While The Tax Foundation describes itself as a non-partisan organization, its leadership is anything but non-partisan. From its 1937 inception, it has always been a surrogate for big oil – big industry. The early years included the influence of the Earhart Foundation, Harry Earhart having made his fortune in the oil business and being an avid supporter of Hayek economic theory. Beginning leaders included General Motors’ Alfred P. Sloan and William Farish, President of Standard Oil of New Jersey (which becomes Exxon).
More recently, the infamous Koch brothers have been pushing the agenda as The Tax Foundation became an arm of Citizens for a Sound Economy, and the President of The Tax Foundation has been involved with the notorious American Legislative Exchange Council (ALEC). Non-partisan? It is only “non-partisan” in the broadest IRS sense to preserve its 501(c)3 status. It definitely has an agenda.
Let’s be clear. These are the folks who promote a radical and damaging fiscal agenda, one that has led to the massive government deficits since Ronald Reagan’s presidency to the present, except for a few years late in the Clinton administration which was thoroughly undone by a resumption of Hayek-based policymaking under Bush II and Greenspan. The structural problems of diminished revenue from pointless tax breaks, loopholes, etc. compounded by unfunded spending on defense/war-making and health care, plus massive bailouts for financial gamblers and the economy which they wounded grievously, has brought about the unmitigated fiscal disaster we have today.
What does this have to do with Tax Freedom Day? For those unaware, this is supposedly the day when it is estimated that average American households complete the payment of the current year’s worth of federal, state and local taxes and are thereby “free” from further tax payments. It may have occurred to you that with a group with such an obvious agenda, their proclamation may not be an accurate measurement. In fact, it may be totally cooked.
Here is their explanation of their calculations:
Tax Freedom Day computed by dividing total tax collections by the nation’s income, as reported by the Bureau of Economic Analysis. Every dollar that is officially called income by the government is counted, and every payment that is officially considered a tax is counted. The resulting percentage is then converted into days of a 365-day calendar year.
On the surface, it sounds reasonable. However, is anything associated with the characters mentioned above ever reasonable? Enter the Center on Budget and Policy Priorities (CBPP).
The CBPP’s analysis of The Tax Foundation’s calculations is pretty dense. Let me try to simplify.
The folks at the top of the heap make a pile of money. You and I make a pittance by comparison. Average us together like the Tax Foundation does and “the average American household” is paying over 20% in taxes per year. In fact, “the average American household” does not pay anywhere near that much. The top 20% of earners in the USA are in that league, but the other 80% wish they made enough to pay that much in taxes.
It takes no account of the inequities in the tax structure that give multi-millionaire Mitt Romney an effective tax rate of just 14% among other richy-rich tax shelters and schemes.
It also takes no account of the tax revenue that becomes someone’s income or income support, like Social Security, Medicare, Medicaid, VA, farm subsidies, oil subsidies, contractor payments of all kinds, etc. You get the idea.
When you scratch the surface, The Tax Foundation’s Tax Freedom Day is actually a giant fraud concocted with meaningless statistics that are skewed to fit an agenda whose sole message is that taxes are bad. It amounts to a bunch of fat cats whining about the taxes they pay, the itsy-bitsy nick that’s taken out of their overstuffed portfolio. [Sad face.]
No one likes to pay taxes, but it’s the price we pay for a civilized society, right Holmes?