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Opinions/Editorials Title: GOP Can’t Handle The Truth: Taxes Are Lower Under Obama Than Reagan President Obama met with House Republicans today at the White House to discuss ways to move forward on negotiations regarding the nation’s debt ceiling and the budget. During the discussion, talk evidently turned to taxes, and when Obama noted that taxes today are lower than they were under President Reagan, the GOP, according to The Hill, “engaged in a lot of ‘eye-rolling’“:
That House Republicans find this preposterous is symptomatic of the hold Reagan mythology has over them. After all, for seven of Reagan’s eight years in office, the top tax rate was higher than the current 35 percent. In six of those years, it was 50 percent or more. And every year that Regan was in office, the bottom tax bracket was higher than the current ten percent. For a family of four, the “average income tax rate under Reagan in 1983 was 11.06 percent. Under Clinton in 1992, it was 9.18 percent. And under Obama in 2010, it was 4.68 percent.” During Reagan’s time, income tax revenue ranged from 7.8 to 9.4 percent of GDP. Last year, it was 6.2 percent and is not projected to climb back to 9 percent until 2016. In fact, in 2009, Americans paid their lowest taxes in 60 years.
Republicans are very fond of saying that the U.S. has “a spending problem, not a revenue problem.” But the truth is that revenue has plunged due to the recession and to continued misguided tax cuts, and revenue needs to be raised to eventually bring the budget into balance. And Reagan knew that taxes were an important part of the budget equation. After all, he “raised taxes in seven of his eight years in office,” including four times in just two years. Post Comment Private Reply Ignore Thread Top • Page Up • Full Thread • Page Down • Bottom/Latest Begin Trace Mode for Comment # 5. #3. To: Brian S, capitalist eric, go65 (#0) (Edited) This is a false debate and I am really sick of it. Democrats are screaming that tax revenues are low by historic standards, yet our rates are higher than the 1980s, when tax revenues were higher. Republicans are screaming that we have the highest corporate tax rates in the world, yet a whole bunch of politically connected companies pay very little to no taxes. On top of that half the people in the country don't pay any income tax (although they do pay payroll taxes). The real problem is the tax system is so screwed up that no knows what the hell is going on. We need a tax system that looks like it was purposefully designed. Since WII, average tax collections were 18% of GDP. The top 1% paid an average of 25%. So, let's eliminate the payroll tax, eliminate all deductions, and put a flax tax of 15% or so on the first $1 million in income and 25% on every dollar earned over $1 million. This will solve all kinds of problems. It will raise the revenue needed to meet historic revenue levels, it will save the country hundreds of billions of dollars in tax preparation fees, and it will create an economic boom because we'll have a simple, low rate system which enables people to plan and take risks. Obama's deficit commission proposed something just like this, but they didn't get rid of the payroll tax and they had a top tax rate of only 23%. Unfortunately, Obama refused to provide leadership and endorse their program.
#4. To: jwpegler (#3) So, let's eliminate the payroll tax, eliminate all deductions, and put a flax tax of 15% or so on the first $1 million in income and 25% on every dollar earned over $1 million. Do states still get to run their own separate income tax systems?
#5. To: Skip Intro (#4) Do states still get to run their own separate income tax systems? Why wouldn't they? Many states don't have an income.
Replies to Comment # 5. Why wouldn't they? Because one of the attractions of a flat tax is the elimination of the detailed record keeping needed now. If states can still impose their own systems that advantage goes away. If I still have to calculate a federal tax, a state tax, and a local tax I fail to see what the advantage of a flat tax is. For all I know my tax bill would increase under such a plan. Certainly I'm not going to save any money on tax preparation.
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