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Total Taxes Lowest in 60 Years

Even though people keep complaining that taxes are too high, USA Today analyzed publically available information and concluded that total taxes — including income taxes, property taxes, sales taxes and all other taxes — are now lower than they have been since 1950. Currently, everyone, on average, pays 9.2% of their income in taxes of one kind or another. In fact, the total tax rate has fallen 26% in the last three years.

Why? They point out several reasons: Obama’s Stimulus Bill reduced income taxes for all but the very richest Americans, but Obama cannot claim all the credit. The severe recession also reduced taxes paid — if you don’t have a job, you probably aren’t paying much in income taxes. In addition, if you don’t have money, you aren’t buying expensive things, so you aren’t paying much in sales taxes.

But I think it is a mistake to claim that the low taxes are only a fluke caused by the recession. After all, total taxes paid are going down as a percentage of income, which means that taxes fell faster than people’s incomes fell. Some of this is due to our progressive income tax system, where the less money you earn, the smaller percentage of that income is paid in taxes. So as people’s incomes went down, they fell into lower tax brackets.

Regardless of the cause, if you are one of those people who think taxes have been going up and up, you’re just wrong.



  1. Sammy wrote:

    According to the article, Social Security/Medicare payments are not classified as taxes, and I guess that makes sense, considering there is a benefit payout at some point, assuming one lives long enough to be able to take advantage of it. My total tax bite for 2009, if SS/Med are excluded, was exactly 9.57%. My state has no income tax, so I keep all sales tax records. And that is on income that is in the upper end of the middle region of the middle class.

    Wednesday, May 12, 2010 at 10:31 am | Permalink
  2. Sammy wrote:

    Scratch that. I didn’t figure in gasoline taxes. That bumps the number to a hair over 10%.

    Wednesday, May 12, 2010 at 10:40 am | Permalink
  3. Iron Knee wrote:

    One thing I’m sure isn’t included in these numbers is the shift to usage fees — fees to camp in national forests and things like that — which used to be free or less expensive.

    Wednesday, May 12, 2010 at 7:51 pm | Permalink