Sunday, July 20, 2008

Citizens More Taxed Now Than Under King George

According to Americans for Tax Reform, the Cost of Government Day for 2008 is July 16. Working people must toil on average 197 days out of the year just to meet all costs imposed by government. In other words, the cost of government consumes 53.9% of national income.

The Cost of Government Day falls four days later in 2008 than last year’s revised date of July 12. In 2008, the average American will have to work an additional 17 days out of the year to pay off his or her cost of government compared to 2000, when the COGD was June 29.

In fact, since 1977, COGD has fallen later than July 16 in only four of those 32 years - in 1982 and 1983, and in 1992 and 1993 (see chart above). The driving factor for this development is the fact that all components of the cost of government – federal spending, state and local spending, and regulation – are now increasing faster than national income.

Contributing even more to rapidly rising government burdens right now is soaring state and local government spending. The average American worker must labor 50.5 days this year, approaching two months, just to pay for state and local government spending. That compares to 48.9 days just last year, and 44.3 days in 2003. That means in the last five years alone, state and local spending has grown by almost 12% relative to national income (see chart below).

MP: We just recently celebrated our nation's most important holiday - Independence Day. On the Fourth of July we recognize the birth of America as a free nation on the anniversary of the day that the early colonists declared themselves free from British rule in one of the great political documents of history. The Declaration of Independence, adopted by delegates of the thirteen colonies on July 4, 1776, was a rejection of the heavy burden of British statist policies, mercantilism and onerous taxation.

Isn't it ironic that we celebrate Independence Day on July 4 to recognize our rejection of oppressive British regulation, mercantilism and taxation, and yet the typical American now works until the middle of July to pay for Big Government? In other words, we celebrate our declaration of independence from the British government in early July before we are even free from the burden of our current government!

15 Comments:

At 7/20/2008 9:43 AM, Blogger Sophist said...

It is sad I agree and at the same time outrageous.

But, there are a few buts here;

(1) Whenever something happens, like a natural disaster or a bank failure, the majority of people demand that the government bails them out or pays them off (see FTIC secured deposits, subprime bailouts, Federal aid to natural disaster victims, etc.).

(2) Americans employed too many slaves for many many years who were "taxed" 100%, 356 days a year. Now Americans have to repay through social programs certain parts of their population who were not allowed to progress equally with the rest.

(3) IMO, democratic systems and zero or low taxation conflict in many ways. The majority always demands more services by the government and this calls for more taxes. Although I am myself an advocate of zero income taxes and a flat sales tax to finance government programs, as well as zero taxes on capital gains and capitla in general, the currect social politics cannot support this system because it calls for maximum privatization of services, including schools, something the majority opposes.

Thus, citizens are now taxed more than under King George because they wanted to be free from King George and have a social and political democracy and independence.

It is a price for freedom.

 
At 7/20/2008 10:16 AM, Blogger the buggy professor said...

These are very revealing charts, Mark --- this one on local and state government taxes, and the one on total government taxes and the number of days it takes throughout the year to pay for total taxes.

The state taxes are particularly cumbersome, in part because of the way they are tacked on to consumer sales and, additionally --- in a state like California --- hit you with an income tax that is particularly full of complicated forms. In particular, those forms aren't fully meshed with federal tax forms, and require accordingly further paper work even as they entail different and usually fewer deductions.

........

One of the biggest fiscal expenditures in California is the upkeep on roads and highways. It has always puzzled me that in, say, a highly statist economy like the French have, lots of freeways have been built by private firms using a toll system to collect revenue --- and yet we are generally reluctant to follow suit in most of the US.

As for education, only about 62% of all expenditures across the US --- raised by state and local taxes or bonds --- goes for classroom use. The rest go to . . . well, that's easy to guess, no?

And yet we're constantly told that if only taxpayers would support more taxes for funding public education, school authorities would be able to cut classroom size and improve educational performance . . . a claim that has been refuted for decades by good scholarly work, going back to the Coleman report of the 1960s. In fact, as another one of your posts last month (June 2008) showed, public schools financing has surged in the last 18 years, yet with little improvement in the tested performance of students at various levels.

.......

The latter comment about educational finances and taxes that support that financing does entail one further comment . . . a problem with libertarian enthusiasm for no restrictions on immigration, legal or otherwise.

Namely?

The cost-benefit calculus used by libertarian supporters about the low-wage benefits of poorly educated Hispanic immigrants fails to take into account the longer term costs: educational, social, and so on.

In particular, the drop-out rate of Hispanic students in Los Angeles schools is around 60% before the completion of high-school . . . a preparation, it seems, for the development of an ethnic-based underclass. A UCLA study not long ago found that after the first two generations, the educational progress of Hispanic immigrants and their descendants stopped. The UCLA study's conclusion? The public school system was failing Hispanics. The likelier explanation? The Hispanic communities were failing the school system.

By contrast, Asia immigrants have had no trouble continually improving educationally . . . to the point that UC Berkeley, the number one sought-after UC campus --- the UC entrance requirement are for the top 12% or so of California graduating seniors, with the acceptance rate at UC Berkeley 1 out of 10 applicants --- has an entering class each year with about 45% Asian-American freshmen. And yet Asian-Americans are only about 10% of the California population.

......

And the costs of unlimited immigration doesn't stop with educational burdens and taxes to support those burdens.

Consider this example. In Santa Barbara --- a city of 90,000 people that depends on tourism for its main income --- Hispanic teen-age gangs now exist in several places, and they are violent . . . with three savage killings in the downtown area alone in the last year or so. So what do the authorities do? Besides requiring more policing, they have to implement social policies that target Hispanic kids, and even if these policies work --- nobody knows what the long-run benefits are --- they require more taxes for financing too.

Meanwhile, though the local newspaper tries to keep the bad news of the front-page, if violence were to continue as a result of such teen-age Hispanic gangs, local revenue will fall as well.

......

So where are we?

Among other things, a policy embraced with enthusiasm by libertarians --- unlimited immigration, with no check on legality or educational qualifications --- has been entailing more and more fiscal costs, never mind intangible costs, that will require ever greater taxes and almost certainly entail ever greater costs of a social sort as an ethnic-based underclass continues to grow in number.

In short, here, it seems, is a big drawback of libertarians trying to make sense of a complex social and economic world by applying deductions from basic theoretical models to these tangled complexities.


.....

Michael Gordon, AKA, the buggy professor, http://www.thebuggyprofessor.org

 
At 7/20/2008 10:34 AM, Anonymous QT said...

Cost of government day is a very interesting metric comprised of federal spending, state & local spending, federal regulation and state regulation. It is difficult to determine the methodology used.

Many questions remain. For example:

How is the burden to comply with regulation calculated?

On the issue of federal spending, there does not seem to be any acknowledgement of the deficit which quite obviously has not been paid by tax revenue.

It is clear that this organization has a strong political orientation. One notes the forceful opposition to any regulation to address global warming for example.

 
At 7/20/2008 12:07 PM, Blogger juandos said...

"Americans employed too many slaves for many many years who were "taxed" 100%, 356 days a year. Now Americans have to repay through social programs certain parts of their population who were not allowed to progress equally with the rest"...

Well now isn't this a load of libtard nonsense?!?!

Were you a slave owner sophist? Your parents or grandparents? How about their predecessors?

Hey sophist, which one are you in this editorial cartoon?

BTW regardless of what the people want, what part of the Constitution mandates that the federal government pander to these parasites?

This is just another example of your whacked out logic...

Why not bill those who want these government services instead of stealing from the productive?

 
At 7/20/2008 1:00 PM, Anonymous Anonymous said...

There seems to be a substantial difference between this American for Tax Reform (AfTR) report and the Tax Foundation tax freedom day, ignoring the regulatory compliance days.

The Tax Foundation says 74 days for the feds and 39 days for the states + locals, whereas the AfTR says 83.7 days for the feds and 50.5 days for the states + locals.

As the AfTR does not include any underlying data nor methodolgy in its report, I call bullsh*t.

 
At 7/20/2008 1:17 PM, Blogger Sophist said...

Juandos in a state of unprecedented confusion asked:

"Why not bill those who want these government services instead of stealing from the productive?"

Because in a sense, the productivity of those you refer too is improved or even becomes possible by having a government who takes care of these issues by collecting taxes.

Have you thought of that or you just occupy your mind with how to attack people with links? I must call you the Link Attacker.

I give you an example because it seems you cannot grasp easily abstract concepts because you are just a layman in that respect:

You have a small business that researches and designs advanced PC peripherals. You need talent to survive glabal competition, very bright electronics and IT engineers. If education is all private, many bright students cannot afford even to finish high school and drop out. If education is financed by taxes, some of the poor bright students make it to college and graduate. You hire them at a reasonable salary in that case. Productivity is increased.

Your naive reasoning would apply, if and only if, you can lay down proof that productivity is orthogonal to government spending through taxation of income, accross the board.

Since conservtards in many countries have understood my point, emphasis is given not on eliminating government spending but optimizing it to facilitate productivity growth.

 
At 7/20/2008 10:10 PM, Anonymous QT said...

Juandos,

Most of us have been conditioned by our education to accept the concept of white guilt.

For example, most of us were taught that the Treaty of Versailles guaranteed that there would be another world war. While there is little doubt that the treaty was punative and onerous, Germany made the decision to invade Poland. Our choices are our own not someone else's.

Charles Krauthammer was awarded the Irving Kristol award by the American Enterprise Institute for Public Policy Research in 2004. His lecture "Democratic Realism: An American Foreign Policy for a Unipolar World" helps to clarify many of the assumptions which have implications beyond foreign policy:

http://www.freerepublic.com/focus/f-news/1078705/posts

 
At 7/21/2008 7:09 AM, Anonymous Ryan Ellis said...

I work at ATR, so I can answer some of the specific questions:

1. COGD measures spending and regulations. Tax Freedom Day measures the tax burden. The reason why COGD is later is because governments spend more than they tax.

2. The regulation methodology is in the report for anyone who cares to read it. It's produced independently of ATR in an academic setting.

3. The deficit is a meaningless number which is the difference between two meaningful numbers: the level of taxes, and the level of spending. A balanced budget at 40% of GDP in spending is far worse than a 4% deficit and 20% of GDP in spending.

Ergo, the deficit is not the target. Spending is.

4. The spending methodology is simple. It's spending divided by national income. It's also available for anyone to read in the report.

5. Yes, ATR opposes massive new government regulation for the junk science that is global warming. In fact, we oppose massive new government regulation for anything. That's what makes us "free market."

 
At 7/21/2008 11:23 AM, Anonymous disenfranchised in DC said...

While I appreciate sophist's "buts", let's not forget that half a million American citizens in this country, who pay their full share of taxes (federal, state and local) STILL do not enjoy the full fruits of this "social and political democracy and independence" that we pay for. I speak of course about the citizens of Washington, DC who still lack representation in Congress, and thus a voice in how our taxes are spent - one of the fundamental tenants (taxation without representation) about which we went to war with King George.

 
At 7/21/2008 3:50 PM, Blogger juandos said...

Hey disenfranchised in DC I just have to ask, how come you don't move?

Is it an unviable economic situation?

sophist on a roll says: Because in a sense, the productivity of those you refer too is improved or even becomes possible by having a government who takes care of these issues by collecting taxes"...

Oh yeah?!?! Since when?

What does the federal government do for you that the state and local government can't?

sophist continues on in the same vein: "Have you thought of that or you just occupy your mind with how to attack people with links? I must call you the Link Attacker"...

Hey sophist have you ever thought of getting a clue and trying to find out that YOUR socialist mindset (and those of millions of your fellow travelers) are part and parcel of the reason we have this problem: The looming national benefit crisis?

"If education is all private, many bright students cannot afford even to finish high school and drop out"...

Oh geez! You're breaking my heart sophist...

Where's the responbility on the part of the people who had these bright children?

Now if YOU want to delve into YOUR OWN wallet and pay for their education, well by all means...

"Since conservtards in many countries have understood my point"...

You're kidding yourself sir... That's logic only a kostard would understand, other folks see it for what it is, 'theft'...

 
At 7/21/2008 6:24 PM, Anonymous Anonymous said...

Sophist (the name fits you) said:

"Americans employed too many slaves for many many years who were 'taxed' 100%, 356 days a year."

Your reasoning shows the same lack of sense that your not knowing the number of days in a typical year does.

 
At 7/22/2008 12:57 PM, Blogger Eric said...

You mean we aren't under King George?

All those unconstitutional executive orders make things kinda fuzzy...

 
At 7/22/2008 3:53 PM, Blogger juandos said...

Hey qt, regarding the Krauthammer speech: Democratic Realism (which I thank you for) had these great lines: 'Today, however, isolationism is an ideology of fear. Fear of trade. Fear of immigrants. Fear of the Other. Isolationists want to cut off trade and immigration, and withdraw from our military and strategic commitments around the world. Even isolationists, of course, did not oppose the war in Afghanistan, because it was so obviously an act of self-defense--only a fool or a knave or a Susan Sontag could oppose that. But anything beyond that, isolationists oppose. They are for a radical retrenchment of American power--for pulling up the drawbridge to Fortress America'...

Well how much better can a description be?

Hey eric, your comment: "You mean we aren't under King George?

All those unconstitutional executive orders make things kinda fuzzy...
"

O.K. name one these executive orders...

 
At 7/24/2008 12:28 PM, Blogger Eric said...

Here's the latest:

http://www.whitehouse.gov/news/releases/2007/07/20070717-3.html

 
At 10/29/2008 1:35 AM, Anonymous Anonymous said...

"Your reasoning shows the same lack of sense that your not knowing the number of days in a typical year does."

That's it goof. Take a typo and turn it into a major crisis. Goes right along with WMDs. No substance, lots of BS.

 

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