Lets start with the basics. There are fundamentally only two ways to balance a budget. One is to cut spending. That's really popular now with Republicans in congress. But there is another way. That's to increase income. That's not at all popular in congress since it means increasing taxes.
While much attention is being focused on spending Common Sense thought it might be worthwhile to take a look at taxes. Now Common Sense knows that no one, Common Sense included, likes paying taxes. But that said, everyone enjoys the benefits that taxes provide. So ultimately what really needs to be considered are tax rates.
Here is a link to some interesting historical tax rate information. Here's the story in an easily digested graphic.
However you feel about taxes you should note that tax rates are historically low. If you look not at the marginal rate but the effective rate (the net rate paid on total income) you get a picture like this:
What's clear here is that one cause of budget deficits is that our taxes are historically low! That's not to say, of course, that spending is an issue. It is. Rather it's that one of the reason the deficit is so large is that taxes are low.
It turns out that if you look at the data from almost all reasonably factual sources you'll find the same results.
Common Sense thinks that while we're looking at budgets and spending it makes just good common sense to also look at taxes. Just a POV.
No comments:
Post a Comment