Did you know that you worked for the government from Jan 1 to today, Aug 12 (224 days) to pay all the taxes, fees, and regulatory burdens the govt. imposes on you?In other words, in 2009, the cost of government consumes 61.34 percent of national income, by far the highest percentage since this figure has been calculated. (See the chart.) HERE's the link to the report, which includes the calculations.
And remember that President Obama's big-government schemes are just now getting enacted.
"Did you know that you worked for the government from Jan 1 to today, Aug 12 (224 days) to pay all the taxes, fees, and regulatory burdens the govt. imposes on you?"
ReplyDeleteWhen you say that, I am just curious, what type of people are you referring to, in which tax bracket?
The poor or the rich?
Shawn,
ReplyDeleteIt's just the percentage we are through the year (224/365), just over 61% assuming we've earned that much of our annual salary so far.
Interesting paper. Unfortunately (?) the methodology used for calculating outlays is not the methodology used by Treasury to actually pay for things.
ReplyDelete"For our calculations, we are assuming the full expenditure of the $700 billion in TARP funds in 2009."
Instead of collecting all the money to pay for TARP in the year the funds are allocated, TARP is financed through long-term debt and paid back over years.
Supposedly, some of the TARP money is actually going to be repaid by the folks getting it. I'm not holding my breath on much of that happening. I suspect they'll be given tax credits for their repayments.
The discussion of the cost of regulatory compliance is arguable.
Many regulations - much of the stuff in HIPAA and OSHA, for example - is what serious businesses are doing anyway. You don't run a business and try to let your customers' data leak out; you don't run a business and try to injure your employees. If you are managing your business, you track the details of what you're doing.
Writing the reporting to Federal specifications adds some cost.
This report assigns all of the cost of running a business by accepted modern practices to regulation.
Many (all?) libertarians argue that businesses would operate ethically and honorably absent government regulations. There are costs tied to the behavior, even absent OSHA, HIPAA, etc.
Another headscratcher is the argument around corporate taxation. Large companies in the US pay tax selectively. In a good year for lobbying, they can pay little, nothing, or be given large amounts of net funds.
Goldman Sachs - the only big financial player that's doing well on the stock market this year, and a recipient of plenty of TARP funding both directly and indirectly (their mortgage bets with AIG were covered by the Feds and paid in full!) - paid a 1% tax rate in 2008.
In this report, the nominal top corporate tax rate is 35%, that number is used as the basis for at least some calculations (in the section on taxation of international companies it is used extensively, and the way that it is used implies that it also underlies the primary calculation.)
End of the day, it's worth bearing in mind that this study comes out of Grover Norquist's think tank. Norquist is on the record as wanting to shrink government to a size where it can be drowned in the bathtub.
Lenin was actually less violent in his imagery, writing of the State withering away.
I'm not sure one should accept statistics collected under the banner of either Lenin or Norquist without a massive helping of salt.
What's even funnier about this 'paper' is that the authors did not go back and revise last year's figures to include the cost of the Bush bailout dollars.
ReplyDeleteThey only included the emergency spending bills in this year, despite the evidence that emerged by November of last year that on top of TARP, there were direct and indirect guarantees of several trillion as well as a Treasury involvement in the short term debt market ("commercial paper.")
Not revising last year's figures to include the spending of the first 350B is dishonest.
IMO, not attempting to find out if there were direct costs from the loan guarantees, etc under Bush is more so - the goal here is to make the current administration carry most of the weight for stimulus spending.
It is near impossible to accurately calculate the cost of government but that larger point that we work much of the year to pay for government before we earn a dime is unarguable. Whether it's three months or 7 1/2 months per the study, can anyone responsibly claim that society would not be better if most of that income remained in people's pockets? Yes, government should provide basic defense, police, fire, transit, etc., but not our wildly metastasizing bureaucracy, cost-ineffective programs, and strangling regulations. Parsimonious government, I'd imagine would cost us much less than half what we currently pay.
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