Cost Shifting
Here are the sources of revenue for the US Federal budget for fiscal year 1999 [a balanced budget] and fiscal year 2010. It shows the percentage of the revenue based on the type of tax:
| Tax | % FY 1999 | % FY 2010 |
|---|---|---|
| Personal Income | 48.2 | 41.6 |
| FICA Payroll | 33.5 | 40.0 |
| Corporate Income | 10.1 | 8.8 |
| Excise | 3.8 | 3.1 |
| All Other | 4.4 | 6.5 |
As is obvious, the burden has been shifted from the personal income tax, the corporate income tax, and the excise tax to the FICA payroll tax and the miscellaneous taxes.
When someone says the wealthy pay “40% of the taxes”, they may or may not mention that the only tax they are talking about is the personal income tax. In 1999 that was just under 20% of revenue, and in 2010 it has dropped to about 16%. In contrast between the income taxes and FICA taxes, the working people provided over 60% of the revenue in 1999 and about two-thirds of the cost in 2010. This despite the fact that wages haven’t even been able to keep up with inflation, and the large increase in productivity.
I would also note that the receipts for the FICA taxes are severely impacted by high unemployment, so they will fall unless something serious is done about creating jobs. Creating jobs will also increase the receipts for the income tax. If you are really concerned about the budget deficit, jobs should be your top issue.
4 comments
“Eat the rich,” said Steve, only half ingest. 😈
I unabashedly favor a return of taxes to their levels 50 years ago. Says Robert Reich,
The only question is whether America could ever get from here to there. It seems to me that the GOP has pretty well sewn up the campaign funding laws while holding only one house of Congress… but I guess owning the Court counts double, or more.
That was in extremely poor taste, Steve. 😉 Much too high in cholesterol and fat to be a healthy alternative.
If you are making all the money, and deriving all the benefits, you should be paying the taxes.
They are on the verge of creating conditions similar to North Africa, and some of remember that such conditions can lead to riots in this country.
I’m using the actual Federal Budget for 1999 in 1999 dollars, the so-called surplus were FICA taxes for the Social Security trust fund, that Reagan started including in his budgets so people wouldn’t understand what a total wastrel he was.
Did I say thank you to Reagan and the two Bushes who are responsible alone for the current Federal deficit of more than $13.5 trillion budget, no, I continue to hold them and the people who went along with their failed policies in complete contempt.
It is the conservative policies that created the deficits, and continuing will only make the deficits worse.
Regarding the notion that one-time stimulus spending of approximately $1T was responsible for the majority of the deficit, as usual Mr. Duffy is living in his own little universe of pink unicorns and cotton candy trees. I’ll point out that almost half of the so-called “federal debt” is actually owed to the Social Security fund — i.e., to *US* — and is payable over a 30 year period. Compared to the GDP of the United States, paying off that debt over a 30 year period would require less than a 3% hike in taxes. Indeed, simply taking the cap off the payroll tax would more than pay off that debt over the time period in question.
But in any event it’s irrelevant. The Federal Reserve can monetize as much of the non-Social-Security debt as they like and it’s a drop in the bucket insofar as the total amount of U.S. dollars outstanding worldwide. Banksters would scream because it’d raise the inflation rate to 4% or so per year, but so what — it’d handle the balance sheet issues facing American households just fine (since monetary inflation would deflate their debts to reasonable levels), and let them get out from under their current debt overhang caused by buying in to the housing scam of the last decade. Which, I suppose, is why it can’t be allowed to happen…
Just as an aside — I am one of the people whose taxes would be raised if Obama raises taxes on individuals making over $150K and families making over $300K. I assure you, I will be doing no less work and will be just as happy to get pay hikes even if a small percent more goes to taxes. I already make more than enough money for a single penguin to live on, even in the Silly Cone Valley. America’s been good to me, why *wouldn’t* I want to pay America back? But wait, I forgot, I’m not a sociopathic scum lizard creature in human form…
– Badtux the Monetary Penguin