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Morning Bell: Liberal Lies on Taxes

Posted By Conn Carroll On April 15, 2008 @ 8:41 am In Ongoing Priorities | Comments Disabled

Today is tax day for Americans, and like clockwork the establishment media are working overtime to cover up just how unfair and burdensome the U.S. tax code really is. The following Gallup headline is typical: “Just Half of Americans Complain Tax Bill Is Too High. [1]” Clicking through, we see that 52% of Americans believe the amount of federal income tax they pay is too high compared with 42% who say it is about right. Looking at past trends we see that as recently as April 2002 only 47% of Americans thought their tax burden was too high. It takes some gumption to ignore a five-point gain in the belief that taxes are too high and slap a “just half” headline on it.

But as outrageous as Gallup’s spin is, the coverage of “What Are You Going To Do With Your Rebate? [2]” is even worse. This is less the media’s fault than it is blatant dishonesty by the federal government. According to data released by the IRS in 2007 [3], the government asked American families to send in $22,100 over the course of the year — the total taxes paid by the average American household. Now we’re supposed to have a national conversation about how to spend this paltry gift of a tax rebate. Somehow we’re supposed to be gleeful that the government took less, rather than more.

Current rules used by the Congressional Budget Office when calculating revenue baselines also distort reality [4]. Many budget rules, especially Pay-As-You-Go, come into play when a proposed change in law changes the expected level of tax receipts. To calculate expected changes, the CBO assumes that current law will be maintained for the next five or 10 years even when existing law is set to change existing tax policy. The recent debate over extending the Alternative Minimum Tax (AMT) patch exposed how flawed the system is. When Congress tried to preserve existing tax rates on millions of middle class families in 2007, the CBO scored the legislation as a tax cut that had to be offset under PAYGO. The problem will get even worse when the 2001 and 2003 tax cuts expire in 2010.

According to American Enterprise Institute scholar Glenn Hubbard and Hoover Institute senior fellow John Cogan, the expiration of those 2001 and 2003 tax cuts will cause the “largest increase in personal income taxes since World War II. … The increase would push total federal government revenues relative to GDP to 20% [5].” Already Americans must work from January 1 until April 23 [6] just to fund our nation’s government. Americans already spend more on taxes [6] than on housing, health care, food or transportation. If more Americans knew these truths, the percentage of Americans who thought they paid too much in taxes would be a lot higher than “just” 52%.

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URL to article: http://blog.heritage.org/2008/04/15/morning-bell-liberal-lies-on-taxes/

URLs in this post:

[1] Just Half of Americans Complain Tax Bill Is Too High.: http://www.gallup.com/poll/106492/Just-Half-Americans-Complain-Tax-Bill-Too-High.aspx

[2] What Are You Going To Do With Your Rebate?: http://www.usatoday.com/money/perfi/taxes/2008-04-14-tax-rebates_N.htm

[3] According to data released by the IRS in 2007: http://www.hoover.org/research/focusonissues/focus/17442454.html

[4] Current rules used by the Congressional Budget Office when calculating revenue baselines also distort reality: http://www.heritage.org/Research/Budget/wm1848.cfm

[5] largest increase in personal income taxes since World War II. … The increase would push total federal government revenues relative to GDP to 20%: http://www.aei.org/publications/pubID.27769,filter.economic/pub_detail.asp

[6] April 23: http://www.taxfoundation.org/taxfreedomday/

[7] reports: http://www.usatoday.com/news/world/2008-04-14-%20amnesty-executions_N.htm

[8] fast becoming a new flash point in global diplomacy: http://www.nytimes.com/2008/04/15/business/worldbusiness/15food.html?_r=1&ref=todayspaper&oref=slogin

[9] unless companies like Shell are allowed to produce more oil from domestic sources, the industry will have to import more and prices will stay high: http://www.sacbee.com/103/story/861973.html

[10] reports: http://thehill.com/leading-the-news/crusaders-wiggle-room--on-earmarks-2008-04-14.html

[11] reports: http://www.politico.com/news/stories/0408/9607.html

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