Consumer Law & Policy Blog

Remember: Taxes Are Not High; They Are at Historical Lows

As you assess whether some or all of the Bush tax cuts should be allowed to expire, bear in mind that the popular notion that Americans are suffering under a high and ever-increasing tax burden is nonsense. That's right: It's just not true. To the contrary, taxes are at historical lows. We have covered this issue over the last couple years, including here, here, and here.

Check out this New York Times article from last Thursday. The article focuses on the large gulf between popular perception (taxes are high and getting higher) and reality (taxes are low and have been getting lower). Here's an excerpt:

[A]cross the country, people ... are pained by the conviction that they are paying ever more to finance the expansion of government. But in fact, most Americans in 2010 paid far less in total taxes — federal, state and local — than they would have paid 30 years ago. According to an analysis by The New York Times, the combination of all income taxes, sales taxes and property taxes took a smaller share of their income than it took from households with the same inflation-adjusted income in 1980.

Ralph Nader: Congress Should Enact a Speculation Tax to Narrow the Federal Deficit

Ralph Nader explains in this op-ed that Congress should impose a small tax on trades of stocks and other financial products, such as derivatives. The tax would never exceed 1/2 of 1 percent of the value of the traded product, with the hardest hit on short-term investments. Here's an excerpt:

In the debate over the “fiscal cliff,” President Obama and congressional Republicans have returned to the proposals that they were sparring over before the election. They remain at odds over key elements of revenue and spending. Yet both sides are unwilling to consider a minuscule tax on financial transactions that could be a major source of income. A financial transaction tax would apply to purchases and sales of derivatives, options and stocks. The tax would be small, half a penny or less on each dollar of the transaction value, depending on the product. This idea is often called a “speculation tax,” because it would hit hardest at frothy high-volume trading as opposed to sober long-term investment.

Looking Back on David Vladeck's Soon-to-be-Completed Tenure at the FTC

Next month, David Vladeck will a leave the helm of the FTC's Bureau of Consumer Protection--by all accounts reinvograted under his dynamic leadership--to go back to Georgetown Law. Jeff Gelles, the Philadelphia Inquirer's consumer columnist, attempts to sum up David's tenure in a piece entitled "Consumer chief leaves FTC a feistier place." A snippet:

Speaking last week to the Consumer Federation of America, Vladeck said his agency felt a special duty as it saw what happened after the 2008 financial collapse. Scammers were targeting the "last dollar" of people who had already lost nearly everything - jobs, homes, creditworthiness, even their hope.

It doesn't speak especially well of humanity, but the evidence is abundant: People already on the edge are frequent targets for fraudsters who promise to settle their debts, rescue them from foreclosure, dangle new sources of income, or even promise bogus health insurance. Under Vladeck, the FTC has pursued more than 100 cases against such predators, often winning restitution and agreements barring the principals from ever striking again.

Times Magazine Asks Who Do Online Advertisers Think You Are?

by Jeff Sovern

Here.  The piece is by GW's Jeffrey Rosen and explores how online marketers gather and use information about consumers.  Rosen describes how he visited different web sites using two different browsers, as a result of which one online marketer, BlueKai, created two inconsistent personae for him.  BlueKai, incidentally, allows consumers to see what information it has collected on them here.  But what about the marketers who don't give consumers such a right?  Shouldn't Congress do for online marketing what it has done for credit reports in the FCRA--namely, give consumers the right to find out what is reported about them and correct errors?  Certainly the errors in Rosen's online avatars suggests that such errors are common. 

And then there's the discrimination risk.  Such finely-targeted advertising raises the possibility that advertisers are treating different groups differently. Advertising presents opportunities. If some ethnic groups, for example, see some types of ads that others don't, does that create issues of discrimination?  What if only whites see ads for Maui vacations, and a different ethnic group, say, sees ads for vacations in Atlanta?  Congress enacted the Home Mortgage Disclosure Act to enable observers to determine if mortgage lenders are treating different groups differently.  Perhaps we need something similar to see if advertisers are offering the same opportunities to different groups.