‘No Better Off Than in 1981’ : Tax Cuts Leave Americans in Lurch, Group Says

“Americans are no better off now than they were in 1981 despite economic growth, cuts in income tax rates and repeated claims that government spending has been cut to the bone,” the Tax Foundation said today.

An average American will have to labor 124 days this year just to pay federal, state and local taxes, reaching Tax Freedom Day on May 4, the foundation said.

That is the same number of days of work required to meet tax obligations in the last two years and the same as in 1981 when across-the-board cuts in federal taxes were enacted. Tax Freedom Day has never been later.

Economists at the foundation, a Washington-based nonpartisan research organization, attributed the lack of progress to the 1986 Tax Reform Act, tax increases enacted in 1982 and 1984, Social Security taxes that have grown faster than the economy, and steadily rising state and local taxes, in part to pay for a reduction in federal programs.

Meantime, the Coalition Against Regressive Taxation, a group opposing any excise tax increase to cut the budget deficit, released a study indicating that over the last 10 years the share of all federal taxes falling on the poor has risen by 12% while the burden on upper-income Americans has dropped by 4.3%.

The 50% of taxpayers considered to have middle income--between $20,000 and $60,000--saw a 3.4% rise in their share of the burden. Those with incomes under $20,000 constitute about one-third of the population; those over $60,000, about one-sixth.