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Tax Rates Hit 30-Year Low

Tax Rates Hit 30-Year Low

Taxes under President Barack Obama are lower than they were under any president since Jimmy Carter, according to a report by the Congressional Budget Office.

The average household federal income tax rate fell to 7.2 percent in 2009, and the average rate for all federal taxes including payroll taxes fell to 17.4 percent.

Taxes fell for a number of reasons, including the sluggish economy and tax cuts passed as part of the 2009 stimulus package.

There is more than a little irony in the report. 2009 saw the birth of the Tea Party, which claimed to be opposed to the heavy, onerous tax burden faced by Americans. But as the Tea Party was launching its broadside against Obama, tax rates were dropping to lower levels than under Ronald Reagan or either President Bush.

Taxes fell across the board. The lowest 20 percent of earners paid just one percent of their pre-tax income to the government, while the top fifth of earners paid 23.2 percent, down from 24.7 percent in 2007.

The Romney campaign has falsely claimed that Obama has raised taxes on Americans. While some taxes have gone up under Obama, including the excise tax on cigarettes, the overall tax burden has clearly fallen dramatically.

Democrats attacked the GOP using the new data.

“However much Republicans try to perpetuate false claims, the facts speak for themselves: tax rates have never been lower than under President Obama,” said Rep. Sander Levin, D-Mich., the ranking Democrat on the House Ways and Means Committee.

Republicans, meanwhile, said that taxes had only fallen due to “a weak economy.” And they attacked him over his opposition to extending the Bush tax cuts on income over $250,000.

“Despite yet another disappointing jobs report on Friday, he doubled down on that tax hike,” said Michael Steel, a spokesperson for House Speaker John Boehner, R-Ohio.

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25 comments

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12:02PM PDT on Jul 13, 2012

Paula M.-Well 1) that is not what the tea party is saying, and 2) they obvioulsy do not understand the concept of macroeconomics and deficit spending which allowed for the formation of the modern nation-state.

Do you have a house and a car? A mortage and a car note? Then you have a huge "deficit." If you were to make a comparison your house mortage and car note probably gives you the equivilent of trillions and trillions of dollars in deficit. But you make your mortage and car note payment every month (even pay extra if economic times happen to be good) and there is no problem.

That is the concept of "deficit spending" and as long as the deficit is kept to a reasonable percentage of GDP (like it is here in the U.S.) there is no problem. The "sky is falling" caterwailing of the tea-party on the deficit and taxes is just that; nonsense being sold to them by their corporate masters so they can lower taxes on the rich, destroy government protections for the people, and dismantle the social safety net they hate so much.

11:10AM PDT on Jul 13, 2012

@Robert K. [But social security isn't part of the budget.]

As the government over time via BOTH parties has borrowed money from the social security trust fund , replacing them with same with government securities (I.O.U's) , it's hard to see social security as not being part of the budget.

Because the government spends cash borrowed from the social security trust fund, some people see the trust fund assets as an accumulation of securities that the government will be unable to make good on in the future. Without legislation to restore long-range solvency of the trust funds, redemption of long-term securities prior to maturity would be necessary.

Since these securities are backed only by the full faith and credit of the U. S. Government whose credit rating has been down graded, there may indeed come a point where our credit won't be good enough to finance a pair of roller skates.

This is not so much a defect in the social security system as it is a wanting in the integrity of both parties to indeed keep social security separate from the governments petty cash box.

4:31AM PDT on Jul 13, 2012

But social security isn't part of the budget.

10:48PM PDT on Jul 12, 2012

CBS/New York Times poll found 44 percent of Tea Party supporters were either receiving Medicare themselves or had a family member receiving Medicare. When it came to Social Security, that percentage was even higher (48 percent). Exactly one year later, in April of this year, it came as no surprise that 70 percent of tea party supporters said they were against Medicare cuts. They're also against Social Security cuts by a two-to-one margin. And they don't want to cut Defense either. SS, Medicare and Defense are over 2/3rd of the US budget.

8:56PM PDT on Jul 12, 2012

Mark K, Bush left office on Jan 20th 2009 and that year, for 50 days the Dems has a filibuster proof Senate before Ted Kennedy was hospitalized, and that's when those tax actions were passed.

8:52PM PDT on Jul 12, 2012

James K, you got that right. The know nothing party was a far right wing anti immigrant party who claimed to be better informed than the regular people. The name came from their belief that the people "know nothing." And like the Tea party twits, they were the dumbest and most hateful people around.

4:16PM PDT on Jul 12, 2012

Shhhhh don't tell the teaparty taxes are low cause what would their purpose be then ....when their main objective is for the wealthy to pay less taxes. .

3:40PM PDT on Jul 12, 2012

@Mark K. My apologies, as in re-reading your post , it appears I mis-parsed it.

3:35PM PDT on Jul 12, 2012

@Mark K. [Wasn't 2009 the year Bush left office? Weren't all the policies in place at the time BUSH POLICIES?]

So can we take your comments to mean that ALL policies and events occurring under Bush's reign are things that he should take credit for, or only those that might reflect favorably when viewed with special lenses and filters?

How about that $4,000,000,000,000 war started against a country that had not done anything at all to us?

Will we here but crickets or a change of subject in response?

1:32PM PDT on Jul 12, 2012

James K.-That was a very excellent point about the Boston Tea Party, you did get one fact wrong it was not colonial tea farmers that were upset by the cheaper tea, it was colonial tea "smugglers (like John Hancock) who were smuggling illegal tea (largely form the Dutch). The new "untaxed" British tea would have been cheaper than the smuggled illegal tea. John Hancock, who bankrolled the Sons of Liberty, was having none of that and the Boston Tea Party occurred.

But you are quite right, the whole Boston Tea Party was not about "too much tax" it was about denying cheap tea to consumers and the protection of rich illegal smugglers of tea, such as John Hancock. Of course this fact, and most history, is totally lost on the moronic members of the "Tea Party."

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