US leads world in punitive tax rates
Posted by Richard on March 23, 2011
You know all that leftist carping about tax breaks for the rich and the rich not paying their share? As many of us have pointed out all along, it's bunkum. If they want the US to be more like Europe and the rest of the world, they could start by cutting taxes on the rich. According to the Tax Foundation, the richest 10% of households in the US pay more in taxes as a proportion of their share of income than in any other developed country (emphasis added):
The first column shows that the top 10 percent of households in the U.S. pays 45.1 percent of all income taxes (both personal income and payroll taxes combined) in the country. Italy is the only other country in which the top 10 percent of households pays more than 40 percent of the income tax burden (42.2%). Meanwhile, the average tax burden for the top decile of households in OECD countries is 31.6 percent.
By contrast, column #2 shows that the richest decile in America earned 33.5 percent of the market income in the country in 2005 – the year in which this snapshot was taken, but little has changed since then. But, a few other countries do have a greater or similar concentration of income as does the U.S. For example, the OECD table shows that the wealthiest decile of households in Italy and Poland earn a greater share of their country's market income than do our "rich" – 35.8 percent and 33.9 percent respectively – while the share of income earned by the top decile of households in the U.K. is about on par with those in the U.S. at 32.3 percent.
The table then adjusts for the underlying allocation of income by showing the ratio of income taxes paid to the share of income earned by the top decile in each country. The ratio for U.S. households is 1.35, far greater than the ratio of taxes to income in any other country. Even in the three countries with a comparable distribution of income, the ratio of taxes to income was less, 1.18 in Italy, 0.84 in Poland, and 1.20 in the U.K.
(HT: TaxProf, via Instapundit)
As for that other boogeyman of the left, the corporation — well, the US currently has the second highest corporate tax rate among developed nations. But not for long. Come April 1, we're going to be number one:
According to a study by the Tax Foundation, America’s combined federal and state rate of 39.2 percent is only out paced by Japan’s rate of 39.5 percent – which Japan plans to lower next month. Without Japan in the lead, America’s 39.2 percent will render it the corporate tax rate leader in the developed world, aka the countries comprising the Organization for Economic Cooperation and Development (OECD).
In recent years, many OECD nations have been lowering their corporate income tax to create more favorable environments for business. The Tax Foundation notes that since 2000 Germany, Canada, Greece, Turkey, Poland, the Slovak Republic, Iceland, and Ireland have all lowered their corporate rates by double-digits.
I'm sure all the Socialist Democrats will celebrate on April 1, chanting "We're number one! We're number one!" as we sink further into a 70s-era stagflation. Or worse.
I suspect Instapundit is correct when he opines that a Carter rerun is now the best-case scenario.
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