Some pretty damning charts from the Center for American Progress show that Americans are relatively undertaxed compared to other countries.
The usual tricks are on display here, such as setting the axes such that a small differences appear to involve precipitous drops, etc. But what interests me much more about these debates is the comparison of countries.
Why would anyone compare the United States to the UK? Because both speak English? That’s about the only thing the countries have in common. Consider this: the US population is 5 times the UK population, but it has 10 times more paved roads than the UK. 12% of the UK population lives in London, while only 6% of the US population lives in LA (the largest US city). And less than 10% of the US population lives in the 10 most populated cites. The US is much more spread out, much more geographically diverse than the UK. Comparatively speaking, the UK enjoys much greater economies of scale for public services and infrastructure than the US.
And this is always the tactic when some aspect of life in the US is the focus of a policy debate. How often was US healthcare compared to that of Denmark (pop. 34) during last years debate? And these charts here compare the US alternately to the UK, Norway, and Australia.
Why not do the obvious, and compare it to all of Europe? Because then you’d have to include the parts of Europe that aren’t also France and Germany. As great as Norway is, what with it floating on North Sea oil, it has only 1/5th the population of Romania, but 5 times the per capita GDP. And that’s Romania. I don’t see Greece, Portugal, or Ireland on those charts either. Remember Moldova? No one else does either, but I assure you it exists, right there in the center of Europe. It has 3.5 million people to Norway’s 4.9 million, but a per capita GDP of $3,000, roughly in line with Ghana.
And before we sing Norway’s praises too much, let’s remember that22% of Norweigians are on welfare and 13% are too disabled to work, the highest proportions in the world. That means, higher than in the US, by the way.
Cherry picking the countries to compare the US to is akin to throwing out data that doesn’t fit some scientific hypothesis solely because it, well, doesn’t fit. What is obviously going on here is that the people who put this chart out are pushing for higher taxes on the wealthy and corporations. They are trying to get the public to buy into that by convincing them that the current system is unfair. This is an important tactic, because really what we are talking about is getting 50% of voters to increase the taxes on about 5% of the voters. That is called democracy.
One more thing missing from these charts that you think would be the first graph they included: in Europe, they tax wealth. Not just income, but wealth. They tax you on how much you have accumulated, in addition to how much you make. If you did this in the US, if you taxed, for example, the Forbes 400–a list of only 400 people–10% on their net worth, you’d get an additional $120 billion in revenue. Each year.
But they don’t talk about that, because if they did, all their support would vanish. Warren Buffett is fond of relating how the tax system is so screwed up his secretary pays a higher percentage on her income than him. Okay then, Warren, how about we forget about income taxes and talk about a mere 10% tax on net worth? All of a sudden the system isn’t so screwed up. Consider how that same message would resonate with people like George Soros, and you realize why no one in the US ever talks about a wealth tax. Those 400 people are, shall we say, highly influential.
It is true that the economy in the US is in trouble, but sloppy statistics and cherry-picked comparisons aren’t the way to solve the problems, they are simply the ways that one side consolidates power over the other.