Taxes

* Total tax collections in the U.S. were $2,667,000,000,000 in 1998.(1) This represents 35.4% of the country's total income.(2)

* Medieval serfs paid an effective tax rate of 33.3% and were considered slaves.(3)

* The Tax Foundation (a non partisan organization established in 1937) calculates something known as "Tax Freedom Day". The calculation illustrates the average number of days Americans work into a year to pay their taxes.

Year Tax Freedom Day

1930	Feb. 12
1950	Apr. 03
1970	Apr. 26
1980	Apr. 30
1990	May. 01
2000	May. 12
2002	Apr. 27

(2)

 

* In 1997, Democrat Senate Minority Leader Tom Daschle said "I don't think the American people are overtaxed." In 1997, Bill Clinton told the people of Virginia, that they would be "selfish" to favor a reduction in the Virginia car tax.(4)

* Bill Clinton made this claim in his Feb,2,1998 State of The Union Address: The typical middle class family will have the lowest tax rate in 20 years.(5) Federal taxes in 1998 will be 20.1% of the Gross Domestic Product, which is the highest level any year since World War 2.(24) Tax Freedom Day (an average) has been pushed out 9 days since Bill Clinton became President. Taxes for the U.S. median family as a percentage of income:

1977 1997

single income family 33.9% 35.9%

dual income family 36.5% 37.6% (2)

* Republicans attempted to pass a Constitutional Amendment in 1997 that would have required a 3/5ths majority vote in both Houses of Congress in order to run a deficit. To create a Constitutional Amendment, it must pass both Houses of Congress with a 2/3 majority and 3/4 of the individual States must ratify it. The Amendment was defeated primarily by Democrats. N.J. Senator, Democrat Bob Toricelli promised voters in his 1995 campaign that he would vote for a Balanced Budget Amendment. He voted against the Amendment and it failed to pass the Senate by one vote. (10)(14)

* The tax cuts in the 1997 budget agreement were pushed for and secured by Republicans. The tax cuts included an increased child tax credit and a reduction in the capital gains tax. As of 1998, Republicans in Congress are trying to enact numerous proposals to cut taxes. Among the proposals: ending the marriage penalty, eliminating estate taxes, further reducing the capital gains tax, and eliminating the tax on Social Security benefits. (11)

* In 1997, the top 1% of income earners in this country paid 29% of the total federal income taxes.

The top 10% of income earners paid 60% of the total federal income taxes.

The top 20% of income earners paid 74% of the total federal income taxes.

The bottom 50% of income earners paid 5% of the total federal income taxes. (6)

* 32% of individual federal income taxes are needed in order to pay the interest on the national debt of $3,500,000,000,000.(15)(16)(1998 figures)

* The "Flat Tax" is a proposal by Republicans Dick Armey and Richard Shelby to change the federal income tax to a single flat rate of 17%. Under this proposal, a family of 4 with an income of $48,890 would pay $2,990 in federal income taxes, as opposed to the $3,967 they would pay under the current system (1998 figures).(2)

* A family of 4 with an income of $32,000 would pay no federal income taxes under a flat tax (1998 figures).(7)

* A flat tax would reduce the costs of compliance (i.e. accounting costs, tax attorneys)with the federal tax code. If the costs of compliance ($236,000,000,000 in 1997) were added into the Tax Freedom Day calculation, Tax Freedom Day would come 13 days later into the year.(2)

* A flat tax would reduce the influence of the 67,000 lobbyists employed by special interest groups who lobbied the federal government to the tune of $8,400,000,000 in 1997. Most lobbyists work securing and protecting tax deductions, shelters, and loopholes for their employers.(8)

* Bill Clinton and most Democrats are opposed to a flat tax.(8)

* Taxes we pay, which we may not be aware of, are called "hidden taxes". Typically, hidden taxes start out as corporate taxes and are eventually passed along to consumers in the form of higher prices.(17)

* As of 1998, there are 30 taxes on a gallon of gas amounting to 54% of the final purchase price. There are 18 taxes on a pizza.(17)

* In the 1996 Telecom Bill, there exists language that asks the FCC to "enhance" the access of school children to the Internet. The FCC (run by political appointees) decided the language in that bill allows them to tax the telephone companies in order to pay the cost of wiring schools for Internet access.(18) A vote of Congress is required to establish a federal tax. Congress did not vote on this.(19)

* The FCC expected the phone companies to absorb this tax. Many phone companies defied the FCC and listed the tax as a separate line item on the phone bill.(18)(22)

* To administer this program, the FCC created a new bureaucracy. The head administrator, Ira Fishman, was assigned a salary of $200,000. The total cost of the program would have been about $2.3 billion, costing the average household $25/year.(23)

* When Republicans protested, The FCC cut the program to $1.3 billion, cutting wealthier schools out of the program and folding the bureaucracy into an already existent corporation.(18)

* Al Gore supported this proposal and went on tour with then FCC chairman Reed Hundt, speaking about the federal mandate to wire every school and library for Internet access. (23) On June 10,1998 Al Gore stated "Students in predominately minority schools were 3 times less likely to have Internet access than those in predominately white schools."(20) On June 8,1998 Al Gore stated, "The e-rate is critical to our efforts to put computers in every classroom and library, giving every child the tools to succeed." (19) According to the 1997 tax return of Al and his wife Tipper, they earned $197,729 and gave $343 to charity.(21)

Tax Bites (25)

* About 82% of what consumers pay for a pack of cigarettes ends up going to the government in taxes. Based on recent averages, the total price for a pack of cigarettes in the U.S. is now $3.73. Only 8 cents of that goes to the farmer and about 28 cents go to those "rich" tobacco companies. The remainder goes to the government.

* If the American consumer pays $1.59 for a loaf of bread, they are paying 64 cents in taxes.

*30% of the price of an airline ticket goes to pay such things as federal excise tax, a $2.50 surcharge tax for air traffic control services, a $12.40 arrival tax, a $12.40 departure tax, a $5.00 Customs Users tax, a $6.00 Immigration tax, a $2.00 agricultural inspection tax, among other state and local taxes.

Other tax bites

automobiles	38% taxes
electricity	25% taxes
firearms	46% taxes
liquor	44% taxes
telephone	50% taxes
soft drink	35% taxes
tires	36% taxes

More Tax facts;

* The typical American family pays more in taxes than in food, clothing and shelter combined. That is, over 38% taxes, and 28% for food, clothing and shelter.

*The average tax rate for taxes filed in 1916 was 2.75%. Today, the typical families pays a combined 38.2%.

* When Bill Clinton claimed his tax hikes hit only the rich, he ignored the huge tax increase he placed on middle income seniors. He subjected 85% of Social Security benefits to federal income taxes for unmarried seniors earning more than $34,000 and married seniors with combined income of $44,000 or more (only $22,000 per person). These figures were not indexed for inflation, which means that each year, more elderly Americans have their benefits taxed.

If you are an employee, have you ever complained about not being paid enough? Before you do that the next time, consider this, today an average manufacturing worker costs his employer $14.89 an hour (not including fringe benefits). But the employee’s take home pay is only $10.79 an hour. The government takes $4.10 per hour in taxes – federal and state income taxes, payroll taxes, unemployment insurance taxes and worker’s compensation – thus reducing the worker’s take home pay by 28%. For a worker earning $60,000 a year and living in a state with average taxes, the government’s share rises to 36%. (26)

American’s like to talk about Corporate Welfare, but in actuality, the government imposes a 35% tax on corporate income, and states, on average, take another 5%. This is the forth highest tax burden of corporations in industrialized nations. Also, U.S. Chartered firms must pay tax on income earned in other nations. This puts U.S. corporations at a disadvantage since most of our trading partners rely on a "territorial taxation", the commonsense notion that governments only tax income earned inside their borders. (27)

Sources:

1) McCaslin, John. "Inside The Beltway: Pay to play." Washington Times National Weekly Edition, June 8-14, 1998.

2) Tax Foundation Website (www.taxfoundation.org) August 7, 1998.

3) Mitchell, Daniel. "Working for The Man until May 10." Washington Times National Weekly Edition, May 18-24, 1998.

4) Pierce, Greg. "Inside Politics: The real stripes." Washington Times National Weekly Edition, November 10-16, 1997.

5) Miller, James III. "Clinton budget just doesn't add up." Washington Times National Weekly Edition, February 9-15, 1998.

6) Lambro, Donald. "Debunking popular American myths." Washington Times National Weekly Edition, September 1-7, 1997.

7) Independent calculations based on data from Source 2

8) Armey, Dick. "Here's a way to flatten taxes." Washington Times National Weekly Edition, November 24-30, 1997.

9) Family Research Council. "Tax Limitation Amendment." Legislative Hotline, March 6, 1998.

10) The Republican Presidential Task Force. "One Man. One Vote. One Betrayal." American In Crisis, 1998.

11) Hallow, Ralph Z. & Godfrey, John. "GOP's tax proposals evoke Reagan's." Washington Times National Weekly Edition, January 22-28, 1998.

12) Akers, Mary Ann & Godfrey, John. "GOP says Clinton spending plan may break the budget." Washington Times National Weekly Edition, February 2-8, 1998.

13) Kudlow, Lawrence. "Republicans should take credit for the budget surplus." Washington Times National Weekly Edition, February 2-8, 1998.

14) Project Vote Smart Website (www.vote-smart.org) August 7, 1998.

15) Editorial: "Don't start the celebrations just yet." Washington Times National Weekly Edition, January 12-18, 1998.

16) Independent calculations based on data from sources 2 and 15.

17) Pierce, Greg. "Inside Politics: Hidden taxes." Washington Times National Weekly Edition, December 29, 1997-January 4, 1998.

18) Editorial: "The Gore tax." Washington Times National Weekly Edition, June 22-28, 1998.

19) Kellner, Mark A. "Al Gore's tollbooth on the information superhighway." Washington Times National Weekly Edition, June 15-21, 1998.

20) Kopecki, Dawn. "'Gore tax' is too costly, Senators tell the FCC." Washington Times National Weekly Edition, June 15-21, 1998.

21) Pierce, Greg. "Inside Politics: Gore's Reply." Washington Times National Weekly Edition, April 27-May 3, 1998.

22) Notice sent by Bell Atlantic Phone Company, received on January 7, 1998.

23) Pierce, Greg. "Inside Politics: Doesn't get it." Washington Times National Weekly Edition, December 15-21, 1997.

24) Lambro, Donald. "A big lie about our 'small' government." Washington Times National Weekly Edition, February 16-22, 1998.

25) Americans for Tax Reform: Tax Bites

26) Cato Institute Policy Analysis No. 302, by Dean Stansel

27) The Heritage Foundation: Corporate Expatriation Protects American Jobs, by Daniel Mitchell, Ph. D. Executive memorandum # 829, August 29. 2002.

28) Resources: Joint Committee on Taxation, February 27, 2001, JCX-2-01

29)Joint Committee on Taxation, August 2, 2001, JCX-65-01