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American Government
Tax Revenues $
The Laffer curve
Prohibitive
Range
100%
0%
McGrawHill
From McKenna: The Drama of Democracy, 3rd Ed.
Tax Rates
© The McGraw-Hill Companies, Inc., 1998
Taxes for deficit reduction: What Americans think
American Government
McGrawHill
If it became necessary, would you be willing or not willing to pay:
$100 a year more in taxes to reduce the Federal budget deficit?
Willing
58%
Unwilling
39%
How about $500 a year?
Willing
14%
Unwilling
84%
Source: From the New York Times poll conducted February 9-11, 1993. (c)
1993. Repritned
with
permission of TheCompanies,
New York Times
Company.
© The
McGraw-Hill
Inc.,
1998
Taxes for deficit reduction: What Americans think
American Government
If it became necessary, would you be willing or not willing to pay:
$100 a year more in taxes to reduce the Federal budget deficit?
Willing
58%
Unwilling
How about $500 a year?
Willing
14%
Unwilling
84%
To reduce the Federal budget deficit:
Would you favor or oppose a tax on all forms of energy, like gasoline, electricity,
and home heating oil?
Favor
41%
Oppose
57%
Would you be willing or not willing for the Federal Government to increase the
portion of Social Security benefits recipients have to pay income taxes on?
Favor
45%
Oppose
McGrawHill
39%
46%
Source: From the New York Times poll conducted February 9-11, 1993. (c)
1993. Repritned
with
permission of TheCompanies,
New York Times
Company.
© The
McGraw-Hill
Inc.,
1998
Rising receipts, rising deficits
Receipts, outlays, and surplus or deficit
1600
1400
Billions of dollars
American Government
Federal Budget Summary: 1945 to 1996
Deficit
1200
1000
Outlays
800
600
Receipts
400
200
0
1945
McGrawHill
1950
1955
1960
1965
1970
1975
1980
1985
1990
1995
Year
1996 Statistical
Abstract p. 329;
Fig.
10.2.
© TheSource:
McGraw-Hill
Companies,
Inc.,
1998
The Federal government dollar
American Government
McGrawHill
The Federal Government Dollar
Fiscal Year 1997 Estimates
Where it comes from...
Social
Insurance
Receipts
33%
Corporate
Income
Taxes
11%
Other
4%
Borrowing
9%
Individual
Income
Taxes
39%
Excise Tax
4%
Source: Budget of the United States Government, Fiscal Year 1997
(Washington,
D.C.: U.S. Government
Printing Office,
1996).
© The McGraw-Hill
Companies,
Inc., 1998
The Federal government dollar
American Government
McGrawHill
The Federal Government Dollar
Fiscal Year 1997 Estimates
Where it comes from...
Social
Insurance
Receipts
33%
Corporate
Income
Taxes
11%
Other
4%
Borrowing
9%
Individual
Income
Taxes
39%
Where it goes...
Excise Tax
4%
Other federal
Operations
5%
Grants to
States and
Localities
15%
Direct Benefit
Payments for
Individuals
49%
Net
Interest
15%
National
Defense
16%
Source: Budget of the United States Government, Fiscal Year 1997
(Washington,
D.C.: U.S. Government
Printing Office,
1996).
© The McGraw-Hill
Companies,
Inc., 1998
The national debt
100
Federal Debt Held by Public
as Percent of GDP
American Government
120
80
60
40
20
0
1945
McGrawHill
1950
1955
1960
1965
1970
1975
1980
1985
1990
1995
Year
Source: Reprinted with the permission of The Free Press, A Division of Simon & Schuster from The Seven
Fat Years: And How To Do It Again by Robert
L. Bartley.
Copyright (c)
1992 by Robert
L. Bartley.
© The
McGraw-Hill
Companies,
Inc.,
1998
The economy under Clinton
1990
Federal budget deficit
(billions of dollars)
American Government
McGrawHill
Year
0
1991
Bush
1992
1993
1994
1995
1996*
Clinton
-50
-100
-150
-200
-250
*estimate
Source: New York TImes, August 3, 1996, p. 8. (c) 1996. Reprinted with
permission of TheCompanies,
New York TImes
Company.
© The McGraw-Hill
Inc.,
1998
The economy under Clinton
Federal budget deficit
(billions of dollars)
1990
1992
1993
Bush
0
1994
1995
1996*
Clinton
-50
-100
-150
-200
*estimate
260
255
250
245
Bush
1990
McGrawHill
1991
-250
Average
weekly earnings
American Government
Year
1991
Clinton
1992
1993
1994
1995
96
Year
Source: New York TImes, August 3, 1996, p. 8. (c) 1996. Reprinted with
permission of TheCompanies,
New York TImes
Company.
© The McGraw-Hill
Inc.,
1998
How people feel about the shape of the economy
American Government
McGrawHill
Most feel the economy is in good shape...
How would you rate the condition of the national economy these days?
Dec.
1996
6
61
22
8
Very
good
Fairly
good
Fairly
bad
Very
bad
Source:
New York Times,
December 29,Inc.,
1996,1998
p. 22.
© The
McGraw-Hill
Companies,
How people feel about the shape of the economy
American Government
McGrawHill
Most feel the economy is in good shape...
How would you rate the condition of the national economy these days?
Dec.
1996
6
61
22
8
Very
good
Fairly
good
Fairly
bad
Very
bad
But nearly half worry about job loss.
How concerned are you that in the next two or three years you or someone else in
your household might be laid off?
Dec. 1996
Very
concerned
16%
Not at all
concerned
51%
Somewhat
concerned
33%
Source:
New York Times,
December 29,Inc.,
1996,1998
p. 22.
© The
McGraw-Hill
Companies,
American Government
McGrawHill
Percent civilian force
unemployed
America in the 1990s
8
7
6
5
4
3
2
1
0
1991
1992
1993
1994
1995
Year
Source: Budget of the United States, Fiscal Year 1997, supplement, p. 24; Labor
Department figures analyzed
the New York Times,
December 29,Inc.,
1996,1998
p. 22.
© ThebyMcGraw-Hill
Companies,
8
7
6
5
4
3
2
1
0
1991
1992
1994
3.0
1995
Workers whose jobs
were eliminated each
year, as a percentage
of the civilian
workforce
2.5
2.0
1.5
1.0
0.5
Age 20 and over;
moving average
0
83
McGrawHill
1993
Year
Rate of job elimination
American Government
Percent civilian force
unemployed
America in the 1990s
86
89
Shaded periods
are recessions
92
96
Year
Source: Budget of the United States, Fiscal Year 1997, supplement, p. 24; Labor
Department figures analyzed
the New York Times,
December 29,Inc.,
1996,1998
p. 22.
© ThebyMcGraw-Hill
Companies,
How much is fair?
American Government
McGrawHill
Question: What is the highest percentage of income that would be fair for a
family of four making $200,000 to pay in all taxes combined?
Responses:
Males
Females
Republicans
Democrats*
Independents
*The median response for
Democrats was 29 percent.
25%
25%
Whites
Blacks
Conservatives
Moderates
Liberals
25%
25%
Source: Survey by the Roper Center for Public Opinion Research for Reader’s Digest,
October 21-29, 1995; the Tax Foundation. Reprinted with permission from the February
1996 Reader’s Digest.
(c) 1996 by The
Reader’s Digest
Assn.,
Inc.
© Copyright
The McGraw-Hill
Companies,
Inc.,
1998
How much is fair?
American Government
McGrawHill
Question: What is the highest percentage of income that would be fair for a
family of four making $200,000 to pay in all taxes combined?
Responses:
Males
Females
Republicans
Democrats*
Independents
Whites
Blacks
25%
25%
Conservatives
Moderates
Liberals
Less than $30,000
$30,000-$49,999
$50,000-$74,999
$75,000 or more
High-school or less
Some college
College degree or
more
25%
25%
25%
25%
Age 35 or younger
36-49 yrs.
50-64 Yrs.
65 yrs. and older
25%
Source: Survey by the Roper Center for Public Opinion Research for Reader’s Digest,
October 21-29, 1995; the Tax Foundation. Reprinted with permission from the February
1996 Reader’s Digest.
(c) 1996 by The
Reader’s Digest
Assn.,
Inc.
© Copyright
The McGraw-Hill
Companies,
Inc.,
1998
How much is fair?
American Government
McGrawHill
Question: What is the highest percentage of income that would be fair for a
family of four making $200,000 to pay in all taxes combined?
In reality, such a family pays:
Males
Females
Republicans
Democrats*
Independents
Whites
Blacks
25%
Conservatives
Moderates
Liberals
25%
Less than $30,000
$30,000-$49,999
$50,000-$74,999
$75,000 or more
25%
25%
25%
39%
High-school or less
Some college
College degree or
more
25%
Age 35 or younger
36-49 yrs.
50-64 Yrs.
65 yrs. and older
25%
Source: Survey by the Roper Center for Public Opinion Research for Reader’s Digest,
October 21-29, 1995; the Tax Foundation. Reprinted with permission from the February
1996 Reader’s Digest.
(c) 1996 by The
Reader’s Digest
Assn.,
Inc.
© Copyright
The McGraw-Hill
Companies,
Inc.,
1998