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Ten Things You Need to Know about Taxes

Ten Things You Need to Know about Taxes

NOTE: This post comes from the DemosOur Fiscal Security Project.”  Demos is our most recent content partner and we are happy to have them.

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.

3.     The Bush tax cuts added $1.7 trillion to the nation’s debt over 2001-2008, which is more than it would cost to send 24 million kids to four-year public universities.

4.     On average, government spending boosts the economy by over 225% more per dollar spent than permanent tax cuts.

5.     Corporate income taxes account for only 1 percent of GDP are 76% lower than they were 50 years ago. Exxon Mobil, the most profitable corporation in history, paid ZERO federal taxes last year.

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%.

7.     98% of small business owners are not in the top 2% tax bracket that would increase (from 35% to 39.6%) under the Obama plan to let the upper-income Bush tax cuts expire.

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.

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by AlanCleaver_2000 via Flickr/Creative Commons
by the Our Fiscal Security Project

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91 comments

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11:09PM PST on Nov 20, 2010

Thanx.

12:39AM PST on Nov 14, 2010

Our system is flawed to say the least. Unfortunately we will have a much harder time fixing it, after the results of the Citizens' United case.... Money is corrupt, and so are the people with lots of it.

7:54AM PST on Nov 13, 2010

And yet the income tax receipts for the Bush years were more than 50% higher than the Clinton years! The percentage figures are correct. But what do they mean? The GDP in the '60s was some $717 billion on average. An increase of 4.5% is about $31 billion. For the last decade the average GDP - $12,247 billion. The 1.8% increase comes to $220 billion. Seven time the increase of the '60s. Though the GDP has grown by a factor of 17. Depends on how you want to look at things. The percentage is not as good, but as a number grows it takes more and more to make the same percent of increase. Fact is there is still growth. Problem is that you think high taxes fuel growth. But I have shown that belief to be in error.

Can't discuss the link that id's to “docid=54” as “54” does not exist and Can't determine which of the ten that have that as part of the id to which you meant to refer .

"Last but not least important:
The tax rate on the top income bracket was as high as 80%
http://www.taxpolicycenter.org/taxfacts/displayafact.cfm?Docid=213 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
http://www.taxpolicycenter.org/taxfacts/displayafact.cfm?Docid=54 on the wealthiest."

4:47PM PST on Nov 12, 2010

"Historically, Mike, whenever taxes for the wealthy are cut significantly, the economy tanks; when the top tax rates are raised again, the economy recovers. "

I have already shown that to be untrue! As shown in " Michael Cunningham says - Nov 12, 2010 3:21 PM"

4:45PM PST on Nov 12, 2010

"the rich weren't whining. People like you were."

I am not wingeing even now. If the facts are weak I challenge them. Apparently I deal honestly with the results of that challenge.

4:42PM PST on Nov 12, 2010

"(Clinton)created 25 million new jobs."

First it can be debated if any President creates any job outside of Government. Though they can but in place policies that facilitate job creation. That being said the data does not support the creation of 25 million jobs under Clinton - data shows 43.5 million. Bush years 13.3 million.

3:28PM PST on Nov 12, 2010

"We don't have space here to conduct economics lessons; care2 wisely limits comments size. But it's all been said thousands of times, and you still refuse to believe. Who was it who said that there are none so blind as those who are unwilling to see."

I provide you counter arguments using many of the same sources and you don't even try to provide a refutation. Merely state I will not accept what you have determined to be correct.
You follow this with a statement that Clinton made us all rich in spite of high taxes. So in addition to a surplus you claim at five times that of his best he is responsible for all business decisions as well. I just finished looking at US tax revenues for the two Presidents in question and Bush with tax cuts garnered tax revenues 50% greater than Clinton with his 'oh so wonderful high taxes on the rich'.
Which data I posted just before this message.

Seems to me you are the one either unwilling to see or unwilling to consider anything that challenges your "faith"!

3:21PM PST on Nov 12, 2010

"Here is another irrefutable FACT. ... President Clinton gave us a tiny middle class tax cut and raised the taxes on the wealthy--and in so doing created a trillion-dollar-plus budget surplus,"

The records of the IRS show no tax cuts for any income group during the Clinton years. And everyone over $53,000 received a minimum 10% increase in taxes. If you consider that level of income outside the "middle class" you would be correct.
You assert that these tax increases are the direct cause of the Clinton surplus? A "trillion dollar plus budget surplus"? Interesting! As the Clinton surplus never reached $237 billion in current dollars.
1998 69.2 Billion Dollar Surplus 89.96 Billion Surplus
1999 125.6 Billion Dollar Surplus 159.512 Billion Surplus
2000 236.4 Billion Dollar Surplus 290.772 Billion Surplus
2001 127.3 Billion Dollar Surplus 152.76 Billion Surplus
Even more interesting is that the "reviled" tax cuts of the Bush years brought in revenues more than 50% greater than Clinton year increases. $9.5 trillion vs $6.2 trillion. (http://www.taxpolicycenter.org/taxfacts/displayafact.cfm?Docid=203)

8:09AM PST on Nov 12, 2010

"
Michael said: "One other point Gary A. I don't believe you were the party I made my request of!"

Laughing at you, Michael. As I've said before, you've never met a fact you like. "

Your name is not on the original article therefore I had not directed any comments to you personally. In spite of that I am willing to deal with what you have to say without any attempt to denigrate you personally. Something you seem incapable of doing.

6:09AM PST on Nov 12, 2010

Evidently, Michael C can't. Rather, he chooses not to see. My sources included the Congressional Budget Office, the Federal Reserve, and history. When I posted the three or four links I could have provided you with more than enough to overflow the 1500 character limit without even trying. I posted links although I knew you wouldn't bother reading the material. A quick skim in one direction doesn't count. In explanation for the dimwitted, if you look only to the right when pulling out into traffic, you might get crushed by five hundred cars going the other direction.

We don't have space here to conduct economics lessons; care2 wisely limits comments size. But it's all been said thousands of times, and you still refuse to believe. Who was it who said that there are none so blind as those who are unwilling to see.

The fact, Michael: Bill Clinton raised taxes on the rich, and we all prospered, even the rich. Dubya lowered the taxes on his pals the filthy rich and destroyed American prosperity.

But what the hell, he was followed Ronnie Reagan's policies, right? Got news for you, bud. Ron Reagan cut social programs, rich boy taxes and doubled 200+ years of deficit spending in his first couple of years in office. Remember what he replied when the growing deficit was mentioned? "Deficits don't matter."
I still wonder was he playing the role of dumb actor, or was he really that clueless!

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