The week when federal taxes are due predictably generates fist-shaking by the various forces for individualism and small government, and increasingly, counter-demonstrations by the “99 percenters” who favor a stronger public sector and more fair economic outcomes.
But the basic fact that taxes actually are lower in the United States and in Minnesota _ lower overall than in other wealthy nations and lower for the wealthy in our country than at any time in recent decades _ is often missed by news media coverage of the sign-waving by both sides.
The most crisp presentation of these realities I’ve seen recently comes from the national group Demos and The American Prospect, which produced the following “Top 10 Tax Facts”. Growth & Justice was a partner last year with Demos in a report on the declining security of Minnesota’s middle class.
- The government has collected less in taxes as a proportion of the economy in the past three years than it has in any three-year period since World War II, and tax rates are at historic lows.
- One out of three multi-millionaires pays a lower percentage of their income in taxes than the vast majority of people making $60,000 a year.
- House Budget Chairman Paul Ryan’s tax-cut proposal, which has been praised by presidential candidate Mitt Romney, would deliver benefits to people with incomes over $1 million that are 10 times greater than the benefits to those earning $40,000 or less.
- Corporate income taxes for the past three years have hovered at just over 1 percent of GDP, lower than for any three-year period since World War II. The average for OECD countries is 3.5 percent.
- The Bush tax cuts added $1.7 trillion to the nation’s debt between 2001 and 2008, which is more than it would cost to send 25 million kids to four-year public universities.
- America has a revenue problem, not a spending problem. It is only because of the Bush tax cuts that our national debt is rising. If not for those cuts, our debt would be stabilized at under 60 percent of GDP.
- General Electric, which reported over $4 billion in US profits in 2010, paid ZERO taxes.
- A financial speculation tax of only 0.50 percent on financial trades couldraise up to $170 billion annually.
- Upper income households save an average of $5,500 thanks to the mortgage interest tax deduction whereas families earning between $40,000 and $75,000 save only $500.
- Only two OECD nations collect less revenue as a percentage of GDP than the United States—Chile and Mexico.
For my money, that last fact is the most compelling. Do we want our nation and state to be more like Canada, or more like Mexico? Immigration patterns in both hemispheres suggest that people are voting with their feet for the safer and more prosperous destinations with higher taxes, more equitable communities, higher education levels, and better jobs.