There is a vehement and polarised debate going on in this country about our budget deficit.
One side argues that America’s taxes (revenue) are already much too high and that the budget problem is “just a spending problem.”
The other side, meanwhile, argues that the deficit is the result of a combination of factors, including economic growth being too slow, spending being too high, and taxes being too low.
Obviously, this is a philosophical argument more than anything else.
The conservative side of this argument believes that the government should not support poorer, older, sick, or out-of-work Americans–and, therefore, that we should cut a huge portion of our government spending.
The liberal side, meanwhile, thinks America should continue to support poorer, older, sick, and out-of-work Americans–and, therefore, that we should continue to have the government spend on these programs.
Reasonable people can disagree philosophically.
And it is certainly worth having an ongoing national conversation about what sort of country we want America to be.
But one fact should be kept in mind during this argument.
America is NOT a high-tax country.
In fact, America is a relatively LOW-tax country, when compared to almost all other developed countries in the world.
What those who are saying that America should continue to cut taxes are arguing, therefore, is that America’s government should provide far fewer services than the governments of most developed countries do.
Don’t believe it?
Take a look at these charts.
They’re from an excellent new KPMG report on global tax rates.
These charts are based on 2012 taxes, and some U.S. taxes have increased since 2012, but the U.S. will still rank relatively low.
Before you look, here are some key points:
- These charts include Social Security taxes. They’re the blue part of the bars.
- These charts include state taxes (KPMG used New York State tax rates, which are relatively high).
- These charts do not income capital gains taxes, which, in the US, are quite low. So, in terms of overall taxation, the US’s global ranking may actually be overstated.
- These charts do not include “VAT” taxes that appear in many other developed countries. They also don’t include state sales taxes, which can be viewed as the same thing as a VAT tax.
So here you go.
For those who make $100,000 a year, the U.S. is the 55th-ranked country in terms of total taxes (click for larger):
For those who make $300,000 a year, meanwhile, U.S. rates rates are a little more punitive. For these folks, the U.S. is the 53rd highest ranked country:
READ MORE: The Highest Tax Rates In The World
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