The Dog in the Manger

By Patricia L Johnson and Richard E Walrath

“The gap between the rich and poor is increasing. Some are living to eat, while others are struggling to eat enough to be able to live.” ~ Anna Hazare [Given name Kisan Baburao Hazare, Indian Activist]

Mr. Hazare was speaking about the gap between the rich and poor in India but his quote applies to many countries, especially the United States, and if the new Republican led House has its way it won’t be long before this gap is widened even further.

The Republicans have been on their ‘cut spending to reduce the national debt’ soapbox for months and we applaud their efforts, but where were these same people during the years 2001 through 2008?

No matter how many times they imply President Obama got us into this economic mess, it is not going to change the truth which is legislative changes put into effect under the Bush administration added $5 trillion dollars to the national debt, reduced U.S. revenues and sent this country spiraling into the deepest recession since the Great Depression, yet the Republicans are still claiming cutting taxes is the answer to all our employment/unemployment concerns.

142.5 million tax returns were filed for tax year 2008, with only 90.7 million [63.6%] classified as a taxable return [a taxable return is an income tax return that has a total income tax greater than $0]. The 63.6 percent is the lowest percentage of taxable returns filed in over 23 years.

The average rate for taxable returns in 2008 was 13.6 percent. Did you pay 13.6 percent income taxes in 2008? Probably not… you probably paid a much higher rate because you were not able to take advantage of all the tax deductions available to the rich in this country.

The last full year President Clinton was in office [2000] when we had a budget surplus as far as the eye could see, the average percentage paid on income taxes was 16.1 percent.

Using the 1979 Income Concept which provides a more consistent estimate of the average tax rate across years, the IRS calculated the total amount income taxes decreased in 2008 as being more than $84 billion dollars. This is one year only. Think of where we would be financially if that $84 billion was extrapolated over the 8-year span of the Bush administration. To be fair, let’s drop the $84 billion down to $50 billion a year for 8 years. That’s $400 billion dollars the U.S. Treasury lost due to legislation put in place by another Republican administration.

Remember the story about the dog in the manger?

After a hard days’ work the horse came in for his dinner and found a dog lying on top of the hay in the horse’s manger.

“I’m tired and hungry”, said the horse. “Won’t you please get out of my manger and off my hay so that I can eat it?” The dog refused to budge.

“You aren’t going to eat the hay and yet you won’t let me have it?” said the horse.

That’s the story that comes to my mind when I hear the Republicans talk about the "deficit" problem. They’re the ones that caused it, and now they want something, or they will let the government default on its debt obligations by not voting to raise the debt ceiling.

Data Source: IRS SOI 2008

© 2011 Patricia L Johnson and Richard E Walrath

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