entirely. They do no pay the taxes due to loopholes, and knowing the right people… GE payed 0% taxes last year… Warren Buffet has repeatedly said that his $100,000 per year secretary pays a higher percentage than he does. One of us is probably misinformed, which we really can’t be blamed for because let’s face it we’ve been lied to, but I believe that along with decreasing spending we have to increase our budget by collecting from the people who aren’t paying their taxes at the TOP, that is where the largest portion of tax evasion happens. And for very poor people who don’t pay taxes, I just don’t see it as the same thing, but that is something that needs constant examination and guidance so that “cheating” is not allowed to happen.
As for the Federal Budget being in a bad place I completely agree.
“GE payed 0% taxes last year” – I actually heard that they did what basically amounted to pre-paying their taxes last year, or something to that extent. Either way, for last year when info is available, the 2009 yr, their effective rate was 7%. People talk about 35% corporate taxes and all, but after its all moved around and deductions are levied, its drops a ton.
Also, the myth that poor people don’t pay taxes is pretty unrealistic. People need to look at effective tax rates as well as payroll and sales taxes. While their effective federal may be low, the poor pay a much higher percentage of payroll (FICA) and sales taxes. Social Security taxes max out around $100K which means someone making $100K pays the same as someone making $1M. Low income folks pay 6.2% just like “we” do. Then sales taxes hit them harder because they have less cushion to save but rather generally spend everything they have, as well as the fact that special taxes like gas and cigarettes are regressive – the low pay a higher percentage because these items constitute a greater percentage of their income. So it is true that many families do not pay federal income tax, but to think that all federal taxes are from that structure is incorrect.
I guess I should have qualified that by saying that the people at the top are going through the process, but not paying taxes due to loopholes, whereas there were $290 billion in uncollected taxes in 2007 due to people not even submitting their tax forms, or under reporting their income, that’s a 10 year high. Almost the entire amount was the result of individual tax fraud. In the last decade the IRS has removed more than 7.6 million accounts from the collection list totalling over 32 billion dollars that they will not even attempt to recover. So when I say that the top earners (by that I mean corporations and businesses) are paying taxes I mean they are going through the (albeit corrupt) system. When I say others (meaning indivudual earners) are not, I mean they are breaking the law by not properly filing their taxes in the first place.
My point is not to defend the large corporations or top earners who are being given a free ride by politics, but rather to put into perspecitve the range of the tax liability and reasons for revenue shortage. It angers me when I see people going after those top earners in an attempt to demonize them without even mentioning the fact that there is a growing problem with individual tax evasion that creates a significant gap as well. We need reform on all levels, not to just stick it to the big guy while we let the little guy out the back door. Let us be frank here. Paying taxes is part of our legal obligation. The law needs to apply to everyone, rich and poor, and it needs to be fair. Which is why I believe that we as a country should more seriously consider the “fair tax” system.
Danny: Who is your CPA? I want to pay 6.2% in taxes next year too.
If the IRS claims that people OWE money, it must be people in the upper half of earners not reporting, because almost half on average I believe do not owe federal income tax. So if it is a lot of individual earners not reporting and owing, it would be middle or upper class, not lower.
As to the 6.2%, that’s the FICA we all pay. That is not including federal, state and local taxes. I mention that PART of the tax liability to note that no one is getting off paying nothing. So take that 6.2% for the poor then assume they are paying local/state taxes on virtually everything else, including higher income percentages on gas/cigarettes.
Does it matter whether it is the middle and upper class that owes the money? They obviously aren’t getting subsidies or they would be reporting their taxes. You say “subsidies are bad, and there is a revenue shortage”. I say “true, but look at all the people who aren’t reporting correctly too”. You say “yeah but those must be middle and upper class earners”. Ah, we get to the heart of the matter. You have adopted the classical liberal viewpoint that anyone who makes money is obviously evil.
The middle class is just that. The middle. Most people fall into that category. I know I do. I don’t have oodles of money to spare, but I pay my taxes. That being the case I know many people in my same tax bracket do not pay their taxes or under report their income, which contributes substantially to the revenue shortage. That is illegal. No one ever says a word about it, but everyone is quick to jump on the bandwagon when the finger pointing begins at select large businesses or top earners. The standard is (as demonstrated by the individual in this video) to attack powerful people through basically non political means (subsidy bashing) for their political views (tea party). The conservative right does the same thing to the liberal left. It’s mudslinging that does not address all the true issues at the heart of the problem or in any way portray an accurate and complete picture, and its hurting my country. People rely on these types of videos to form their opinions, and there are just as many with very true (yet incomplete) accusations from the other side. It’s causing Americans to become divided on partisan lines for issues that are politically neutral, like the growing debt and revenue shortage. No wonder we are always so close to government shutdown.
I have no sympathy for cigarette smokers. It’s a choice. If you don’t like the cost, quit.