Are Americans Overtaxed?

[ugabuga]

US tax burden lowest since 1950

The US tax burden has shrunk to its lowest level in 60 years, the Bureau of Economic Analysis said. Including state, federal and local taxes, the average tax bill came out to 9.2 percent of personal income in 2009.
U.S. tax burden at lowest point in years - UPI.com

That's down from an average of 12 percent over the past 50 years. The tax burden has not been this low since 1950.
"The idea that taxes are high right now is pretty much nuts," said Michael Ettlinger, head of economic policy at the Center for American Progress.

The tax rate has fallen 26 percent since 2007 as a result of changes made during the Clinton and Bush administrations and also by the cuts in Obama's Stimulus bill.

The vast majority of Americans paid lower federal taxes than in previous years when they filed their income taxes in April.

In spite of the low rates, 66% of Americans feel they're overtaxed, according to a recent Rasmussen poll.
66% Say America Is Overtaxed - Rasmussen Reports?

Are Americans overtaxed?

 

[30A Skunkape]

US tax burden lowest since 1950

The US tax burden has shrunk to its lowest level in 60 years, the Bureau of Economic Analysis said. Including state, federal and local taxes, the average tax bill came out to 9.2 percent of personal income in 2009.
U.S. tax burden at lowest point in years - UPI.com

That's down from an average of 12 percent over the past 50 years. The tax burden has not been this low since 1950.
"The idea that taxes are high right now is pretty much nuts," said Michael Ettlinger, head of economic policy at the Center for American Progress.

The tax rate has fallen 26 percent since 2007 as a result of changes made during the Clinton and Bush administrations and also by the cuts in Obama's Stimulus bill.

The vast majority of Americans paid lower federal taxes than in previous years when they filed their income taxes in April.

In spite of the low rates, 66% of Americans feel they're overtaxed, according to a recent Rasmussen poll.
66% Say America Is Overtaxed - Rasmussen Reports?

Are Americans overtaxed?

If you feel deprived you are welcome to pay mine!

 

[AndrewG]

This is a numbers shell game. Medicare & Social Security increased tax caps and percentages are at an all time high. Also, State taxes are at an all time high. Don't forget to include the new Healthcare tax. You have to compare all deductions from earnings not just federal taxes since 1950. How much of the money you earn winds up in your pocket?

 

[30A Skunkape]

Ugabuga, this is actually a very timely thread. Smack dab on the front page of today's New York Times is a story on where our taxes are heading. Get ready for the impending battle!
Most Republicans want to extend the tax cuts for everyone, and some Democrats agree, saying it would be unwise to raise taxes on anyone while the economy remains weak. If no action is taken, taxes on income, dividends, capital gains and estates would all rise.
http://www.nytimes.com/2010/07/25/us/politics/25tax.html?pagewanted=1&ref=us

 

[ugabuga]

This is a numbers shell game. Medicare & Social Security increased tax caps and percentages are at an all time high. Also, State taxes are at an all time high. Don't forget to include the new Healthcare tax. You have to compare all deductions from earnings not just federal taxes since 1950. How much of the money you earn winds up in your pocket?

You are certainly right that it's hard to make sure any tax analysis is not a "shell game." I hope in this forum/thread we can help each other to understand as best we can.

The Bureau of Economic Analysis figures do include state & local, as well as fed taxes. And, of course, in FL, there is no state income tax.

As far as the Healthcare tax goes, you're right that high-earning individuals and couples will see their Medicare payroll taxes on earned income increase by 0.9% to 2.35%; in addition, the overhaul includes a new 3.8 percent Medicare payroll tax on some investment income for ?individuals earning at least $200,000 and couples earning at least $250,000. These changes take effect in 2013.

My taxes will not increase due to the new Health Insurance Reform Act, nor will the taxes of the vast majority of Americans. If your taxes increase due to reformed Healthcare, I'm not sure whether to offer my condolences or my congratulations.

From a selfish point of view, I love the Healthcare Reform, since my daughter with a pre-existing condition would otherwise be uninsurable.

You may not want to believe it, but the Congressional Budget Office says that overall Healthcare Reform will ultimately reduce the deficit.

 

[Geo]

Let's say you manage a multi-unit apartment complex. Some of the units in the building are luxury units and some are pretty modest.

So you get drunk at a party for all the residents and you decide to lower the rent for six months for only your friends who rent the penthouse suites.

Three months later you are replaced with a new property manager. And it's just about time for the break on the rent given to the folks who live in the penthouse to expire.

Does it seem logical that they would protest that a new property manager is considering "raising their rent"? How persuasive are these folks when they keep a straight face at the next tenant meeting and argue that if their rent is raised in the middle of the year that it will be detrimental to the rest of the tenants and to building ownership?

 

[ugabuga]

Let's say you manage a multi-unit apartment complex. Some of the units in the building are luxury units and some are pretty modest.

So you get drunk at a party for all the residents and you decide to lower the rent for six months for only your friends who rent the penthouse suites.

Three months later you are replaced with a new property manager. And it's just about time for the break on the rent given to the folks who live in the penthouse.

Does it seem logical that they would protest "rent increases" in the middle of the year?

Why, Mr. Geo, I do believe your parable relates to rescinding the Bush Tax Cuts for the Wealthy.

Of course the penthouse dwellers will protest--they might be successful & keep their low rents (even though their original rents were not unreasonable).

The rich get richer & the poor get poorer, at least in part, because the rich know better how to "work the system."

 

[30ashopper]

US tax burden lowest since 1950

The US tax burden has shrunk to its lowest level in 60 years, the Bureau of Economic Analysis said. Including state, federal and local taxes, the average tax bill came out to 9.2 percent of personal income in 2009.
U.S. tax burden at lowest point in years - UPI.com

That's down from an average of 12 percent over the past 50 years. The tax burden has not been this low since 1950.
"The idea that taxes are high right now is pretty much nuts," said Michael Ettlinger, head of economic policy at the Center for American Progress.

The tax rate has fallen 26 percent since 2007 as a result of changes made during the Clinton and Bush administrations and also by the cuts in Obama's Stimulus bill.

The vast majority of Americans paid lower federal taxes than in previous years when they filed their income taxes in April.

In spite of the low rates, 66% of Americans feel they're overtaxed, according to a recent Rasmussen poll.
66% Say America Is Overtaxed - Rasmussen Reports?

Are Americans overtaxed?

Some are over taxed, others are undertaxed. Our tax system is very unfair, it should target consumption (which is why I love florida), not income and investment.

Personally, I'm fine with my current effective tax rate. I do not feel I should pay anymore than I currently am.

 

[30ashopper]

Why, Mr. Geo, I do believe your parable relates to rescinding the Bush Tax Cuts for the Wealthy.

Of course the penthouse dwellers will protest--they might be successful & keep their low rents (even though their original rents were not unreasonable).

The rich get richer & the poor get poorer, at least in part, because the rich know better how to "work the system."

The increases on those earners are really pretty minimal. We had the same tax rates for the latter half of the 90's and nobody really seemed to mind. (They were based on a bipartisan agreement between Clinton and the republicans if I remember correctly.)

It's worth mentioning that from what I understand, these tax rates on the top two marginal rates and capital gains really only represent about a 6% increase in federal tax revenue, so these changes aren't some sort of magic bullet that'll solve all our fiscal woes. (The wsj had an article out stating they represent about 300 billion in revenue over ten years. That's pocket change.)

The big revenue chunk comes from the rates on low and middle class earners. Bush's cuts for these earners should probably be extended at least temporarily until the economy recovers.

 

[Lynnie]

I am ok with my effective tax rate as well. Investing in the services of a good CPA is money well spent. But, it's all of the other taxes that get you: phone, cable, internet, power co., gas, storm water runoff, taxes if you own a business, surcharge to use a credit card for services at some businesses, etc.
I have no problem paying 23 percent in sales tax. I don't spend 100,000/yr., so I will be paying far less than 23,000 for my consumption, have money to save, play, travel, make improvements to my home and drink expensive wines. I totally am on board for the fair tax....well, because it's fair and it makes sense!