Taxes at Lowest Level Since 1958? Good News!

The U.S. tax burden hit its lowest point since 1958, according to a report from the Bureau of Economic Analysis. Ruminate with me for a moment on 1958. It was the sixth year of the Eisenhower administration. "South Pacific" was the highest grossing film at $17 million. The song "Tequila" was a top single. The Cha-cha was invented. The Dow averaged just shy of 600. There was no such thing as Medicaid or Medicare. Upshot: It's been a while!

I've already seen liberals and conservatives turn this stat into gunpowder for daily tax debates, so let me put the figure into new perspective as much as possible.

1. This is Good News. Really, it's very good news. For now. When an economy is weak and the government can borrow at cheap rates, it makes sense to run high deficits, which means the government is investing much more than it's taking from the private sector. (It's especially nice to have low taxes with this kind of gas and food inflation.) That's why the White House and Congress agreed to extend the Bush tax cuts and give everybody a payroll tax cut and accelerate depreciation for businesses in December. That we're experiencing the lowest tax year in the last half century isn't an accident, it's a present from Uncle Sam. But this gift shouldn't last forever.

2. We Can't Celebrate Like It's 1958 Forever. Tax revenue rises for two reasons. Either tax rates rise or taxable income rises. We need both to happen in the next ten years. It doesn't make any sense to have a 21st century government on the back off a mid-20th century tax burden. We're richer, and the rich and much richer, and most of us can afford higher taxes. But we also don't want to raise rates so high that they interfere with a growing economy and growing taxable income. The best way to do this is probably to keep rates around their current level and kill the tax expenditures that skew toward the richest Americans.

Some final stats to chew on: The BEA found that in the first quarter of his year, individuals paid taxes at an annual rate of $10,549 per person -- "about the same as individuals have paid since 1990 when adjusted for inflation," USA Today reports. Meanwhile the government spent at an annual rate of $18,086 per person.