The Big Lie the TEA Party Was Founded On

Taxes are lower than they have been for decades.  So why do those on the right claim they have been “Taxed Enough Already?”


Remember back in 2009 when the Tea Party first made itself known to the public.  It created an acronym from the words, “Taxed Enough Already” – TEA –  and they took that acronym to represent a time in history when American colonists protested high taxes by the British Royal government without representation by dumping crates of tea in the Boston harbor.  The problem with this notion for the Tea Party, that they’re being taxed too much, is that it’s not true, then or now.

The researchers at the Center for American Progress think tank have documented, with the use of 10 graphs, that taxes are not only not oppressive but haven’t been this low for nearly 60 years.

Somebody hasn’t been paying attention to these facts or perhaps has deliberately exploited right-wing anger following the passage of the $800 billion stimulus package Obama and the Democrats passed to prevent the economy from devolving into another Great Depression era.  The fractious elements with ultra-conservative groups that began to connect with each other through social networking in early 2009 were ultimately funneled and more cohesively formed by astroturf groups like FreedomWorks  and Americans for Prosperity (AFP)

Both groups are tainted.  In an article by Ed Pilkington with The Guardian, we discover that  “FreedomWorks and AFP are sister groups who came from the same parent body — a campaign called Citizens for Sound Economy, which split in two in 2004. It was set up by one of America’s richest men, David Koch, an oil tycoon who has funded right-wing causes for decades.

FreedomWorks receives funding from the tobacco conglomerate Philip Morris, as well as from Richard Scaife, another business tycoon, who for years helped fund dirt-digging investigations into Bill Clinton. Local branches of Americans for Prosperity have also received tobacco money; the group has opposed smoke-free workplace laws and cigarette taxes.”

FreedomWorks and AFP took the honest outrage of people who mistakenly thought they were being taxed for wasteful spending at a time when many Americans were losing their jobs and homes and used it to promote the hysteria that would benefit them in undermining the Democrats in 2010.  The “anti-tax movement” that resulted, not from real over-taxing, but from fear generated by people whose self-interest to regain the seats of power were preeminent, is now exposed as a fraud.

  1. Tax revenue as share of GDP is lower now at 14.8% than it was in 1946 at 20.4% and lower than it ever was during George Bush’s or Ronald Reagan’s administrations.
  2. The U.S. has much lower taxes as a share of GDP – 26.9%,  than other developed countries like Canada, 33.1%, Great Britain, 35.8% and Denmark with 49.3%.
  3. We have lower tax rates than our parents or some grandparents did.  In 1945 top marginal tax rates on ordinary income was 94%.  Today it is currently at 35%.
  4. Top capital gains tax rates are also lower now at 15%, a rate we haven’t seen since 1933.
  5. The tax on large estates has virtually disappeared.  Total percent of all estates subject to federal tax has dropped from 2.14% in 2001 to 0% in 2010 but which has recently rose to 0.14% this year.
  6. Tax rates for the wealthy and super wealthy have plunged.  Millionaires who were paying 26.8% of their total income towards taxes in 1992 are now paying around 22.8%.  Billionaires have received an even better deal.  The richest 400 households went from a tax rate of 26.4% in the same time period to one of 16.6%
  7. Corporate tax revenue has also declined over the years following WWII.  Corporate tax revenue as a share of GDP has dropped from 7.2 percent in 1945 to 1.3% this year.
  8. The U.S. raises less tax revenue from corporations than most other Organisation for Economic Co-operation and Development countries (OCED).  Out of 26 OCED countries 18 others have a higher corporate tax revenues as a share of GDP than the U.S., with Norway having nearly 4 times the rate than the U.S.
  9. And the one that anti-tax, pro-corporate Republicans like to tell constituents about how the U.S. are taxed more than their foreign rivals is also bunk.  Technically on paper that business tax rate is 35% which is higher than in most OCED countries but thanks to tax breaks and loopholes for corporations that have proliferated since 1982 from $526.1 billion in 1982 to over $1 trillion in 2010, U.S. companies have an effective corporate tax rate of 13.4%, a rate that is lower than 19 other OCED countries.

Voters are being misled by powerful interests to vote out those we sent to Washington to correct years of spending by Republicans who had no serious plan in place to pay for this spending.  Under George Bush we borrowed furiously from foreign treasuries to replace the revenue lost through these tax cuts as well as paying for two foreign wars and a Medicare Prescription bill.

today's cartoon
When George Bush and the Republican-led Congress signed off on tax cuts for the wealthiest 2% in 2001, we lost the revenue we needed to sustain the surplus we had then.  Had this bill not been pushed through by corporate-friendly Republicans of that time we would have averted a deficit now that seems out of reach.

Clearly we’re are not going to get out of this mess with spending cuts alone.  The Bush tax cuts need to end in 2012 as promised by the Obama administration.  They should not have been renewed for two more years by Democrats last December to appease the new GOP majority in the House.

The record shows, contrary to GOP and Tea Party views, that raising taxes, especially on the wealthy, in such economic hard times will not only aid the recovery but will grow the GDP, as it did during the Depression Years of the 1930’s

There are no free rides and if we are to provide quality education for our children and sustain elderly retired workers that rely on Social Security and Medicare/Medicaid we need to end the tax Bush tax cuts across the board for all Americans.  At this rough economic period for middle and low in come families we could perhaps postpone it for a couple of more years but the wealthiest 2% need to see tax rates reset to levels they survived handsomely under before Bush cut them in 2001.  Tax rates that were still lower than they were under Ronald Reagan.



The Truth About the Economy in 2 Minutes

3 responses to “The Big Lie the TEA Party Was Founded On

  1. Very good post as usual, L.B. I am also for giving the middle class a deferment on tax hikes. I think they have suffered the most in this recession and paid a devastating price so that the rich could get richer. It is time to give them a fair shake.

  2. The TP in its orginal form was a pretty good shot at the limelight but then the corporations and special interests hijacked the movement and now it is just a political shame…..

  3. I’m with ya one the Tea party. Bunch of idiots being fooled by the rich to keep Their taxes low at the expense of all others. My fear is that one issue party will push the call for less government spending at just the wrong time, and drive us back into a massive recession (or depression, as spending cuts did in 1937, 38).

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