- The real tax on the American people is the cost for health insurance which has gone up nearly 20 fold over the past half century. And expect this to get worse with the implementation of ObamaCare.
- In 1960 government tax revenues were 93 billion, today they are 2.3 trillion dollars. If we consider the population rate doubled and the average inflation rate and GDP growth was 4.1% then our tax revenue base should be no higher than 1.5 trillion dollars today (and this is being very generous). Hence, the government is taking in about 50% more in tax revenue than in the 1960’s per capita. To make matters worse, in 1960 U.S. deficit levels were around 50% of GDP, reduced from over 100% after World War II just 15 years prior. Today, our deficit levels are back over 100% of GDP. What does this say, the government has a spending problem and entitlements are the main culprit.
- In 1960, the estate tax was much lower because its minimum rate was much lower than today’s rate (although the upper rate was much higher in 1960). 1960 also had a higher capital gains tax rate than today, 25% compared to 15%. However, in 1960 the average length of time to hold securities was over 8 years, today this timeline has reduced to fewer than 4 years meaning people are paying taxes on their holdings quicker and many holdings are being taxed at a higher short term rate.
Yes, tax rates were higher in 1960, but the effective tax rate today is much higher for the many reasons outlined above (you have to look at the revenues collected by the government to find the true tax rate people paid). And yes, the stock market and the economy were much healthier in 1960 than today. However, the reason for this is because the government is taxing more, spending more, and the cost of goods and services in nearly 50% higher. The bottom line, I asked my brother would he start his own business and his answer was “no, it is too risky.” But he expects people who took these risks to pay more in taxes (over 50% of all business ventures fail). This to me does not seem fair. People who took these risks should also reap those rewards (and remember, the top 1% already pay over 50% of the nation’s income tax – In fact, the top 1% today pay more in taxes than what all Americans paid in taxes in 1960 [adjusted for inflation and population growth]).
This type of thinking is typical liberal ideology at its best. Progressives expect their neighbors to make more sacrifices while many do nothing to gain control of their own fiscal wellbeing. Another liberal fallacy I read about while researching this article is their claim higher tax rates do not make Americans lazy. Once again they point to the high tax rates in the 1950’s and 1960’s while the economy was booming. This, I have already proven to be a fallacy. The truth is effective tax rates are higher today, anti-poverty spending is up 12% of GDP, disability spending is up 6% of GDP, people on unemployment is up 100%, and so forth. I am all for helping people who really need assistance and are willing to help themselves, but nothing about these numbers says Americans are any less lazy today compared to 1960. Sadly, it is commonsense to jump to the conclusion Americans are becoming increasingly more lazy.
No matter how much we raise taxes, it is never enough. Today, Democrats are pushing for more tax increases on the wealthy without understanding the implications of their recent rate increase on high income earners and those ObamaCare taxes which have started this year. At the same time, after several months of debate on this subject, the Democrats have conceded 10 hours of spending cuts.