Tax day facts

Tax day facts

- in Fitzsimon File

Today is tax day, when most of the media report on the last minute rush at the post office and how to file an extension to give yourself six more months to send your forms to the IRS.

It’s also a day when the anti-government crowd swings its propaganda machine into overdrive to brew resentment over taxes to serve their narrow ideological agenda, still best summarized by Grover Norquist’s statement that his goal was to shrink government “down to the size where we can drown it in the bathtub.”

Here are a few facts about taxes and spending that you won’t hear from the folks trying to dismantle our schools and safety net and the rest of our public infrastructure.

The United States collects less tax revenue as a share of its economy than all but two of the world’s developed countries. Citizens for Tax Justice reports that only Chile and Mexico collect less. That doesn’t sound like a country that is overtaxed.

North Carolina’s state tax system has traditionally collected revenue at roughly six percent of state personal income. The N.C. Budget & Tax Center reports that during the recession revenue collections dropped to 4.8 percent of personal income.

That drop and the unwillingness of state lawmakers to adequately address it has meant a ten percent reduction in K-12 education funding since the recession began, and a nine percent reduction in higher education funding.

Overall state funding for core services like education, health and human services and public safety, adjusted for inflation, will fall to a forty-year low next year thanks to the budget decisions made by the 2011 General Assembly.

Lower income taxpayers in North Carolina continue to pay a higher percentage of their income in taxes than the wealthy. The Budget & Tax Center reports that low-income households contributed $9.50 for every $100 in income while a household in the richest one percent paid $6.80 for every $100 in income.

Back to the national tax system. Guess which President was talking about a letter he received when he said this.

“It’s a letter from a fellow out in the country, an executive who is earning six figures, well above $100,000 a year, He wrote me in support of the tax plan because he said I am legally able to take advantage of the present code…and wind up paying a smaller tax than my secretary pays. And he wrote me the letter to tell me that he’d like to come to come to Washington and testify before Congress as to how that is possible for him to do and why it is wrong.”

That was not President Obama. It was President Ronald Reagan in 1985, making the case for the Buffet Rule, Obama’s proposal to make sure that people in the highest tax bracket do pay a lower percentage of their income in taxes than most Americans.

And finally, on another historical note, President Abraham Lincoln was the first president to sign the income tax into law and as Bradley University Sociologist Jackie Hogan points out in the Christian Science Monitor, it was a progressive income tax with higher rates for the wealthy and it treated capital gains the same as all other income.

Wonder why none of the speakers at all the Republican Party Lincoln Day Dinners across the state have pointed that out?

About the author

Chris Fitzsimon, Founder and Executive Director of N.C. Policy Watch, writes the Fitzsimon File, delivers a radio commentary broadcast on WRAL-FM and hosts "News and Views," a weekly radio news magazine that airs on multiple stations across North Carolina.