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AP Says Federal Taxes Must Be Raised

From an utterly shameless Associated Press:

By one measure, federal taxes lowest since 1950

By Stephen Ohlemacher, Associated Press
February 7, 2011

WASHINGTON – Taxes too high?

Actually, as a share of the nation’s economy, Uncle Sam’s take this year will be the lowest since 1950, when the Korean War was just getting under way.

For the record, at least according to the Tax Policy Center (run by the leftwing Urban Institute and the leftwing Brookings Institute), in 1950 the US federal revenue from income tax was 5.8%. The percent of GDP from corporate tax was 3.8. In 1950, the total federal revenue (taxes) was 14.4% of the GDP.

In 2010, the revenue from income tax was estimated to have been 6.4% of the GDP. And corporate tax revenue was estimated to be 1.0%. In 2010, the total federal revenue was estimated to be 14.8% of the GDP.

These recent numbers are clearly the result of the ‘Great Recession.’ During the ‘Great Depression,’ both of these numbers hovered at or were below 1% of the GDP.

And for the third straight year, American families and businesses will pay less in federal taxes than they did under former President George W. Bush, thanks to a weak economy and a growing number of tax breaks for the wealthy and poor alike.

Income tax payments this year will be nearly 13 percent lower than they were in 2008, the last full year of the Bush presidency. Corporate taxes will be lower by a third, according to projections by the nonpartisan Congressional Budget Office.

The poor economy is largely to blame, with corporate profits down and unemployment up.

The hell you say.

But so is a tax code that grows each year with new deductions, credits and exemptions. The result is that families making as much as $50,000 can avoid paying federal income taxes, if they have at least two dependent children.

When USA Today ran practically this same story back in May 2010, they at least had the good grace to credit George Bush and Bill Clinton for these cuts.

Low-income families can actually make a profit from the income tax, and the wealthy can significantly cut their payments.

Is the ‘Earned Income Credit’ supposed to be news? Well, maybe it is to the AP.

"The current state of the tax code is simply indefensible," says Sen. Kent Conrad, D-N.D., chairman of the Senate Budget Committee. "It is hemorrhaging revenue."

Spoken like a true Democrat.

In the next few years, many can expect to pay more in taxes. Some increases were enacted as part of President Barack Obama’s health care overhaul.

Which, of course, is the entire reason for this article. To pave the way for the upcoming tax increases, courtesy of Mr. Obama and the Democrats.

And many states have raised taxes because — unlike the federal government — they have to balance their budgets each year. State tax receipts are projected to increase in all but seven states this year, according to the National Council of State Legislatures.

Largely due to the need to pay for their runaway public sector union, wages, benefits and pensions.

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 by 3 percent this year. But federal tax revenues won’t rebound to pre-recession levels until next year, according to CBO projections.

In the current budget year, federal tax receipts will be equal to 14.8 percent of the Gross Domestic Product, or GDP, the lowest level since Harry Truman was president. In Bush’s last year in office, tax receipts were 17.5 percent of GDP, just below their 40-year average.

So the evil tax cuts did not hurt federal revenue so much, after all. In fact, they grew the economy and filled the treasury’s coffers.

The lack of revenue, combined with big increases in spending, means the federal government will have to borrow 40 cents for every dollar it spends this year. The annual federal budget deficit is projected to reach a record $1.5 trillion

Then it is clear that we need to cut our record spending. Staring with the biggest budget busting entitlement of all time, Obama-care.

"America’s tax system is clearly broken," Donald Marron, a former economic adviser to Bush, told the Senate Budget Committee at a recent hearing. "It fails at its most basic task, which, lest we forget, is raising enough money to pay for the federal government."

You see, everybody agrees with the Democrats and their lickspittle minions at the Associated Press.

Taxes must be raised. After all, wasn’t that what last November 2nd was all about?

(Thanks to Franco for the heads up.)

This article was posted by Steve on Monday, February 7th, 2011. Comments are currently closed.

7 Responses to “AP Says Federal Taxes Must Be Raised”

  1. mr_bill says:

    It is simply mind-boggling that 15% of all the commerce conducted in the US is not enough to fund the government. 14.8% of a $14 trillion dollar economy is a bit over $2 trillion (the rest is deficit spending).

    We can’t run the government on $2 trillion dollars?! Think about what you would do if you had Bill Gates’ money. $2 trillion is 37 times as much as Bill Gates’ net worth! If you took all 10 of the richest people in the world, their total net worth is $342.2 billion. If you spent a million dollars a day every day for 6,000 years, it would be just over 2 trillion dollars.

    According to the liberals, $2 trillion could fund both the Afghanistan and Iraq wars for 20 years! But it isn’t enough to run our bloated bureaucratic subjugation-machine of a government for 8 months. They whine incessantly (well, not anymore since there’s a democrat in the Oval Office) about the cost of the wars, yet our own government squanders 20 times as much in only 7.2 months.

    Somehow, I’m supposed to believe that we just aren’t being taxed enough? I declare shenanigans.

  2. proreason says:

    As usual, the proreason budget was upside down in 2010.

    So I have called the proreason family creditors and demanded that they contribute their fair share to the Proreason Deficit Reduction Plan, aka addional spending.

    I’m confident that will solve the problem.

  3. David says:

    Taxes have become a form of welfare. My wife and I don’t make much but every year we end up getting more then we put in from taxes. (Eventually this will change as I get out of school and start really contributing) However, it is not like we are trying to milk the government. We simply report everything they require us to report and they send us checks each year. I have no problem paying my fair share, the broken tax system we have simply doesn’t let me!

    • proreason says:

      Politics is a great deal.

      The way it works is you get to take money from citizens (who will be arrested if they don’t surrender) to bribe other citizens to vote for you.

  4. Rusty Shackleford says:

    As much as Reagan’s “trickle-down economics” was flamed by the left, I would have to say the demcrats’ plan of “spend our way out of debt” to be of clearly dubious success. If by “dubious”, one means “completely whacked”. Just like that cartoon on American Thinker where Obama said, “We’re digging our way out of a hole”. Ah, such a revealing statement.

  5. Liberals Demise says:

    AP can KMA!!

  6. untrainable says:

    What’s wrong with the tax system? Low-income families can actually make a profit from the income tax ’nuff said.

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