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  • Chart of the Week: Taxes Soaring Past Highest Level Ever

    Americans are facing an unprecedented $494 billion tax hike on Jan. 1, 2013. It’s been dubbed “Taxmageddon” given the economic devastation it would cause.

    Conventional wisdom suggests lawmakers in Washington will wait until the 11th hour to come up with a solution. Fortunately, Speaker John Boehner (R-OH) announced last week he won’t wait for a lame-duck session of Congress. From his speech to the Peter G. Peterson Foundation’s 2012 Fiscal Summit:

    Tax hikes destroy jobs – especially an increase on the magnitude set for January 1st. Small businesses need to plan. We shouldn’t wait until New Year’s Eve to give American job creators the confidence that they aren’t going to get hit with a tax hike on New Year’s Day. Any sudden tax hike would hurt our economy, so this fall – before the election – the House of Representatives will vote to stop the largest tax increase in American history.

    The bulk of Taxmageddon comes from expiration of the 2001 and 2003 Bush tax cuts, but also means the child tax credit will be cut in half, the Alternative Minimum Tax patches end, the Death Tax returns to its 2001 level, and a handful of new Obamacare tax hikes take effect.

    Here’s the outlook under Heritage’s Federal Budget in Pictures:

    If this isn’t enough to scare you, then the prospect of waiting until after the November election should be. Here are five good reasons from Heritage’s J.D. Foster why Congress should act now:

    1. Families and small businesses should not be threatened by their own government with a devastating tax hike.
    2. A massive tax hike would obviously devastate the economy in 2013 and beyond, but the uncertainty about how, when, and even whether Congress will prevent Taxmageddon is already adding to the large cloud of uncertainties hanging over the economy, threatening to slow job growth even further.
    3. Congress has no excuse for threatening families and the economy with this tax hike with the entire summer legislative schedule wide open for business.
    4. Many Members of Congress of both parties agree with President Obama on the need for fundamental tax reform. Allowing Taxmageddon to go into effect would raise tax rates while increasing the tax on saving and investment—the opposite of tax reform’s results. Even though positive reforms are extremely unlikely in 2012, Congress can prevent a severe case of sound policy backsliding and create more opportunities for exploring positive options for tax reform in the balance of the year by preventing Taxmageddon quickly.
    5. Elections are referendums on past decisions and on the future direction of the country. Voters should be able to judge performance of their Members on more than just vague assurances. Those favoring raising taxes should have the opportunity to vote their beliefs while challengers announce their fidelity to higher taxes, and likewise for those favoring low taxes and limited government. Citizens can vote their beliefs based on solid information.

    Conservatives should applaud Boehner for seeking a solution sooner rather than later. But without action from the do-nothing Senate, there’s little hope of stopping this enormous and unprecedented tax increase before November.

    Posted in Featured, Obamacare, Scribe [slideshow_deploy]

    15 Responses to Chart of the Week: Taxes Soaring Past Highest Level Ever

    1. occamsedge says:

      I hate to say this, but Boehner is part of the problem, not part of the solution. He has caved in on every confrontation with the administration. Why would we believe that he will remain resolute now? No one with an IQ higher than room temperature would believe that. Sorry, but true.

    2. Richard Schramm says:

      I can see why you didn't include the 50's – perhaps you should redo this "analysis"

    3. Bob says:

      What would be awesome would be to put the Budget that the House passed (Paul Ryan's) on this chart!

    4. Bill Duffy says:

      It looks like the same game? Kick the ball down the road to the very end, then rush to do something stupid, like, raise the debt limit again,again,again. Right now the ball is in the republicans court and all I see is talk. Where is the action? Will it be before the summer recess? Do any of our representatives work? We need to shout "Get the work done?"

    5. James W Walker says:

      I believe that we should let the tax increase go through. After all this was to be a short-term Tax reduction. It appears that congress is going to continue to spend spend spend. I also believe this amount of revenue should be spent on reduction of the National Debt, not the current budget.

      It is time that the House and Senate refuse to spend .01 cent over our income. You got us here you need to get us out of the Habit of adding to the national debt.

      Do it quick for you won't be back next year. It is time for a complete sweep of all serving congress man. this is not patianship . this is every party, We elected you to speak for us but as soon as you to Washington you for get us and do you own crap. I don't blame our President he does not make bills, and he can not, spend a penny unless the congress lets him. And if he does spend with out congress approval you should have quickly written a bill to disalow the money.

    6. Marine1 says:

      Smaller government and pay down the debt OR end all taxpayer giveaways. OUR choice.

    7. Blair Franconia, NH says:

      SHHHHHHHH! DON'T TELL OBAMA. HE MIGHT RAISE THEM!

    8. Bobbie says:

      What Constitutional reason does Obama have? NONE! STOP THIS! NOW! People learn quick how to be self reliant but Obama doesn't agree! He doesn't want some people to have to work to provide for their own and he is PATHETICALLY WRONG or people wouldn't have immigrated here. Increase the tax base or decrease taxes and work with what you GET!

      FAIR taxes is EVERYONE PAYING THEIR SHARE! Even immigrants who chose to leave their countries origin and take refuge here! Many years have gone by, when do they pay their PATRIOTIC share?

    9. Jim, CT says:

      Taxes as a percent of GDP was 20.9% in 1944.

      But taxes as a percent of GDP is a useless statistic because GDP includes government spending and government spending includes debt. All the government has to do to manipulate that statistic downward is borrow more money. What you should use instead is taxes as percentage of private sector GDP.

    10. Royce says:

      ALL of them are masons, do I need to expound on that thought more? I can and will

    11. The CW says:

      The use of the verb soaring indicates a condition that is currently happening. I'm certain that was not your intention because that would be needlessly inflammatory.

      Currently taxes are near a historic low.

      • Bobbie says:

        whatever taxes are near a historic low isn't ALL OF THEM! Taxes are raised without reason or truth in other areas that make up whatever "near a historic low" you're talking about.

    12. Juan Freeman says:

      Boehner, McConnell and the boys will go on all of the shows and list, correctly, what should be done to resolve the matter. The case will be made point by point and in detail. Then, they will contort their faces, squirm, perhaps even sweat a bit as they lament their impossible circumstances and complain that they really have no choice. As they capitulate once again, they will say, "if only the President would listen to reason," or some other such nonsense. As the stake is being driven into the heart of the economy, yet again, they will proclaim, "NEVER AGAIN, NEVER AGAIN WILL WE ALLOW THIS TO HAPPEN!" Did I get that about right you represestatives of the people?

    13. Buzz Roye says:

      Tax revenue between 15% to 20% of GDP should be plenty for our federal government – CUT SPENDING!

    14. Dan I-4 Corridor says:

      Seems more evasive than productive to hammer on Republican counter-action when the obvious current objective is to inhibit any further negative impact by this radiacal White House and Senate. The most immediate method available to avoid the mischief of an egg sucking dog is to deny him access to the eggs. As pressing as the economy is to all of us our current priority is to deny furhter acesss by theTop Dog to our nation's budget. THEN and only then can leadership replace the exisiting deceptive fiscal tactics of this administration. Prepare to gather the eggs in November.

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