According to the heated rhetoric coming from certain quarters, United States citizens are laboring under a steadily increasing tax burden that is likely to bury us all under a mountain of debt and crush our hopes and dreams.
Now, as a proud Scottish-American, I am proud of being reasonably thrifty. My colleagues would probably substitute the word “cheap” for thrifty. If I’m not brown-bagging my lunches, often with leftovers (four-day-old marinated chicken thigh on wheat bread today), my idea of a splurge is the Greg’s Meat Market special.
So, yes, I would like to keep as much of my and my lovely’s wife’s hard-earned salaries as possible rather than send it to the federal and state governments.
On the other hand, I also like paved roads; schools; parks; protections against crime, invasion and terrorism; consumer protection; college loans; disaster relief; some sort of social safety net for those in need; and, in the not-too-distant future, Social Security and Medicare.
It is also my understanding that I, and the rest of us, have to pay for those things. Therefore, some sort of balance needs to be struck.
Now, if I were independently wealthy, I wouldn’t worry so much about some of those issues. I would be paying for private schools. I wouldn’t need parks, because I could afford fancy vacations. Crime? My gated community and private security would deal with that. Social Security and Medicare? Wouldn’t need them; I would rather keep my cash and invest it. Consumer protection? An annoyance to my company’s profits.
I might well be supporting the party that advocates for lower taxes, because that would boost my bottom line, and I wouldn’t need those government services.
But I’m a small-town journalist, and my wife is a teacher. We’re solidly middle class, if that. I’m thinking a lot of what the government does is actually pretty useful.
So what is my fair share? How much taxation is counter-productive to the economy? Hey, I’m willing to pay less if it will help the greater cause. Sounds good to me.
I’m not sure how much taxation is the right amount, but here are some facts.
Our current level of income taxation is the lowest it has been since 1950, according to the Bureau of Economic Analysis. At this point, U.S. citizens are paying 9.2 percent of their incomes to the IRS. Since 1960, the average amount paid has been 12 percent.
Correct me if I’m wrong, and there certainly have been a couple downturns, but there have been good times while the tax rates were higher, too, with booms in the mid-1950s and mid-1960s, the 1980s, the 1990s and 2000s. Of course, then tax cuts in the early 2000s combined with two wars increased our national debt, but that’s a discussion for another day.
But how do we compare with other countries?
Most available data looks at the Organization for Economic Cooperation and Development (OECD), which includes many European and Latin American countries as well as Japan, Korea, Turkey and the U.S.
According to three sources — ThePolicyCenter.org, PublicAgenda.org and IBM.com — the U.S. tax burden is low compared to most of the 30 countries in the 50-year-old OECD, and is shrinking.
In 2006, the average tax burden among the 30 countries was 36 percent, and the U.S. tax burden stood at 27.3 percent. Only Mexico, Turkey, Korea and Japan had lower tax burdens. Those numbers are courtesy of ThePolicyCenter.org.
By 2008, the U.S. tax burden had dropped to 26.1 percent, and was the third lowest, per PublicAgenda.org.
By 2009, according to an IBM project, the number was even lower, 23.9 percent, behind only Chile and Turkey.
By the way, virtually every other country in the OECD has national health care paid for by the federal government and those taxes. Meanwhile many U.S. citizens pay for private insurance or receive it from their employers. And if it is coming from employers, it is an anti-competitive burden on those businesses. And those of us with insurance already effectively pay for those without. Just sayin’…
So, no, I don’t really want to pay more. But I also don’t want to give up many of those benefits, nor do I want to leave a huge tab for my two daughters to help pick up.
So, are we taxed enough already?
Andy Kirkaldy may be reached at [email protected].