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The Tax and Spend Spectator
Happy New Tax Freedom Day
In our debt-ravaged country, Cost of Government Day actually falls much later in the year than it seems.
Tax Freedom Day is long past. Americans supposedly finished paying for government on April 12.
But not really.
Taxes once reflected the cost of government. No longer. This year Uncle Sam is borrowing 40 percent of the money necessary to fund federal operations. Regulation imposes a separate quasi-tax on the American people.
As a result, Americans don’t actually stop paying for government this year until today, August 12. That’s 224 days representing more than 61 percent of national income. Americans for Tax Reform’s latest Cost of Government Day report, by Jacob Feldman, makes for a depressing read.
COGD actually falls two days earlier this year. Alas, noted Feldman, the “estimates are premised upon CBO’s ambitious 2011 calendar year estimate of 3.7 percent GDP growth. CBO numbers may overestimate annual growth,” which means “the estimate in this report may significantly underestimate the real cost of government for 2011.”
Moreover, COGD still falls far later than just three years ago, when it was only July 18. Worse, explained Feldman, “the average American will have to work an additional 41 days to pay off his or her share of the cost of government compared to ten years ago in 2001, when COGD was July 2.” COGD jumped by an incredible full month between 2008 and 2009, when Congress was spending money on anything and everything in the name of “stimulating” the economy. (Sadly, it hasn’t worked particularly well — just look at the last unemployment report).
Indeed, the Obama era, to which Republican George W. Bush contributed, is a fiscal tragedy. Given President Barack Obama’s druthers, Washington will be permanently enlarged. He hasn’t even finished his first term, but he already has made his mark. Wrote Feldman: “the three years of the Obama Administration have been three record-setting years of federal government regulation and spending — a 21.78 percent increase relative to the average size of the federal government between 1977 and 2008.”
The problem is not just outlays but debt. From 2009 to 2011 Uncle Sam ran up the largest deficits in history. Moreover, wrote Feldman, “These spending sprees constitute the largest deficits as a percentage of GDP since World War II. In the past three years alone federal debt has increased by nearly 80 percent, compared to an increase of 25 percent over both terms of the previous Administration. Debt now stands at its highest level since 1950.”
And it’s going to get worse. Much worse. Never mind the recent budget deal, which does not cut expenditures — in fact, federal spending and borrowing will continue to increase. Observed Feldman, “The two-day decrease of the 2011 COGD is only a temporary fall before projections of increased future spending.” ObamaCare alone is likely to “add $2.3 trillion to COGD over its first decade,” he warned. So much for health care “reform,” which bent the cost curve up, not down.
Entitlements, which are driving federal spending ever upward, remain untouched. Military spending may be cut some or not at all. And there are more domestic bail-outs to come. For instance, Standard & Poor’s just downgraded the debt of Fannie Mae and Freddie Mac, which continue to lose money.
Anyway, no current Congress can bind a future Congress. The Standard & Poor’s rating downgrade for federal debt offers a dramatic warning to Americans, one which past experience suggests is likely to go unheeded.
Unfortunately, Americans are not getting their money’s worth from all they are paying for government. Spending is the most important component of the COGD, which accounts for 147 days of labor. Regulation runs another 77 days — a roughly 50 percent surtax on top of government outlays.
The biggest single cost is federal spending, which consumes 103 days of Americans’ lives. People are working well into April to pay for all of the “benefits” graciously bestowed by Uncle Sam. This figure edges up again every time a new interest group shows up to lobby in Washington.
Of course, after negotiation of the latest budget deal the lobbyists became more active than ever. The ink was barely dry on the accord when the New York Times published an article entitled: “Jockeying Anew in Congress In Next Budget Fight Phase: A Panel in the Making, and a Swarm of Lobbyists.” The Washington Post entitled an article published on the same day “Defense, Health-Care Lobbyists Prepare to Go On the Offensive.” All that matters in Washington is protecting the spenders from the taxpayers.
The second biggest expense is federal regulation, which accounts for 50 days — almost two months of the average Americans’ life. (This assessment only includes compliance costs. Lost economic output, the so-called “deadweight” economic loss, is not counted, and would raise costs dramatically).
About the Author
Doug Bandow is a senior fellow at the Cato Institute. A former Special Assistant to President Ronald Reagan, he is the author and editor of several books, including The Politics of Plunder: Misgovernment in Washington (Transaction).
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Petronius| 8.12.11 @ 9:51AM
One more year like this one and COGD will be New Years Eve. Nobody pays the slightest attention to this because it isn't palpable. And the sheeple won't come around until they can't afford any presents under the tree the week before. They're also the ones who believe government is Santa Claus.
massmile | 8.12.11 @ 1:22PM
The second biggest expense is federal regulation, which accounts for 50 days -- almost two months of the average Americans' life. (This assessment only includes compliance costs.
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Oldefarte| 8.12.11 @ 2:39PM
'.....All Six Dems on Budget Committee Flunk Tax Test
Friday, August 12, 2011 11:41 AM
By: Tom O'Connell
Each of the six Democrats sitting on the bipartisan congressional committee tasked with cutting spending by $1.5 billion over the next decade received a grade of “F” for their voting records from the National Taxpayers Union, reports CNSNews.com.
Those lawmakers who failed the group’s tax test are Rep. James E. Clyburn of South Carolina, Rep. Xavier Becerra of California, Rep. Chris Van Hollen of Maryland, Sen. Patty Murray of Washington, Sen. John Kerry of Massachusetts, and Sen. Max Baucus of Montana.
The nonpartisan organization flunks and labels as “Big Spender” those lawmakers who score 20 percent or less in its rating system. Those scoring at least 90 percent are graded “A” and named a “Taxpayers’ Friend.” Scores are based on how they voted on budget-slashing legislation.
Clyburn received the lowest score, voting just 2 percent of the time to cut spending. His Republican counterpart on the committee, Sen. Jon Kyl of Arizona, scored highest, voting on cuts 97 percent of the time.
The committee is made up of six Senate and six House members from both parties....'
Mimi| 8.12.11 @ 5:27PM
O.F. ......Thanks for the info...How on earth do you get it! This looks like Grid Lock for sure!
More ill will to the country from Ried and Pelosi...You think they would want to stop the HARM...this makes it worse...Like Newt Says a waste of 4 months time, and more tragic the Defense dept is on the LINE! Looks like more of the SAME-OLD! Every time it looks like Maybe some hope ...The destroyers show up with more GAMES! Pitiful!
Lord Karth| 8.12.11 @ 3:49PM
Factor in the costs of local and provincial government, and things just get worse. If you live in Illinois, you're probably not done till Labor Day.
If you live in California, Columbus Day.
If you live in upstate New York province, you're likely not done till October 15th.
If you are so unfortunate as to live in New York City, try Halloween.
Your servant,
Lord Karth
Pat| 8.12.11 @ 5:32PM
Us Americans have many special “Days” set aside for this or that national celebration – but Tax Freedom Day isn’t one of them. It should be though - but a major impediment to national recognition is the greeting card companies, until they’re on board this very special day won’t receive its just desserts. Valentine’s Day, Mothers’ Day and Fathers’ Day – all special days which weren’t worth spit, or even noticed, until Hallmark and FTD got involved.
When the FTD folks will deliver a dead duck or a fatted pig to the White House kitchen in your name, Tax Freedom Day has no meaning outside of disgruntled taxpayers. And don’t forget your local Congressperson. If you have any after-tax wealth left, buy your Elected Sweetie a 1,000 lb. pork belly contract on the Chicago exchange, but not for commodity trading purposes, rather for actual delivery to their driveway. If you’re one of us poverty stricken taxpayers, nothing says “I Love You” like a dead sow’s ear from your local butcher shop carrying a large “X” drawn in black Magic Marker – a marked pig’s ear, he or she will get the message – or maybe their aide or their intern will catch your “earmark” drift and explain your meaning.
And Hallmark should develop a line of Tax Freedom Day cards, both the plain vanilla kind and those newer cards with the singing microchip. No one comes up with catchy phrases better than those Hallmark writers – no one. “Roses are Red, Violets are Blue, Our Taxes are High, We Blame It on You” is merely a crude example of sincere and loving words we should include in our next Tax Freedom Day greeting card to Obama. Or, the song “Living in America” with the lyrics changed to “Starving in America” could be encoded on the card’s microchip – and don’t forget correct postage is required by our taxpayer subsidized US Postal Service. Please Hallmark and FTD – America needs your support.
Appleby| 8.13.11 @ 1:31PM
Eliminate withholding; make everyone pay their taxes in cash on April 15.
Move Election Day to April 16.
Problem Solved.
POST American| 8.13.11 @ 12:21AM
-----Great piece!
BTW --speaking of finance, the costs of
rampant USURY and the ever looming,
ever unmentioned Globalist RED China
TREASON OP -----again, BEWARE the
Fabian Murdoch FOX News op.
Take note how they've buried not onlythe John Wheeler murder, or the ever more HAARP-esque Fukishima world DEPOP OP
----BUT
how they leak in RED China 'values' with the
likes of Soros sideman, the 'Jolly' Jim Rogers
on FOX Biz.
------PERFECT sap op for the takedown.
-----------------------PERFECT!-------------------------