Do you understand what that meant: Once in a while, reporters at the New York Times may say a few words about federal taxes.
This morning, Robert Pear offered one paragraph on the subject. Do you understand what he said?
PEAR (10/6/11): Tax rates on the wealthy have declined in recent decades. The total federal tax rate for the top one-thousandth of all earners—a group that now starts at about $1.5 million in annual income—was 53.7 percent in 1980, according to research by the economists Emmanuel Saez and Thomas Piketty. By 2004, the latest year for which the economists have data, the total federal rate had fallen to 33.7 percent.Do you understand what “the total federal tax rate” is? We’ll guess that most readers have no idea. We wouldn't swear that we'd get that question right. Pear didn’t stop to explain.
We’d love to see our big newspapers do front-page reports about the way tax burdens have shifted. We’d love to see these matters explained, in ways real people can understand.
But then, we’d also like to see Pepsi come out of our our garden hose. We don’t think it’s going to happen.
On a more intriguing note, the editors discuss tax rates today. They love to posture on issues of race. On taxes, they’re often much sharper:
NEW YORK TIMES EDITORIAL (10/6/11): To reassemble his coalition, Mr. Reid on Wednesday proposed scrapping the president’s plan to pay for his bill, and substituting a new 5 percent surtax on incomes of more than $1 million. That would increase the progressivity of the tax code, and White House officials said they could accept it. But their original idea was much better.Fascinating! In the highlighted passage, the editors say that we will have to return to (let’s say) the Clinton tax rates even for those making more average salaries. If you read the Times every day, you read about dogs and coyotes and otters twice weekly.
Ultimately, families making $250,000, and even those making less, will have to give back some of the tax benefits they got from the Bush administration if the budget is to return to long-term health. Beginning that tax-reform process now makes more sense than confining the new tax to millionaires, whatever its populist satisfactions.
You rarely hear much about that.
Can we talk? Middle-class tax cuts serve one key purpose; they help disguise the stagnation in middle-class salaries (for those who still have such things). What is causing that stagnation?
Once in a while, the Times may hand you a glimmer. But the Times hands you Seamus each week.
Her own private Otter: In this morning's column, Gail Collins tells us she hopes Idaho Gov. Butch Otter runs for president, “mainly because I like saying ‘Idaho Gov. Butch Otter.’” But then, she said the same thing in last Saturday’s column. In fact, this is the fourth time in the past year she has told us how much she likes saying Otter’s name.
Seamus is in there again, of course. So is Rick Perry’s coyote—third time in four weeks.
Are we still claiming that Collins is well? Plainly, our culture is not.
The New York Times wrote: families making $250,000, and even those making less, will have to give back some of the tax benefits they got from the Bush administration if the budget is to return to long-term health.ReplyDelete
This is an understatement. I assume that returning the budget to "long-term health" means not only balancing the budget but also running substantial surpluses for many years so as to pay down the National Debt. In order to achieve this, we would need tax increases much larger in magnitude than Bush's tax cuts. We would need to raise all federal taxes, including assessments for Medicare and Social Security, by at least 50%!
In principle, part of this increase could be offset by commensurate spending decreases. But, those seems politically out of the question. Can you imagine Congress cutting Social Security payments by 1/3? Can you imagine them revising Medicare to eliminate coverage for one third of the things it now covers? I don't think so.
Your worries (it'll be politically too tough to cut spending) and assumptions (the National Debt must be eliminated to achieve budgetary health) are a yawner. They comport so well with traditional received wisdom.
I imagine that you must have some suggestion on what course the US budget should ideally follow, opposing the "Can you imagine?... I don't think so" scenario you sketched here.
But please, don't tell us.
"We would need to raise all federal taxes, including assessments for Medicare and Social Security, by at least 50%!"
The economy is an engine that generates money. You assume that in a recovery, revenues relative to debt would remain flat. They don't, they increase and in a period of growth from real business friendly policies (not executive friendly policies) they would increase at a greater rate.
The federal government is not run on a household checkbook and the lessons you think you learned in home ec don't apply.