Some interesting statistics about taxes and spending...
Here is a list of countries with total tax revenue as a percentage of GDP. The important thing to notice is that the United States has a lower tax revenue (at 24% of GDP) than almost all of the reasonably wealthy OECD nations on the list. The tax burden in the US is much less than European countries, Australia, Canada, etc. This suggests that increasing taxes in the USA might not be unreasonable. Of course, Americans might think this is because "all those other countries" are socialist or whatever and our way is better...
Here is some data on historical USA federal tax revenue as a percentage of GDP. The important thing to notice is that total tax receipts (14.9% of GDP last year, predicted 14.4% for this coming year) are at their lowest level since 1950, which was prior to medicare and when the percentage of Americans eligible for social security was much lower than it is today. The predicted receipts go up substantially in 2012 and 2013, but this is predicated on current tax policy, which assumes the expiration of all the Bush-era tax cuts and the failure to extend alternative minimum tax "fixes" which are almost inevitably extended to protect the middle class. Again, this suggests that increasing taxes in the USA might not be unreasonable.
Our government is currently taking in less money (as a percentage of the economy) than it has at any point in recent history, and also takes in less money than virtually any other country we'd want to be compared with. Obviously the government needs to have some revenue (even the staunchest conservatives want the government to do a bit for the national defense and so forth). The above facts suggest that raising taxes in some form should be part of a solution. Note that we have major companies making billions in US profit (GE, Chevron, etc) and paying virtually nothing in taxes. We also have a system where super-wealthy individuals (i.e. Warren Buffet) whose income is mostly capital gains pay a lower rate (roughly 15%) than the middle class... and the Republicans seem to want to cut Mr. Buffet's taxes to
zero (eliminating capital gains tax) while also cutting programs like Medicare that middle class Americans depend on for their very
survival in their retirement. Raising taxes on the wealthiest companies and individuals such that they pay closer to the statutory marginal rate (35% currently) or at least closer to the percentage that typical upper middle class wage earners pay seems altogether reasonable.
Here is a pdf report from the OECD about health care costs. The important observation is that the USA spends a larger percentage of GDP on health care than any other country. This includes both public (government) and private (insurance company) expenditures. There is also discussion of health care outcomes (life expectancy, etc) suggesting that the US is not doing particularly better than other wealthy countries. The numbers suggest that if our health care system were more like that of other countries (i.e. single-payer), we could give
everyone full health care coverage for roughly what we spend in the public sector (on medicare/medicaid) today.
Here is a list of countries by military spending. Note that the USA spends something like 42% of the world's combined moneys on military spending, far more than all our "enemies" combined. Also note that we spend more than other western countries as a percentage of GDP (although not as much as some middle eastern countries like Saudi Arabia or Israel).
This article discusses the growth in US military spending over time. Note that military spending increased at an average rate of 9% per year from 2000 through today, a much faster rate than GDP. These suggest that reducing military spending should be a priority when it comes to spending cuts.
Republicans say things about how "we don't have a revenue problem, we have a spending problem" but that is just political oversimplification. Compared to historical US figures or to other countries, we clearly have
both a revenue problem and a spending problem. The Republicans deny the existence of the revenue problem and refuse to address it, even as part of a compromise with Democrats which would cut spending as well. As to the spending problem, the biggest part of it is health care (where the Republican solution seems to be "get the government out of health care" which is exactly the opposite of what other countries and our own experience have proven to work) and military spending (where Republicans refuse to permit cuts, even to programs that the Pentagon itself wants eliminated).
Adam W. Meyerson
a.k.a. Appeal Without Merit