Exploring US Taxation

by Liberty and Power

In the discussion of taxes few Republicans get beyond the “Teabag” stage. A conservative libertarian who does is Bruce Bartlett, whose book on Bush, early on blew the whistle on what was happening to America.

Last week at Forbes.com, he compared U.S. taxes to those in foreign countries and found that ours are relatively low. The anti-tax crowd universally denounced this analysis on the grounds that why should we care if foreigners are even more overtaxed than we are.

This week he looked at the effective tax rate on the median family income. He showed that taxes are at a historically low level. Furthermore, polls show a historically low level of dissatisfaction with taxes. He concluded that the tax protestors lack the credibility to be taken seriously.

Those libertarians who live in the real world, and don’t imagine we can simply dispense with all taxes, might find this data useful. We need to strive toward an equitable (fair) tax system at the same time attempting to prevent the Empire from further bankrupting itself with the foreign/military policies espoused by the Bush and Obama regimes, along with their domestic welfare policies as well.

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William Marina - 4/21/2009

Rick,
I don't think you can ever develop a tax system that benefits all equally. A tax on roads, for example, as Reason magazine showed years ago, is a subsidy to truckers, who pay much less than cars relatively, while causing much greater wear on the roadway, and some people may not drive on the road at all.

Whether, one likes it or not, we do pay less taxes, despite the high price of Empire, than many other nations.

I would like to see us get out of the Empire Game, both in terms of our Welfare State and our Warfare State, which surely would lower taxes. That would still, however, not eliminate the equity issue in whatever taxes still remained.

Rick Croley - 4/18/2009

I agree. My wife and I, firmly entrenched in the median income level, paid twice that much. I also don't see what's wrong with criticizing Bartlett's comparison of the U.S. with other countries. Who cares what other countries pay? Seriously?

I don't want to feed the Federal monster any more than I have to, it outgrew it's Constitutional limitations a century ago.

Rick Croley - 4/18/2009

Dr. Marina,

I didn't get that the two respondents were making any arguments for a complete elimination of taxation. They seemed to me to be simply pointing out that taxation for things that benefit all equally was lost a long time ago.

That is why so many are growing angry and frustrated. That is what I get from both Jeremy and Mr. Hunt, and from many of the tea party attendees.

I, like Jeremy, also hate the "well, compared to other countries" argument. If you know that the Bush and Obama regimes were and continue to work to expand and maintain the "Empire", if you know they are shoving bad domestic policies down our throats, how can you defend the idea that taxation at current levels is okay? What level of taxation would be fair, exactly?

William Marina - 4/18/2009

Most of the comments seem to be from those who really want no taxation at all.
Wouldn't that be lovely in a Libo/Randian World!
But death & taxes are the real world.
And, as the real American Revolutionists, not the Teabaggers, noted, "Taxation Without Representation is Tyranny."
Well, you have your representatives in a two-party, Plutocratic Corporatism cleverly manipulated by lobbyists and other wealthy interest groups.
Ain't Democracy grand! Why aren't you happy?

Jeremy - 4/18/2009

What is "equitable"? What is "fair"? Is taking 1/3 of my income fair? Or is it only fair at 1/4? Will the fairness depend on who I am and what I earn?

Is it fair when the money is spent in Afghanistan? Or is it only fair when it's spent on welfare? Who gets to define "fair and equitable", anyway?

Also, I love this (horrible) argument: "other people in the world have it worse, so who are you to complain?"

As my mother used to say: "If everyone else jumped off of a cliff, does that mean that you should, too?"

Lester Hunt - 4/18/2009

"We need to strive toward an equitable (fair) tax system at the same time attempting to prevent the Empire from further bankrupting itself ..."

How can the system bankrupting itself possibly be a worry if they are still only taxing us at a rate of a little over 5%? That would be the least of our worries, wouldn't it?

Lester Hunt - 4/18/2009

Who are these "median" families who are only paying, according to Bartlett, 5.91% of their income to the Feds in taxes, and how do I become one of them? I just payed my taxes and they were several times that. If my taxes were that low, all my financial worries would be over and, believe me, they are very real.

Here is another source: this is a wikipedia report of the account of the Tax Foundation (the guys who calculate "Tax Freedom Day"). They show the tax burden currently to be 28.2%. Now there is a number that I recognize from my own experience.

(I note, though, that they do show that the burden has been falling since the end of the Clinton administration, when it was at an all-time high.)

Further, I think you and Bartlett are doing the protesters a disservice in suggesting that they are angry because of current tax levels. They are looking ahead, even if you and Bartlett evidently are not. Recent spending practices will either cause taxes or inflation or both to rise enormously, soon. That is the real problem.

The astronomical sums that have already been spent will have to be paid for some day by somebody. Guess who that will be.