So here it is – my first blog post. Welcome to CakeOrDemocracy. I have established this blog as my proactive attempt to develop and put to paper my beliefs. To use the process to further educate myself through research, to use that information to develop my opinions and in a practical sense apply them in the real world - and to invoke and engage in an informative and stimulating discussion that has us all walk away just a little smarter.
I was very proud of the title of my first post “don’t tax me, bro” in which I present data regarding the actual numbers on the U.S tax rate - that was until I actually researched the phrase “don’t tax me, bro”.
1,890,000 results on Google – with an elaborate marketing scheme where you can buy items ranging from t-shirts and buttons to baby clothes.
Ain't that cute.........Who wouldn’t want to put their little bundle of joy in that outfit?
Someone is making a lot of money from my idea. Undaunted and still in love with what I thought was an incredibly original and witty turn on a phrase I proceed
A brief history of recent U.S. tax approach
Between 1960 (when the "1950s" faded into history) and the 1980s, when Ronald Reagan pushed through landmark tax cuts, top tax brackets had much higher rates than those in place today. For instance, the top rate was 91 percent in 1960, and 70 percent on the eve of Reagan’s election in 1980.
By 1988, the top federal income tax rate fell to 28 percent, and it stayed there until 1990. It ticked up to 31 percent for 1991 and 1992, before rising to 39.6 percent in 1993.
So, for five tax years -- 1988 through 1992 -- the top tax bracket had a lower rate than today’s top bracket. Put another way, out of 52 tax years since 1960, the top tax rate was lower than today’s only 10 percent of the time. (Today’s top tax bracket has been steady since 2003, so in nine additional tax years, the earlier bracket was tied with today’s.)
From a article on Politifact.com – where Republican presidential candidate Tim Pawlenty – “Minnesota's outgoing Republican governor and a likely candidate for president in 2012 -- met with Washington reporters on July 26, 2010, for a wide-ranging discussion of politics and policy. One of the things he said made it into the reports of at least two journalists in attendance, Ruth Marcus of the Washington Post and John Dickerson of Slate..
Asked what his reaction would be if a presidential commission on the national debt were to recommend a mix of spending cuts and tax increases, Pawlenty said, "Not good. I don't think the argument can be credibly made that the United States of America is undertaxed compared to our competitors."
In an opinion column published the following day, Marcus took aim at Pawlenty's remark.
"Actually," Marcus wrote, "the United States is on the low end in terms of the overall tax burden -- 28 percent of gross domestic product in 2007,
according to the Organization for Economic Cooperation and Development, compared with an average of 36 percent in the 30 OECD countries. Only South Korea, Mexico and Turkey were lower."
By locating the OECD chart -- which is exactly what we would have done -- Marcus ably did much of our work for us. But we still wanted to check with a few tax experts to make sure that she didn't miss anything in her analysis.
Three experts we queried -- Daniel J. Mitchell, a senior fellow at the libertarian Cato Institute, William Ahern, the director of policy and communications at the Tax Foundation, a tax research group, and Dean Baker, co-director of the liberal Center for Economic and Policy Research -- all agreed with Marcus's conclusion…”
According to a May 31st 201 article in the NY Times by Economist Bruce Barlett.
“…federal taxes are at their lowest level in more than 60 years. The
Congressional Budget Office estimated that federal taxes would consume just 14.8 percent of G.D.P. this year. The last year in which revenues were lower
was 1950, according to the Office of Management and Budget.”
in the same article – Bartlett discusses One would not know from the Republican document that corporate taxes are expected to raise just 1.3 percent of G.D.P. in revenue this year, about a third of what it was in the 1950s.
The
G.O.P. says global competitiveness requires the United States to reduce its corporate tax rate. But the United States actually has the lowest corporate tax burden of any of the member nations of the
Organization for Economic Cooperation and Development.
So why the entire hullabaloo about taxes – the numbers certainly doesn’t indicate that our tax rates are high and that actually they at a historical low. I think there are two forces at work here.
As a friend of mine who is a world famous author who may want to remain anonymous suggested - switch the word taxes with the word “service”.
Let’s list services like Medicare, Social Security, Unemployment Benefits or programs that assist woman WIC (Woman, Infant and Children) or education – (disclaimer – I am married to an educator) (disclaimer – my son and step-son are in education) any other government program that provides assistance to people who are in need of help. People who are well-off are typically not in need of those services.
The second is a little more nefarious – much like the recent Wisconsin battle over the right to work where we were led to believe the unions are the problem – much like where we are hearing the teachers are the problem.
We are being set up for these internal scrabble which is pitting blue collar against white collar – friends against friends – and interfamily (sorry Sis).
And while we argue and fight over the crumbs laws are being rewritten, by people like the Koch Brothers who in a NY Times article were described as “longtime libertarians who believe in drastically lower personal and corporate taxes, minimal social services for the needy, and much less oversight of industry—especially environmental regulation. “
Read more http://www.newyorker.com/reporting/2010/08/30/100830fa_fact_mayer#ixzz1RAtcVPky“As the nation focuses on the efforts of Governor Scott Walker to take away collective bargaining rights from public employees in Wisconsin, new information is coming to light that reveals what is truly going on here.
Mother Jones is reporting that much of the funding behind the Walker for Governor campaign came from none other than uber-conservatives, the infamous Koch Brothers.
What’s more, the plan to kill the unions is right out of the Koch Brothers play book.”
http://blogs.forbes.com/rickungar/2011/02/18/koch-brothers-behind-wisconsin-effort-to-kill-public-unions/
We are being led to believe that we are overtaxed – from a historical perspective this is just not true – the case can be made that America’s greatest period of growth was post WWII (tip of the hat to my late father who was very proud of his service) through the 50’s and 60’s where tax revenue was spent building the infrastructure that made America prosperous and allowed Americans to travel freely and safely cross county. As tax revenues have fallen to their lowest point in the last 60 years we no longer have the means to maintain much less grow that infrastructure which could now be made to include the electronic information highways as well.
Compared to other industrialized nations our tax rates are relatively low – there is a cost to running a nation – it is not free and we cannot remain the greatest country in the world (note to self – next blog to be on metrics to compare where America is number one).
Three concurrent wars without a single penny raised through taxes to pay for them has added a decade of deficit – with the only proposed balancing being looked at by reduction in social programs – which include social security (which for some bizarre reason is referred to as an entitlement program - NO – we pay for it - that for another blog entry).
I had hoped to more clearly state my belief that taxes are a privilege we pay to live in this country and enjoy all that it has to offer. We certainly don't all agree on what programs are supported by those taxes but as a percentage of our income it is relatively low to other countries and historically within our own.
This is much more rambling than I had hoped but I hope you will bear with me as I learn to do this –
For a number of reasons I have delayed putting this together; one including sheer laziness. But for the most part because for the fear that whatever it is I want to say it has been said more succinctly and accurately than I could but I believe that we all have a voice. I would like to thank Reed B for the clever title “CakeorDemocracy” and Mark S who after three minutes of listening to me talk about how SOME day I would like to start a blog sat down and in 15 minutes walked me through the process. Some might say he called my bluff and said put up or shut up but he certainly moved my time frame up a decade or so. And finally to my beloved wife who is an inspiration and motivation to me to become the person I have always wanted to be.
Peace JC
Looking at the components of the revenue is illuminating as well. The rise of Social Security tax revenue seems to neatly offset the decline in corporate tax and the miscellaneous taxes over the years. Personal income tax, always the largest source of federal revenue, also seems pretty range bound (albeit with a good deal of volatility). It'd be interesting to try to disentangle the effects of income, employment levels and marginal tax rates here. It's clear, however, that overall economic health plays a large role in how much income tax is collected. Peaks and troughs seem to correspond with recession start and end dates from visual inspection. ( from http://www.deptofnumbers.com/blog/2010/08/tax-revenue-as-a-fraction-of-gdp/)
