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Special Report
Tax Freedom Day Today
Free, free at last -- but wait till next year (and the years after that)!
Although paying taxes is never fun, there is some good news this year. Americans stopped paying for government before they had to file their taxes. The Tax Foundation figures that "Tax Freedom Day" (TFD) arrived today, April 13. But enjoy your freedom while you can. Today's tsunami of government spending ensures a much higher tax burden in the future.
April 13 is more than two weeks earlier than the recent record of April 30 set in 2007. In fact, TFD hasn't been so low in more than 40 years. The last time we finished paying our taxes -- local, state, and federal -- sooner was 1967, when TFD fell on April 12. The more recent record was set in 2003, after the Bush tax cuts, at April 16.
This is good news, but it has come with a big price tag. First, the drop reflects this year's so-called stimulus bill, which included badly designed tax relief. The legislation relied on credits, deductions, and offsets, intended to micro-manage individual behavior rather than increase incentives to work and invest. This tax package was better than last year's rebate, but only barely. Better to let people spend their own money than not, but the "stimulus" tax provisions did so in a wasteful and inefficient fashion.
Second, the lower tax burden is temporary. Warns the Foundation: "For 2011, both the HR 1 tax cuts and the earlier Bush tax cuts of 2001 and 2003 are set to expire." Unless both houses of Congress and the president agree to extend the Bush tax reductions, Americans will pay far higher taxes starting in 2011. Unfortunately, such an extension can be blocked by any of these three.
Third, the drop in relative taxes paid reflected the impact of the recession that began in late 2007. Tax receipts shrank faster than did the economy, leaving taxpayers relatively better off compared to the government. But federal spending simultaneously exploded. Deficit financing replaced tax collections and much more.
Nor does the average TFD reflect the burden on citizens in high tax states. Connecticut is the worst: Tax Freedom Day will not come there until April 30. New Jersey is number 2 at April 29. New York comes in at number three with April 25. TFD in California is April 20, the fourth latest in the nation.
However, this year more than most, TFD, average or not, does not adequately reflect the burden borne by taxpayers. Spending, whether financed by taxes or borrowing, is the best measure of government's fiscal impact. This year more than a third of government outlays are borrowed funds. Total government expenditures are at record levels. You have to go back to the last two years of World War II to beat this year's spending burden.
Reports the Tax Foundation:
Because of the federal government's ability to deficit-finance its operations, Tax Freedom Day moves somewhat independently from an alternative calculation that adds the federal budget deficit to total taxes collected. In 2009, an unprecedented budget deficit over $1.5 trillion produces a date of May 29, fully forty-five days later than Tax Freedom Day.
If the bailouts and "stimulus" bill were likely to rescue the U.S. economy, then this year's spending level could be dismissed as an unfortunate anomaly. But the prolific bailouts have been unfocused and unconditional. Nor is there any end to the bailout candidates: Wall Street firms, banks, auto companies, auto suppliers, insurers, and more. All told, Congress, the Treasury Department, and the Federal Reserve have spent, lent, and guaranteed some $12.8 trillion, approaching America's annual GDP. The nearly $800 billion approved earlier this year to jump-start the economy was larded with pork, social spending, and other old panaceas from the liberal wish list which have diverted good money to bad uses. Moreover, three quarters of the "stimulus" outlays will occur in 2010 or beyond, when the recovery is expected to be underway. Only $185 billion of $787 billion will be used this year.
Whatever the short-term benefits of this spending explosion, the costs will be bigger and persist far longer. The Congressional Budget Office came to the astounding conclusion:
In contrast to its positive near-term macroeconomic effects, the legislation will reduce output slightly in the long run, CBO estimates. The principal channel for that effect, which would also arise from other proposals to provide short-term economic stimulus by increasing government spending or reducing revenues, is that the law will result in an increase in government debt. To the extent that people hold their wealth as government bonds rather than in a form that can be used to finance private investment, the increased debt will tend to reduce the stock of productive private capital. In economic parlance, the debt will "crowd out" private investment.
CBO figures that the legislation is likely to slightly raise the GDP through 2012, have no impact for a couple years, and then reduce economic output starting in 2015. The most optimistic case envisions small increases through 2014 instead of 2012. But the reduction in GDP will be permanent, and will mostly manifest itself in lower salaries -- for workers who will be taxed much more to pay off the government's increased debt. The agency's conclusion has special credibility since CBO is subject to retaliation by the Democratic congressional majority for criticizing the party's economic centerpiece.
Runaway spending ensures that this year's TFD will be dwarfed by future TFDs. Some day someone will have to pay off the debts being run up today. The Obama administration's budget figures are bad enough, but they almost certainly rest upon unrealistic economic expectations. The CBO again offers a sobering analysis: "CBO's estimates of deficits under the President's budget exceed those anticipated by the administration by $2.3 trillion over the 2010-2019 period."
The agency's bottom line is even more astonishing. CBO reports that "the President's proposals would add $4.8 trillion to the baseline deficits over the 2010-2019 period," leading to a deficit of $1.8 trillion in 2009 (compared to the Tax Foundation's $1.5 trillion assumption) and $1.4 trillion next year. Moreover, "The cumulative deficit from 2010 to 2019 under the President's proposals would total $9.3 trillion, compared with a cumulative deficit of $4.4 trillion projected under the current-law assumptions embodied in CBO's baseline. Debt held by the public would rise, from 41 percent of GDP in 2008 to 57 percent in 2009 and then to 82 percent of GDP by 2019." Congress trimmed a bit from the president's proposals when it approved the budget in early April, but actual federal spending almost always ends up far higher than initially projected.
About the Author
Doug Bandow is a Senior Fellow at the Cato Institute and the Senior Fellow in International Religious Persecution at the Institute on Religion and Public Policy. A former Special Assistant to President Ronald Reagan, he is author of Beyond Good Intentions: A Biblical View of Politics (Crossway).
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Pingback| 4.13.09 @ 7:47AM
Tax Freedom Day Today - American Spectator | Fizyka links to this page. Here’s an excerpt:
SLG| 4.13.09 @ 7:56AM
Just curious, is there a Libertarian site anyone might suggest? As several others have suggested in previous remarks, I am afraid I don't feel fully comfortable when surrounded by those who seem so adament about stemcells, Gay-marriage and anti-abortion measures. Not only is the zeal with which they state their case against "choice," for example so repugnant, but, I can't help but wonder where the libertarian types hangout, without the fear of browbeating and lectures as to how unfeeling they are.
Is there a more open, live-and-let-live, libertarian place with a similar format?
Thank you.
Melvin| 4.13.09 @ 8:02AM
Good intentions will not achieve the required results. My posts have been consistently not in favor of these tea parties that have sprung up all over the Country, because they will achieve nothing but provide amusement to our elected corrupt government Representatives.
Politicians are afraid of two things, loss of their office and loss of tax revenue.
Kicking these homesteaders out of office stands about as much chance as winning the lottery, but there is one thing that we as productive citizens have, and that is our ability to work and produce tax monies that are sent in monthly to our federal government.
Whose to say that the productive citizens and businesses conduct a national strike? This is the one thing that the tax payers still have in our favor, and the loss of tax revenue will have a profound effect on local, state and the federal government officials because this will get their attention and get it quick.
What these Tea Parties can do, is become a National coordination effort to coordinate the producing element of this Nation to conduct a national strike at the most effective time and maximize it for maximum impact.
If businesses and citizens join in on this National Strike and be willing to endure the sacrifice and hardship that will come with it, we can and will get our elected officials attention, because tax monies is like crack cocaine to politicians because if the tax supply line stops where is the polticians going to get their fix. There is only one place and that place is the productive citizens of this country from the sweat off our backs and once again prove to Washington D.C. we control the money and not them.
Big J| 4.13.09 @ 8:45AM
Melvin,
The last part of your post contradicts the first. The former being the purpose of the tea parties. Consensus and coordination has to start somewhere. Americans have been asleep at the wheel for far too long, and they are waking up. Ever heard of going Galt? That's where the productive members of this society are headed, if our government doesn't change it's looting ways. Consider April 15th their last chance to listen to the productive voices of reason. All Americans have a tipping point. You are witnessing it right now.
Hope to see you at one Wednesday.
Melvin| 4.13.09 @ 9:25AM
Big J I hope your right, and I hope that this movement doesn't burn out like the Fair Tax did, even though the Fair Tax is a outstanding idea. But in order for the Fair Tax to work we need to change the status quo in Washington D.C.
Pingback| 4.13.09 @ 4:03PM
Happy Tax Freeom Day! « Soo Tea Party links to this page. Here’s an excerpt:
Bernie| 4.13.09 @ 6:34PM
I knew a libertarian once...he ran for office in our city on the Libertarian ticket. He lived in our development and ranted and raged over the homes association fees he had to pay for services such as lawn mowing, snow removal, and pool upkeep. Pool upkeep drove him crazy because he insisted he never used the pool and only those who used it should pay for its upkeep. After years of rancor with the rest of us who agreed to self-tax ourselves for minimal services, he finally moved out....using as major selling points our amenities of lawn mowing, snow removal, but especially pool upkeep. This is my understanding of who libertarians are: Really contrarians at heart who make life miserable for those of us who agree that some taxation is necessary for a decent quality of life. I do not "enjoy" paying taxes, but I do appreciate having decent schools, bridges and roads, police and fire, safe neighborhoods etc. Now that we finally have an administration in place that will be an advocate for the 95% of us who actually are paying quite high taxes compared to that top 5%, I'm optimistic for the first time in years.
Tripp| 4.13.09 @ 6:41PM
SLG, i'm an ardent libertarian but love TAC and NR as well- however, I do enjoy two libertarian sources of material in particular. These are Reason Magazine, and the Cato Institute's site (the author's employer). Great supplementary material for the thinking conservative. If you like to venture into the weird/outdated/spacey esoterica of the "old right" you could check out the American Conservative, originally thought of by Pat Buchanan but strays away from his (correct) viewpoints quite often, particularly in its harsh criticism of Israel.
Happy hunting!
TS| 4.13.09 @ 8:46PM
Melvin : You are 100% correct...!!!! I have preached this scenario for 20 years.. The biggest obstacle is getting enough people to actually do what needs to be done. Most people live day to day... food, fuel, coffee, atm machine , etc...
People need to realize that the only one looking out for them and their families are themselves...
Personal responsibility.... What an original concept...!
If you had enough of the populace completely stop all consumption for 1 week, it would grind everything to a halt... Let's get started... I 'll be right beside you Melvin... ! Thanks for your service....!!
Bilwick| 4.14.09 @ 11:53AM
I saw a book written by a "liberal" (I forget the title but it was one of a flurry of books that came out during the Bush years that might be grouped under the genre "Der Staat Strikes Back, " and the titles of the books might have all been: "Getting the Tax Serfs to Shut Up: Reclaiming our Power), and there was a section that ridiculed the very notion of "Tax Freedom Day." The argument was kind of convoluted, as I recall, but the basic argument seemed to boil down to the punch-line of a famous NEW YORKER cartoon. The cartoon showed a forlorn-looking shlub sitting in an IRS office, obviously being audited, while the auditor tries to cheer him up. The caption was something like: "It helps, Mr. Jones, if you stop thinking of it as your money."
That's pretty much what coercive redistributionism comes down to. Right, Bernie?
Don DeVan| 4.14.09 @ 4:20PM
THE FREEDOM MANIFESTO
I just read an article in Politico on the agenda of MoveOn.org, which explains their new agenda, now that the most liberal politician in our history has been elected President. Got me thinking of what it would look like if the "right" would - hypothetically speaking, of course - develop a plan to resist MoveOn, Obama and the age of huge (hot just big) government. These people at MoveOn did not wait for politicians in Washington to step up to their agenda - they stepped up to the politicians and said "you are going to do this, or else." We Christians and Conservatives, likewise cannot continue to howl and fuss at Republicans who do not fight for the Founding Principles upon which our nation was founded. If MoveOn and the Daily Kos can do it, so can we. And we must. The attack plan below to restore Constitutional government, is just a start but should include: 1.Begin to establish the groundwork for a boycott of the federal income tax. This will require employers to defy a federal mandate to withhold taxes from paychecks. Do they have the courage to do this? What would Patrick Henry do? If you no longer feel the federal government is operating within the confines of the Constitution, you have a moral obligation to become a conscientious objector and simply say NO to the payment of taxes to Washington. Does the Constitution give the Feds the right to bail out labor unions and give non-citizens rights and benefits? If you feel that by doing so, our sovereignty, Constitution and Bill of Rights are null and void then so is any responsibility you may have had for taxes under the 16th Amendment.
2. Begin a vigorous campaign to urge the public to home-school and/or send their children to private schools, with or without vouchers. Then begin a major program to build a private, non-union school system. This is the only way we will crack the huge union dominated government school bureaucracy. 3. Begin to use the legal system to fight big government. If the ACLU can do it, why can't we? We must begin to bring suit on every issue that threatens our nation's original freedoms and traditions. We should call our organization the MFMT which stands for Maximum Freedom, Minimum Taxation, which sums up why we fought for independence in the first place. 4. We begin a systematic march on the media, especially television. TV is the medium through which the liberal agenda is being implemented. The left learned long ago that a picture is worth a thousand words and the best example of this is the pictures of bodies of dead soldiers they broadcast every time we are in a war they do not approve of (usually when a Republican is leading it!). Holding pro-America, Republican rallies at local TV stations would be a great start - especially if the liberals re-implement the "Fairness" Doctrine. 5. Boycott employers who advertise on far left liberal media outlets like NBC. No patriotic American should buy a General Electric household product as long as Matthews, Olbermann and their ilk are permitted to spew their anti-Republican, anti-American hatred. 6. Expose the controlling roll that unions play in growing a totalitarian media/government complex. 7. Establish an underground network of physicians and health care providers that will fight to preserve private sector medicine. 8. Establish Committees of Correspondence and Safety to provide communications and security - just as our Founding Fathers did. 9. Join the NRA.
These are just a few of the actions that are necessary to first stop and then roll back the liberal juggernaut that threatens our basic freedoms and liberty. Patrick Henry said "give me liberty or give me death." It is not too late for us to make that same commitment; in fact it is just in time.
"Guard with jealous attention the public liberty. Suspect every one who approaches that jewel. Unfortunately, nothing will preserve it but downright force. Whenever you give up that force, you are inevitably ruined."
--Patrick Henry, speech in the Virginia Ratifying Convention, 5 June 1778
TALK IS CHEAP. WHEN DO WE MARCH ON THE MEDIA?
http://www.resistnet.com/ http://www.teapartyday.com/Locations.aspx http://www.smartgirlpolitics.org/
Patrick Henry| 4.14.09 @ 8:15PM
Tax Foe Who Ran for California Governor Admits Evasion, Gets 3-Year Term
When he was a Republican candidate for governor in 2002, George "Nick" Jesson brashly campaigned in red, white and blue attire on a platform that taxes were unconstitutional and easily skirted. On Monday, in a wheelchair and wearing an inmate's jumpsuit, Jesson pleaded guilty in a Santa Ana courtroom to state tax evasion charges.
The admission of guilt to three felony counts of filing false tax returns from 1997 through 1999 resulted in a sentence of three years in prison.
Because he had already pleaded guilty to federal charges of tax evasion in April, he will serve the new sentence concurrently with his 27-month federal prison term.
Jesson's attorney, Michael Ware, said the legal problems that dogged his client since the campaign statements caught the attention of tax authorities had left the businessman financially broken and possibly unable to pay restitution, expected by prosecutors to exceed $238,000.
"Obviously, he's devastated," Ware said.
His wife, Trina, is charged with four felony counts of filing false tax returns and faces seven years in state prison if convicted on all charges.
She will be back in court Aug. 11 to appear before Superior Court Judge Francisco P. Briseno, the same jurist who sentenced her husband.
During Jesson's campaign for governor, the 55-year-old from Fountain Valley took out an advertisement in USA Today to announce that he had stopped withholding taxes for the employees of his multimillion-dollar electronics businesses. The reason, he said, was that the government had no authority to demand the money.
Jesson received 1% of the vote in the Republican primary.
Since that time, his businesses have collapsed and his attorney said Jesson has developed debilitating back pain that requires him to use a wheelchair.
Still, Ware said, "he is a very resilient individual. He is also a very patriotic individual and believes very strongly in this country. His disagreement with taxing authorities is as American as apple pie."
By Garrett Therolf LATimes / July 25, 2006
Pingback| 4.25.09 @ 7:12AM
Doug Bandow » Blog Archive » Tax Unfreedom Day links to this page. Here’s an excerpt:
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poptropica | 4.9.10 @ 11:39PM
I’ll have a Poptropica full written walkthrough very soon, but in the meantime, here are some answers to some of the frequently asked questions about Mythology Island. Having trouble? Post a question in the comments and I’ll try to answer it!
Getting Hercules to Help You Poptropica
Hercules won’t help you until you have all five items from Zeus’ quest. Once you have the five items, bring them to Athena. Zeus will appear and steal them. The big jerk! Once this happens, talk to Athena and she will tell you that Hercules will help you. You’ll need to have the magic mirror from Aphrodite because Hercules doesn’t want to have to walk. He’s so lazy!
Getting the Hydra Scale poptropica
You can see how to do this in the videos, but basically you need to jump up when the Hydra is about to strike. He will rear one of his heads back to attack and his eyes will bulge out. poptropica
When this happens, jump up in the air and then try to land on top of his head. That head will get knocked out. When all five heads get knocked out, the Hydra will be asleep and you can click on him to get one of the scales. poptropica
I’ll have a full written walkthrough very soon, but in the meantime, here are some answers to some of the frequently asked questions about Mythology Island. Having trouble? Post a question in the comments and I’ll try to answer it!poptropica
Getting Hercules to Help You
Hercules won’t help you until you have all five items from Zeus’ quest. poptropica
Once you have the five items, bring them to Athena. Zeus will appear and steal them. The big jerk! Once this happens, talk to Athena and she will tell you that Hercules will help you.poptropica
. You’ll need to have the magic mirror from Aphrodite because Hercules doesn’t want to have to walk. He’s so lazy!
Getting the Hydra Scale