What Americans don't know about their tax rates

A lot. Mitt Romney's 15 percent tax rate might seem outlandishly low, but it's actually higher than what many of us pay. Taxes, in fact, are at their lowest levels in 60 years (nearly half the population doesn't even pay federal tax). This disconnect between what we think we pay and what we actually pay is helping distort the economic and political narratives. From the NYT's Dave Leonhardt:

Since the late 1970s, just before the modern tax-cutting push began, total federal tax rates have fallen for every income group. The payroll tax has risen, but declines in the income tax have more than made up for those increases. Nearly half the population now pays no federal income tax. All told, most households pay less than 15 percent of their income to the federal government because of tax breaks, like the exclusion for health insurance, and because marginal rates apply to only a small part of a taxpayer's income. On the first $70,000 of a couple's taxable income, the total federal income tax rate is only 13.8 percent.

The reality, of course, is that all taxes should be raised, not lowered. Same in California, where the very wealthy have been paying a disproportionate amount. Soaking the rich sounds like a grand idea, but when the rich have a bad year or move out of state the revenue numbers quickly plummet and California is back with a huge deficit. This is why the ballot proposal to raise taxes for higher income earners is not the ultimate answer in dealing with the budget.