Ten Things You Need to Know about Taxes
We heard plenty about taxes during the election and are likely to hear plenty more. This should help translate the rhetoric.
1. It’s no surprise we have a deficit; we’re trying to create a high-speed track into the 21st century on a steam-engine federal budget. The government collected less in taxes in 2009 than it has in over three generations, and tax rates are near historic lows.
2. Prior to the recession, spending rose, on average, 5 percent a year over the past decade, a rise largely attributable to the expenses of the two unfunded wars in Iraq and Afghanistan.
4. On average, government spending boosts the economy by over 225% more per dollar spent than permanent tax cuts.
6. The Bush tax code taxes wealth less than work: middle-income paychecks are taxed at 25% compared to stock dividends and capital gains for the wealthiest, which are taxed at a top rate of only 15%.
8. The tax rate on the top income bracket was as high as 80% during the 1960s, when the average growth rate of the economy was almost 4.5%, compared to a growth rate of around 1.7% for the past decade of historically low taxes on the wealthiest.
9. Under the Bush tax cuts, the 400 taxpayers with the highest incomes in America pay income, Medicare and Social Security taxes amounting to virtually the same share of their incomes as people making just $50,000 to $75,000.
10. A Wall Street transactions tax of 0.50% on short-term speculation could raise up to $170 billion annually.
by AlanCleaver_2000 via Flickr/Creative Commons
by the Our Fiscal Security Project