The Beautiful, Meme-Destroying Graph From the CBO

More

Screen Shot 2011-12-12 at 4.44.34 PM.png


Click on the image above. It's a beautiful illustration of how the United States spends money (on the left) and taxes (on the right), from the Congressional Budget Office. If we could tattoo these graphs on the forearms of our politicians and cable news hosts, it would automatically clear up two big myths about big government.

1) "Half of Americans don't pay any taxes!" No. Half of American households have negative tax liability under the federal income tax code. That means that, due to deductions and exemptions and the like, they don't pay federal income taxes. But as you can see on the left, "social insurance taxes" account for nearly as much federal revenue as income taxes. This is a regressive tax borne on all workers but not on income above about $107,000. To be fair, the way Social Security distributes income, the effect of the Social Security program is progressive for many families. But it's wildly misleading to say that, since a family doesn't pay federal income taxes, they'd don't pay the government any money.

Here's another graph I quickly put together breaking down tax receipts by source: income taxes vs. social insurance taxes vs. corporate taxes, since 1981. Income and social insurance taxes have long accounted for nearly equal parts of government revenue.

Screen Shot 2011-12-12 at 5.50.21 PM.png
2) "The stimulus turned the U.S. into a big government behemoth!"
Hardly. If the big circle on the left says "big government" to you, then we were a big government long before Obama put his hand on the Bible, and we would still be a big government even if the president's last name were McCain. The policies that made government big -- Social Security, Medicare, and Social Security -- are decades old. Nearly half of government spending is income security for the elderly (Social Security) and sick (Medicare and Medicaid) that was passed into law and augmented under Republican and Democratic administrations and Congresses.
Jump to comments
Presented by

Derek Thompson is a senior editor at The Atlantic, where he writes about economics, labor markets, and the entertainment business.

Get Today's Top Stories in Your Inbox (preview)

CrossFit Versus Yoga: Choose a Side

How a workout becomes a social identity


Join the Discussion

After you comment, click Post. If you’re not already logged in you will be asked to log in or register. blog comments powered by Disqus

Video

CrossFit Versus Yoga: Choose a Side

How a workout becomes a social identity

Video

Is Technology Making Us Better Storytellers?

The minds behind House of Cards and The Moth weigh in.

Video

A Short Film That Skewers Hollywood

A studio executive concocts an animated blockbuster. Who cares about the story?

Video

In Online Dating, Everyone's a Little Bit Racist

The co-founder of OKCupid shares findings from his analysis of millions of users' data.

Video

What Is a Sandwich?

We're overthinking sandwiches, so you don't have to.

Video

Let's Talk About Not Smoking

Why does smoking maintain its allure? James Hamblin seeks the wisdom of a cool person.

Writers

Up
Down

More in Business

Just In