Morning Bell: It’s About the Spending
Conn Carroll /
According to the Tax Foundation, today is Tax Freedom Day: That means Americans have worked about three and a half months of the year, from January 1 to April 13, before they have earned enough money to pay this year’s tax burden at the federal, state and local levels. Thanks in part to both President George Bush’s tax cuts and President Barack Obama’s temporary tax cuts, this year’s April 13 Tax Freedom Day is the earliest it has been since 1967. But do not celebrate yet. The Tax Foundation also identifies how long Americans would have to work to payoff each year’s budget deficit. That day does not arrive until May 29 … the latest day ever for the deficit inclusive measure.
But back to the taxes. The Congressional Budget Office released a study last week that should give pause to anyone who believes the gap between spending and revenues can be closed by taxing the rich alone. In 2006, the latest date data is available, the top 20% of earners paid 69.3% of all federal taxes. Never has the top 20% of earners paid such a high share of federal receipts. Meanwhile, the bottom 90% of households paid only 45%, and the lowest 20% of earners paid only .8% of all federal taxes. Editorializing on the CBO findings the Washington Post warns: “There just isn’t enough revenue to be found above that figure unless we create a system so lopsided that voters would always want more government spending because it would come at such a low price.”