Courtesy of Lee Adler of the Wall Street Examiner
This story touches on the idea that the US refuses to pay for the things that it wants government to provide, including an immense military and limited social benefits. The US ranks 32nd among industrialized nations in terms of taxes as a percentage of GDP right between Chile and Turkey. The result is huge deficits and cuts in government services at not only the Federal, but particularly state and local levels.
Virtually all of the countries with higher tax rates than the US provide universal health care and stronger social safety nets. If the 18% of GDP that health care costs the US is included in the tax rate as a form of private tax, then the US would have the 9th highest rate of taxation in industrialize Western style democracies. But instead of universal health coverage the US leaves 50 million uncovered.
While Americans may be undertaxed, including the ”health” tax that goes to the US medical business industry, Americans bear a financial burgeon among the top ten in the world, while arbitrarily denying 15% of the American people participating in the receiving the benefits.
The most important debates in U.S. politics today center on the cost and the role of government. Cutting taxes, limiting expenditures, and reducing debt have become the chief concerns of Republicans, whereas Democrats generally seek to preserve or even expand government spending and are willing to raise taxes to do so. The looming expiration of the George W. Bush tax cuts at the end of 2012 and the economy’s weak recovery give these debates special urgency, as decisions made in the next few months are likely to shape the nation’s economic, social, and political trajectory for years to come.
Behind each party’s position lies not only a particular collection of interest groups but also a story about what the government’s role in the U.S. economy is and what it should be. Democrats think Washington can and should play a more active part, using taxation, regulation, and spending to keep the economy growing while protecting vulnerable citizens from the ravages of volatile markets. Republicans, in contrast, think Washington already does too much; they want to scale government back to liberate markets and spur economic dynamism.
When mulling these stories, it can be useful to put U.S. fiscal policy in perspective. Compared with other developed countries, the United States has very low taxes, little redistribution of income, and an extraordinarily complex tax code. These three aspects of American exceptionalism deserve more attention than they typically receive.
via America the Undertaxed | Foreign Affairs.
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