American Patriots Know That Federal Income Taxes on Middle-Income Americans Near Historic Lows

American Patriots Know That Federal Income Taxes on Middle-Income Americans Near Historic Lows

Federal taxes on middle-income Americans are near historic lows, our updated report explains, and that’s true whether you’re talking about federal income taxes or all federal taxes.

When it comes to income taxes, a family of four in the exact middle of the income spectrum will pay only 5.3 percent of its 2013 income in federal income taxes next year, according to a new analysis by the Urban-Brookings Tax Policy Center.

Average income tax rates for these typical families have been lower during the Bush and Obama Administrations than at any time since the 1950s (see graph).  Taxes were particularly low from 2008 to 2010 because of the Recovery Rebate Credit and the Making Work Pay Tax Credit, which have since expired.

When it comes to overall federal taxes, households in the middle fifth of the income spectrum paid an average of 11.1 percent of their income in taxes in 2009, the latest year for which data are available, according to the Congressional Budget Office (CBO).  This is the lowest on record in data that go back to 1979.
When CBO publishes data for more recent years (such as 2013), overall federal average tax rates on this middle group will likely be higher — though still low historically — because they will reflect the expiration of Making Work Pay and other temporary tax cuts, including the payroll tax cut that expired at the end of last year.

The expiration of the payroll tax cut is the biggest tax change for most people in 2013.  As this table shows, the tax cut helped workers in a wide range of income groups, and its expiration is a key contributor to the slowdown in economic growth that CBO forecasts for 2013.

Yet those wacky conservatives keep claiming that we have to keep large tax cuts for wealthy corporations and billionaires to stimulate economic growth, or have new tax cuts. There is no relationship between low taxes for those skimming huge profits off the backs of American workers. Why are cons lying about taxes. They want to starve thew government safety net - Medicare, Social Security, workmen's comp, unemployment insurance  - pretty much anything that does not fire a missile. The reason we safety net is because history shows us that markets are often good and create wealth, but they are not perfect - as any adult who was around in 2007 will know. The U.S. and it's imperfect markets have a long history. Patriots learn from history, conservatives either rewrite it or pretend it didn't happen.

Americans Want a Back-to-Work Alternative to Creepy Paul Ryan's Austerity Scheme

Americans Want a Back-to-Work Alternative to Creepy Paul Ryan's Austerity Scheme

When it comes to budgets, debts and deficits and, most importantly, the future of the US economy, there are two distinct visions competing in Washington.Members of the Congressional Black Caucus speak against proposed tax cuts, December 10, 2010. (AP Photo/Charles Dharapak)

Both cost a lot of money.

But they seek to steer the United States in radically different directions.

One vision, that of House Budget Committee chairman Paul Ryan, spends our federal largesse on tax breaks for the rich and schemes to divert Medicare funds into the accounts of private insurers. It’s classic crony capitalism. But that’s not the worst of it. Because Ryan’s plan comes wrapped in an austerity model for squeezing government spending and investment, it threatens to stall an economy that is only beginning to grow at a rate sufficient to create needed jobs.

On Thursday, the House voted 221-207 for the Ryan budget. The Republican majority was reasonably solidified in support of the proposal, although ten sincere fiscal conservatives opposed a measure that focuses far more of satisfying the demands of Wall Street donors than actual deficit reduction.

Democrats overwhelmingly opposed the Ryan budget. That can and should be read as a rejection of the ugliest face of austerity. But it is not the case that congressional Democrats are united when it comes to presenting an alternative to Ryanism. And that’s a problem because voters don’t just want Congress to reject austerity; polling data makes it clear that they want an alternative that is focused on job creation.

The best alternatives to the Ryan budget have been presented by the Congressional Black Caucus and the Congressional Progressive Caucus. The two groups, which have a significant overlap in their membership, saw their proposals rejected by the House on Wednesday. Ryan’s Republican colleagues opposed both plans, as did dozens of cautious Democrats who have yet to recognize the importance of challenging the lie of austerity with a no-holds-barred growth agenda.

The political reality, of course, is that this week’s House votes settle nothing with regard to the budget priorities that will ultimately frame the nation’s future. “Once again, Republicans in the House have passed a budget that the American people do not support, and has no real chance of becoming law,” explained Congressman Mark Pocan, a Wisconsin Democrat who serves on the Budget Committee. “This is a budget whose math is bogus, but whose consequences are real and serious for our middle class families in Wisconsin. From destroying jobs, to raising taxes on the middle class, to turning Medicare into a voucher system, it makes the wrong decisions and reflects the wrong priorities… But the biggest problem with the GOP budget is that it fails to tackle the greatest threat to our long-term deficit—our need to grow our economy and create jobs. With 12 million Americans still unemployed, and millions more who are underemployed, the best budget we can put forth is one that fosters job growth.”

It will be in the wrangling between the House and Senate, and the broader national debate, that the fiscal and economic priorities of the nation will finally be shaped.

And it is important to recognize that, in that broader national debate, Ryan and the House majority have already lost.

The American people have no taste for austerity.

They want a growth agenda. The new Gallup Poll finds that 72 percent of Americans support spending federal money on a program to “put people to work on urgent infrastructure repairs.” Seventy-two percent of Americans also favor “a federal jobs creation law that would spend government money for a program that would create more than one million new jobs.”

Those positions are antithetical to everything Ryan is proposing.

That’s a growth agenda that is the opposite of austerity.

It is a growth agenda that mirrors what the Congressional Progressive Caucus has proposed with its “Back to Work” budget.

The CPC budget plan balances the budget far more efficiently and effectively than does Ryan’s—as it eschews the pay-to-play giveaways to campaign donors in the insurance, pharmaceutical and financial-services industries—and stimulates job creation. That’s because the CPC proposal rejects austerity in favor of growth. The focus on growth is essential to the CPC plan, which is wholly distinct from other Democratic plans that seek to strike an often incoherent balance between smart investments and Ryan’s austerity.

Believing in conservative austerity, Ryan's austerity or Romney austerity is like believing that flesh eating trolls live under all bridges. It is all based on the fetid fantasies of the conservative bubble, not sound economics. America cannot afford austerity. Democrats have already given them austerity-lite, which is why the economy is growing, but slower than it would if we did away with austerity all-together.

Elitist Conservative Corporate Plutocrats talk about shared sacrifice, but the only thing they want to share is your retirement money with their wealthy friends

Elitist Conservative Corporate Plutocrats talk about shared sacrifice, but the only thing they want to share is your retirement money with their wealthy friends

The Obscenely Rich Men Bent on Shredding the Safety Net

New York magazine calls it [3] a “Mass Movement for Millionaires.” The New York Times' Paul Krugman sums up the idea [4]: “Hey, sacrifice is for the little people.”

The Campaign to Fix the Debt [5] is a huge, and growing, coalition of powerful CEOs, politicians and policy makers on a mission to lower taxes for the rich and to cut Social Security, Medicare and Medicaid under the cover of concern about the national debt. The group was spawned in July 2012 by Erskine Bowles and Alan Simpson, architects of a misguided deficit reduction scheme in Washington back in 2010. By now, the "fixers" have collected a war chest of $43 million. Private equity billionaire Peter G. Peterson, longtime enemy of the social safety net, is a major supporter.

This new Wall Street movement, which includes Republicans and plenty of Democrats, is hitting the airwaves, hosting roundtables, gathering at lavish fundraising fêtes, hiring public relations experts, and traveling around the country to push its agenda. The group aims to seize the moment of the so-called "fiscal cliff" debate to pressure President Obama to concede to House Republicans and continue the Bush income tax cuts for the rich while shredding the social safety net. The group includes Goldman Sachs’ Lloyd Blankfein, JPMorgan Chase’s Jamie Dimon, Honeywell’s David Cote, Aetna’s Mark Bertolini, Delta Airlines’ Richard Anderson, Boeing’s W. James McNerney, and over 100 other influential business honchos and their supporters.

Corporations represented by the fixers have collected massive bailouts from taxpayers and gigantic subsidies from the government, and they enjoy tax loopholes that in many cases bring their tax bills down to zero. Sometimes their creative accountants even manage to get money back from Uncle Sam. For instance, according to Citizens for Tax Justice, Boeing has paid a negative 6.5 percent tax rate for the last decade, even though it was profitable every year from 2002 through 2011.

These CEOs talk about shared sacrifice, but it seems that they don’t intend to share anything but your retirement money with their wealthy friends. As New York mag reports:

    “Most on-the-record comments are a mishmash of platitudes about shared sacrifice and working together for the good of the country. But interviews with a number of organizers and CEO council members point to a massive networking effort among one-percenters — one that relies on strategically exploiting existing business relationships and appealing to patriotic and economic instincts."

As the Fix the Debt gang moves around the country spreading their message, they are starting to attract public protests. On November 27, they were greeted in North Carolina with a rally [6] from NC Progress, which called for an end to the Bush tax cuts for the wealthiest 2 percent and told the group to keep its hands off the middle-class wallet. The fixers are often vague about their mission, and they tend to speak in coded language that conceals their actual goals. Let’s have some blunt talk about what the fixers want to do and why they want to do it – talk you're unlikely to hear in mainstream media supported by corporate advertising.

1. “Fix” means cut: When they say “fix” Social Security, they mean cut Social Security. Fixers want to convince the public that a well-managed, hugely popular program that does not add to the deficit (it’s self-funded) is somehow in crisis and requires intervention in the form of various cutting schemes. They seek this because many of the rich do not want to pay taxes for Social Security, and financiers want very much to move toward privitization of retirement accounts so they can collect fees on such accounts.

2. “Reform” means rob. When the say “reform” the tax code, they mean “make taxes even lower for the rich.” The wealthy do not pay their fair share of taxes in the United States, which is a major reason there is a large deficit in the first place. When the very wealthy pay lower tax rates than ordinary working people, the result is an increasing redistribution of income upward that puts the U.S. in the top 30 percent in income inequality out of 140 nations, according to the Central Intelligence Agency [7]. We’re a shameful #42. Income inequality is not only unfair, it’s dangerous and makes society unstable.

3.“Bipartisan” means all of the rich. Fix the Debt is a pro-business ideological movement pretending to be a bipartisan group of concerned citizens. But the group is really just a coalition for the greedy, unpatriotic rich. There are plenty of financiers and other 1 percenters in the Democratic Party, and some of them have decided to join forces with their GOP counterparts to work toward a goal that means a great deal to all of them: Making the rich even richer.

4. “Concern” means covet. There was a time, a couple of generations ago, when business leaders would not dare to go public with their desire to increase income inequality and stick it to hard-working Americans. When Owen D. Young, CEO of General Electric in the '20s and '40s, spoke to an audience at Harvard Business School in 1927, he emphasized that the purpose of a corporation was to provide a good life not only to owners, but also to employees. Corporations, he said, were meant to serve the larger goals of the nation:

    “Here in America, we have raised the standard of political equality. Shall we be able to add to that, full equality of economic opportunity? No man is wholly free unless he is both politically and economically free.”

Fast forward to 2012: Jeffrey Immelt, the current CEO of GE, is a member of the Fix the Debt Campaign, which is designed to lower the expectations of hard-working Americans. Goldman Sachs honcho Lloyd Blankfein explained this recently in a CBS interview:

     “You’re going to have to do something, undoubtedly, to lower people’s expectations of what they’re going to get, the entitlements, and what people think they’re going to get, because you’re not going to get it.”

5. “Fiscal conservative” means economically confused. Longtime Wall Street executive Steve Rattner, one of Obama’s auto bailout czars, has been using his influence to attract tycoons from the financial industry to the Fix the Debt movement. Over the last year, Rattner has been on a crusade to convince Americans that they should put aside their worries about real crises like unemployment to focus on the deficit. Rattner, like many of his cohorts, poses as a moderate whose thinking is needed to counter the advice of respected economists like Nobel Prize-winners Paul Krugman and Joseph Stiglitz, who have long been warning that defict hysteria is not only counterproductive, but based on a lack of understanding of how the economy actually works.

Political economist Thomas Ferguson, who teaches at UMass Boston and is a senior fellow at the Roosevelt Institute, described the dubious policies the fixers defend:

    “Talk about the audacity of hope! The people who brought you the Great Recession by pushing deregulation and financial leverage to insane dimensions are back. Now they propose to ‘fix the debt’ by throwing average Americans who generously bailed them out in 2008-09 over the fiscal cliff.

    One trusts that even in our money-driven political system, their transparently self-interested nonsense will be firmly rejected. There is no reason why anyone needs to do anything at all about Social Security for a long time; as even Peter Orszag admits in the fine print. It just isn't a driver of the deficit.

    The U.S. does need to reduce its spending on defense and it certainly needs to aggressively contain medical costs. But you do both of those the old fashioned way. In the case of defense, you stop plunging into wars and attend carefully to what actually is needed to defend America. In the case of medical spending, you end ‘fee for service’ schemes that reward endless tests and procedures and you vigorously pursue anti-trust and regulatory remedies. You don't simply cut Americans off from health care. It's ridiculous that we have ‘single payer’ for ailing banks, but not citizens. If you are worried about the deficit, just let tax rates rise back to the levels of the Clinton era, when growth ran far ahead of today's economy, and tax dividends, carried interest, and capital gains at the rates working Americans pay. And don't, absolutely don't, let American companies escape taxation by stashing their money abroad.”

6. "Strip-mining is not leadership." Fixers present themselves as magnanimous, responsible leaders doing what they believe is best for the country. But that’s a tough sell when you’re advocating policies that mainly benefit…yourself.

The way evil works is to shroud itself in nice sounding platitudes. In this case evil uses fine sounding words about God, country and patriotism. Never mind that what these sleazy plutocrats are selling are the opposite of what Jesus preached, has brought the country the worse recession since 1929 and is more about unhinged nationalism and moral corruption than patriotism.