Donald Trump’s greatest asset is that he single handedly holds the ability to provide fodder for commentators at a pace we can’t possibly match. His acceptance speech last week could keep me in fresh, new topics until 2032 when Pres. Elizabeth Warren will be leaving office after succeeding Hillary.
By the point in Mr. Trump’s rambling remarks last week, after grazing the surface of dozens of topics, when he turned to taxes, I was paying less attention than I should have been. So, I’m not positive exactly where he put the United States on his list of highly taxed countries, but if it wasn’t first, it was way up there.
In any case it isn’t true–not even close.
Ranking countries by taxation isn’t the easiest chore. There are a lot of variables, but there is no way to cook the books to say that the United Sates places, even a moderately high, tax burden on its citizens.
Let’s stick to federally collected taxes. States collect almost all property and goods taxes and they each set their own rates. That’s as it should be and we’ll leave those out of this discussion. As far as federal income tax is concerned, we place 55th on a list of 114 countries when it comes to collecting taxes on people making $100K a year and 53rd when switching the math to those in the top two percentiles. The numbers show that we don’t take advantage of the top two-percenters. They don’t need a tax cut!
Take a look from another angle and we find the good ol’ U.S. of A. 30th out of 33 industrialized countries when the percent of Gross Domestic Product is the denominator. Denmark tops the list at 48% and Mexico is last with about 22%. The U.S.A. is shown between 24% and 27% depending upon the group doing the math–third from the bottom.
Most other countries supplement their coffers with a value added tax on goods. America is in the minority by not doing this. That puts us even lower on the totem pole.
On the surface it looks like we use our corporations as cash cows for gleaning government revenue. Our 39.1 top corporate tax rate is the third highest on any list. But, no company pays that. The average for corporate taxes actually paid after deductions and loopholes is 19.4%, and that puts us back in the ho-hum middle of the pack as tax collectors.
Corporate taxes today have dropped to a mere 10% of federal revenue from about one third in 1950. It is also well documented that there are 26 Fortune 500 companies who have not paid one cent in federal taxes in years. General Electric, Boeing, and Verizon are three of the culprits.
Our corporations have some $2.1 trillion in untaxed profits stored offshore in havens that are often just a postal box.
I checked a ton of data and it is clear that not only are we nowhere near the top of any taxation list, we likely don’t tax ourselves enough. When we get on our high horses and start politicking for our favorite causes, whether it be education, the military complex, taking care of farmers, the social safety net, or any other, we advocate for funding and carp about cuts. The answer isn’t simple. There is certainly government waste and administrative voodoo being played out, but if we had more tax money, we could improve the Veterans’ Administration, hire workers to improve our infrastructure, and on and on.
When universal, single payer healthcare finally comes to fruition, we will have to raise taxes to pay for the merciful expansion of Medicare and Medicaid to every citizen. However, at the bottom line there will be savings. The government cost of delivering universal healthcare will be less than we are paying now to private insurers–we will trade a $5000 bill each year for a $4000 tax–more tax, but less expenditure. That’s good stuff.
Finally, my biggest concern isn’t what Donald Trump said about our taxes, it’s about what he believes about our tax structure. If his completely false comments were heat of the moment politicking, an attempt to scare voters into thinking we are over taxed with few benefits–if he knows it’s a lie–I can understand his desire for a political edge. But, if Mr. Trump thinks that he was speaking the truth, and if elected would operate the government based on that ridiculous premise, we are in for a long, long four years.
Unfortunately, I’m not sure we can ever find out what he really thinks.