The Truth About Taxes
In this cross-post from Our Fiscal Security, Tamara Draut, vice president of Policy & Programs at Demos, gives us a quick list of the top 10 tax stats.
1. The government collected less in taxes in 2010 than it has in over three generations, and tax rates are at historic lows.
2. The Bush tax cuts added $1.7 trillion to the nation’s debt over 2001-2008, which is more than it would cost to send 24 million kids to four-year public universities.
3. Corporate income taxes totaled about 1 percent of GDP this year, 60 percent lower than 40 years ago.
4. General Electric, which reported $5 billion in U.S. profits, paid ZERO taxes this year. Exxon Mobil, the most profitable corporation in history, paid ZERO federal taxes in 2009.
5. The Bush tax legacy means we currently tax wealth less than work: middle-income paychecks are taxed at 25 percent compared to stock dividends and capital gains for the wealthiest, which are taxed at a top rate of only 15 percent.
U.S. Poverty, Home Repos Soar, 300 Economists, Policymakers Say Time to Act BIG
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Two bad economic reports this morning reinforce today’s call by 300 economists and policymakers urging the president and Congress to “redouble efforts to create jobs” through investment in infrastructure, sending aid to the states and creating public service jobs.
First, the bad news.
- U.S. poverty hit its highest rate since 1994, according to the U.S. Census Bureau. In 2009, one in seven people were in poverty, and one in five children were in poverty.
- U.S. home seizures reached a record for the third time in five months in August as lenders completed the foreclosure process for thousands of delinquent owners, according to RealtyTrac Inc. Bank repossessions climbed 25 percent from a year earlier to 95,364. RealtyTrac sees a record 1.2 million repossessions this year, up from just under 1 million last year, with more than 3.2 million homes in some stage of foreclosure.
Such data make all the more relevent the statement by 300 prominent economists, “Don’t Kill Growth and Jobs in the Name of Deficit Reduction.” In short, the statement urges the president and lawmakers:
Public Backs Ending Tax Cuts for Rich, and More
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Note to lawmakers: It’s the economy, stupid.
Most Americans support ending Bush tax cuts for the wealthy. A new CBS News poll finds that a majority of Americans, 56 percent, say the tax cuts for the wealthy should expire for households earning more than $250,000 per year, as Democrats have proposed. Thirty-six percent of Americans say they should not be allowed to expire.
Lower GDP offers more reason for Congress to act. Jeff Bivens at the Economic Policy Institute (EPI) outlines the ramifications behind today’s revisions to estimates of gross domestic product (GDP). The new data revised the GDP downward for the second quarter to 1.6 percent from an initial estimate of 2.4 percent. Bivens says this downward revision shows
without the stream of spending provided by the Recovery Act, the economy would have contracted outright. This is most troubling, as Recovery Act money is almost spent and will provide no boost to growth going forward. The case for more action from policymakers to support the recovery and return the job-market to health is now overwhelming.
Big Bankers Howl—and Other Tidbits
Finally, some good news on the jobs front. The Council of Economic Advisers announced that the American Recovery and Reinvestment Act has now created or saved between 1.5 million and 2 million jobs. The economic recovery package also added several percentage points to the growth of the nation’s gross domestic product (GDP). Other tidbits:
• President Obama yesterday announced his intention to propose a Financial Crisis Responsibility Fee that would require the largest and most highly levered Wall Street firms to pay back taxpayers for the extraordinary assistance provided so that the TARP program does not add to the deficit. Even before the announcement, Big Bankers were squealing like stuck pigs. From Think Progress:
Edward Yingling, president and chief executive, American Bankers Association: “To impose yet another burden on the industry would obviously decrease their ability to lend.”
