Our Changing Globe

The CBO (Congressional Budget Office) just released some very enlightening figures, about who paid how much tax in 2006.

The top 20% of earners paid 70% of all federal taxes.

On average, they paid 26% of their income to the government.

The very the top 1% of taxpayers, who had household incomes of over $332,000, paid 28% of all taxes, which was 31% of their income.

The three groups in the middle of the highest and lowest paid 10, 14 and 18%.

The lowest 20% of households paid only 0.8% of all federal taxes.

The bottom 90% of all households combined, paid only 45%.

The above figures demonstrate very convincingly that the U.S. already has a very progressive tax system, that isn’t seriously stacked for or against any group in society, and this is noteworthy, because taxes will have to go up in the coming years.

The government is already running huge deficits, that are only going to get bigger, and the country will go bankrupt if no attempt is made to close the gaping hole. Under different circumstances, one would expect the government to enact spending cuts, but no budget proposal presently on the table even comes close to what will be needed.

The generally accepted political definition of ‘rich’ right now, is $250,000, whereas it was $100,000 not so long ago. Bluntly put, this means that unless the definition is changed, that the ‘middle class’ will soon have to pay more taxes, if the tax code is going to remain progressive.

Obama promised that taxes would not be increased for families making under $250,000, but there simply isn’t enough available revenue above that figure, unless the system becomes totally out of kilter, which could lead to voters demanding more and more government spending at the expense of fewer and fewer people.

Professor Alexander Fraser Tyler, a Scottish historian who in 1787, writing about the decline and fall of the Athenian Republic over two thousand years before, said:

“A democracy cannot exist as a permanent form of government. It can only exist until the voters discover that they can vote themselves largesse from the public treasury. From that moment on, the majority always votes for the candidates promising the most benefits from the public treasury, with the result that a democracy always collapses over loose fiscal policy, always followed by a dictatorship.”

“The average age of the world’s greatest civilizations has been 200 years. These nations have progressed through this sequence:

From bondage to spiritual faith
From spiritual faith to great courage
From courage to liberty
From liberty to abundance
From abundance to complacency
From complacency to apathy
From apathy to dependence
From dependence back again into bondage”.

Related posts:

1. Bill To Limit Credit Card Increases To Be Advanced
2. The ‘Loan Modification Program’ Finally Gets Underway.
3. Several Banks Are Preparing To Repay Taxpayer Money
4. The Fed’s Top Policy Makers Play Down The Risks Of Inflation
5. The CBO Expects Trillions More in Borrowing!

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