This is not a widely accepted point, granted. The share of Americans who say that their taxes are too high is at roughly 50 percent, a 15-year peak. Moreover, Republicans have sold their tax bill as an essential tax cut for America’s income-starved, tax-strangled families and businesses, promising to deliver $4,000 a year to the average family and huge boosts to corporate investment. “Today, America has one of the least competitive tax rates on planet Earth, 60 percent. Think of that, 60 percent higher than the average in the developed world. So our taxes are 60 percent higher,” President Trump said this month. “These massive tax cuts will be rocket fuel.” [...]
Data from the Organization for Economic Cooperation and Development clearly shows that the United States is not a particularly heavily taxed country at all. Indeed, out of 35 developed economies, the United States’ tax burden as a share of GDP—26 percent—is the lowest save for four others: Turkey, Ireland, Chile, and Mexico. (Turkey, Mexico, and Chile are considerably poorer than the United States, and have considerably younger populations.) The social democracies of northern Europe, like Denmark and France, take in nearly 50 percent of their GDPs and spend the money on ample welfare states, including child-care benefits and old-age pensions. “From a global perspective, [our tax rate is lower] than average,” said Scott Hodge, the president of the Tax Foundation, a Washington-based think tank. “The difference is that other countries tend to have a value-added tax, in addition to the same system we have with income taxes, payroll, and all that stuff.”
Moreover, Trump has insisted that the United States has an extremely high corporate-tax burden, one that forces businesses to keep money overseas and hurts jobs and income growth here at home. He is correct that the United States has very high statutory tax rates on corporate incomes, with a top rate of 39 percent on business’ profits. But the American corporate tax code is also full of exceptions, special provisions, and loopholes that companies use to reduce their tax bills. Factoring in deductions, credits, and so on, the effective corporate tax rate is about 19 percent—lower than the top marginal rate that Republicans would put in place. The OECD has found that the United States is about average when it comes to hitting companies with income taxes. [...]
The overall effect would be to make government far less redistributive, meaning post-tax, post-transfer inequality would become even more severe. Indeed, a new analysis by the Tax Policy Center found that most working families would end up with less money in pocket as a result of the Republican plans. “If you consider plausible ways of financing either the House or the Senate bill, most low- and middle-income households would eventually end up worse off than if the bill did not become law,” writes William Gale, the co-director of the TPC. “In other words, they would lose more from inevitable future spending cuts or tax hikes necessary to eventually offset the costs of the tax bill than they would gain from the tax cuts themselves.”
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