Americans are undertaxed

They say there are only two things certain in life: death and taxes. Alas—and you will understand why I say “alas” in a moment—only the former is truly certain in too many American lives.

With that in mind, I want to give a big guy2k/Red Wind shout-out this morning to the editorial board of the New York Times for putting in print something I have been screaming (mostly, but not entirely, metaphorically) for well over a decade: America, as a whole, does not pay enough in taxes.

With corporatists, Republicans, and libertarians coming at me from the right, and the working poor or the just chronically overworked underpaid who shoulder more than their fair share going bug-eyed on my left, let’s just say that this is not one of my more popular views. In fact, saying that Americans are undertaxed in front of Bill Maher once got me tossed from an audition to be on Politically Incorrect (his producers, by the way, really loved my “incorrect” stance, but it was Bill’s show, after all).

What I tried to explain to Bill all those years ago, and is even more true now, is that Europeans laugh at us when they hear the American vox populi whine about high taxes. As the Times details:

According to a report from the Organization of Economic Cooperation and Development, a think tank run by the industrialized countries, the taxes collected last year by federal, state and local governments in the United States amounted to 28.2 percent of gross domestic product. That rate was one of the lowest among wealthy countries — about five percentage points of G.D.P. lower than Canada’s, and more than eight points lower than New Zealand’s. And Danes, Germans and Slovaks paid more in taxes, as a share of their economies.

The reason Americans think they are overtaxed (as I tried to explain then, but as the Times falls just short of explaining today) is because we don’t see our tax dollars coming back home and working for us. With large percentages going to the military, farm subsidies, and various aid programs for the poor and elderly, the bulk of the hard-working, tax-paying electorate feels like they are getting a raw deal. And, frankly, with too much of our federal kitty going to the military-industrial complex and agribusiness, most taxpayers are.

When polls are conducted asking individuals if they would be willing to pay a few dollars more a year (and we really are only talking about a few dollars for average earners) for equal access to affordable healthcare, cleaner air and water, safer food, or better public schools, the results show most Americans are easily sold on the idea.

Of course, when polls are conducted asking Americans if they wouldn’t like to pay less on their taxes, most say yes—but, hell, who doesn’t love a bargain?

The problem is that an underfinanced and unprogressive tax structure is no bargain at all. Americans pay every day for the shortfalls in the government coffers and the shortsightedness of pandering politicians. Again, the Times:

Politicians on the right have continuously paraded the specter of statism to rally voters’ support for tax cuts, mainly for the rich. But the meager tax take leaves the United States ill prepared to compete. From universal health insurance to decent unemployment insurance, other rich nations provide their citizens benefits that the United States government simply cannot afford.

The consequences include some 47 million Americans without health insurance and companies like General Motors being dragged to the brink by the cost of providing workers and pensioners with medical care.

For most of the last thirty years, our tax-cutting “leaders” have flattened what was once a truly progressive federal income tax into a high-calorie subsidy for corporations and very wealthy individuals, while providing a subsistence level diet for the government. Or, especially as we move forward, with the burdens of foreign policy fiascos and crumbling domestic infrastructure, a sub-subsistence level diet. It is time for some of our true leaders—and I’m not saying there are many—to acknowledge that fact, to expend the time and political capital to explain it, and to then set about fairly and properly nourishing the civil sector.

(cross-posted to guy2k, Daily Kos, and The Seminal)