"Tax Freedom Day Today" by Doug Bandow (Cato Institute: Commentary)

"Tax Freedom Day Today" by Doug Bandow (Cato Institute: Commentary): "The Tax Foundation figures that 'Tax Freedom Day' (TFD) arrived today, April 13. ... April 13 is more than two weeks earlier than the recent record of April 30 set in 2007. In fact, TFD hasn't been so low in more than 40 years. The last time we finished paying our taxes -- local, state, and federal -- sooner was 1967, when TFD fell on April 12. The more recent record was set in 2003, after the Bush tax cuts, at April 16."

"Warns the Foundation: "For 2011, both the HR 1 tax cuts and the earlier Bush tax cuts of 2001 and 2003 are set to expire." Unless both houses of Congress and the president agree to extend the Bush tax reductions, Americans will pay far higher taxes starting in 2011"

"Spending, whether financed by taxes or borrowing, is the best measure of government's fiscal impact. This year more than a third of government outlays are borrowed funds. Total government expenditures are at record levels. You have to go back to the last two years of World War II to beat this year's spending burden.

Reports the Tax Foundation:

Because of the federal government's ability to deficit-finance its operations, Tax Freedom Day moves somewhat independently from an alternative calculation that adds the federal budget deficit to total taxes collected. In 2009, an unprecedented budget deficit over $1.5 trillion produces a date of May 29, fully forty-five days later than Tax Freedom Day."

"CBO figures that the legislation is likely to slightly raise the GDP through 2012, have no impact for a couple years, and then reduce economic output starting in 2015. The most optimistic case envisions small increases through 2014 instead of 2012. But the reduction in GDP will be permanent, and will mostly manifest itself in lower salaries -- for workers who will be taxed much more to pay off the government's increased debt. The agency's conclusion has special credibility since CBO is subject to retaliation by the Democratic congressional majority for criticizing the party's economic centerpiece.

Runaway spending ensures that this year's TFD will be dwarfed by future TFDs. Some day someone will have to pay off the debts being run up today. The Obama administration's budget figures are bad enough, but they almost certainly rest upon unrealistic economic expectations. The CBO again offers a sobering analysis: "CBO's estimates of deficits under the President's budget exceed those anticipated by the administration by $2.3 trillion over the 2010-2019 period.""

"Moreover, "The cumulative deficit from 2010 to 2019 under the President's proposals would total $9.3 trillion, compared with a cumulative deficit of $4.4 trillion projected under the current-law assumptions embodied in CBO's baseline. Debt held by the public would rise, from 41 percent of GDP in 2008 to 57 percent in 2009 and then to 82 percent of GDP by 2019.""

"Even at today's "low" tax burden, observes the Tax Foundation, "Americans will pay more in taxes than they will spend on food, clothing and housing combined." When the rest of the government's bills come due and taxes rise accordingly most Americans won't have any money left for necessities let alone discretionary outlays after they pay their taxes."