Think taxes are higher than ever? Think again. (Page 2)

Well, I made less money last year AND paid more taxes.

It also does not account for the number of hours each family must work to maintain a household.

I also live in CA, where I see almost no return on my investment for taxes.

The thing that tics me off the most is when people compare CA to other states in spending.... let's take education.

Not only are we low in terms of taking all the $$ spent on education and dividing it by the number of pupils.

This works on the very faulty assumption that, when compared to other states, Sacramento does not waste a huge amount of education dollars in unnecessary state bureaucracy and stupid mandates that do not improve educational outcomes.

The table I posted from BEA doesn't relate taxes to GDP -- it's showing taxes relative to personal income.  Unless I'm missing something, that *is* the individual's tax burden, and it is indeed at its lowest point since 1950.

Tripolar, it is an interesting chart, and it tells me clearly we need to cut spending. It also shows the highest outlay per GDP since 1946!! I am guessing it was still high from WWII and Marshall Plan commitments.

Also, the receipts and outlays are only Federal. I would be willing to bet that average state and local receipts and outlays have increased dramatically from 1950. According to this page, http://www.taxpolicycenter.org/taxfacts/displayafact.cfm?Docid=328,in 2007, state and local receipts just about matched federal receipts.

Edited by eberulf 2010-05-12 2:20 PM

I'm glad that I live in CA where we have some of the highest tax rates in the country, which should give us the best government services in the country.

But yeah, that doesn't seem to be working out too well for us.

I wouldn't say we have a super duper crushing tax rate, however, there are other developed nations with lower marginal tax rates than we do.  Plus, do we really want to revisit the era of the 75% top marginal tax bracket?  Yeah, they are rich...but despite the fact that someone is taking 3/4 of the pie.  Is that really fair?  I mean, on the one hand, we say that we want people to succeed and achieve on their own efforts, but then, if you do succeed, we're going to punish you for those that didn't succeed. 

Just think of this argument next time your first thought is to raise taxes...the rich are already rich, and it is not always because of income, it is often because of assets.  If assets are not sold, there are no capital gains taxes or income taxes to take from the rich.  The soon-to-be-rich are the ones with the high incomes, and are being taxed the most.  By raising the highest tax brackets, we are likely preventing people from becoming rich and by that logic possibly broadening the gap between the super wealthy (who we likely falsely assume we are deriving the most taxes from) and the maybe wealthy.  Unless we end up stripping people of their assets (I hope not!) we are not really increasing the entire breadth of the social mobility ladder...but restricting others from accessing the super wealthy end of that ladder.  We will, of course, still achieve the higher social mobility among lower wealth levels that we do today using social programs. 

I have no data to support any of this, but have used my business experiences to come to these conclusions.  My wealthiest clients pay significantly lower tax rates than my working clients.  The rest is all hypothetical, but it seems to make sense to me.  Feel free to discuss this argument with me as well...maybe we can solve the world's problems together!