Like Matthew Yglesias, I was a little stunned at this line from Sen. Rick Santorum in today’s kinder, gentler Washington Post forum:
One place the government does not help is through taxes. In fact in 1950 the average American family paid 2% in taxes. Today that average American family pays 27% in taxes to the federal government. Oddly enough the difference, 25%, is what the average second wage earner makes in America today. So you see, on average, the second wage earner is working simply to pay the increased burden the federal government has put on the family.
That’s a showstopping statistic. Can it be true? I’ve gone to the Tax Policy Center site, which has the most detailed information that I could find. This table, “Historical Combined Income and Employee Tax Rates for a Family of Four”, doesn’t seem to back up Santorum. The TPC chart starts in 1955 (not 1950), before Medicare. According to TPC, federal taxes (federal income, Social Security, and Medicare) for a family of four with the median income have risen from 7.35% to 14.36% between 1955 and 2001.
That’s a substantial increase, but isn’t congruent with Santorum’s description. If we managed to recapture the 1955 tax rate, it would have saved this family $4436 in 2001. $4436 is a pleasant sum to contemplate, but it’s not enough to replace the wages of many second earners.
If anyone else can find a source, please let me know. Maybe there was some major change in tax rates between 1950 and 1955; maybe he’s defining “average family” in a different way. I’ve called Santorum’s press secretary, and will update if they get back to me. If this figure is substantially true, Republicans ought to be screaming it off the rooftops. If it isn’t, the Senator really shouldn’t be throwing it around.
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BigMacAttack 07.25.05 at 3:54 pm
Probably it’s the old Krugman nonsensical hair splitting approach. Without the bother to be specific. Which in a way actually makes it better.
You will get a letter back detailing how 2% was paid in federal income tax.
Just a guess. Might be fun to rummage around the site and see if it is true.
wishful 07.25.05 at 4:57 pm
Let’s take him at his word, and use several real median-earning families with two wage earning parents. Let’s assume for the sake of argument that Santorum’s claims of 2% vs. 27 % taxes are correct (which I doubt, but…). Then let’s actually figure out what would happen if the mother quits her job, and the father is given a reduction in his federal taxes of 25%.
Let’s use several REAL families. Consider one who would lose health insurance because it is the mother’s job that provides it. Consider another where the mother quits, then a few years later, the father dies of cancer, and the mother doesn’t qualify for a decent job. Consider just a regular family that Santorum imagines we all can be, with no issues to consider that will detract from his “vision”. Consider a family who doesn’t have extended family to care for the kids when the mom gets sick. Consider a family that doesn’t have grandparents who can give them the occasional helpful check (like the Santorums have). Consider a family with an autistic child. Consider a family that would like to send the children to college, but they don’t wualify for academic or sports scholarships. Again, remember to find actual families for the exercise, not hypothetical families. They are out there, contrary to Santorum’s apparent beliefs. How do all of these families fare in Santorum-land?
Hogan 07.25.05 at 5:05 pm
The FICA payroll tax was 2% in 1950; he may be thinking of that somewhere in the back of his mind (he’s been pushing SS privatization since the mid-’90s). But the top personal income tax rate that year was 84.4%, and it didn’t go down significantly until 1962, so my strong suspicion is that Santorum is (not for the first time) deeply confused.
Rich Puchalsky 07.25.05 at 6:42 pm
It is so hard to accept that Santorum told yet another blatant lie? Republicans lie; it’s what they do. Why even bother with “If this figure is substantially true”?
jane adams 07.25.05 at 6:48 pm
Well it can be noted that federal spending has been roughly 20% of GNP for a while, there has been a few percent increase since the fifties. You can find it here a few charts down:
http://www.marktaw.com/culture_and_media/TheNationalDebt.html
It went up to nearly 25% under Reagan.
Now please note that this percentage includes social security and medicare so actual general revenues spent have been declining as a percentage of GNP.
I read elsewhere that taxes are currently at their lower percentage since the fifties.
So *if* what good old Rick said bears any resemblance to the truth it is not because the spending has increased but because we have shifted the tax burden away from corporations and the wealthy.
The problem of course is that people will believe his numbers. They simply *don’t* want to know the numbers. They want to take everyhing on faith that faith being that “if you stopped spending on what I don’t like there would be oodles and oodles of money for what I want because what you want costs lots and lots of money and what I want is really reasonable!”
You even get individuals who get elected believing this kind of drivel and then they hit real budgets and needs. Some of them still can’t shut up with their talking point which is in this case is we need more tax cuts.
Steve LaBonne 07.25.05 at 7:10 pm
If anything Sen. Sanctimoron ever says bears any resemblance to the truth, it’s purely by accident.
KCinDC 07.25.05 at 7:15 pm
Maybe Jon Stewart will ask him about it when Santorum appears on the Daily Show tonight.
Jonas Grumby 07.25.05 at 8:29 pm
The reference in the title is astonishingly lowbrow for a site like CT. I’m almost embarrassed that I picked up on it ;-).
Andrew 07.25.05 at 9:24 pm
haha, that reference is the best kind of low brow :P. Comparing it to Krugman isn’t really fair since Krugman is just an opinion columnist. Santorum is a Senator. I think Senators need to be held to a higher level of accountability.
jacob 07.25.05 at 10:08 pm
This is really a pet peeve of mine. Even if (and this is a big if) Santorum is right on the issue of income taxes, I doubt very much he means all taxes. What about sales tax? What about property tax? The failure to include sales and excise taxes when one talks about the percentage of ones income one pays in taxes really irks me, because it substantially understates the amount that poor people pay in taxes.
Sebastian Holsclaw 07.26.05 at 12:32 am
“Even if (and this is a big if) Santorum is right on the issue of income taxes, I doubt very much he means all taxes. What about sales tax? What about property tax? The failure to include sales and excise taxes when one talks about the percentage of ones income one pays in taxes really irks me, because it substantially understates the amount that poor people pay in taxes.”
I suspect Santorum is incorrect, but this can’t be why. City and state sales taxes (there is no national sales tax) have been going up in most of the larger states for decades. Except in California (where property taxes are limited by Prop 13) property taxes are certainly not lower than they used to be. I can think of very few taxes for the middle or lower class that used to be higher than they are now.
Dan 07.26.05 at 12:36 am
I’m not clear on Ted’s post and the percentage citation. I’m not a Republican or conservative, but fica is about 7.5%, minimum federal tax is 15% (if you are a couple making over $14,301), state tax (in Arizona) is about 20% of the feds (3%). I’m at 25% already…who gets away with 14.something%?
mark 07.26.05 at 12:38 am
According to the U.S. Treasury, the federal tax burden in 1944 was 20.9 percent of GDP. It fell to 14.4 percent of GDP in 1950 because of postwar tax cuts, then, because of the Korean War and the big increase in Cold War military spending, rose to 19.0 percent of GDP in 1952. The overall federal revenue burden was 16.4 percent of GDP in 2004. So today’s overall federal tax burden at a time of war is a little higher than the peacetime burden in 1950 but lower than the wartime burden of 1952.
What’s changed in a major way is the distribution of the tax burden. The top marginal tax rate is no longer over 80 percent, and the estate and corporation taxes have been substantially lowered. A majority of households today pay more in Social Security/Medicare payroll taxes than in income tax. This results in average middle class families with children paying more in federal taxes than they did in the early 1950s. But I very much doubt that Santorum would restore the golden days of the 1950s by going back to the policies that made them golden for the middle class: High tax rates on the rich and corporations, extensive unionization, and effective minimum wage laws.
fifi 07.26.05 at 3:17 am
What’s so terrible about taxes? All the countries I want to live in are (a) wealthy (b) heavily taxed. Is that a coincidence? I bet if I didn’t give money to the gov’t to waste, robber barons would take it away from me anyway.
MFB 07.26.05 at 3:42 am
Of course he should be saying that. What has he got to lose by lying? Someone might believe him, and then he’s off to the races again. And nobody will challenge him.
dglp 07.26.05 at 3:56 am
Do local and state taxes figure in any of this? (In addition to sales, property taxes) What are the ratios of local, state and federal taxes as a proporation of the total tax burden on a given person?
thereference 07.26.05 at 6:27 am
what does spreading statistics refer to? just curious. i am lowbrow, and i want to know.
Jack 07.26.05 at 7:08 am
Clearly he wants a much more progressive tax regime.
Or what Mark said.
Steve Burton 07.26.05 at 8:17 am
Mark:
(1)
Suppose that Country A has, in 2000 dollars, a GDP per capita of $13,000 and a total GDP of $1.8 trillion.
Meanwhile, Country B has a GDP per capita of $35,000 and a total GDP of $9.8 trillion.
Suppose that both countries pay 20% of their GDP in federal taxes.
For Country A, that works out to $360 Billion, or $2600 per capita. For Country B, it works out to $1.96 trillion, or $7000 per capita.
Does Country A have a higher tax burden than country B, a lower one, or about the same?
I don’t think one can assume, without further comment or argument, that federal taxes as a percentage of GDP is the right measure to use here.
(Country A is the US in 1944; Country B is the US in 2000).
(2)
It’s not at all obvious that tax rates tell us all we need to know about the distribution of the tax burden. What about actual taxes paid? According to Ted’s website, the top quintile (that would be families with incomes of about $100,000 and above) currently pays about 69% of all federal taxes. Unfortunately, the same site doesn’t seem to have any comparable information on the days when top marginal rates were 80%. Did the rich actually end up paying even more back then?
And people wonder why the federal government serves the interests of the well-to-do! It’s theirs! – bought and paid for. The bottom 40% (i.e., families with incomes of about $40,000 and below) contribute practically nothing except to their own retirement scheme.
Ragout 07.26.05 at 9:18 am
Suppose Santorum cites this or this or this, or some other Christian rightist who’s used this line. Then it’s just one liar quoting another. Or perhaps if Santorum has a source for his information, no matter how questionable, he shouldn’t be called a liar? Truly, the right wing echo chamber raises deep philosophical questions.
Ragout 07.26.05 at 9:21 am
Suppose Santorum cites this
or this or this, or some other Christian rightist who’s used this line. Then it’s just one liar quoting another. Or perhaps if Santorum has a source for his information, no matter how questionable, he shouldn’t be called a liar? Truly, the right wing echo chamber raises deep philosophical questions.
jet 07.26.05 at 10:02 am
It would appear the opposite of this is true. If the bottom 40% contribute nothing but to their own retirement yet still receive the same public services as the other 60%, then it would appear they are getting a free ride. So contrary to your conclucsion, it would appear that the federal government is first serving the interests of the not-so-well-to-do’s a la their free lunch.
Andrew 07.26.05 at 11:37 am
fifi: Well, I like to be able to spend money. Taxes take money away from me. If tax money is spent well, no problem here. But if it’s spent on war, waste, massive subsidies to ineffective french farmers or corporate handouts to airbus I’d rather keep it.
Rich Puchalsky 07.26.05 at 12:00 pm
Commenter 17, try http://www.spreadingsantorum.com/ .
Steve Burton 07.26.05 at 1:24 pm
jet: I agree. I was assuming, for purposes of snarkiness, the standard leftish position that the Federal Government in general, and the Republican Party in particular, are merely out to serve the interests of the wealthy and empowered classes.
Perhaps I should have put it like this:
If it were true that the government merely served the interests of the rich, then it would be hard to complain, since it is the rich who are paying for it.
Dan 07.26.05 at 3:49 pm
thereference, spreading statistics refers to santorum.
Dan 07.26.05 at 3:50 pm
Or rather, Santorum.
Todd 07.28.05 at 12:02 pm
During the past 40 years, the federal income tax burden on a family of four has increased dramatically as a share of the family’s income.
* The average American family now pays 24.5 percent of its income to the federal government in taxes, compared with only 2 percent in 1950.
* When state and local taxes are included, the government now takes 37.6 percent of the income of the average family with children.
* Among married-couple families where both the husband and wife are employed, two-thirds of the wife’s earnings go to pay for increased federal taxes and only one-third to supporting the family.
One root cause of this antifamily bias in the tax code is the eroding value of the personal exemption.
* In 1948, the $600 personal exemption for children shielded 68 percent of the average family’s income and the standard deduction shielded the rest.
* To have the same relative value today, the personal exemption would have to be about $7,000 to $8,000.
The second tax blow to family finances has been the increase in Social Security payroll taxes.
* In 1948, the Social Security tax was 2 percent on annual wages of up to $3,000 – 1 percent nominally paid by the employee and 1 percent paid by the employer.
* By 1992, the combined Social Security tax had risen to 15.3 percent on annual wages of up to $55,500.
Families with children now have less aftertax income than elderly households, single persons and couples without children.
Source: Robert Rector, “Reducing the Crushing Tax Burden on America’s Families,” Backgrounder No. 981, March 7, 1994, Heritage Foundation, 214 Massachusetts Avenue, NE, Washington, DC 20002, (202) 546-4400.
Jonathan Ichikawa 07.28.05 at 6:41 pm
Media Matters covers this statistic here. They cite two ways we might calculate those averages, each of which falsifies both of Santorum’s numbers.
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