Corporate tax raises relatively little revenue, and most Western European countries don’t rely on it much because its easier to tax individuals.
If we don’t want to be getting more in debt we should raise taxes on middle class people to the level of say Germany. In a state like California, our taxes on rich people and corporations are already about as high as in Germany, its our taxes on people making sub-200k that really dramatically lower. That’s where most of the income is—in the 50-99% range.
That may be true (I haven't checked), but my guess is that germany (and most other western nations) offer a lot more government services for that level of tax. Taxing the middle class here the same as say, norway doesn't make sense unless you offer the same services. My half-decent insurance plan is one of my biggest monthly expenses and I'm lucky that it doesn't impact me too much. Many other "middle-class" people are barely getting by as it is.
> Taxing the middle class here the same as say, norway doesn't make sense unless you offer the same services.
My point is that the bellyaching in America is targeted at the wrong thing. It's not about how much taxes rich people or corporations pay. That's not why Germany has free education and we don't. It's that a household making $100k pays 20% taxes here and 40% in Germany. That's the major difference between the countries.
Exactly. Lots of talk of taxing the rich, but if you look at other countries, the "rich" are clearly middle class. No other way to raise enough revenue.
"The U.S. spends more public money on healthcare per capita than Canada, Sweden, Denmark, Germany, Switzerland, France, Japan, Australia, New Zealand, and the United Kingdom. In fact, each year the U.S. government spends $4,197 per person, while the OECD median spend is $3,677."
It's astounding that as screwed up as the budget & debt picture is, it could still be fixed if everyone were willing to be even modestly rational about our situation. The fiscal house has been on fire for a decade and most of DC wants to pretend otherwise (particularly when their favored party is in power).
- Lock spending growth for ten years at a maximum 1% per year, no matter what.
- Cut $250 billion off the military. Make the human force smaller. Trim or end various very expensive, unnecessary weapons systems. Close & consolidate a lot of bases. Aim for ~2.3% of GDP for military spending.
- Reverse the recent personal tax cuts. Raise income taxes on the top 1/3, staggered toward the top 10%. Try to get $150-$200 billion here.
- Bring Social Security costs down by $50b. Add some means testing for people that really don't need it.
- Squeeze costs out of healthcare by using Medicare/Medicaid/CHIP/VA as a club, across the board targeting of all costs in the industry. The US Government spends over $1 trillion on healthcare, find at least $100b in savings.
- Go to work on the national debt by gently abusing the position the dollar has as the global reserve currency. Have the Fed start a ten year QE program buying $500b per year back in debt and retiring it.
- Federal legalization of marijuana (another tax point for states, perhaps reducing some federal revenue dependency that could be redirected back to the federal budget); it'd also reduce the vast, expensive government prison, policing & enforcement costs. We're heading this direction now, let's just move faster.
- Meaningfully increase gasoline taxes, eg $0.20 per gallon, to fund & offset infrastructure costs. Also consider a new infrastructure tax on expensive consumer vehicles, meant to amplify the contribution by higher income persons to the infrastructure funding increase (since the gas tax hits the bottom 2/3 far harder).
That combination would produce a budget surplus within maybe five years. The surplus after a decade of spending growth locked at 1%, would be immense. We'd be down to $12 trillion in public debt within a decade, with a $26-$28 trillion economy, making the public debt easily managed. The Fed's QE debt retirement could end there. And all it would take is ten years of shared, modest pain and discipline.
> And all it would take is ten years of shared, modest pain and discipline.
Modest for who?
Social Security: There are an absolutely insane number of people who didn't plan for self-sufficient retirement because they planned on social security checks. They shouldn't need it, but they do. Those people are a far larger problem and constitute the bulk of avoidable liability. The problem with SS is people who need it but shouldn't have, not the people who actually don't need it.
Military: Here's a truth that doesn't win elections: blind patriotism is the only palatable way to sell any absolutely enormous jobs program to the US public. A lot of these folks don't have the education or skills required to operate in a private sector unbuoyed by gov't spending. And to the extent that they do, they'd be entering newly saturated job markets with low barriers to entry.
Gas taxes: Carnage for the lots of folks who can't afford to true cost of driving but already sunk 30+% of their annual gross into a car as a 10+ year investment.
The policies you're suggesting -- at least, most of them -- would leave an enormous amount of human suffering in their wake.
Still justifiable policies / good ideas? Well, that's another discussion. But let's be realistic about the impacts.
It raises very little money due to how many loop holes are deliberately left in our tax code.
Adding a tax to the middle class without a corresponding raise in income will result in economic downturn, especially since we are increasing interest rates on an already debt-burdened middle class.
It's not a "loop hole" if its a purposeful design. Countries make the deliberate decision to tax individuals instead of corporations because its easier (and related decisions like taxing capital gains at lower rates). Even countries like Sweden focus taxation on the middle class, with lower corporate taxes and a much less progressive tax structure than the U.S., because it's easier. It's a deliberate fiscal policy.
Oh so its "purposeful" that corporations in the US move their money through 3 different nations to avoid paying taxes?
All 3 nations got together and decided that was the best way to go about it?
That makes sense.
Also the effective corporate tax rate in Sweden is almost double that of the rate Google paid. Claiming that Western European countries pay less in taxes is naive, as their corporations have far fewer loop holes to lower their tax rate.
Maybe if American corporations actually paid the rate they are supposed to we would have a high tax rate, but very few large corporations do.
Now you're changing the subject. Is your point that loop holes exist (which I don't dispute), or that loop holes are the reason why corporate taxes don't raise much money (which is wrong)? Those are two different points.
Google's 11% tax rate probably is the result of loop holes. But most companies don't deal in bits and IP that can be moved around to take advantage of international arbitrage. Walmart pays 29% taxes.
"Republican tax policy" will bring that down somewhat. But corporate income taxes only bring in 9% of revenue. Even if you doubled them they'd be only 18% of revenue. But your effective tax rate would be more than triple that of France.
"In a state like California, our taxes on rich people and corporations are already about as high as in Germany, its our taxes on people making sub-200k that really dramatically lower. That’s where most of the income is—in the 50-99% range."
It is truly astounding how few people realize this...
If we don’t want to be getting more in debt we should raise taxes on middle class people to the level of say Germany. In a state like California, our taxes on rich people and corporations are already about as high as in Germany, its our taxes on people making sub-200k that really dramatically lower. That’s where most of the income is—in the 50-99% range.