USA Today: Taxes are Lower for Third Straight Year

If you talk with just about any Republican, or any member of the Tea Party, taxes are too high.  And for many of these people, there is no problem faced in the US that can’t be solved by cutting taxes. 

But, according to USA Today, by one measure, taxes are lower today than they were in the 1950s and 2011 makrs the third straight year federal tax liability has dropped.  Not that Republicans will give any credit to President Obama for it whatsoever.

But in the third year of Obama‘s presidency, federal taxes are at historic lows. Tax receipts dropped sharply in 2009 as the economy sank into recession. They have since stabilized and are expected to grow 3% this year. But federal tax revenue won’t rebound to pre-recession levels until next year, according to CBO projections.In the current budget year, federal tax receipts will equal 14.8% of the gross domestic product, or GDP, lowest level since Harry Truman was president. In Bush’s last year in office, tax receipts equalled 17.5% of GDP, just below their 40-year average.

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At the request of The Associated Press, The Tax Institute at H&R Block compared 2008 and 2010 tax bills for families at various income levels, showing how their taxes have changed since Obama took office. Taxpayers are filing their 2010 tax returns this spring, while 2008 was the last full year that Bush was president. The scenarios assume that each family had the same income, filing status and number of dependent children in both years.Income tax rates remain unchanged. But many taxpayers are seeing their bills drop because of more generous tax credits for college students, working families, homebuyers and the working poor. Many of the changes were enacted as part of the big economic stimulus package passed in 2009.Congress also extended Bush-era tax cuts through 2012. Lawmakers let Obama’s Making Work Pay tax credit expire at the end of 2010, but they replaced it with a one-year cut in Social Security payroll taxes that is already showing up in workers’ paychecks.”

The story acknowledges the hugh size of the federal budget deficit due to spending by the federal government to save our economy from complete collapse.  But while Americans continue to pay less in taxes, one has to wonder when these tax cuts are actually going to result in a stimulated economy the Republicans keep promising.

From the story: “And for the third straight year, American families and businesses will pay less in federal taxes than they did under President George W. Bush, thanks to a weak economy and a growing number of tax breaks for the wealthy and the poor.Income tax payments this year will be nearly 13% lower than in 2008, last full year of the Bush presidency. Corporate tax receipts will be lower by a third, according to projections by the nonpartisan Congressional Budget Office.

  6 comments for “USA Today: Taxes are Lower for Third Straight Year

  1. April 13, 2011 at 1:55 pm

    Only the reinstatement of Glass-Steagall will “save our economy from complete collapse.”

    GOOD NEWS: Glass-Steagall has been introduced.
    Now we need co-sponsors, please contact your Representative, there is a link to all members of congress at http://www.politics1.com

    The text will soon be at http://thomas.loc.gov

    Greetings Congress-member _______,

    Please co-sponsor H.R. 1489, before you leave for the two week break,
    H.R.1489 Latest Title:
    To repeal certain provisions of the Gramm-Leach-Bliley Act and revive the separation between commercial banking and the securities business, in the manner provided in the Banking Act of 1933, the so-called “Glass-Steagall Act”, and for other purposes.

    Thank you,

  2. Rampant Corruption
    April 13, 2011 at 3:08 pm

    Soon after the Republicans and Tea Partiers get their tax cuts Americans will wake up to the fact that we have cut social programs to an unacceptable level. We will have to restore funding if we do not want poor people, especially the elderly and very young, living in substandard housing and not having enough to buy basic groceries.

    What we need is a return to the policies and events that made the U.S. the world’s dominant economy. We need to restore tariffs, restore taxes on the wealthy, and start a new labor movement that provides the middle class with the means necessary to consume products made in the U.S.A.

    There is plenty go around in our economy. The problem is that the politicians are in the pockets of the very rich who want to horde the pie and only give crumbs to the rest of us.

    • April 13, 2011 at 5:17 pm

      Without the return to the Glass-Steagall system the U.S. economy will collapse, and then the cut-tax-borrow debate will not matter.
      Please review the first blog entry.

      What’s Glass-Steagall? – An 11 minute video is below.
      http://www.youtube.com/watch?v=x0k2PmF-o5Q

  3. cook
    April 13, 2011 at 3:22 pm

    Taxes are based on taxable income, not wealth.

    The reason taxes are down is because taxable income is down.

    Anyone who thinks taxes are not high enough has the right to pay more, just write your check to the US treasury.

    • April 13, 2011 at 3:52 pm

      so if you have wealth that creates more wealth, shouldn’t that new wealth be taxed? It is income after all?

      • cook
        April 13, 2011 at 5:14 pm

        I think so, Dan. But our tax system is based on taxing income from labor at the highest rates and increases in wealth at little to no tax.

        And the tax code treats income (from labor) difference than wealth. The president was only talking about increasing taxes on income only.

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