Are Americans' Taxes Really That High? - Spokane, North Idaho News & Weather KHQ.com

Are Americans' Taxes Really That High?

Posted: Updated:

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 (VAT).

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.

  • Most Popular StoriesMost Popular StoriesMore>>

  • BEAUTIFUL HOMES: Top 10 Most Expensive Homes For Sale In CDA

    BEAUTIFUL HOMES: Top 10 Most Expensive Homes For Sale In CDA

    Tuesday, March 25 2014 9:20 AM EDT2014-03-25 13:20:34 GMT
    KHQ.COM - When it comes to shopping around for a house, it's always fun to dream. We did a search for some of the most expensive homes for sale right now in the Coeur d' Alene area.>>
    KHQ.COM - When it comes to shopping around for a house, it's always fun to dream. We did a search for some of the most expensive homes for sale right now in the Coeur d' Alene area.>>
  • WATCH: Cell Phone Video Of Sinking Ferry Released As 270 Are Still Missing

    WATCH: Cell Phone Video Of Sinking Ferry Released As 270 Are Still Missing

    Friday, April 18 2014 4:21 PM EDT2014-04-18 20:21:35 GMT
    MOKPO, South Korea (AP) - Searchers have now put markers on the surface of the water where the South Korean ferry went down. Part of the ship had remained above the surface until today, but now the entire vessel is submerged. They're continuing the effort to find some 270 people who are missing and feared dead.>>
    MOKPO, South Korea (AP) - Searchers have now put markers on the surface of the water where the South Korean ferry went down. Part of the ship had remained above the surface until today, but now the entire vessel is submerged. They're continuing the effort to find some 270 people who are missing and feared dead.
    >>
  • Man Identified In Fatal Crash Friday Morning On Bowdish Rd.

    Man Identified In Fatal Crash Friday Morning On Bowdish Rd.

    Friday, April 18 2014 4:13 PM EDT2014-04-18 20:13:11 GMT
    SPOKANE, Wash. - The man killed in an early morning crash on Friday has been identified as 34-year-old, Alejandro E. Apodaca. Just before 12:30, Apodaca crashed his car on S. Bowdish Rd. He was traveling South on Bowdish near 17th when he lost control of his car, uprooting a tree in the front yard of a home.
    >>
    SPOKANE, Wash. - The man killed in an early morning crash on Friday has been identified as 34-year-old, Alejandro E. Apodaca. Just before 12:30, Apodaca crashed his car on S. Bowdish Rd. He was traveling South on Bowdish near 17th when he lost control of his car, uprooting a tree in the front yard of a home.
    >>