Three Cheers for Tax Day!

Around this time every year, people start making all kinds of ideologically motivated claims about taxes. So I thought it might be worthwhile to diffuse a few myths. Let's get right to it:

We're taxed to death! Well, no. In fact, when you look at American tax rates compared to those of other countries, we have extremely low taxes. This graph, using data from the Organization for Economic Co-operation and Development, shows that among industrialized countries, we rank near the bottom in taxes paid. It's a little hard to see, but the U.S. is over there on the right, with only the Japanese, Turkish, and Mexicans paying less in taxes than us:

Tax rates 2.JPG

But the hard-working rich are paying all the taxes! Again, no. The rich pay much more in federal income taxes, which are actually progressive. But federal income taxes are only one of the many taxes we pay. Add in payroll taxes, sales taxes, excise taxes, and property taxes, and you get a very different picture, one in which the poor pay a little less, but once you move into the middle class, every income group pays about the same proportion in taxes. The good folks at Citizens for Tax Justice made a picture:

Tax rates 1.JPG

But Barack Obama is killing us with his taxes! Wrong. In fact, through the stimulus bill, Obama cut, repeat, cut taxes for 98 percent of working families. While the health-care bill includes some tax increases on the wealthy, those haven't taken effect yet, and won't affect most Americans. But most Americans have already gotten their Obama tax cuts. Here's how much they got, again courtesy of CTJ:

Tax cuts.JPG

So to sum up: Americans pay much less in taxes than citizens of similar countries; people at all income levels pay about the same amount in taxes, except for the poor who pay slightly less; and Obama cut your taxes.

But there's one other thing to keep in mind on tax day: Your tax dollars buy stuff. Some of it is stuff you may not like, but a lot of it is stuff you like a lot. Like police, and firefighters, and roads, and bridges, and schools, and food inspectors, and health care for your grandmother, and veterans' benefits, and cancer research, and all the other stuff that makes us a civilized society and gives the future an opportunity to be better than the past. So instead of grumbling on tax day, why not take the opportunity to say, "This is a day to celebrate. I am a proud American, and I'm doing my part."

-- Paul Waldman

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