Jim Cason / Friends Committee on National Legislation & Benjamin Powell / The Independent & The Huffington Post – 2013-04-16 02:21:27
WASHINGTON, DC (April 15, 2013) — If the question is where more than one-third of all your tax dollars go, then war is the answer.
Today, our federal income taxes are due. For every tax dollar we pay, 37 cents go toward Pentagon spending for current and past wars.
Tax day provides a great opportunity for all of us to talk about what our nation could be spending that money on instead of war. What about investing in education to train a 21st century workforce, spending money on diplomacy to prevent future wars or providing adequate money to help the nearly 100 million people living in or near poverty?
Changing the balance of the federal budget wonâ€™t happen overnight, but it is happening. Already, members of Congress have agreed to cut about half of the $1 trillion the Pentagon was planning to spend in the next 10 years â€“ cuts that even a few years ago would have been unthinkable for Congress to accept. Your steady, patient advocacy helped make this happen.
Now help keep up the momentum for change. Please write a letter to the editor to let others in your community know where their tax dollars are going. Encourage them to contact their members of Congress to support cuts to Pentagon spending.
War should not be the answer to where the biggest chunk of our federal income tax dollars goes.
Jim Cason is Associate Executive Secretary for Strategic Advocacy
Happy Tax Freedom Day?
Benjamin Powell / The Independent & The Huffington Post
(April 15, 2013) — We’ve all heard politicians argue about whether the government has a “revenue problem” or a “spending problem” as the debates about the fiscal cliff and sequestration have transpired over the past several months. Let me be clear: The US government has a spending problem, not a revenue problem.
On April 15, Uncle Sam will collect. The average American has worked since Jan. 1 to meet his or her tax burden.
Graciously, we the taxpayers are granted a temporary reprieve each year, otherwise known as National Tax Freedom Day.
The Tax Foundation calculates a tax freedom day each year. It’s the day that “the nation as a whole has earned enough money to pay its total tax bill for the year.” National Tax Freedom Day comes just a few days behind our deadline to pay up, with the exception of Texas, where residents have a lower average state and local tax burden and therefore keep an extra eight days of earnings. Tax Freedom Day for Texans began on April 10.
Obviously, National Tax Freedom Day does not mean that we stop paying taxes that day. Tax burdens also vary tremendously across individuals, resulting in different individualized tax freedom days. But the Tax Foundation’s calculations help put our overall tax burden into perspective.
As a nation, we’ll pay $2.76 trillion in federal taxes and another $1.46 trillion in state and local taxes. That equals 29.4 percent of all of the income US citizens will earn this year. April 18 is 29.4 percent of the way through the year.
It’s easy to lose sight of our massive tax burden in our day-to-day affairs. The Independent Institute’s Government Cost Calculator helps to personalize the costs to associate these numbers with the real-life sacrifices Americans must make to meet our commitments to Uncle Sam. The most substantial tax, the income tax, is withheld from most American’s paychecks, so we never “feel” the loss of the income.
Other taxes are buried in our day-to-day purchases. Sure, we note sales taxes and meals taxes added to our bills. But each individual payment is small. Less obvious might be gasoline taxes, a myriad of utility taxes and “sin taxes.” The list could go on and on.
The Tax Foundation and the Government Cost Calculator’s work provides needed perspective on how all these taxes add up. For example, it takes Texans approximately 100 days every year to have earned enough income to pay all of these taxes.
On average, Americans nationwide will work 40 days just to pay their income tax, another 25 days for payroll taxes, 15 days for excise taxes, and 12 days for property taxes. Overall, Americans will spend more on taxes than on food, housing, and clothing combined this year.
These calculations understate the government’s fiscal burden, because the government issues debt to finance spending in excess of its tax revenues. Government debt is just a tax burden pushed into the future — if you believe it will be paid back. Tax Freedom Day arrives later, when we account for the burden of the deficit.
National Tax Freedom Day, when the deficit is included, has occurred later over the last few years than at any time in our history, except during World War II. Tax Freedom Day would be pushed back nearly a month if the government were to try to cure the deficit by raising taxes. The result would be a tax freedom day that is more than 20 days later than at any other time in US history.
To entirely eliminate the deficit, inflation-adjusted spending levels would have to fall to roughly the level of spending during President Clinton’s last years in office. That is hardly a return to an era of “small government.” Though, if I had my druthers, I’d like to see National Tax Freedom Day in January.
Benjamin Powell is a Senior Fellow at The Independent Institute, Associate professor of economics at Suffolk University, and President of the Association of Private Enterprise Education. Dr. Powell received his Ph.D. in economics from George Mason University. He has been assistant professor of economics at San Jose State University, a fellow with the Mercatus Center’s Global Prosperity Initiative, and a visiting research fellow with the American Institute for Economic Research. Benjamin is also the editor of Housing America: Building out of Crisis.