YAHOO.COM - No, the U.S. is not a high-tax country. But saying exactly how not-high-tax we are gets a little tricky.
The graph at the top of this article comes from a KPMG report excavated by Henry Blodget. It shows personal tax rates on $100,000 around the world. The U.S. comes in at 55th out of 114.
As for the richest one or two percentiles of earners, we come in at practically the same place: 53rd-highest. Reminder: The fiscal-cliff tax hike kicks in about $100,000 above this level.
But these numbers might understate how low taxes have been
in the U.S. Unlike most advanced economies, the U.S. don't supplement
personal income taxes with a national sales tax, or value-added tax
Consumption taxes accounted for about a fifth of total U.S.
revenue in 2008 (mostly at the state and local level) compared to an
OECD average of 32 percent.
In other words, the U.S. relies uniquely on
personal tax rates to raise revenue -- and we have relatively low
personal tax rates.
The best way to answer the question "Are U.S.
taxes high or low compared to other countries?" is to look at taxes as a
share of the economy. Here's how the U.S. stacks up to other OECD
countries in a graph from the Tax Policy Center. (We're at the bottom of the stack, 25 percent below the average.)
For the next few years, there's no particular reason to expect there
will be another major tax increase, but after 2020 the government's
health care bill will start to make our spending levels look, for lack
of a better term, European.
There are any number of ways to stop the
trend, from the extreme -- turning Medicare into a voucher-support
program -- to the incremental -- tweaking Medicare and hoping that
medical inflation slows down on its own.
But either way, the U.S. won't
have historically low interest rates forever, and it's probable that the
third-lowest tax/GDP ratio in the developed world is a good deal for
now, but not a sustainable deal for the long run.
Friday, December 6 2013 2:18 PM EST2013-12-06 19:18:21 GMT
KHQ.COM - We all know that passwords protect our personal accounts and information. >>
KHQ.COM - We all know that passwords protect our personal accounts and information. However it's important to make sure that your password is unique and difficult to prevent people and software programs from figuring it out.>>