Category Archives: federal budget deficit

>FYI – Tax Freedom Day Arrived on April 12

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FYI – Tax Freedom Day arrived for many, if not all of us on April 12th. Tax Freedom Day is the day of the years when it is figured that the average American worker has earned enough money to pay their federal, state and local property tax obligations for the year.

It does not celebrate whether or not the average american worker can afford those taxes however!

by Kail Padgitt –Tax Foundation

Tax Foundation Special Report No. 190

Tax Freedom Day® will arrive on April 12 this year, the 102nd day of 2011. That means Americans will work well over three months of the year, from January 1 to April 12, before they have earned enough money to pay this year’s tax obligations at the federal, state and local levels.

Tax Freedom Day arrives three day later in 2011 than it did in 2010, but nearly two weeks earlier than in 2007. This shift toward a lower tax burden since 2007 has been driven by three factors:

• The Great Recession has reduced tax collec tions even faster than it has reduced income.

• President Obama and the Congress, after a long debate, extended the Bush-era tax cuts for two additional years.

• As part of the extension agreement, the Making Work Pay tax credit was replaced with the 2 percent reduction in the payroll tax.

Despite these tax reductions, Americans will pay more in taxes in 2011 than they will spend on groceries, clothing and shelter combined.

Tax Freedom Day 2011 is later than last year largely because of income changes rather than statutory tax law changes. As the economic recovery continues, individuals’ rising income pushes them into higher tax brackets. Corporate tax revenue has also seen a resurgence.

Although these income increases are the main reason for the later Tax Freedom Day, several tax law changes are also partly to blame: The federal estate tax has returned after a one-year repeal, this time at a rate of 35 percent and with an exemption of $5 million. In addition, taxes associated with the Patient Protection and the Affordable Care Act con tinue to be phased in.

Tax Freedom Day, like almost all tax burden measures, does not take into account the current year’s federal budget deficit. Only taxes that will actually be collected dur ing 2011 count in the tally. In many years the deficit is fairly small as a percentage of total government spending, so Tax Freedom Day alone is a good guide to the size of government.

Since 2008, however, deficits have increased dramatically. As a result, Tax Freedom Day may give the impression that the burden of government is smaller than it is. If the federal government were planning to col lect enough in taxes during 2011 to finance all of its spending, it would have to collect about $1.48 trillion more, and Tax Freedom Day would arrive on May 23 instead of April 12—adding an additional 41 days to the nation’s work for government. This date for a deficit-inclusive measure is the latest since World War II.

Click >>> Here to read the full report.

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Filed under blog, blogging, corporate tax breaks, federal budget deficit, President Obama, Tax Foundation, Tax Freedom Day, tax obligation

>President Obama’s Weekly Address 2/26/11: Traveling the Country, Winning the Future

>WASHINGTON – In this week’s address, President Obama said that he expects Democratic and Republican leaders in Congress to find common ground as Congress focuses on a short term budget next week. The President will consider any serious ideas to reduce the deficit, regardless of which party proposes them. In fact, the President has already proposed freezing domestic spending, which would cut the deficit by $400 billion and bring this kind of spending to the lowest level, as a percentage of our economy, since the Eisenhower administration. But, cutting investments in education and innovation would hinder our ability to out-compete the rest of the world. While the President recognizes that everyone needs to be willing to sacrifice, we cannot sacrifice our country’s ability to win the future.

http://www.whitehouse.gov/sites/all/modules/swftools/shared/flash_media_player/player5x2.swf

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Filed under deficit reduction, federal budget deficit, President Obama, spending cuts, weekly address

Jon Stewart Video: Deductible Me

Another spot on commentary from Jon Stewart last night you just have to watch.

“Republicans don’t realize that extending the Bush tax cuts will strengthen the deficit monster that’s going to eat our babies”

From the Huffington Post

Last night on “The Daily Show” Jon Stewart took on Republicans for their dramatic words about the deficit and simultaneous defense of the Bush tax cuts. While conservative pundits refer to the deficit as “crushing” and dangerous to our “children and grandchildren,” Stewart worried that the GOP doesn’t understand what’s causing the deficit they fear so much in the first place. “Do they not realize that the tax cuts strengthen the deficit monster that’s going to eat our babies?”….

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Filed under Deductible Me, federal budget deficit, Jon Stewart, Republicans, tax cuts, video

President Obama’s Weekly Address: 2/28/09

President Obama explains how the budget he sent to Congress will fulfill the promises he made as a candidate, and assures special interests that he is ready for the fight.

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Filed under Budget, corporate tax breaks, Education, family struggles, federal budget deficit, Financial crisis, healthcare costs, President Obama, renewable energy, weekly address

Obama Wants To Halve Budget Deficit By End Of First Term

In an article posted on Yahoo News,  President Obama will be working to cut the federal budget deficit in halve by the end of his first term.

How does he plan to do this? Mostly by scaling back Iraq war spending, raising taxes on the wealthiest and streamlining government, an administration official.
According to the article: 
 “Obama hopes to achieve his deficit-reduction goal by generating savings as he follows through on three core campaign promises over the next four years.

He has pledged to wind down the Iraq war by withdrawing most combat troops within 16 months of taking office. He also has said he would let the temporary Bush tax cuts expire in 2011 for people making more than $250,000 a year, effectively raising taxes on those people. And, he has vowed to scale back spending and improve government efficiency by eliminating programs that don’t work.”
To me, it seems like a lofty goal given the current economic climate. He may be relying to much on the hope that the economic climate will change sooner rather than later, which would tend to follow Obama’s  personnal outlook of being an optimist. The President tends to see a glass half full rather than half empty.
I certainly hope that he is right and I wish him well because if the budget deficit is not brought under control soon the Nation will be looking at annual budget deficits of over a trillion dollars annually for many years to come.

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Filed under Economic Crisis, federal budget deficit, Iraq War, President Obama, State of the Union Adress, Yahoo News

>Obama Wants To Halve Budget Deficit By End Of First Term

>

In an article posted on Yahoo News,  President Obama will be working to cut the federal budget deficit in halve by the end of his first term.

How does he plan to do this? Mostly by scaling back Iraq war spending, raising taxes on the wealthiest and streamlining government, an administration official.
According to the article: 
 “Obama hopes to achieve his deficit-reduction goal by generating savings as he follows through on three core campaign promises over the next four years.

He has pledged to wind down the Iraq war by withdrawing most combat troops within 16 months of taking office. He also has said he would let the temporary Bush tax cuts expire in 2011 for people making more than $250,000 a year, effectively raising taxes on those people. And, he has vowed to scale back spending and improve government efficiency by eliminating programs that don’t work.”
To me, it seems like a lofty goal given the current economic climate. He may be relying to much on the hope that the economic climate will change sooner rather than later, which would tend to follow Obama’s  personnal outlook of being an optimist. The President tends to see a glass half full rather than half empty.
I certainly hope that he is right and I wish him well because if the budget deficit is not brought under control soon the Nation will be looking at annual budget deficits of over a trillion dollars annually for many years to come.

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Filed under Economic Crisis, federal budget deficit, Iraq War, President Obama, State of the Union Adress, Yahoo News

Why a Stimulus Package Must Be Big and Targeted

FOR IMMEDIATE RELEASE

WASHINGTON – January 6 – Read more on CAP’s stimulus plan: How to Spend $350 Billion in a First Year of Stimulus and Recovery

Before federally sponsored electric cooperatives extended the magic of electricity to rural America, many in our country got their water by using a backyard hand pump. These pumps were simple yet remarkable tools. They could produce gallons upon gallons of water from deep below the surface of the earth without great exertion. But before any water would flow, the users of these pumps had to make certain that there was a solid column of water from the level of the underground reservoir to the base of the pump. Sometimes, they had to pour water into the ground before they could pump larger quantities out.

“Priming the pump” is a metaphor that economists have frequently used to explain a policy of using government deficits to restore the circulation of goods, services, and money in a struggling economy. As our economy continues to deteriorate after nearly a year in recession, the question of pump priming becomes a central issue in public discourse. But there are a number of questions that need to be addressed before enacting any economic stimulus plan. These include:

Won’t economic stimulus add to the federal budget deficit when our total public debt is already out of control?
Who will lend the federal government the funds to cover the expected increase in the budget deficit?
How much economic stimulus is necessary?
How should a stimulus package be structured?

In the pages that follow, this paper will examine each of these questions in turn, beginning with a historical analysis of government deficit spending and ending with an analysis of what exactly needs to be done. The purpose: to explain why a large but targeted economic stimulus package is critical to cope with an even more severe recession in 2009 than we’ve already experienced in 2008.

Read the full report (pdf)

Read more on CAP’s stimulus plan: How to Spend $350 Billion in a First Year of Stimulus and Recovery

CONTACT: Center for American Progress

John Neurohr, Deputy Press Secretary
202.481.8182

The Center for American Progress is a think tank dedicated to improving the lives of Americans through ideas and action. We combine bold policy ideas with a modern communications platform to help shape the national debate, expose the hollowness of conservative governing philosophy, and challenge the media to cover the issues that truly matter.

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Filed under "Priming the pump", Economic Stimulus Package, economy, federal budget deficit, John Neurohr, The Center for American Progress