Tuesday, May 11, 2010

Taxes Lower in 2009?

USA Today has a story about how Tax bills in 2009 at lowest level since 1950

Amid complaints about high taxes and calls for a smaller government, Americans paid their lowest level of taxes last year since Harry Truman's presidency, a USA TODAY analysis of federal data found.
Some conservative political movements such as the "Tea Party" have criticized federal spending as being out of control. While spending is up, taxes have fallen to exceptionally low levels.

Federal, state and local taxes — including income, property, sales and other taxes — consumed 9.2% of all personal income in 2009, the lowest rate since 1950, the Bureau of Economic Analysis reports. That rate is far below the historic average of 12% for the last half-century. The overall tax burden hit bottom in December at 8.8.% of income before rising slightly in the first three months of 2010.

Gosh, I wonder what else happened in 2009? You gotta go to Newsbusters to find out.
The newspaper downplayed the pain caused by the recession and the fact that the downturn lowered both incomes and consumption...

But USA Today also buried important reasons for the drop in tax payments. One reason was that the recession cut incomes, but they didn't mention that until the ninth paragraph. Lower income means taxpayers paid at a lower rate because of the progressive income tax structure. In addition, unemployment in 2009 reached levels not seen for roughly 25 years. The recession also caused "sharp" cuts in consumer spending, resulting in much lower sales tax payments.

USA Today gave credit to the massive stimulus bill for "tax cuts," specifically the "Making Work Pay" credit. But the paper waited until the last paragraph to admit that the lower tax burden may only last through the end of 2010 because "virtually all the stimulus tax cuts expire at the end of the year."

Meanwhile, 15.3 million people were out of work last month, and they probably didn't spend very much because of it. The idea that less taxes because fewer people are working is a good thing is disgusting and USA Today should be ashamed to spin the news this way.