INDReporter

Analysis: American tax burden lowest since 1958

by Leslie Turk

An analysis released Friday reveals that it's been five decades since Americans paid such a small percentage of their income in taxes.

USA Today's analysis shows that tax cuts and a weak economy have Americans paying the smallest share of their income for taxes since 1958. The total tax burden, which includes federal, state and local taxes, fell to 23.6 percent in the first quarter of this year, according to Bureau of Economic Analysis data. The paper noted:

By contrast, individuals spent roughly 27% of income on taxes in the 1970s, 1980s and the 1990s - a rate that would mean $500 billion of extra taxes annually today, one-third of the estimated $1.5 trillion federal deficit this year.  "We have a 1950s level of taxation and a 21st-century-sized government," says Robert Bixby, executive director of the Concord Coalition, a deficit-reduction advocacy group. The fall in taxes is almost entirely caused by a weak economy rather than lower rates, says Curtis Dubay of the conservative Heritage Foundation. "It's easy to draw the wrong conclusion," he says.

Read more here.

The USA Today story follows an April 11 Scripps Howard News Service report that found Americans pay much less in taxes than most other people in the industrialized world:

According to the latest estimates from the Organization for Economic Cooperation and Development (OECD) - a Paris-based consortium that tracks financial conditions in 34 nations - the United States pays 24 percent of its gross domestic product (the sum of all goods and services produced in a year) to taxes collected by all levels of government. Australians pay 27 percent; the Japanese 28 percent; Canadians 31 percent; British 34 percent; Germans 37 percent; French 42 percent; and Swedes 46 percent. Danes lead the world at 48 percent.

Read that story here.