Jul 1 2009, 10:30AM
Daily Chart: Time to Raise Taxes?
Roger C. Altman argued in yesterday's Wall Street Journal that it's time to consider new taxes: "A bipartisan deficit reduction commission, structured like the one on
Social Security headed by Alan Greenspan in 1982, may be necessary to
create sufficient support for a [value-added tax] or other new taxes." Over at the National Review, Veronique de Rugy cuffed him around a bit: "When will lawmakers in Washington understand that the only
way out of this mess is for the government to spend less, not to
institute a VAT, which will just give them license for yet more
spending?"
Seems like a fair chance to toss out some scintillating comparative data on national taxes and debt! Here's total tax revenue, by country in the Organization for Economic Cooperation and Development (OECD), as a percentage of gross domestic product (the OECD average is in blue; the UNITED STATES is in all-caps):
And here's government liabilities as a percentage of GDP (again, OECD mean in blue; UNITED STATES in caps):
Do these numbers include non-federal government taxes and liabilities?
All the stats are pre-TARP right?? What we really need is the Fairtax (HR25) which eliminates payroll taxes by instituting a national sales tax and written into the bill is the stipulation that if an income tax were to be brought back, the Fairtax would be abolished.
Plus, we would collect taxes from undocumented workers. Uncle Sam...take your hand off my paycheck!!
Details available at their site: http://www.fairtax.org
Connor,
I wondered as well if this showed both federal and state tax revenues. It appears to do so. I compared it to Keith Hennessey's graphs and the figure presented for the U.S. is in line with his for combined federal and state revenues. Here's the link http://keithhennessey.com/2009/04/15/a-short-history-of-higher-taxes/.
I don't know if Altman is floating trial balloons on behalf of the administration, but I thought his opinion piece was structured to present only an argument for higher taxes. He seemed to accept mediocre economic growth as a given for the foreseeable future thus dismissing any argument for growth solving at least part of the problem.
It's a big problem that we face and one that probably will require new taxes. But that's not the only fix that can be applied.
You'd have to adjust those tax numbers for the different services provided. If the governments are providing medical care or college education, it's not an apples-to-apples comparison with the U.S..
Also, this is the way unions and CEO's all justify their pay raises... Hey, I'm not getting as much as the other guys!
You should do federal taxes as a percentage of GDP as a follow up.
US time series I mean