Tax and Spend

Democrats who supported Obamacare now want to delay its medical device tax.

Contrary to what the media tells us, Americans don't support higher taxes on anybody.

"You might believe that the Democrats and mainstream media are right, according to public opinion polling. Just one example, a recent ABC News/Washington Post poll, found that 60 percent of respondents support increasing taxes on incomes more than $250,000 a year, including a meaningful 39 percent of Republicans. It is seemingly hard to argue with that.However, when you ask the public what the top tax rate should be, you get a completely different picture of reality.
In a survey conducted by The Hill in February, 61 percent of likely voters said the top tax rate should be 25 percent or less, a rate that is substantially lower than the present top rate, demonstrating majority support for lowering taxes below what they are today. Fully 88 percent said the top rate should be at the current 35 percent, or less. Only 4 percent supported a top tax rate of 40 percent, which is closest to the proposal of President Barack Obama and congressional Democrats to increase the top rate to 39.6 percent."

It would be nice if this info made it to the people. The only reason the people don't know this info is Republicans don't want them to know it.

US taxes are much higher than people think.

"Taking into account all taxes on earnings and consumer spending—including federal, state and local income taxes, Social Security and Medicare payroll taxes, excise taxes, and state and local sales taxes—Edward Prescott has shown (especially in the Quarterly Review of the Federal Reserve Bank of Minneapolis, 2004) that the U.S. average marginal effective tax rate is around 40%. This means that if the average worker earns $100 from additional output, he will be able to consume only an additional $60."

Ouch.

"High tax rates—on both labor income and consumption—reduce the incentive to work by making consumption more expensive relative to leisure, for example. The incentive to produce goods for the market is particularly depressed when tax revenue is returned to households either as government transfers or transfers-in-kind—such as public schooling, police and fire protection, food stamps, and health care—that substitute for private consumption.In the 1950s, when European tax rates were low, many Western Europeans, including the French and the Germans, worked more hours per capita than did Americans. Over time, tax rates that affect earnings and consumption rose substantially in much of Western Europe. Over the decades, these have accounted for much of the nearly 30% decline in work hours in several European countries—to 1,000 hours per adult per year today from around 1,400 in the 1950s.
Changes in tax rates are also important in accounting for the increase in the number of hours worked in the Netherlands in the late 1980s, following the enactment of lower marginal income-tax rates.
In Japan, the tax rate on earnings and consumption is about the same as it is in the U.S., and the average Japanese worker in 2007 (the last nonrecession year) worked 1,363 hours—or about the same as the 1,336 worked by the average American.
All this has major implications for the U.S. Consider California, which just enacted higher rates of income and sales tax. The top California income-tax rate will be 13.3%, and the top sales-tax rate in some areas may rise as high as 10%. Combine these state taxes with a top combined federal rate of 44%, plus federal excise taxes, and the combined marginal tax rate for the highest California earners is likely to be around 60%—as high as in France, Germany and Italy."

That's nuts.

Nice analysis shows that no level of taxes can fund government spending.

"Thus, a 100% confiscation of all income of those making more than $10 million would amount to less than 24 days of federal spending."
"Confiscating 100% of all income from those who made over $1M funds the federal government for 72 days."
"Confiscating 100% of the income from those who made more than $200K funds the federal government for only about six months."
"The data indicate that 17,446,537 tax returns showed an income over $100,000.  These returns represented a total income of $3.765 trillion.Estimated 2012 spending comes in at $3.796 trillion (refer to page 205 here).  This is still $30 billion more than a 100% confiscation of the annual income of all Americans that reported more than $100K of income for 2009."

It's the spending, stupid.