A lesson about the US tax system

Oops.. and I violated this just yesterday in my post.

Rule: Don't use absolute dollar amounts when discussing issues.  Cite things as a percentage of something else.

For example, don't say "$2 trillion" - say 16 percent of Gross Domestic Product. 

Don't say (as Boehner said yesterday) - a trillion dollars in cuts over 10 years (that works out to $100 billion in cuts a year to a $3 trillion dollar US government budget..peanuts basically....)

Which sounds like more is being done: 1) a trillion dollars over 10 years!!  2) a 3% cut!!!

From yesterday's debate - they were the same, sadly.....

The popular press (and Obama) are great at doing this (heck, any politician or news organization does this ad nauseum).

For example, there are 300 million or so people in the US - and with that 140 million "taxpayers" (many tax returns have multiple people on it - mine has 4 - me, my wife and our two daughters.)

So Obama points out that "50 million Americans are without health insurance!"  He doesn't say that 17 percent of Americans are without health insurance, or even worse for him, 83 percent of Americans have health insurance.

No, he used absolute amounts which make it seems worse.

But on the other hand, he wants to raise taxes on only the top 5% of US taxpayers.  Doesn't seem like much.

But how about "I want to raise taxes on 7 million tax paying households!"  That sounds like more.

And when you consider that the 7 million households represent about 30 million Americans - how about "I want to raise taxes on 30 million Americans!"  Now that sounds a lot worse than 5%!

So - to be "tax literate" - remember to always base your discussion on government revenues and expenditures as a percentage of something else - not absolute dollar amounts.