Tuesday, January 10, 2012 Tuesday, December 21, 2010
herblondness:

By Felix Salmon
Stephen Culp has another striking chart today.
This chart should be ingrained in the mind of anybody who cares about fiscal policy. The main things to note:
Federal taxes are the lowest in 60 years, which gives you a pretty  good idea of why America’s long-term debt ratios are a big problem. If  the taxes reverted to somewhere near their historical mean, the problem  would be solved at a stroke.
Income taxes, in particular, both personal and corporate, are low and falling. That trend is not sustainable.
Employment taxes, by contrast—the regressive bit of the fiscal  structure—are bearing a large and increasing share of the brunt. Any  time that somebody starts complaining about how the poor don’t pay  income tax, point them to this chart. Income taxes are just one part of  the pie, and everybody with a job pays employment taxes.
There aren’t any wealth taxes, but the closest thing we’ve  got—estate and gift taxes—have shrunk to zero, after contributing a  non-negligible amount to the public fisc in earlier decades.
If you were structuring a tax code from scratch, it would look  nothing like this. But the problem is that tax hikes seem to be  politically impossible no matter which party is in power. And since any  revamp of the tax code would involve tax hikes somewhere, I fear we’re fiscally doomed.

herblondness:

By Felix Salmon

Stephen Culp has another striking chart today.

This chart should be ingrained in the mind of anybody who cares about fiscal policy. The main things to note:

  • Federal taxes are the lowest in 60 years, which gives you a pretty good idea of why America’s long-term debt ratios are a big problem. If the taxes reverted to somewhere near their historical mean, the problem would be solved at a stroke.
  • Income taxes, in particular, both personal and corporate, are low and falling. That trend is not sustainable.
  • Employment taxes, by contrast—the regressive bit of the fiscal structure—are bearing a large and increasing share of the brunt. Any time that somebody starts complaining about how the poor don’t pay income tax, point them to this chart. Income taxes are just one part of the pie, and everybody with a job pays employment taxes.
  • There aren’t any wealth taxes, but the closest thing we’ve got—estate and gift taxes—have shrunk to zero, after contributing a non-negligible amount to the public fisc in earlier decades.

If you were structuring a tax code from scratch, it would look nothing like this. But the problem is that tax hikes seem to be politically impossible no matter which party is in power. And since any revamp of the tax code would involve tax hikes somewhere, I fear we’re fiscally doomed.