U.S. taxes & spending: Key facts

Here are somewhat random but indisputable facts on U.S. federal taxes and spending, all of it hyperlinked:

Corporate tax:

·        The U.S. collects less corporate tax relative to the overall economy than almost any other country in the world:  about 1.3 % of GDP in 2010, compared to 5 % in the 1950s.

·        WSJ citing the CBO: Corporate federal taxes paid fell to 12.1 % of profits earned from activities within the U.S. in fiscal 2011, the lowest % since 1972.

·        26 Fortune 500 companies paid no net federal income tax from 2008-2011.

·        WSJ:  More than 60 % of U.S. businesses with profits over $1 million pay zero corporate tax, since they are structured as pass-throughs.

·        Citizens for Tax Justice: From 2008-2010, 280 profitable Fortune 500 companies collectively paid an income tax rate of 18.5 % vs. the statutory 35 % rate, while receiving $223 billion in tax subsidies.  And at least 22 companies used offshore tax havens like the Cayman Islands (like Mitt Romney does).

Individual taxes:

·        CBO:  In 2009, the same year the Tea (Taxed Enough Already) Party was born, Americans paid the lowest average federal tax rate (17.4 %) in 30 years.

·        Bush tax cuts will cost $5.4 trillion if extended in full from 2013-2022. Romney-Ryan claim they will close tax loopholes and broaden the tax base, but repeatedly refuse to give specifics, most recently on FoxNews.

·        DC Johnston/Reuters: Per capita federal tax revenue was 31.5 % less in real terms in 2011 than in 2001, because of the recession but also Bush’s tax cuts.

·        On the “47 % who pay no income tax:”

o   Only about 17 % of households did not pay any federal income tax or payroll tax in 2009, despite the high unemployment and temporary tax cuts; in 2007, it was 14 %.

o   CBO: the poorest fifth of households paid an average of 4 % of income in federal taxes in 2007, the latest year for which these data are available.

·        Institute on Taxation and Economic Policy:  The bottom 20 % of U.S. households pay more of their income in state and local taxes than does the top 1 %.

·        Tax Policy Center: Romney’s tax plan would result in "large tax cuts to high-income households, and increase the tax burdens on middle- and/or lower-income taxpayers."

·        The Estate (“Death”) Tax affects only 0.6 % of Americans whose death would lead to the payment of any estate taxes.  Only 2.7 % of Americans receive an inheritance over $50,000.  However, elimination of the Estate Tax would cost $253 billion from 2012-2022. 

·        David Stockman, Reagan’s director of the OMB, told CNBC: "We couldn't afford those tax cuts back when they were implemented by Bush. We can't afford them now."

  

Spending and deficits:

·        NYT:  Before President Obama even took office, the CBO projected a $1.2 trillion deficit for 2009 and deficits in subsequent years, based on continuing Bush’s spending and tax policies. (The actual deficit in FY 2009 was $1.4 trillion.)

·        NYT: Only 17 percent of the increase in government debt in 2009 and 2010 was because of discretionary spending of any kind, including the stimulus bill.

·        More than 1/3 of the Recovery Act’s (stimulus bill) cost to-date has been for tax credits: $298 billion.

·        PolitiFact:  Growth in government spending under Obama is lower than at any time since President Eisenhower (adjusted for inflation).  Deficits have increased, nevertheless, because of a down economy and resulting lower tax receipts – and the Bush tax cuts.

·        OMB: Contrary to Romney’s claims, defense spending increased under President Obama, from $661 billion in 2009 to $693 billion in 2010 to $705 billion in 2011.

·        GAO:  Interest paid on the federal debt as a percentage of annual federal spending is lower under Obama – 6.4 % in 2011 – that at any time since the 1970s.  And the interest paid on federal debt as a percentage of GDP is at its lowest since WWII.

·        OMB:  As a result of recessionary unemployment, "income security" payments built into our system before Obama took office, such as unemployment insurance, disability pay, food stamps and housing assistance, increased from $431 billion in 2008 to $533 billion in 2009 to $622 billion in 2010 and slightly decreased to $597 billion in 2011. 

·        OMB federal debt figures (p. 140):  2009: $ 11.88 trillion; 2010:  $ 13.53 trillion; 2011: $14.76 trillion. That was a $2.88 trillion increase, or 24 %, over 3 years for President Obama.  Meanwhile, from 2002 to 2009, the federal debt increased from $6.2 trillion to $11.88 trillion.  That was a $5.88 trillion increase, or 91 %, over 8 years for President Bush.

·        Taken together, tax credits in the Recovery Act (stimulus bill) , and the payroll tax reduction for 160 million Americans in 2011 and 2012, both passed by President Obama, gave Americans $298 + $240 billion = $538 billion in tax relief.    

·        The non-partisan Committee For a Responsible Federal Budget projects that, without offsets that Romney’s campaign refuses to explain, his tax plan would increase the federal debt by $2.6 trillion.
·        Non-defense discretionary spending totaled 18 % of the federal budget in 2012. It includes: border control, education, environment, food safety, infrastructure, housing, veterans' healthcare, disaster relief, public safety, scientific research, etc.