So bobby, are you retracting your vague red herring?

No. Even with the caveats you've added about possible incompleteness in the data, and the difference between revenues and expenditure, I do not believe it is a "red herring".

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I think you'll find it's a bit more complicated than that ...

There is a more up to date report, 2011, on income tax and social security from KPMG http://www.kpmg.com/Global/en/IssuesAndInsights/ArticlesPublications/Documents/individual-income-tax-social-security-rate-survey-September-2011.pdf

As you might expect it doesn't do rich, middle class, working class or poor. It's assesments are at $100,000 and $300,000.

But the personnal tax figures for an income of $100,000 are

US Income Tax 18.6% Social Security 5.7%
UK Income Tax 23.3% Social Security 7.7%
AUS Income Tax 23.8% Social Security 1.5%

I realize that European countries have the VAT -- my point here is that in the US -- that is at the state, not the country level. In fact, not only is there a state sales tax in nearly every state of the union, but various communities (counties or cities) add a bit of a sales tax of their own. In Phoenix, that is a 2% tax on top of the state 7.3%.

NY state base rate is 4%, My county adds 4.25% to that. :-(. Not to mention we have some of the highest property tax rates in the country in my county. (This is offset a bit by house values being lower than most of the country. i.e. here 200,000$ buys a reaaaaallllyyyy nice house.)

All this talk about taxes. Even if residents of my area haven't paid Federal income tax, you can rest assured that they are making up for that with other taxes at the state and local levels, which in my area tend to cost everyone far more than any federal taxes.

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#resist

Thank you Barry. bobby, let me put it in simpler terms than Barry. If revenue as a % of GDP is a reliable indicator of how big government is, then how do you account for the $1T our government is spending over tax revenue collected?

WinterKnight, no it still remains inaccurate. At best it might be an average with an incredibly wide margin of error. Along with the additional taxes Barry mentioned, does it include the four taxes that make up of the total of my annual property tax? Does it include the multiple taxes I pay for the privilege of driving a car? Does it include the "Military Base Adjustment Factor" tax and the "Municipal Franchise Fee" tax I pay when I pay my electricity bill? Does it include the "FCC User Fee" tax when I pay my cable TV bill?

Does it include the "FEDERAL UNIVERSAL SERVICE FEE" tax I pay on my wife's and my cell phone, which pays for the free Obama phones?

ON TOPIC: Does it include the Patient Protection and Affordable Health Care Act which has recently been deemed not only a TAX, but the largest tax increase in the history of the U.S.?

Just to mention a few...

Like I said, at best, it's misleading.

So bobby, are you retracting your vague red herring?

Poor Guy, he can't tell the difference between a cleverly worded price increase and a tax.

This is a good thing as an example of what taxing a corporation actually gets. It makes the bottom line of the corporation bigger. Everyone thinks I've gone bananas. I'll take the "FCC User Fee" as an example. It isn't a tax to Guy, it is a price increase. It isn't a tax because the FCC does not have the cable company collect it from Guy on their behalf. It is a tax to the cable company. They made the business decision to have a price increase equal to the tax and put a fancy label on the bill. Because to Guy it is just a price increase he can't deduct this as a tax paid on his income tax return. However the cable company can make that deduction as they are paying a tax. They get to pocket a reduction in an income tax and aren't out of pocket for any tax. As I say, paper doesn't pay taxes, only humans pay tax.

The "FEDERAL UNIVERSAL SERVICE FEE" is another such non-tax. There are dozens of such examples all over the service industries. Why do Americans put up with it? Because the IRS has breed such fear into Americans they have given over the preparation of their taxes to companies such as H&R Block who are nothing more than loan sharks offering refund anticipation loans at rates the Mafia wishes it could charge. The average American has no working knowledge of the tax code. It is in everyone's interest to keep the truth from the average American, or the system would collapse.


<ed>damn spell checker ...

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So bobby, are you retracting your vague red herring?

No. Even with the caveats you've added about possible incompleteness in the data, and the difference between revenues and expenditure, I do not believe it is a "red herring".

Then quit being vague and tell me what you're trying to say.

Perhaps reading the article I linked, (from which I also linked the graphic, as Firefox users are unable to view the article) might help.

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I think you'll find it's a bit more complicated than that ...

as Firefox users are unable to view the article) might help.

Firefox is now rendering it, so the advertisements may have changed, in any case the article itself is behind a pay wall.

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Guy, have you read my other messages?

I'll restate here for simplicity.

11 years ago, the numbers (revenues/expenditures) were matched at about 20% -- and during the preceding 40 years those numbers were reasonably close - with a small excess in expenditures (ie we'd see something like 21%/20% some years).

During the Bush administration, revenues as a percentage of GDP declined somewhat as a result of the big tax cuts. At the same time due to the vast expansion of the defense and security budgets, along with the addition of Medicare Part D, expenditures bumped up. This was matched with an unwillingness of either party to reduce other expenditures. So we were moving from that 20/20 position of the Clinton years to something like 22%/18%.

Then, as you may recall, the near depression hit. What this did (along with what was at first a bipartisan response at the end of the Bush administration), was reduce revenues AND increase expenditures.

So today, a piece of the excess spending over revenues is systemic (aging population, increased medicare benefits, massive defense/security establishment with limited will to control increases there), a piece of the excess spending is recession hangover based (increased food stamps, increased unemployment pay outs, increase SS payouts for earlier than expected retirement, left overs from the various bailout and recovery bills). As to the revenue side, a small piece of that cut is directly due to the recession hangover, and a large piece is due to the Bush cuts.

So, as I noted a few times, we have both a revenue issue (16% GDP versus 20% GDP) and a spending issue (24% versus 20%). To resolve this requires political will -- on BOTH parties. Seemingly this does NOT exist. As long as the Teapublicans harp on balance via budget cut only -- and at the same time hold defense and security spending at the current levels or HIGHER as a religiously upheld requirement, the Democrats are likely to insist on a budget balance approach that requires greater revenues, and cuts only to the defense and security establishment. Neither side seems inclined to realism.

Personally I think that if Republicans regained control over the Teapublican party (that is those inclined to governance instead of obstructive irrational ideological purity) and responded by suggesting that *some* revenue increases made sense and *some* defense/security cuts made sense, it just might be possible for rational Democrats to agree to *some* cuts in various entitlement programs (including Medicare) including various Democrat 'hot button' areas, along with *some* revenue increases (including some that are going to effect the middle class).

But as long as the Teapublicans are calling the shots in the former Republican party, I just don't see any incentive for the Democrats to cave in. At this juncture, caving in to the Teapublicans looks like appeasement to Democrats -- there is nothing to negotiate. So, given that absent some *collaboration* we will see some real budget cuts (due to sequestration) including cuts to the Defense/security establishment AND real revenue increases (due to ALL the Bushcuts expiring at the end of this year), I can see that scenario not only happening, but being more fiscally rational than either party currently is pushing for.

Gary, I take your point that taxes on corporations amount to a fair degree as pass through. US taxes on corporations (at least on paper) appear to be higher than those in the civilized world. Then again, corporate influence on the political process in the US is also higher than most countries.

Bobby may have shown a chart from behind a paywall, but I don't see how the chart itself is misleading, and anyway the figures are available in other places, incl. Wiki http://en.wikipedia.org/wiki/List_of_countries_by_tax_revenue_as_percentage_of_GDP.

Just try a search of "oecd tax revenue as a percentage of gdp". I found this in a few minutes.http://www.oecd-ilibrary.org/taxation/total-tax-revenue_20758510-table2

WinterKnight,

The tax revenue as a % of GDP, I don't have a problem with. What's in the chart may be relatively accurate +/- some unstated margin of error. Barry in Arizona continues to state different numbers but I really don't care what this number is anymore by itself. As bobby puts in his tag line, I think you'll find it's a bit more complicated than that.

My problem is that bobby implied in his original statement that this chart demonstrates how *small* the U.S. government is compared to other nations.

Revenue as a % of GDP alone does not state in any way, shape or form the size of government, especially when you look at the U.S. today.

OK, so take a look at http://www.livescience.com/14156-government-size-happiness.html

The rankings table is at http://www.livescience.com/14157-happiest-country-rankings.html

Guy, as I've noted a few times -- the 16% number that I've mentioned is the recent Federal only (2009, 2010, 2011). The numbers in that chart include other taxing entities -- they are more inclusive. Those numbers also are not as current as those I've cited -- so they are not in conflict with that chart.

Percent of GDP is one measure. It seems you are rejecting it because the US economy is so much larger???

As to sequestration and the ending of the Bush cuts. The way I see it is this.

If Obama is (as seems increasingly likely) re-elected, then I would expect Reid to work toward forcing a deal on the Teapublicans. Either they work with the Democrats and perhaps achieve something like the 'grand bargain' that Obama tried back in summer 2011 -- which includes revenue increases, or Reid will truly play hard ball (and Obama might as well). I suspect under those conditions, their might be enough governance Republicans to come up with a deal working with Democrats. Otherwise, what may well happen is the previously passed legislation (including sequestration and the ending of all the Bush cuts) goes into effect on January 1 and then the new Congress gets to scramble in early 2013 to do what the previous Congress was incapable of doing.

If Romney is elected, then Reid will pretend he is McConnell and nothing will get done at all.

I've just read about another reason why the health bills are so high over there.

When your surgeon isn't the one you expected

Question.

Would the Republicans be brave enough to get rid of the Federal Reserve?

And truly follow the take up the thoughts of Friedrich Hayek.

Winter -- the Republicans would not be inclined to get rid of the Federal Reserve -- it would wreak too much havoc.

The Teapublicans though -- well they don't care about havoc -- that is the concern of folks interested in governance.

Winter -- the Republicans would not be inclined to get rid of the Federal Reserve -- it would wreak too much havoc.

The Teapublicans though -- well they don't care about havoc -- that is the concern of folks interested in governance.

It was just a thought. If the two parties wanted to put a distance between themselves, then on monetary policy they would probably follow the teachings of one of the three main 20th century monetary philosophers Keynes, Hayek or Marx.

One of those would not be acceptable by 99.999% of Americans, so I just thought the Repulicans might go for Hayek, as the centre ground has been claimed by the Democrats.