Chart Of The Day: Truth About Taxes Edition
This chart from a Felix Salmon column in December is worth considering:
This chart should be ingrained in the mind of anybody who cares about fiscal policy. The main things to note:
- Federal taxes are the lowest in 60 years, which gives you a pretty good idea of why America’s long-term debt ratios are a big problem. If the taxes reverted to somewhere near their historical mean, the problem would be solved at a stroke.
- Income taxes, in particular, both personal and corporate, are low and falling. That trend is not sustainable.
- Employment taxes, by contrast—the regressive bit of the fiscal structure—are bearing a large and increasing share of the brunt. Any time that somebody starts complaining about how the poor don’t pay income tax, point them to this chart. Income taxes are just one part of the pie, and everybody with a job pays employment taxes.
One thing to note is that the share of estate taxes above reflects a period when the estate tax was zero. That ended on December 31, 2010.