# Taxes, a quick look at the last 30 years



## r82230 (Mar 1, 2016)

Two things certain in life are................................... never mind you already know. I came across this piece and thought I'd pass it one. All 30 years can be found at this site:

http://www.msn.com/en-us/money/taxes/what-americans-have-paid-in-taxes-over-the-past-30-years/ss-BBNzxJW?ocid=ientp#image=1

The Cliff Note version of just about every 10 years (note: the gov't has gotten more efficient in collecting it seems, not on the spending though): Amount paid per person has roughly tripled, while the total amount paid in has roughly quadrupled.

*2017*
Gross collections: $3,416,714,139,000
Population: 326,613,000
Taxes paid per person: *$10,461*
Operating costs: 11,526,389,000
Cost of collecting per $100: *34 cents*

In January of 2017, Donald J. Trump became the 45th President of the United States. Throughout his campaign, he made assertions and promises regarding taxes, some of which have been kept, and some of which have not. One important note on this slide: the 2017 population listed here is an estimate by the U.S. Census Bureau.

*2008*
Gross collections: $2,745,035,410,000
Population: 305,554,000
Taxes paid per person: *$8,984*
Operating costs: 11,307,223,000
Cost of collecting per $100: *41 cents*

Commonly called as the greatest financial collapse since the Great Depression, the Great Recession took place primarily in 2007 and 2008. After massive subprime loan losses, a bank bailout, and much general distress, the recession was technically over by mid-2009. Amidst all of this, research was being done on how best to avert these problems, potentially through the issuing of income tax rebates.

*1998*
Gross collections: $1,769,408,739,000
Population: 277,003,000
Taxes paid per person: *$6,388*
Operating costs: 7,564,661,000
Cost of collecting per $100: *43 cents*

In 1998, there may not have been Instagram, Facebook, or even the earliest hint of Myspace, but there certainly was the Internet. It was during this year that the "Internet Tax Freedom Act" came into play. The act essentially prevented "state and local governments from taxing Internet access, or imposing multiple or discriminatory taxes on electronic commerce." In short, this was an attempt at providing free Internet access for all.

*1988*
Gross collections: $935,106,594,000
Population: 246,329,000
Taxes paid per person:* $3,796*
Operating costs: 5,035,543,000
Cost of collecting per $100: *54 cents*

In the immediate aftermath of the Tax Reform Act of 1986 and the Revenue Act of 1987, there was some confusion about which changes would be applicable by the time returns were filed in 1988. Ironically, the entire purpose of the 1986 Tax Reform Act was "to simplify the income tax code" for the general public.

Larry


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## KYhaymaker (Jun 7, 2018)

Great post. The growth in taxes is eye opening, and the growth in debt even more so. Democrats want to spend into oblivion and, not to be outdone Republicans call a reduction in the GROWTH of spending a budget cut.

We cannot tax our way out of this mess, because that will strangle the growth we need to get our house in order. Government confiscating a bigger chunk of the pie wont work...a bigger pie means bigger oieces for everyone. We need to stop spending so much across the board, quit stealing from our own grandchildren with entitlements, and reduce the size and scope of government. If we do that we might get our economic house in order. Unfortunately, anyone who suggests any of that gets run out of town on a rail in DC.

For instance, if I could opt out of social security in exchange for not paying into it I would. It is a terrible program. Every single person that depends on it would have far more money if the social security tax they paid all their lives went into a low cost index mutual fund like Vanguard offers. Far far better off. If the government actually cared about people having money in retirement, then thats what they would do...put the money in an index account with your name on it, and as you approach retirement adjust away from mostly stocks into a mix of stocks, bonds and cash.

If they did that, most Americans who work their whole lives until 65 would literally be millionaires. I can only conclude that government doesnt want that...they want tax money they can spend right now, so thats how the program is set up. Sick.


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## rjmoses (Apr 4, 2010)

Several thoughts:

1) It would be nice to known was the GDP, the CPI and the rate of inflation was for each of those years.

2) It would also be nice to know the state sales and income tax related data.

3) SS is a capped ceiling, flat rate tax, which puts the heaviest lower income workers. (Funny how the liberal politicians don't ever talk about that.)

4) Since Nixon floated the dollar, it has been an open season printing press. (IMO, "The Rise And Fall Of The American Empire" will probably mark that moment as turning point in American history.)

5) In line with #4, there is really no need for any form of federal taxes, other than a political position to have it appear that we are still a representative republic. All federal spending could just be funded by running the presses.

Just thinking......

Ralph


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## somedevildawg (Jun 20, 2011)

KYhaymaker said:


> Great post. The growth in taxes is eye opening, and the growth in debt even more so. Democrats want to spend into oblivion and, not to be outdone Republicans call a reduction in the GROWTH of spending a budget cut.
> We cannot tax our way out of this mess, because that will strangle the growth we need to get our house in order. Government confiscating a bigger chunk of the pie wont work...a bigger pie means bigger oieces for everyone. We need to stop spending so much across the board, quit stealing from our own grandchildren with entitlements, and reduce the size and scope of government. If we do that we might get our economic house in order. Unfortunately, anyone who suggests any of that gets run out of town on a rail in DC.
> For instance, if I could opt out of social security in exchange for not paying into it I would. It is a terrible program. Every single person that depends on it would have far more money if the social security tax they paid all their lives went into a low cost index mutual fund like Vanguard offers. Far far better off. If the government actually cared about people having money in retirement, then thats what they would do...put the money in an index account with your name on it, and as you approach retirement adjust away from mostly stocks into a mix of stocks, bonds and cash.
> If they did that, most Americans who work their whole lives until 65 would literally be millionaires. I can only conclude that government doesnt want that...they want tax money they can spend right now, so thats how the program is set up. Sick.


Nope, I think they got some kinda "lock box" they was suppose to put that money into years ago....problem is, they gave everyone the key to the lock box. Bunch of morons......


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## rjmoses (Apr 4, 2010)

When SS was established, it was basically a program of what came in, went out.

Then it was morphed into a "retirement" program that collected funds that could only be invested in long term US Treasury bonds which was not a problem because we were on the gold standard and every dollar had to be backed by gold.

But, once the dollar was floated, there was only the "good faith and credit of the US government" to back it. This meant that buyers of the US bonds trusted that we would be able to repay.

Now, SS has become a hidden, fixed rate tax. The "surplus funds" in SS can still only be used to buy US Treasury bonds, which, when you simplify it, is a load to the US Government which will have to be paid back by either raising income taxes or printing more money.

Either way, it's a Ponzi scheme by another name, played on the uneducated.

Ralph

Morning rant over--going back to sleep.


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## JD3430 (Jan 1, 2012)

There's only one way to cut wildly out of control government spending, and that's STOP wildly out of control government spending.

I believe President Trump is on the right track and setting a good example, but he cant do it alone. Last week he requested 5% cuts in each departments spending. He has lowered taxes to increase investment in America to grow the economy. Its been proven over & over that lowering taxes increases revenues into the government. Hopefully those revenues can cut into adding a trillion/year in debt.

At the core of the government spending is the increase in the size and scope of government. Since government really has no competition, it is inherently inefficient and needs to shrink back to a more manageable size. We also have to get out of the business of tempting further illegal immigration with welfare handouts to our new illegal arrivals. Force our global partners in the free world to spend more of their revenues on military spending. So much savings potential to be realized there. Lastly, cut regulations to a realistic level and become an industrial and energy giant once again.


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## r82230 (Mar 1, 2016)

rjmoses said:


> Several thoughts:
> 
> 1) It would be nice to known was the GDP, the CPI and the rate of inflation was for each of those years.
> 
> Ralph


Probably shouldn't of ask Ralph, the debt to GDP ratio is depressing.

GDP Debt to GDP ratio Inflation rate (YOY)
2017 2.2% 103% 2.1%
2008 -0.1% 68% 0.1%
1998 4.5% 61% 1.6%
1988 4.2% 49% 4.4%

For the GDP figures:

https://www.thebalance.com/us-gdp-by-year-3305543

Debt compared to GDP

https://www.thebalance.com/national-debt-by-year-compared-to-gdp-and-major-events-3306287

Inflation rates (YOY)

https://www.thebalance.com/u-s-inflation-rate-history-by-year-and-forecast-3306093

As far as SS benefits, keep in mind it is reversal progressive benefit paid out. Which means the more you make, the less percentage of your average earnings you receive. Here are some numbers that might help explain (FRA = Full Retirement Age):

$3,000 average monthly earnings, FRA benefit of $1,106

$4,000 average monthly earnings, FRA benefit $1,304 (income 33% higher, SS benefit less than 18% higher than those making $3k a month).

$5,000 average monthly earnings, FRA benefit $1,508 (income 66.6% higher, SS benefit less than 37% higher than those making $3K a month).

$6,000 average monthly earnings, FRA benefit $1,711(income 100% higher, SS benefit less than 55% higher).

These above numbers are for someone reaching FRA (age 66), next month and used the earnings for 2018.

Time to go,

Larry


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## rjmoses (Apr 4, 2010)

You're right--I shouldn't have asked.

The good news (or bad news?) is that many of us on HT will have to worry or even think about the FRA benefits.

Ralph

When people ask me when I'm going to retire, I tell them that first you have to work to retire. And that I have only worked maybe six weeks in my life and played around the rest of the time--but I've played damn hard!


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## KYhaymaker (Jun 7, 2018)

I have paid a shade under $100,000 into social security and another $100,000 from my employer.

That averages out to about $362 a month I have been contributing since Age 20. Lets assume I continue to do that until age 67, which is the current full retirement age.

Had I been investing that in a low cost index fund, and continue investing $362 a month by the time I retire I would have $2.1 million dollars in that account at 8% average return, a good 100year historical average for the market.

If I live until 67, the social security admin expects to pay me about $500,000 in total, not that 2.1 million I would have earned. So I figure they owe me about 1.6 million.

Thats not even considering the $362 a month that my employer is contributing, so the really the shortfall is even worse.

Social security is killing our retirement, not "securing" it.


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## slowzuki (Mar 8, 2011)

Didn't see in the article if they adjusted the numbers for inflation?

I'm assuming the cost of administering taxation has declined along the same curve as the reduction in paper filing? The cost for an algorithm to screen an electronic return is peanuts. Edit - I expect the adoption of electronic filing is much higher than the reductions in cost. Wonder what they are spending the savings on.


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## somedevildawg (Jun 20, 2011)

KYhaymaker said:


> I have paid a shade under $100,000 into social security and another $100,000 from my employer.
> That averages out to about $362 a month I have been contributing since Age 20. Lets assume I continue to do that until age 67, which is the current full retirement age.
> Had I been investing that in a low cost index fund, and continue investing $362 a month by the time I retire I would have $2.1 million dollars in that account at 8% average return, a good 100year historical average for the market.
> If I live until 67, the social security admin expects to pay me about $500,000 in total, not that 2.1 million I would have earned. So I figure they owe me about 1.6 million.
> ...


What would be even better, would be to not regulate that businesses should match your contribution......that should be on a voluntary basis. They could match or if they want to, more/less. A lot of businesses would hire additional people if they didn't have to match....but if they wanted to attract a good long term work force, match the employees contribution into their retirement savings account.


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## KYhaymaker (Jun 7, 2018)

Right. If my employer match had also gone into the index fund for the last 45 years then there would be 4.2 million in my retirement account.

Seriously...had everyone's social security taxes been going into an investment instead of the treasury department then anyone that worked through their adult life would retire a millionaire.

Even if you were to suffer a crash like 2008 right before retirement, and then suffer a catastrohic accident or something requiring you to withdraw it all before it had a chance to recover, youd still be light years ahead. $2.1 million x 50% losss equals just over a million. Still double what social security would pay in total over the rest of your life in my example. Also its available in total right then, will keep earning interest during retirement if you dont spend it all, and becomes part of your estate that you can leave to your heirs.

The only people social security actually benefits are those who never paid into it. Social security is perhaps the best example of the fact that even when government tries to help it screws you over. I dont know how many times we have to learn this but we will learn it again when it come to healthcare Im sure.


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