Taxes in America Today
The pending expiration of the “Bush” tax cuts at year end has given rise to much debate and discussion as to whether these tax cuts should be extended in part or in total. President Obama has taken the position that he does not favor the extension of these tax cuts to Americans at the upper end of the income schedule…the so-called millionaires and billionaires. House Minority Leader John Boehner recently stated he would vote for tax cuts for the middle class if that was his only choice. Senate Minority Leader Mitch McConnell said he would filibuster any legislation that raised taxes on any tax payer. And the mainstream media continues not to fully inform the citizenry on this while positioning the issue as one of class warfare…middle income America versus “the rich.”
But a closer examination of taxation policy by federal, state, and local governments in America reveals that the real warfare is not one of class, but of one of taxpayers versus the government. Over time, the taking of citizen’s resources by governmental entities has grown dramatically, leaving us with less disposable income. Take a look at these numbers.
America’s 2010 federal tax code for individuals is highly “redistributive” or regressive as seen by the chart below from the Tax Foundation web site(www.taxfoundation.org).
| Married Filing Jointly | ||
| Marginal | Tax Brackets | |
| Tax Rate | Over | But Not Over |
| 10.0% | $0 | $16,750 |
| 15.0% | $16,750 | $68,000 |
| 25.0% | $68,000 | $137,300 |
| 28.0% | $137,300 | $209,250 |
| 33.0% | $209,250 | $373,650 |
| 35.0% | $373,650 | – |
Taking a quick snapshot of family income scenarios reveals this disincentive for work. The more income families bring in, the higher percentage of that income(all other things being the same) is taxed away to the federal government.
| Joint Taxable Family Income | Federal Income Tax Owed | Tax as % of Income |
| $50,000 | $6662 | 13% |
| $100,000 | $17,362 | 17% |
| $150,000 | $30,243 | 20% |
But lost to many in comparing the effect of varying marginal tax rates on tax payer’s incomes is the sheer size of the taking of our resources by the federal government. I don’t know about you, but when you look at a federal taking alone of up to 20% of a working couple’s income, it’s time to say this government is simply too large.
Another way to look at the growth of the impact of the massive growth in the size of government at all levels is The Tax Foundation’s famous “Tax Freedom Day” statistics. “Tax Freedom Day” in this case tells you the number of days of work it takes on average to pay total local, state, and federal obligations:
| Year | No. of Days Of Work To Pay Taxes | Tax as % of Income |
| 1900 | 22 | 5.9% |
| 1940 | 66 | 17.9% |
| 1976 | 109 | 29.8% |
| 2010 | 99 | 26.9% |
The true enemy now comes to light when you see that Americans on average are now working 4.5 times longer to pay their tax burdens than they did in 1900…or stated another way…we’ve lost a full 21% of our incomes to taking by all levels of government in the past 100 years in America. Granted, defense spending, a constitutional enumeration, has grown substantially over time. But it is the effect of the unconstitutional acts like Medicare, Medicaid, and Social Security that have exploded spending in the past century. And these numbers look even worse when the total debt obligations of the government are included. More information about the growth of government and its effect on our taxes can be found at the foundation’s web site www.taxfoundation.org.
With the coming explosion in entitlement costs that will require a doubling of current tax rates by 2080 if no revisions are made, it is clear that the enemy is not our fellow taxpayers who are burdened as well. The enemy of freedom is a government that is taking an ever-increasing share of our resources. With all due respect Mr. Boehner and Mr. McConnell, we will not settle for extending tax rates as they are currently…we want across the board reductions in taxes and spending that will significantly lower the cost of government at all levels.
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