April 2008
By Alan W. Dowd

Tax Tabulations

• The top one percent of the population pays 37 percent of federal income taxes
• The top ten percent pays 68 percent of federal income taxes
• The bottom 50 percent pays three percent of federal income taxes
• 60 percent of Americans believe the income taxes they pay are fair
• 37 percent believe the taxes they pay are unfair
  Source: Stephen Moore/The American Magazine

Down and Up and Down
The Wall Street Journal’s Stephen Moore writes in a recent issue of The American that marginal tax rates have fallen dramatically—and almost consistently—over the past 48 years.

Decade                         Highest Marginal Income Tax Rate
Early 1960s                   91 percent

Late 1960s                    70 percent

Early 1980s                   50 percent

Late 1980s                    28 percent

1990s                            39.6 percent

2000s                            35 percent
Source: Stephen Moore/The American Magazine

A Generous State
Tax time is an ideal time to take stock of what Americans are giving to charity. A new study by the Fraser Institute finds that almost 31 percent of tax filers donated to charitable causes in the most recent year for which statistics are available, translating into $182 billion in donations.

The most generous state, according to the study, was Utah, “whose citizens donated 3.71 percent of their aggregate income to charity.” Here’s the top ten:

                                    Percentage Donated to Charity

Utah                                         3.71

District of Columbia                   2.40

Wyoming                                  2.30

Georgia                                     2.30

Oklahoma                                 2.28

Maryland                                  2.22

Idaho                                        2.16

Arkansas                                  2.13

South Carolina                           2.11

Alabama                                   2.09

Find out more at http://www.fraserinstitute.org/.

Lower Taxes, Higher Revenues
According to research published by The American Magazine, the Congressional Budget Office reports that “federal revenues have grown by $745 billion since the 2003 tax cuts—the largest real increase in history over such a short time period.”

Euro-Tax
The American Enterprise Institute reports a surprising trend in Europe—a continent-wide push for tax relief.

• The Dutch have cut corporate tax rates from 34 percent to 25 percent.
• Germany has cut its corporate rates from 38.7 percent to 29.8 percent.
• Denmark has cut corporate rates from 28 percent to 25 percent.
• The UK has cut its corporate rates to 30 percent, down from 50 percent in the 1980s.
• Even Spain, which is governed by a Socialist prime minister, has cut corporate taxes from 35 percent to 30 percent. The Socialists’ political rivals promise to scrap the income tax for Spaniards earning less than 16,000 euros (or about $23,100).

Snap, Crackle, Ouch!
The cost of food is skyrocketing, according to the latest Food Index compiled and published by The Economist magazine. Wheat prices have doubled, with milk and corn nearing record highs. In fact, “prices have jumped by 75 percent since 2005.” This follows three decades of falling food prices.

Among the causes for the price spike are changing diets in China, where consumers once lived on 44 pounds of meat per year but now expect more than twice as much; U.S. ethanol development, which means a third of America’s corn harvest is being diverted to bio-fuels rather than used for food; the trend among poorer countries to import food rather than grow their own, which was not the case in the 1980s; and a drought-devastated wheat crop in Australia.

However, The Economist is quick to note that scarcity is not the cause for the record prices. In 2007, the global grain yield was a record 1.66 billion metric tons. But the rising demand for meat, which requires huge amounts of grains to feed livestock, is having a significant impact on supply and price—as is the decision by U.S. farmers to plant less wheat and soybeans and more corn in order to cash in at the heavily subsidized “bio-fuels bonanza.”

Hitting the Target
The Defense Department reports that all services met or exceeded their active-duty recruiting goals for 2007, while most of the services met or exceeded their reserve-forces recruiting goals.

Fortress on the Tigris
The new U.S. embassy in Iraq is being called a city within a city. With a $592-million price tag and a 104-acre footprint, it’s easy to understand why.

The St. Petersburg Times notes that the new embassy has its own power plant and water treatment facilities, adding that it sits on a swath of Baghdad that is six times bigger than the UN compound in New York. The Times of London observes that the embassy complex covers an area “roughly the size of Vatican City.” The jaw-dropping statistics don’t end there:

• Its annual operating budget will be $1.2 billion
• The ambassador’s residence is 16,000 square feet
• It will have enough office space for 1,000 personnel and sleeping quarters for 619.
• It comprises 21 buildings, including a movie theater, gym, beauty parlor, shopping mall and food court, school, Marine barracks, and apartments.

Kick the Can
When asked if they believe “Iran’s nuclear program is for peaceful purposes or military purposes,” 80 percent of registered voters say “military.” When asked if the U.S. should take a “softer line with Iran, including more diplomacy, or a tougher line, including military action,” 50 percent endorsed the get-tough approach, and only 31 percent advocated diplomacy. Yet when asked what the president should do if diplomacy fails to end Iran’s nuclear program, 54 percent said “let the next president deal with Iran.”
Source: Fox News/Opinion Dynamics

Backlogs Bury Reservists
The Uniformed Services Employment and Reemployment Rights Act (USERRA) was created to protect Reservists from losing their civilian jobs while on deployment. But as Amy Gershkoff of the consulting firm MSHC Partners detailed in The Washington Post, thousands of USERRA complaints are languishing in the government’s bureaucratic maze. According to government reports obtained by Gershkoff, “The average time service members have to wait for USERRA complaints to be resolved is 619 days—nearly two years.” 

Some 16,000 Reservist complaints were filed between 2004 and 2006, but the Government Accounting Office estimates that fewer than 30 percent of possible USERRA violations are ever filed.

Over There
Army Ranger Logan Veath began an incredible sixth deployment in six years in December, when he shipped out for a 15-month deployment to Baghdad. The Lincoln Journal Star reports that Veath’s unit will focus on infrastructure projects in the Iraqi capital. A Nebraska native, Veath is the son of an airman and the brother of a Marine.

As a contributing editor to The American Legion Magazine, Dowd writes columns and news briefs on national security, foreign affairs and U.S. politics each month for the magazine's "Rapid Fire" section.