PrintMay 26, 2010
Taxes? Not to worry
"I am proud to be paying taxes in the United States. The only thing is - I could be just as proud for half the money."
The late Arthur Godfrey uttered these words many decades ago when taxes were much lower. I wonder what he might say today.
Apparently the government has its own concerns regarding public perception of tax levels and is trying to influence them. One message from your used-car-salesman government and its media accomplices deliberately attempts to distort reality -- You are not overtaxed, you just think you are.
That is the message. As discussed by The Freeman:
To the surprise of opponents of big government, the U.S Bureau of Economic Analysis (BEA) estimates that taxes at all levels of government take only 9.2 percent of our income, the lowest rate since Harry Truman was president. USA Today and various news-media personalities, like Chris Matthews of MSNBC, have used this statistic to hammer those who complain about President Obama's profligate fiscal policies.A lie this big cannot be covered up, even by the government or by the agency that initially fueled it:
The BEA staff itself estimates that the tax burden was 30.2 percent of national income in 2009 (as opposed to personal income). Taxes were 23.8 percent of national income during Truman's presidency. Summing up all the aforementioned figures on spending and regulation leads to the conclusion that the real economic burden of government in America is over 50 percent, and rising.Actually matters are even worse and most of these are dealt with in the Freeman article.
One area The Freeman does not deal with is "imputed" GDP. Imputed GDP represent phantom, rather than market, transactions. They are the figment of some statistician's imagination, representing judgments regarding quality and product enhancements. Regardless of how appropriate they might or might not be for measuring GDP, they further serve to understate the true tax burden. They inflate GDP and consequently understate any tax rate using GDP or any of its imputed components as a measure of income.
For how significant this is, see some alternative tax calculations here: Government is 79% of the Economy.
Monty Pelerin www.economicnoise.com montypelerin@gmail.com
