Taxes:

Cecil's Columns/Staff Reports
1

http://www.straightdope.com/columns/001201.html

Do these figures for the US then include STATE taxes, capital gains, etc?

Of course not.

The chart then is very deceptive. Most other nations in the world have unitary forms of governance–we have a federal system that includes state taxes. Or most of them do.

Ask any small business owner if 100k a year means you get to pocket that money. And yes, I’m talking AFTER business expenses. Closer to 60K is what you get to pocket after all taxes are assessed.

The US is not starving for tax revenue. Granted we don’t have Swedenic rates–but then who says we should other than chuckleheads who think sitting on the duff and eating ice cream cones automatically entitles people to more government handouts.
What we DO have a problem with are spineless politicians who pander to every conceivable hand begging for something from somebody else. So we might be Sweden yet.

Other than fond memories of ABBA for some, that’s not a really good thing.

2

The table in Cecil’s column clearly states: “Figures don’t include property, sales, or value-added tax (VAT in Europe typically is in 15 percent range).” The problem with trying to include all the variety of sales taxes, property taxes, capital gains taxes, etc is that it would make comparisons impossible. For instance, Germany has state taxes and church taxes, in addition to VAT (sales tax.) And then you can argue about foreign tax credits, and whether charitable contributions are deductible, and… oh, yeah, I bought a hybrid car this year so my taxes are different than… I mean, c’mon, there are zillions of wrinkles in the U.S. tax code.

Your example of a small business-owner isn’t considered in that column, which is focused on individual taxes, not corporate taxes. The U.S. corporate tax rate for small business-owners is higher than individual tax rates.

The question is whether we can make meaningful comparisons, and the answer is yes, but to do so one needs to make some simplifications/assumptions. But however you cut it, U.S. taxes are signficantly lower than taxes in most of the developed world.

3

Yeah I saw the part about what was NOT included.

The problem with trying to include all the variety of sales taxes, property taxes, capital gains taxes, etc is that it would make comparisons impossible

It might be very DIFFICULT. But not impossible. As George Gilder pointed out, when all the tallies are counted and you go past the easy-does-it methodology of only counting the Federal level of taxation, you arrive at a situation where the actual overall tax rate is about 50% of every dollar made. While not sure about the other nations typcially held up as paragons of virtue for raking in big bucks from most people, but in the States many of us DO depend on small business-millions, in fact–so this inclusion, while abominably hard to do, is necessary for any realistic measure of all the accompanying typcial questions of “what we get for the money” variety.

4

Actually, it’s no where near 50% in Ohio.

5

And nowhere near 50% in New Jersey.

6

Let’s try another route here.

As in: Be sure to include it all:

http://www.nowandfutures.com/taxes.html

It is laughable to stop at Federal or state tax rates or corporate rates alone. We can be sure that government is not a malnourished starvling out of some Dickens novel.

http://www.realclearpolitics.com/printpage/?url=http://www.realclearpolitics.com/articles/2006/04/your_tax_burden_the_sneaky_gov.html

For overall taxes–not the highly deceptive Federal levels generally broadcast and bandied about by apologists for a good rectal surge in taxes that some stripes of politicians use like crybabies. No question much of the same crowd that believe in the Audacity of “free healthcare” will find little hits for taxes beyond sales taxes and ad valorem on the sweet ride.

Of course rough averages are just that. Some pay less. The wards of the projects pay little to nothing in Federal but presumably more in cigs and twinkies than the scions of wealth putting around on the golf course.

It is true in Britian as well–where the overall tax rate (the one that counts when all the counting is done and the coffers are finishes filling up), which is not even at the top of the “progressive” tax heap.

Now I’m not saying that this approaches our kin’s sage tax policies overseas. I figure hacking each buck in half is a good stopping point. If paradise is not found by then, so be it. It is not meant to be. If you don’t smoke, drink, use automobiles, or stay up late with coffee your burden will be naturally less. Rough averages can only be that. They are not the mode or the meidan. However it is instructive to note the real burden on how the tendrils of taxation usually finds a way to get the deed done.

7

Just for the record, Sweden isn’t such a bad place to live from what I hear.

8

Dwarf Caiman, if you are going to base your understanding of how much tax we pay on sites such as the two you are linking in your last post, you are going to reach some very poor conclusions. For example, that tax calculating site in the first post is laughable in its efforts. Adding in 8% for sales tax as if you pay that 8% on every dollar you make is really stupid. After all, most states exempt from state sales tax food items and services, which make up a VERY large part of what you spend your money on. So the total contribution of sales tax to the mix is going to be significantly less than 8%. Yet they just add it in blithely as if it makes no never mind. :rolleyes:

Suggest getting some clean, legitimate numbers before you come back to the debate…

9

Here’s a useful OECD .pdf. It’s a little dated but gives you a good picture. It shows 1. total tax revenue by type including state and local taxes; 2 the structure of sub-national taxation; 3. tax as percentage of GDP for OECD countries; and 4. changes in this over from 1975-2003.

It is entirely consistent with Cecil’s characterisation of the US as having taxes that “are low compared to other developed nations” at least as proportion of output.

10

Dwarf Caiman: Your first source takes some sort of “average” – it says state taxes range from 6% to 12% and it picks 10.1%. But it’s wrong: there are some states with no state taxes at all, so the true range is 0% to 12%. And, as noted by DSYoung, those higher rates don’t apply to all income. Heck, even the federal rate doesn’t apply to all income, but your source is wrong is saying that 25% is the top marginal rate.

Your second source just lists varieties of taxes, without quantification. That’s merely political diatribe, not evidence.

Your third source is for the UK, and matches fairly well to what Cecil said – remember that Cecil’s column was written in 2000, saying around a 30% rate compared to your article which sites a 35% rate in 1995. There’s easily a 5% margin of error based on the assumptions made about spending, etc. since your article presumably included VAT (think: sales tax) – as you say, rough averages are only that. And are especially suspect when the distribution is very wide and not necessarily a normal curve.

Cecil’s figures were taken from statistics on what the average taxpayer pays. Such statistics are published by varioius organizations that track cost of living differentials, including taxes, for various income levels and family sizes around the world. (I actually did some minor behind-the-scenes work for this column, and know whereof I speak.)

And, yes, Cecil’s figures were only based on federal levels, because that’s what the question was about. To do a state-by-state comparison would require fifty different entries, and was beyond the scope of Cecil’s column. And, of course, when you start dealing at the state level, then it would be inconsistent to consider only income tax, since states without income tax usually have high sales tax. At that point, comparisons become very fuzzy, since buying patterns for the U.S. are very different from buying patterns in (say) Japan.

But all this is quibbling about precision, not about accuracy. We still wind up with the U.S. being low (among developed countries) in terms of tax.

11

You should be so lucky.

12

Wouldn’t the simplest way to compare taxes be to just sum up all of the money that goes into the government, and divide by the number of people? Surely, those figures are available.

13

Agenda much?

14

If your goal is Swedenic, then we are not that far off. Half of all income–again on averages–is still a hell of a lot of money for missing paradise. The point still being that however the numbers are crunched this obsession is akin to those lists of “child death” rates in places like Sweden also–which is also deceptive for several reasons, one of which is that that is a homogeneious society, the other of course is that not all child death is reported as those in infancy often expire before being added to the official roles, etc.

No meaningful analysis is done for such things without all factors taken into consideration.
Which was also George Gilder’s larger point in Wealth and Poverty.

Having said that, it is probably true that overall we yanks don’t get the rectal probing on taxation that some other nations get routinely. That is a good thing.

While these nations have some wonderful features, a sociological and political climate that fosters what I call “hybrid” creativity and a vital culture and the responsibilities of world policeman are not among them.

Not quite sure of the “luck” of being a Swedenic state where benefits flow merely for taking in oxygen. In a rapidly changing world it may very well be comforting to have what is called a cossetted type of comfy impoverishment, but that can only go so far. Especially as the liability (money wise) of this kind of social services net is under strain from the fact that the birthrates for much of the Industrialized world is dropping.

You cannot tax your way to prosperity. After all, at some point a new generation is on the roles to try and pay for the pension and benefits for a situation of quiet maternity wards and busy nursing homes.

I understand Cecil’s stats being only for Federal level taxation.

Which is far from the full monty and thus mostly meaningless.

15

2005 was the year of those figues–not 2008.

16

Just for the record, Sweden isn’t such a bad place to live from what I hear.**
Neither are the grounds of country club estates.

But I’m not going to pay for someone else to do so.
That’s the “agenda”, if any. At most.

Thanks so much.

Though to be sure, our politicans for a variety of resons have decided that millions of human beings seeking benefits here from various places are effectively turning what used to be a nation into some kind of giant parking lot, yet another situation that most other nations would not tolerate.

Australia is kinda nice to, my brother tells me on his travels. But unless you have some vested reason to be there and can prove so with documentation, they tell you to knick off and place you back on the plane.

17

Yes, Virginia, I do realize that Cecil focused solely on Federal level taxation.
All the more meaningless for the effort.

That was his answer; That was not precisely the question posed, at least not in the tradition sense of the word “question.”

“Are U.S. taxes low compared to the rest of the industrialized world?” 01-Dec-2000

Elsewhere: Having praised Sweden for memorabilia on things like ABBA, I just remembered that Yes, Virginia, it is quite charming to live in a land, I’m sure, where social policy has created a class of people where the divorce rate is 60% higher than the US (and its not damned good here…), illegitimacy exceeds ours by a factor of three, making Fathers’ Day (should they even bother with that) more confusing than Brave New World, and one THIRD of all kids are born out of wedlock. The idea of marriage apparently on the ropes for good due to the kinds of wealth transfers that make this ideal. One hell of a note, to be sure.

Charming to the end. Well, in an Orwellian sense. :stuck_out_tongue:

Yes, the stats can be confusing and mixed and its difficult to get a firm lock on real comparisons on things like tax policy.

Yeah–we at the High Council knew about that. Good show.

And SAY–along these lines economists often DO miss the distinction between RATES and REVENUES and how such are garnered. I could mention the VAST differences in how our kin across the Pond use transfer payments, give allowances for entire industrial sectors (lowering the harrowing gulp of “high” taxes), child allowances, etc., and levels of protectionism that would even embarrass Big sugar here in the States.

Except for the UK, the United States is the only country to raise substantial revenues via property taxes, something not so nettlesome therefore to the Euros, and a high measure of which is business and therefore is not negligible for issues like investment. Because of MASSIVE loopholes, lax enforcement, excemptions, and other ditties that exceed ours, which are the rule more than the exception for both individuals and businesses in Europe, there admittedly ARE serious analytical problems in vesting all the cookies of analysis using merely the income tax rates among the industrialized nations. Or for that matter including everything else. Also true. But this also means that generally Euros pay less at the end of the day—its just we don’t always know exactly how much less.

The United States, in sum, still manages in its own Rube-Goldberg complexity to squeeze more from less across more levels. Thus most observers fail to understand that the US compounds its high direct appropriation of goods and services with what is probably the most progressive system on the planet. It is also the most commercially destructive.

18

Well, except that a large chunk of what goes into the government comes from corporations, not people. While people eventually share this burden through presumably higher prices, the comparison isn’t really apt. After all, if I buy an item that has a lot of component parts, there might have been any number of “compounded” taxes involved.

Similarly, if we tried to figure it the other way, by taking what government spends in toto for the country, we still have some awkward difficulties. For one thing, the federal government provides money to the state governments, which they in turn spend, some of which goes to the local governments and agencies, etc. This makes it difficult to figure what is actually being paid out by government. Further, the federal government pays out more than it “earns,” so to that extent it isn’t reflective of the actual tax burden in any given year.

And keep in mind that collecting the taxation and/or spending totals for every governmental entity in the country would be a daunting task, to say the least! :eek:

And I notice that Dwarf Caiman totally ignored the points made about his/her linked sources, in order to make more statements on the agenda. :rolleyes:

19

State and local taxation is included in the link I gave.

20

I’ve heard this claimed before. There are really only two problems with it: a) it’s not true and b) it wouldn’t be relevant if it were.

Cite?