| thranx said: I did read it. when you are going to compare how much tax is paid by a person, and what % of GDP is spent by the government and compare it to another nation its best to have the most accurate numbers or the comparison fails. We pay a large portion of our taxes to the state so it adds a lot more to what our overall government spends. If austraila is different (which i think it is) than your comparisons are wrong. Off the top of my head I am pretty schools are paid for by state and local funding, not federal. Our taxes also do not inlcude a national health care system. I think once you take that into account you will see we have a spending problem. We are spending a greater percentage of our GDP than ever before, and the government is currently collecting a larger percentage our or GDP in taxes, and there is no end in sight for the deficit. |
Why do you think that Australia's state system would be dramatically different from America's state system?
Australia has the tax structure set up differently, but federal revenue and state revenue are essentially kept separate. Our payroll tax, for instance, is a state tax, not handled by the federal government. And State responsibilities include health and education, too - our public schools are referred to as "State Schools", because they're handled by the state, not the federal, government. We also have local governments, which are predominantly funded by what we call "rates" - local taxes that are levied against people living in the area governed.
And as I said, America has a problem of bad spending, not high spending. You should have a federal health system of some sort, and that system should get a reasonable amount of funding. That funding could easily be taken out of your extremely large defense budget, where the waste is perhaps worst of all.
By the way, you're spending a greater percentage of GDP than any recent time... and yet you're still only spending about on par with what Australia has been spending for quite a while. Australia comfortably survived the GFC, America went into recession. Think about that. Your claim is also false - the US spent far more as a percentage of GDP during WWII, and during WWI it was a little higher than it is now. Of course, during WWI, the top income tax rate was about 70%, and during WWII, it was over 80% and went as high as 94%. Your top tax rate now is just 35%. No wonder your public debt is growing so rapidly.
By the way, here's a plot of US top marginal tax rate vs GDP growth rate for 1929-1945:
Higher maximum marginal tax rate correlates with greater GDP growth, not less as those who are anti-tax would have you believe.
Of course, one thing to note is that a large chunk of US spending actually goes to paying off interest on your public debt. As such, you do need to temporarily restrain some spending, in order to start reducing the debt. As the debt shrinks, you should start to increase your spending to maintain your budget surplus at a fairly constant level. If you can get public debt down to about one tenth of its current levels, you should be in a strong position.
But reducing spending, even temporarily, isn't going to solve the problem. Tax rates need to go up, because if you cut spending too far, it will tank your economy even further. And don't fall into the trap of thinking less expenditure means less deficit. There's a heap of feedback systems within economies, which mean that cutting spending can cause a reduction in revenues. It's all a complicated balancing act, and the kind of reductionist arguments put forward by so many American politicians (on both sides) and so many closed-minded right-wing commentators and lobbyists is only further harming your country.
So again, I'll say it - America needs to look at other countries, and figure out what works, and what doesn't. Stop the damn oversimplified introspection and learn from the rest of us a little.
