Top Ten Tax Facts

This piece is the fifth in a six-part series on taxation, and a joint project by The American Prospect and its publishing partner, Demos.

1. The government has collected less in taxes as a proportion of the economy in the past three years than it has in any three-year period since World War II, and tax rates are at historic lows.

2. One out of three multi-millionaires pays a lower percentage of their income in taxes than the vast majority of people making $60,000 a year.

3. Chairman Paul Ryan’s budget proposal, which has been praised by Governor Romney, would deliver benefits to people with incomes over $1 million that are 10 times greater than the benefits to those earning $40,000 or less.

4. Corporate income taxes for the past three years have hovered at just over 1 percent of GDP, lower than for any three-year period since World War II. The average for OECD countries is 3.5 percent. 

5. The Bush tax cuts added $1.7 trillion to the nation’s debt between 2001 and 2008, which is more than it would cost to send 25 million kids to four-year public universities.

6. America has a revenue problem, not a spending problem. It is only because of the Bush tax cuts that our national debt is rising. If not for those cuts, our debt would be stabilized at under 60 percent of GDP.  

7. General Electric, which reported over $4 billion in US profits in 2010, paid ZERO taxes. 

8. A financial speculation tax of only 0.50 percent on financial trades could raise up to $170 billion annually.

9. Upper income households save an average of $5,500 thanks to the mortgage interest tax deduction whereas families earning between $40,000 and $75,000 save only $500.

10. Only two OECD nations collect less revenue as a percentage of GDP than the United States—Chile and Mexico.

Read the rest

Part 1: Washington, We Have a Revenue Problem
Part 2: Making State and Local Taxes Fair Game
Part 3: Taxing Wall Street Speculation
Part 4: Read My Lips: Fairer Taxes
Part 5: With Corporate Taxes, Less Is More

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I'm getting killed under the current code. If something isn't done quick, I'm gonna have to start doing this to get dates:

0.5% is a very large transaction tax. That's more than a well managed index fund charges in management fees for an entire year. The cost of it will essentially mean that many people are locked into their investment accounts, and that changing IRA or 401(k) providers would be incredibly costly.

For example, if you have $150,000 in a Roth IRA, and you want to move it from one provider to another, that's a $1500 tax ($750 to take it out, and another $750 to put it back in). If you want to change providers from someone charging a .5% annual fee to one charging a .3% annual fee, it would take 5 years to recover the cost of the switch. And good luck finding a .3% annual fee anymore when even if you NEVER rebalance your portfolio it costs .5% to get your money invested.

A transaction tax is not crazy, but 1/2% per transaction is incredibly high. It will mean serious harm to people who are trying to save for retirement.

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