PK used the following chart to make his point. He uses it as proof that
US citizens pay a low tax rate. Krugman wants us to believe that
because we rank so low on this list we should be more than willing to
accept higher taxes to support that big government "we" all want.
It’s hard to argue with this list and the conclusions that PK draws from it. Let me try. This is the raw data that the chart Krugman used was based on:
First let me point out that the 2009 data for the USA (30.1%) was the
lowest in the 13 years of information presented. This is because the US
was in a recession in 08 and that always means lower tax
receipts. To make a statement, Krugman uses the most opportune data to
support his position. When you look at the past and projected numbers
you see that the US average of ~34% is right in line with Japan, Korea,
Australia and Switzerland.
For me, the most significant error by Mr. Krugman and his chart is that
he deliberately chooses to exclude exactly how high those tax rates are
in the countries he holds up as shining examples. Yes it is true, Norway
Sweden, Denmark, Finland, and France have higher taxes than does
America. But look what they are paying to get to the top of the list.
Respectively 56%, 56%, 54%, 53% and 49% of GDP. Who wants to be on the top of that list? I doubt the folks in Sweden or Denmark are so proud to have made it to the top.
What Mr. Krugman shows up as an example of “what we should do” is
actually a disaster. Mr. Krugman should get his head out of, well,
academia and start talking to Americans of all stripes. Liberals,
conservatives and all the folks in between. He won’t find one that will
stand up and support 50+% taxes on GDP. What may be acceptable in Sweden
is simply not going to sell in America.
If he bothered to ask a few economists what they thought 50%/GDP taxes would do for America he would also get an earful. That is just stupid bad policy.
It shouldn’t surprise us a bit when politicians like Ryan and Obama talk
about numbers and budgets and spin every chart to suit their agenda. It
quite another matter when Nobel economists do it.
It's quite simple really. What you earn is yours. No one else has a claim on it. If you choose to be charitable, good on you. If not, you might be a pig. But it's your right to be a pig.
If all paid the same rate, the rich would still pay more. Make the tax (in whatever form) a flat tax with no deductions, and all will pay their share.
Get rid of crony capitalism as well. Sink or swim. No handouts. No bailouts.
That really is all it would take. Without progressive taxes making taxes easier to raise and without corrupt bailouts and handouts, the cost of government would go down as well as discouraging class envy.
The corrupt system we have puts us at each other's throats instead of working together.
</pollyanna>
It's amazing that only a few years after the collapse of the Soviet Union, we're preaching the virtues of big-government socialism. Didn't we all witness the lessons of scarcity, motivation (or the lack thereof), the development of black markets, and the ultimate need to dominate speech, freedom and personal liberty? Oh, wait... I know... But we're smarter than those stupid Russians, right? We'll never go that way. Riiight.
whose preaching USSR central planning govt? who is preaching less liberties, were are talking tax rates and which sectors of ecomony it is efficient to provide things thru govt services. Do Sweden, Germany, France seem like places lacking in liberty. I would call each parent being able to stay home for 18 months paid paternity/maternity leave a lot of freedom, even while my country's economy, businesses, and retail shopping choices thrive. Have you been to retail and business areas in Germany, France and Sweden, have you been to their rich adn poor neighborhoods, they have very rich and ritzy areas and they have way less poor ghetto areas than we have. And do you hear how much France protests, they seem to have their liberty intact, and have plenty of free speech. And Germany is WAY WAY better on privacy than U.S. is...in fact all these countries think we yield too many personal liberties in our war on terror than they would.
Please, I think you and most people are intelligent enough to know the choices are a bit more broad and complex than anybody arguing about the efficacy of say public versus private spending in health care is then advocating for no free markets and central planning ala Soviet Union.
I'm suggesting we do a simple, real world, today, comparison with other modern countries that have higher taxes and see who gets more value for their private and public dollars spent. You may not agree with conclusions, although you can't ignore fact that countries that have much bigger govt than US and much higher taxes are not dying and choking under the burden but in fact are getting at least decent return for their tax dollars and are doing at least as well in their overall economy, if not a whole lot better, as we are. Do Swedes, Germans, French, have less consumer good options, less travel and vacation options than we do? Do their businesses do worse competing globally? And Britain's completely govt health care, Canada's single payer Medicare for all program, and France and Germany's most public, some private universal care programs, all cover their entire population for half the price per GDP as our private and public health care systems do, when still not covering 50 million, non-poor, working age people. You may not want your choices limited, but consider this trade-off if your health care could be delivered by German's standards, of France's standards, or Britain's standards, or by Canada's standards, which Americans seem to think is way way inferior to ours, but by doing this, you could cut our health care costs in half, and practically wipe out all the budget deficit...this may not be your choice, but you can see how this is an appealing choice, option, how it would bring an enormous amount of economic value. Now not everyone wants to a drivve a $18k compact car that is safe and practical and gets around 40 mpgs, some people would prefer a sports care that is not safe, or a big sedan that get 20 mpg etc...but to say considering the inexpensive practical car is stupid backward thinking is not correct.
There are many services that are more efficient to deliver via one supplier, such as a regulated utility monopoly, shoot even garbage collection. My town govt has nothing to do with garbage collection, we all buy from whomever...and my aller has 20 different trucks passing thru each week, with each pass ruining the road at 100 times damage of a regular car pass. The trucks all polluting air and using gas, and it turns out, we pay about 20 percent more on average than town of similar sizes that have garbage collected by single source govt service, and those towns minimize traffic on roads, one truck pass, once a week, and their employees make decent living. Some sectors of economy are just better served by govt monopoly or regulated private monopoly.
Competition and private markets are great idea and should be used whenever it benefits us in getting value, but I don't think we should use them even when they don't deliver value and are not effective. Competition and free markets are economic tools for our benefits, not masters. Liberty, privacy, free will, free speech, now these are human rights. But part of liberty is the ability to democraticly choose to have garbage collection costs reduced and traffic reduced, and damage to roads reduce by having a single source of garbage collection rather than 20 more expensive options.
The west has gone to Oligarchy that steals even more economically...or are you still in never never land? And denies those very rights in the third world where they do to them what Stalin did to his own...More clever that...but now the chickens are coming home to roost with a vengeance the people's ire in the REAL empire, the only one left...until the next one!
The percentage that is always graphed in WSJ usually shows about 20-22% long run average, with the peak (WWII, etc.) at about 24 or 25% as I recall. Does this include state and local taxes? I assume it does.
If not, it is extremely misleading (misleadingly low that is)