Tax bills fell to the lowest level since 1950 in 2009, according to a new analysis from USA Today. But don’t be fooled into thinking that’s a good thing.
The newspaper downplayed the pain caused by the recession and the fact that the downturn lowered both incomes and consumption.
USA Today undermined criticism of taxes saying, “Amid complaints about high taxes and calls for a smaller government, Americans paid their lowest level of taxes last year since Harry Truman's presidency.” [1]
Combined tax payments on the federal, state and local levels “consumed” 9.2 percent of personal income, USA Today reported. “That rate is far below the historic average of 12 percent for the last half-century.”
But USA Today also buried important reasons for the drop in tax payments. One reason was that the recession cut incomes, but they didn’t mention that until the ninth paragraph. Lower income means taxpayers paid at a lower rate because of the progressive income tax structure. In addition, unemployment in 2009 reached levels not seen for roughly 25 years. The recession also caused “sharp” cuts in consumer spending, resulting in much lower sales tax payments.
USA Today gave credit to the massive stimulus bill for “tax cuts,” specifically the “Making Work Pay” credit. But the paper waited until the last paragraph to admit that the lower tax burden may only last through the end of 2010 because “virtually all the stimulus tax cuts expire at the end of the year.”
The newspaper cited a
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