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THERE HAVE BEEN NO INCREASES IN FEDERAL TAXES IN MORE THAN A DECADE.
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A Country in Denial About Taxes
Here’s a picture of a nation in denial about taxes. Almost all of the Republicans in Congress have signed a pledge to never, ever raise taxes. And, over the last decade, we’ve been in a tax cutting frenzy. Significant tax cuts have been enacted almost every year since 2001. There have been no tax increases.
The biggest tax cut–in terms of immediate impact–was the bill President Obama signed last fall to extend the Bush tax cuts. Combined with the effect of the economic slowdown, this decade long tax-cutting binge has decimated federal revenues, which currently stand at less than 15% of GDP. The last time they were this low, the first baby boomers were riding tricycles. Now, they’re collecting Social Security and Medicare.
Before we decided that we really didn’t need to pay for government, things were different. Revenues increased when deficits were deemed alarmingly high. Clinton raised taxes in 1993, but so had George H.W. Bush and Ronald Reagan (on multiple occasions).
Back in the olden days, we acknowledged that wars cost money and didn’t think that our children should pay the entire cost, with interest. (Imagine that!) There were huge tax increases to finance World War II and the Korean War, and fairly significant ones to pay for Vietnam. Even the tax cuts in the 1960s and 1970s are somewhat misleading because taxes used to increase automatically as inflation pushed people into higher tax brackets, which meant that policymakers could raise revenue and pretend to cut taxes at the same time.
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