April 21, 2006

TAXES: WHOSE GOOSE IS PLUCKED?


Caption: It has been said that “the art of taxation consists in so plucking the goose as to get the most feathers with the least hissing.” Castor is no goose, but says “Can we please change the subject?”

In the last few weeks, millions of Americans rushed to submit income tax returns before the April 17 deadline.

Taxation is can be an interesting subject. Well, sort of, anyway. Here are a few facts about the current state of taxes in the US.

According to the Center on Budget and Policy Priorities,

*federal revenues as a percentage of the economy were smaller in 2005 than their average level of the 1960s through the 1990s. The main reason for this has been the Bush administration’s ceaseless wave of tax cuts aimed mostly at the rich since 2001, which also blew a federal surplus and created record deficits.

*revenues are also lost due to tax evasion, which is mostly a white collar, upper income crime. In 2001, the most recent year for which we have data, nearly $300 billion in taxes went unpaid. “To subsidize those who do not pay the taxes they owe,” CBPP reports, “other taxpayers must pay about 17 percent more in taxes.”

[El Cabrero has long found it ironic that people go ballistic about welfare fraud, which occurs in less than one percent of welfare claims and is tiny in comparison with tax evasion, where an estimated 10 percent of taxes owed mostly by the wealthy are never collected.]

*people making over $1 million per year were $100,000 better off due to tax cuts enacted in 2001 and 2003. The value of the tax break is more than twice the annual income of the typical US household.

*social services have been slashed by Congress and the Bush administration supposedly to reduce the deficit, but “the President’s tax cuts for people who make over $1 million a year would cost more than the total savings from all of the proposed cuts in domestic discretionary programs, including the cuts proposed in education, environmental protection, veterans’ medical care, and medical research.

For more, check http://www.cbpp.org/pubs/tax-facts.htm.

The National Priorities Project cites statistics from the Office of Management and Budget that show that the share of income taxes paid by corporations has drastically declined since the 1950s. In 1955, corporate income taxes made up 27 percent of federal revenues; in 2005, they were only 11 percent.

Methinks the wrong gooses are being plucked.

GOAT ROPE ADVISORY LEVEL: ELEVATED

No comments: