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04.14.10

Tax Day Fools

Do the thousands of protesters descending on Washington for Tax Day protests know that taxes have gone down?

Thursday is Tax Day, and more than 750 Tea Party-inspired protests are scheduled to be held across the country, including the Sarah Palin-helmed “People’s Tax Revolt” on the Washington Mall.

Paying taxes has never been anyone’s idea of a good time, but a populist revolt casting President Obama as a socialist King George III is a bit misplaced. While there is ample reason to be angry at unsustainable levels of government spending and fearful of future tax hikes, here’s an inconvenient truth: Americans are paying less in federal taxes this year.

The Obama administration can claim that its president signed the largest single tax cut in American history—although no one’s going to mistake President Obama for a supply-sider.

That’s not all. According to a new report issued by Citizens Against Government Waste, pork barrel spending is on the decline as well—under Democrats’ control of Congress.

book-cover---wingnuts
Wingnuts: How the Lunatic Fringe is Hijacking America. By John Avlon. 304 Pages. Beast Books. $15.95. ()

But don’t expect those facts to get in the way of spleen-venting sound bites that call for a new American revolution.

Our political debates have become increasingly dishonest, distorted by constant partisan spin. But as my math-whiz friends tell me, numbers don’t lie. So here are the facts as they relate to 2009’s tax burden.

To date, as the courageously consistent fiscal conservative economist Bruce Bartlett states in the pages of Forbes magazine, “No taxpayer anywhere in the country had his or her taxes increased as a consequence of Obama’s policies.” In fact, as Bartlett attests, “federal taxes are very considerably lower by every measure since Obama became president.”

Indeed, 98.6 percent of taxpaying working families saw tax cuts in the first year of the Obama administration, according to the dependable Nate Silver over at fivethirtyeight.com. More than one-third—or $288 billion—of the much-protested $787 stimulus bill was in the form of temporary tax cuts or tax credits, most geared toward individuals in admittedly small increments. That’s why the Obama administration can claim that its president signed the largest single tax cut in American history—although no one’s going to mistake President Obama for a supply-sider.

Rebecca Dana: Tea Party FashionBecause out-of-control government spending is the stated No. 1 issue for most Tea Party protesters, Wednesday’s release of the annual “Pig Book” is worth special mention. Citizens Against Government Waste (CAGW) is one of the most vigilant watchdogs of wasteful spending, and this year’s report showed surprising signs of optimism. Overall pork-barrel projects have declined 10.2 percent since the last fiscal year, and the cost of these projects has decreased 15.5 percent, from $19.6 billion in fiscal year 2009 to $16.5 billion this year. The high-water mark for pork-barrel spending took place in fiscal year 2006 and helped lead to Republicans losing control of Congress. CAGW credits “greater transparency” for the reductions, and its spokeswoman, Leslie Paige, concluded, “We’re going in the right direction.”

There is still too much pork floating around for absurd projects, but the top pork-barrel appropriator, ironically, is a Republican—Mississippi Sen. Thad Cochran, who took home $490 million in taxpayer money last year for 240 projects. I look forward to his Tea Party primary in 2014.

But before any Democrat is tempted to excerpt only the top half of this column for partisan purposes, plenty of bad news is coming down the pike for the American taxpayer.

The Obama administration’s 10-year budget plan calls for a tax increase of nearly $1 trillion, including more than $630 billion in personal income taxes on people making more than $250,000, as a result of the Bush tax cuts sunsetting on schedule as well as a hike in capital gains, and $353 billion from American businesses, already the second highest-taxed in the industrialized world. And that is before the terrible European Social Democrat-evoking VAT tax proposal now being floated.

America’s entitlement programs are unsustainable and were in desperate need of reform even before the health-care expansion. Our federal debt and deficit are out of control, with profound geostrategic as well as economic implications. State and local taxes are being raised to compensate for budget deficits fueled in large part by outsize public-sector union pensions. In my home state of New York, amid last year’s budget crisis, the Democratic-controlled legislature managed to raise state spending 9 percent while imposing a misnamed “millionaire’s tax” that kicks in for families making $300,000 or more. At a time when capital can move overnight, the prospect of a combined tax rate of more than 50 percent has many families and small businesses looking for greener pastures—which only will compound the problems of a declining tax base, if and until spending is controlled. Add to that the socially destabilizing dynamic of less than 50 percent of Americans paying federal income tax and it’s easy to see why middle-class tax revolts have an emotional appeal. They are just looking down the road at what’s coming next.

But perspective is rarely protesters’ strong suit, and there is no small dose of Obama Derangement Syndrome also fueling the Tea Party tax revolts. While the Tax Day Tea Party Web site, which aims to coordinate the events, counsels supporters to “make your message clear and simple: Government is expanding, intruding on our rights and wasting our money,” the first post below that admonition I saw Wednesday came from one William Shoppe, who clearly had other issues on his mind. “What I don’t understand is why a man who is bent on destroying our nation from within… and in my mind is nothing more than a ‘political terrorist’, and who won’t prove that he was born in America, is allowed to remain in our White House. Why is he not being impeached or removed in handcuffs as a fraud and thrown in jail. Sotero/Obama is making a mockery of our great nation and needs to be removed immediately.”

Thursday’s tax protests are fueled by political and economic frustration, but they do not reflect the reality of 2009’s tax burden under Obama. Our overheated and too often unhinged political debates are distorted beyond recognition by fear-mongering partisan appeals. President Nixon once said, “We shall never make taxation popular, but we can make taxation fair.” We can also strive to make the debates over taxation fair and, dare I say it, balanced.

Correction: As a commenter pointed out, this article originally implied the administration floated the VAT tax proposal.

John Avlon's new book Wingnuts: How the Lunatic Fringe is Hijacking America is available now by Beast Books both on the Web and in paperback. He is also the author of Independent Nation: How Centrists Can Change American Politics. Previously, he served as chief speechwriter for New York City Mayor Rudy Giuliani and was a columnist and associate editor for The New York Sun.