Saturday, May 7, 2011

Tax Rate in America the Lowest in 53 Years

Led by President Barack Obama, the tax rate in the United States has reached its lowest level since 1958. 

A Bureau of Economic Analysis study shows that Americans are paying an average of 23.6% of their gross income for federal, state and local taxes.  From 1970-1990, they were paying 27% income tax.  Keeping taxes low on the federal level has contributed to this reduction.  Other factors include lowering of property values (hence less property taxes) and unemployment for some Americans during the year, at which time they of course pay zero taxes.

But cutting Social Security taxes is another change, resulting from the budget compromise.  While that Republican proposal sounds good on paper, it will further endanger the future of Social Security, which to Republicans of course is a bonus.  Their philosophy is "to each is own" or "every man for himself" and if you weren't lucky enough to land a job with a pension, too bad for you.

So while it is good that the tax rate has been lowered under Obama, it is not good long-term for either the budget deficit or social security.  Americans will have to decide in the next election if they want to continue to keep more of their money at historic levels and have the future of the country (and by extension their children and grandchildren) in peril or if it is time to get America's house in order.  We can't have it both ways.

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