On The Debt And Deficit, Forget About Shared Sacrifice

A common argument in support of raising taxes on the rich is the idea of shared sacrifice. The United States has a lot of debt, and somebody has to pay for it. And after all, if cuts to programs like Social Security and Medicare are on the table, then how exactly are the rich supposed to sacrifice if not for increased taxes?

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Tax Revenue, Post-WWII, Averages 17.7 Percent Of GDP

In the years since World War II (1946-2011), federal tax receipts have averaged 17.7% of Gross Domestic Product (GDP). This is probably the best way to gauge the federal tax burden because it compares it to economic output. Since there are many arguments in and out of Washington D.C. about the effects of taxation on economic growth, it makes sense to directly compare the measure of taxation (total federal tax receipts) with the measure of economic output (GDP).

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Fact of the Day: The Social Security Wage Cap For 2013 Is $113,700

What is the Social Security “wage cap”? It’s the maximum income level taxed at the 6.2% rate for Social Security benefits. All income above the cap ($113,700 in 2013) is free and clear of Social Security (payroll) taxes. Yes, you read that correctly. All income above the wage cap is exempt from Social Security tax. It’s safe to say this is quite a regressive tax.

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