An interesting article from the Wall Street Journal on the potential impact of tax increases.

Obviously just as an article from a progressive web site would have a tilt, this one does too, but at the same time math is math.

PATRICK EDABURN, Assistant Editor
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Copyright 2011 The Moderate Voice
  • Jhawk

    Comparing the share of taxes paid by the richest 10% in the US versus countries like Sweden is meaningless and misleading without also comparing the share of total income earned by that 10%.

  • DavidMtem

    “math is math.” ?

    And statistics are statistics, unless of course they are cherry picked to provide a misleading picture of the situation.

  • SteveinCH

    David,

    What’s misleading about the calculation? The only thing I can find is that it assumes that the cap on SS wages is going to be eliminated or raised to more than $250K. I’m not sure this is a terribly crazy assumption but it is different than current reality.

    On the other side of the ledger, the calculation used average state tax rates as opposed to looking at CA or CT which would have added about 4 points to the total.

  • Dr. J

    I found those comparisons a bit fast and loose too. But the article was still an overdue counter to progressives’ habitual claim that taxes are lower than they’ve been in ages, based on just federal income tax, just the part that applies to households, and just the top marginal rate. Talk about cherry picking statistics.

    Here’s a more even analysis based on the big picture of government revenue. On the whole taxes rose steadily from WWII through the end of the century. Progressives are right that federal income tax dropped modestly, but social insurance taxes rose, and on the whole Uncle Sam’s take has been more or less flat (figure 4). State and local taxes, though, grew from about 8% of GDP in 1950 to about 16% today (figures 5 and 6).

  • TheMagicalSkyFather

    The GOP is right, we cant get anymore money from people that are already buying the smallest luxury yachts they can. Instead we will just need to find a way to pay teachers less and ensure no old people are living off uncle Sam.

    The cartoons for this just write themselves.

    Look when Bush cut taxes some people actually noticed that by sending less to states many people, especially in the middle and lower income range, never actually felt an actual tax cut since the federal cut was offset by state tax hikes. The GOP shifted the funds from the Fed to states, which may be nicer on their tax progressivity which is why this was a winner for some. Sorry if I do not feel like blaming those that actually noted this trend and prefer to blame those that made the shift in the first place. Maybe when taxes go back up and some have higher rates than in the Clinton era we will think twice next time the snake oil salesman is in town. Either way when speaking of federal rates they should be compared to federal rates not some touchy feely formula adding state tax rates to federal that they may or may not actually pay or adding in SS or other things that are not part of the specific tax discussion(I learned this from talking to conservatives that do not care what the cost of living is, especially when it varies by area, and instead focus like lazers on compensation levels only).

  • Dr. J

    MSF, if your point is we should raise the top incremental federal income tax rate, I agree with you.

    If you’re claiming there was a big transfer of tax collection from fed to state, I’m not seeing that in the second chart I linked, which has federal, state, and local lines moving together. In fact I don’t see Bush tax cuts at all. The big downward swings in federal income tax revenue in 2001-3 are matched by downward swings in business and payroll tax revenue as well. They seem to have more to do with the state of the economy than the tax code.

    Is adding federal, state, and local taxes together a touchy-feely formula? It’s a formula in the sense that it requires addition. And those of us getting dinged for 9.5% sales tax are a little touchy about how these things add up. But if you think it’s more appropriate to consider these budgets in isolation, you might want to reconsider your second sentence.

  • JSpencer

    Not impressed with the editorial. About what I would expect given the source. Same old same old.