The anti-tax movement has been even more harmful than you think

The anti-tax movement has been even more harmful than you think

by digby

I have spoken to many European friends over the years about how they deal with their so-called "tax burden" which to any American sounds like it's extraordinarily high. And they always laugh at me. They know they actually pay much less for all the things a modern society has to offer --- and they have the peace of mind that goes with living in a society where you don't face bankruptcy every time life throws you a curveball.

Josh Holland has written a very good piece on this subject in which he examines just how destructive the cagey and self-serving plutocrats' sponsorship of the "low tax" propaganda in America has been:
Delinking taxes from the services they pay for has arguably been the modern conservative movement’s greatest success. No politician has ever been booed off a stage for promising to cut taxes. But decades of public opinion polling shows that, with a few exceptions, Americans are actually quite fond of the goods and services the public sector provides. They may be wary of the idea of “big government” in the abstract, but they like well-maintained infrastructure, safe food and clean water, efficient firefighting and policing, Medicare and Social Security and virtually every other government-provided service you can name.

This paradox is well known to politicians and policymakers, and has caused a good deal of hand-wringing among those who favor a progressive tax system that raises enough funds to cover the services Americans expect. But there’s another consequence of anti-tax demagoguery: low, low taxes come with a steep cost. In fact, a lower tax bill – especially for federal taxes — actually works against the economic interests of most Americans.

That’s because we pay ridiculously high out-of-pocket costs for things that are provided by the public sector in other developed countries. The difference is quite dramatic. The Organization for Economic Cooperation and Development (OECD) — also known as “the rich countries club” — tracks both public and private financing of social spending. Americans pay almost four times as much as the citizens of other wealthy countries for things such as retirement security and health care on the private market – 10.6 percent of our economic output versus an average of just 2.7 percent among OECD member states.

Contrary to popular belief, American families and corporations enjoy relatively low taxes – in the OECD, we ranked third from the bottom in total tax burden in 2010 – but it’s almost a wash when you add back what we spend out-of-pocket. The eight OECD countries with the highest tax burdens in 2010 (Denmark, Sweden, Norway, Belgium, Italy, France, Austria and Finland) paid out an average of just over 32 percent of their economic output for social services, while we forked over just under 30 percent.

The difference is that we ranked near the bottom in the OECD (26th out of 34 countries) in terms of public spending on these services. Government-provided services accounted for around 19 percent of our gross domestic product (GDP), compared with 29 percent of GDP in those high-tax countries. The difference was made up from out-of-pocket spending by citizens.
You may think you're spending less because you have lower taxes and more "choice." But you're not. You're paying more and often giving a bunch of your money to middle men and "service" providers whose only job is to skim a nice little piece off the top. Because: freedom.

If you haven't been to a European country, as most Tea Party types have not, you might not realize that you don't actually feel less "free" there. It's far from perfect, of course, with its own set of pathologies. But people don't commonly lose everything there when they get sick. And they don't have to fight with everything they have to ensure that they can be assured they will live their elder years in something other than penury. Even their conservatives wouldn't dream of touching their social welfare programs.


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