Tuesday, May 18, 2010

Taxes aren't going higher and higher!

http://www.cbpp.org/cms/index.cfm?fa=view&id=3151&emailView=1



Federal Income Taxes on Middle-Income Families at Historically Low Levels

PDF of this report (2pp.)

By Chuck Marr and Gillian Brunet

April 14, 2010

Middle-income Americans are now paying federal taxes at or near historically low levels, according to the latest available data. That’s true whether it comes to their federal income taxes or their total federal taxes.

  • Income taxes: A family of four in the exact middle of the income spectrum will pay only 4.6 percent of its income in federal income taxes this year, according to a new analysis by the Urban Institute-Brookings Institution Tax Policy Center. This is the second-lowest percentage in the past 50 years.
  • Overall federal taxes: Middle-income households are paying overall federal taxes — which include income as well as payroll and excise taxes — at or near their lowest levels in decades, according to the latest data from the Congressional Budget Office (CBO).

Federal Income Taxes Have Declined Significantly in Recent Decades

Federal income taxes on middle-income families have declined significantly in recent decades (see Figure 1).

In 2000, the year before the 2001 tax cut that President Bush and Congress enacted, the median-income family of four paid 8.0 percent of its income in individual income taxes, according to Tax Policy Center estimates — a smaller share than in any year since 1967 (except for 1998 and 1999). [1] The Bush tax cuts further reduced middle-income tax obligations.

This year, the Making Work Pay tax credit, which President Obama and Congress enacted as part of the 2009 American Recovery and Reinvestment Act, is providing a credit of $800 to married joint filers ($400 to single filers). A median-income family with two children thus will receive an $800 tax cut in the return it files this year.

With the new tax cut, the median family’s federal income taxes will equal just 4.6 percent of its income in 2009. That is lower than in any year since 1955 (the first year for which these data are available) except for 2008, when another stimulus-related tax cut was in effect.

The 4.6 percent effective tax rate — the percentage of its income that a family pays in taxes — is well below the 15 percent marginal tax rate that a family of four in the exact middle of the income spectrum faces. Typically, such a family reduces its effective tax rate by taking the standard deduction (or, in some cases, itemized deductions), personal exemptions, and tax credits such as the child tax credit. The Making Work Pay tax credit further reduces that family’s effective tax rate.

Overall Federal Taxes Also at Low Levels

The decline in income taxes on middle-class households in recent years has driven a decline in these households’ overall federal taxes.

Households in the middle fifth of the income spectrum paid an average of 14.2 percent of their income in overall federal taxes in 2006, the latest year for which data are available, according to CBO.[2] This is just slightly above this group’s effective tax rate of 13.8 percent in 2003, which was the lowest level since at least 1979.

Most Americans pay more in payroll taxes, which support Social Security and Medicare, than they do in income taxes. Thus, the 14.2 percent figure reflects the impact of payroll taxes far more than income taxes.

Due to the impact of the recession and the temporary tax cuts in the Recovery Act, particularly the Making Work Pay tax credit, CBO data for 2009 (when they become available) will likely show that middle-income families faced significantly lower effective overall federal tax rates than in 2006.

End Notes:

[1] Tax Policy Center, “Historical Federal Income Tax Rates for a Family of Four,” April 12, 2010. The Tax Policy Center’s estimates were derived by updating (using Treasury’s methodology) a 1998 Treasury Department analysis that examined changes since 1955 in the percentage of income that the median-income family of four pays in federal income taxes.

[2] The CBO study covers the 1979-2006 period and includes federal income, payroll, and excise taxes. Congressional Budget Office, “Historical Effective Federal Tax Rates, 1979-2006,” April 2009.

Friday, May 7, 2010

Saturday, April 3, 2010

Job Loss/Creation "Bikini" Chart

The economy goes in cycles, but isn't it obvious when Obama's stimulus package was passed?

Friday, April 2, 2010

Some right-wingers ignore facts as they rewrite U.S. history

By Steven Thomma, McClatchy Newspapers Thu Apr 1, 4:05 pm ET

WASHINGTON — The right is rewriting history.

The most ballyhooed effort is under way in Texas , where conservatives have pushed the state school board to rewrite guidelines, downplaying Thomas Jefferson in one high school course, playing up such conservatives as Phyllis Schlafly and the Heritage Foundation and challenging the idea that the Founding Fathers wanted to separate church and state.

The effort reaches far beyond one state, however.

In articles and speeches, on radio and TV, conservatives are working to redefine major turning points and influential figures in American history, often to slam liberals, promote Republicans and reinforce their positions in today's politics.

The Jamestown settlers? Socialists. Founding Father Alexander Hamilton ? Ill-informed professors made up all that bunk about him advocating a strong central government.

Theodore Roosevelt ? Another socialist. Franklin D. Roosevelt ? Not only did he not end the Great Depression, he also created it.

Joe McCarthy ? Liberals lied about him. He was a hero.

Some conservatives say it's a long-overdue swing of the pendulum after years of liberal efforts to define history on their terms in classrooms and in popular culture.

"We are adding balance," Texas school board member Don McLeroy said. "History has already been skewed. Academia is skewed too far to the left."

The effort in Texas and nationwide is controversial, however, even among many conservatives. McLeroy was defeated in a recent primary after he led the campaign for a more conservative version of history, a defeat that the National Review , a leading conservative organ, called "sensible."

While even some conservative intellectuals say that some of the revisionist history is simply wrong, at the core, the effort reflects the ever-changing view of history, which is always subject to revision thanks to new information or new ways of looking at things, and often is viewed through a political lens.

"History in the popular world is always a political football," said Alan Brinkley , a historian at Columbia University . "The right is unusually mobilized at the moment."

"Part of the tide of history is that it's contested terrain," said Fritz Fischer , a historian at the University of Northern Colorado and the chairman of the National Council for History Education . "We should always be arguing and questioning what happened in the past."

It's not just historians who contest history, however. It's also politicians and pundits.

The left has done it.

Fischer cited the case of controversial former University of Colorado professor Ward Churchill , whose essay claiming that the 9/11 terrorist attacks were the fruit of illegal U.S. policies became a cause celebre. Fischer said Churchill "ignored a lot of evidence and made some up to promulgate a particular political belief."

Now, it's the right.

"There's clearly a political impetus behind this that connects to the issues of today," Fischer said, such as labeling President Barack Obama a socialist. "But when history is ignored to do it, that can be dangerous."

Here are five recent examples of new conservative versions of history:

JAMESTOWN

Reaching for an example of how bad socialism can be, former House of Representatives Majority Leader Dick Armey , R- Texas , said recently that the people who settled Jamestown, Va. , in 1607 were socialists and that their ideology doomed them.

" Jamestown colony, when it was first founded as a socialist venture, dang near failed with everybody dead and dying in the snow," he said in a speech March 15 at the National Press Club .

It was a good, strong story, helping Armey, a former economics professor, illustrate the dangers of socialism, the same ideology that he and other conservatives say is at the core of Obama's agenda.

It was not, however, true.

The Jamestown settlement was a capitalist venture financed by the Virginia Company of London — a joint stock corporation — to make a profit. The colony nearly foundered owing to a harsh winter, brackish water and lack of food, but reinforcements enabled it to survive. It was never socialistic. In fact, in 1619, Jamestown planters imported the first African slaves to the 13 colonies that later formed the United States .

ALEXANDER HAMILTON

At the same event, Armey urged people to read the Federalist Papers as a guide to the sentiments of the tea party movement.

"The small-government conservative movement, which includes people who call themselves the tea party patriots and so forth, is about the principles of liberty as embodied in the Constitution, the understanding of which is fleshed out if you read things like the Federalist Papers," Armey said.

Others such as Democrats and the news media, "people here who do not cherish America the way we do," don't understand because "they did not read the Federalist Papers," he said.

A member of the audience asked Armey how the Federalist Papers could be such a tea party manifesto when they were written largely by Alexander Hamilton , who the questioner said "was widely regarded then and now as an advocate of a strong central government."

Armey ridiculed the very suggestion.

"Widely regarded by whom?" he asked. "Today's modern, ill-informed political science professors? . . . I just doubt that was the case, in fact, about Hamilton."

Hamilton, however, was an unapologetic advocate of a strong central government, one that plays an active role in the economy and is led by a president named for life and thus beyond the emotions of the people. Hamilton also pushed for excise taxes and customs duties to pay down federal debt.

In fact, Ian Finseth said in a history written for the University of Virginia , others at the constitutional convention "thought his proposals went too far in strengthening the central government."

THEODORE ROOSEVELT

Theodore Roosevelt was long an icon of the Republican Party , a dynamic leader who ushered in theProgressive era, busting trusts, regulating robber barons, building the Panama Canal and sending the U.S. fleet around the world announcing ascendant American power.

Fox TV commentator Glenn Beck , however, says that Roosevelt was a socialist whose legacy is destroying America. It started, Beck said, with Roosevelt's admonition to the wealthy of his day to spend their riches for the good of society.

"We judge no man a fortune in civil life if it's honorably obtained and well spent," Roosevelt said, according to Beck. "It's not even enough that it should have been gained without doing damage to the community. We should permit it only to be gained so long as the gaining represents benefit to the community."

Actually, Roosevelt said, "We GRUDGE no man a fortune ... if it's honorably obtained and well USED." But either way, Beck saw the threat.

"Oh? Well, thank you," Beck said with scorn during his keynote speech to the recent Conservative Political Action Conference in Washington . The presidential suggestion that the wealthy of the Gilded Age should contribute to the good of society was a clear danger that must be condemned, Beck said.

"Is this what the Republican Party stands for? Well, you should ask members of the Republican Party , because this is not our founders' idea of America. And this is the cancer that's eating at America. It is big government; it's a socialist utopia," Beck said.

"And we need to address it as if it is a cancer. It must be cut out of the system because they cannot coexist. ... You must eradicate it. It cannot coexist."

There's no doubt that Roosevelt was a domestic policy liberal by today's standards. In a 1910 speech inKansas , he acknowledged that his "New Nationalism" meant "far more active governmental interference with social and economic conditions in this country than we have yet had."

The 26th president insisted, however, that he wanted the government to guarantee opportunity, not a handout.

"The fundamental thing to do for every man is to give him a chance to reach a place in which he will make the greatest possible contribution to the public welfare," he said.

"Give him a chance, not push him up if he will not be pushed. ... Help any man who stumbles; if he lies down, it is a poor job to try to carry him; but if he is a worthy man, try your best to see that he gets a chance to show the worth that is in him."

In his autobiography three years later, Roosevelt went on to dismiss the tenets of socialism as taught by Karl Marx as "an exploded theory."

"Too many thoroughly well-meaning men and women in the America of today glibly repeat and accept," he wrote, "various assumptions and speculations by Marx and others which by the lapse of time and by actual experiment have been shown to possess not one shred of value."

In addition, Roosevelt didn't advocate government ownership of the means of production, the definition of socialism.

FRANKLIN D. ROOSEVELT

It's long been debated how well Franklin D. Roosevelt's New Deal government programs countered the Great Depression, but now a prominent conservative has introduced the idea that Roosevelt CAUSED the Depression.

"FDR took office in the midst of a recession," Rep. Michele Bachmann , R- Minn. , told the Conservative Political Action Conference in February. "He decided to choose massive government spending and the creation of monstrous bureaucracies. Do we detect a Democrat pattern here in all of this? He took what was a manageable recession and turned it into a 10-year depression."

A year before, Bachmann went to the House floor to blame FDR and what she called the "Hoot-Smalley" tariffs for creating the Depression.

"The recession that FDR had to deal with wasn't as bad as the recession (President Calvin) Coolidge had to deal with in the early '20s," she said.

Coolidge cut taxes and created the roaring '20s, Bachmann said.

"FDR applied just the opposite formula: the Hoot-Smalley act, which was a tremendous burden on tariff restrictions. And of course trade barriers and the regulatory burden and of course tax barriers.

"That's what we saw happen under FDR. That took a recession and blew it into a full-scale depression. The American people suffered for almost 10 years under that kind of thinking."

The truth? Historians agree that tariffs hurt trade and worsened the depression.

However, the Smoot-Hawley Tariff Act — not Hoot-Smalley — was proposed by two Republicans, Sen. Reed Smoot of Utah and Rep. Willis Hawley of Oregon . A Republican House and a Republican Senate approved it.President Herbert Hoover , a Republican, signed it into law.

The facts also show that the country was in something far worse than a "manageable recession" in March 1933 when Roosevelt took office.

Stocks had lost 90 percent of their value since the crash of 1929. Thousands of banks had failed. Unemployment reached an all-time high of 24.9 percent just before Roosevelt was inaugurated.

JOE MCCARTHY

Sen. Joseph McCarthy , R- Wis. , burst onto the national stage in the early 1950s with accusations that he had a list of names of known Communists in the federal government. He didn't name them, was censured by the Senate eventually and his name became synonymous with witch hunts — McCarthyism.

Now, the end of the Cold War has opened up spy files and identified many Communist spies who operated inside the government during the era. Some conservatives argue that this proves not only that McCarthy was right, but also that he was a hero and that he was smeared by liberals, the news media and historians.

"Almost everything about McCarthy in current history books is a lie and will have to be revised," conservative activist Phyllis Schlafly said.

"Liberals had to destroy McCarthy because he exposed the entire liberal establishment as having sheltered Soviet spies," conservative commentator Ann Coulter said in one interview.

"The myth of 'McCarthyism' is the greatest Orwellian fraud of our times," she said in another. "Liberals are fanatical liars, then as now. The portrayal of Senator Joe McCarthy as a wild-eyed demagogue destroying innocent lives is sheer liberal hobgoblinism. ... If the Internet, talk radio and Fox News had been around in McCarthy's day, my book wouldn't be the first time most people would be hearing the truth about 'McCarthyism.' "

Yet even some prominent conservatives say that McCarthy's defenders go too far, and that even from a conservative perspective, McCarthy was no hero and damaged the country.

"A dangerous movement has been growing among conservative writers to vindicate the late Sen. Joseph R. McCarthy and his campaign to expose Soviet spies in the U.S. government," Ronald Kessler wrote for the conservative Web site Newsmax.com.

"The FBI agents who were actually chasing those spies have told me that McCarthy hurt their efforts because he trumped up charges, unfairly besmirched honorable Americans and gave hunting spies a bad name."

Kessler said the release of secret Cold War files under the Venona Project confirmed that there were Soviet spies in the U.S. government.

"The problem was that the people McCarthy tarnished as Communists or Communist sympathizers were not the real spies," Kessler wrote.

"The cause of anti-communism, which united millions of Americans and which gained the support of Democrats, Republicans and independents, was undermined by Sen. Joe McCarthy of Wisconsin ," wroteWilliam Bennett , who was the conservative secretary of education under President Ronald Reagan .

"McCarthy addressed a real problem: disloyal elements within the U.S. government. But his approach to this real problem was to cause untold grief to the country he claimed to love," Bennett wrote in his book "America: The Last Best Hope."

"Worst of all, McCarthy besmirched the honorable cause of anti-communism. He discredited legitimate efforts to counter Soviet subversion of American institutions."

Wednesday, March 31, 2010

The Shrinking Middle Class


New Rules for a Shrinking Middle Class
MSN Article (1/26/10)
http://articles.moneycentral.msn.com/Investing/Extra/new-rules-for-a-shrinking-middle-class.aspx

The middle-age, middle-income squeeze
MIT Article (3/10/09)

Earth to Bush: The Middle Class is Shrinking
Senator Bernie Sanders of VT (8/8/07)

The Coming Collapse of the Middle Class
Elizabeth Warren, future chair of Congressional Oversight Panel (6/07)

The Shrinking Middle Class
Update on Kerry's "Shrinking Middle Class"--Still shrinking in 2003
FactCheck.org (9/1/04)