a) Income Taxes -- Here's the comparison of taxes on $100k in income: http://i.imgur.com/GR9czuF.png - USA has the 53rd highest effective rate. $100k too low? We actually move down to 55th if you look at the same chart for $300k in income: http://i.imgur.com/2hb7iuB.jpg
b) Corporate Taxes -- Some of the lowest effective rates in the OECD: http://i.imgur.com/ZdPCL9C.jpg
c) Estate Taxes -- "We pay 50%" -- No 'we' don't. The tax doesn't apply at all if you leave your money to a spouse, farms and other small businesses are exempt as assets, only assets over $5.3 million have any tax applied at all, and the rate is 40%. $5M estate when you die? Tax rate = 0%. $6M estate? Tax rate = 4.7%.
d) Tax enforcement is strict? Come on. The vast majority of tax cases ended up with the 'guilty' party settling and paying back taxes. A few end up with penalties on top (most penalties are negotiated away for prompt payment). The only people imprisoned are those willfully engaging in tax fraud.
2. High earner tax rates -- This is so wrong. High earner rates are at the same level they were in the 80's and 90's: http://i.imgur.com/fklDml0.png --- But most importantly, the '1%er' incomes have risen dramatically. If we were in a truly progressive tax system, shouldn't tax rates increase as incomes do?
3. Make sure you're comparing apples to apples.. the OECD and Heritage (who are no fan of taxes and would have every incentive to make the US look worse) show a completely different story than the one you're providing: http://en.wikipedia.org/wiki/List_of_countries_by_tax_revenu...
They show the US at 26.9% of GDP for 2012, Canada at 32.2%, the UK at 39.0%, and France at 44.6%. If you've ever spent time in any of those countries, you'd surely see how absurd it sounds to indicate that we're taxed more than they are.
As for 'We're only 5 points lower than the UK'. Even if that was true, only 5 points would mean almost a trillion dollars in additional tax.
b) The low effective rates published by the GAO and others are well known to be utterly false. Here's a primer: http://tax.org/TAXCOM/TAXBLOG.NSF/PERMALINK/MSUN-99DKXS?OPEN...
c) Again, we're talking about estates worth billions. 50% effective.
d) Talk to some tax accountants in other nations to get a feel for how strict US tax enforcement is. The differences are glaring and obvious. It'll also dispel any notions you had about the US tax rates being lower in practice.
2. Effective rates are higher due to closed loopholes and tighter enforcement and the inability to leave the US with ones assets.
3. I've lived in several different nations. You may be interested to know that, for example, the US government spends more on public healthcare per person than does the UK.
The US has some of the lowest taxes in the developed world:
Note the lack of high regressive taxes such as VAT, excise, and import taxes in the US.
Well, I'm pretty sure that there's more redistribution in northern Europe than in the US. Sure, there's a lot of "paying yourself" going on, but that's hardly everything. Anyway, my point is that in most industrialized countries the mechanisms by which you pay yourself are much more efficient than in the US.
No, but many have sales taxes (which are not the same thing as a VAT, though they serve a similar purpose; VAT's are collected at each step in the supply chain, sales taxes only on sale to consumers.)
[1] https://en.wikipedia.org/wiki/List_of_countries_by_tax_reven...
Or to be more precise: No reason it can't happen here again. Don't forget slavery and Native Americans.
EDIT: Moved this from a sub post to here:
A lot of people are evidently misinformed about the state of US taxation. Since several have responded to my previous post with similar statements, I'll just take the top post and address the whole issue in one go.
1. The US has low tax rates relative to the rest of the world
For low earners, yes. For high earners no.
Re low earners: Federal income tax is low, SS contributions are moderate, but - and this is key - sales taxes (VAT) are extremely low, excise taxes on fuel are extremely low, and import duties are generally extremely low. Car registration, government fees, etc are all generally moderate to extremely low.
Re high earners:
a) Income taxes are extremely high. See http://en.wikipedia.org/wiki/List_of_countries_by_tax_rates , sort by "Individual (max)", and note that only France, Belgium, Sweden, and Aruba are higher.
b) Corporate tax is extremely high. Note that many will correctly state that some corporations are able to avoid some of the corporate tax. This is true, though overstated if you only follow what the NYT reports. For domestic US corporations doing business only in the US, their effective corporate rate will range between 35% and 45%, depending on their state.
e) Estate taxes. We pay 50% of our net worth upon death on all assets transferred to our descendants. A truly morally repugnant tax, this one. Passing on our advantages and earnings to our children is a great joy to many people.
d) Tax enforcement is insanely strict. Prison sentences and hefty fines await those who transgress.
e) We can't leave: American citizens pay tax to the US government even if they reside elsewhere. If we give up our citizenship, we must pay the US government between 30 and 40% of our net worth. The US is the only OECD nation to do this.
2. US taxes are lowest they've been since XX!"
This is true for low and middle earners, whose current tax rates are very low. Not true for high earners. The US tax code is the most progressive in the OECD.
The last tax reform was under Reagan. He traded high tax rates with lots of loopholes for moderate tax rates with few loopholes. Since then, the few loopholes have largely been closed (with exceptions, such as the popular middle class* home interest deduction) whilst rates have risen substantially.
See the wiki link above: top US income tax rates are the fifth highest in the world.
3. Overall US taxation is low!
As detailed above, the US taxation regime is the most progressive in the OECD. But taxation is still not low. At 34% of GDP[1], it's higher than Canada and only 5 points lower than the UK. 11 points less than France.
[1] http://www.usgovernmentrevenue.com/total