Tax Day 2012
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Today, April 17th, 2012 is tax day. It marks the end of fiscal things 2011 for individuals across the country, and the beginning of fiscal year 2012 work for accountants everywhere. You’ve (hopefully) paid your taxes. But, how have things changed in the past year? From our tax rates, to the national debt, to jobs added to the economy, we look at the indicators of how the your tax money fared.
During FY 2011 tax rates were as follows below. But, in order to reduce the deficit and keep up with spending, we included the rates at which taxes would have to be changed to keep up with 2011 spending.
- Corporate Tax Rate: Current: 35% – Rate to Keep Up: 88%
- Highest Income Bracket: Current: 35% – Rate to Keep Up 88%
- Middle Income Bracket: Current 25% – Rate to Keep Up 63%
- Lowest Income Bracket: Current 10% – Rate to Keep Up 25%
Overall taxes would have to more than double in order to keep up with spending.
The National Debt
At the moment our national debt is $15.6 trillion dollars, but since April 15, 2012 the national debt has swollen from $14.3 trillion; this is an increase of $1.3 trillion. Meanwhile the Senate continued to operate without a budget resolution during FY2011 and today refuses to bring a budget to the floor for vote.
Since April 15, 2011, the unemployment rate has remained relatively stagnant, only falling from 8.9% in March 2011 to 8.2% in March 2012.
Key Pieces of Legislation
Despite high deficits, we saw very little action on tax reform last year. We saw the 2002/2003 Bush Era Tax Cuts temporarily extended, the Payroll Tax holiday passed in a $143 billion package, and the Budget Control Act place difficult-to-enforce restrictions on spending, no real reform was done to the tax code.
The last year may have been better than prior years, but the above snapshot still shows how far we have to go just to reach levels of fiscal stability. Should Congress decide that it would rather have a better year in fiscal year 2012, taking the time to consider a budget that would effectively reduce the yearly deficits, stabilize the national debt and free the economy to create more private sector jobs may be a good way to go.