Following up on my post yesterday about France being the top taxed country in the OECD (Organization for Economic Cooperation and Development), the ever resourceful fiscal economist Dan Mitchell dives deeper into the data, including a table that compares the taxes AND spending as a percentage of GDP.
The US ranks in the lower percentages than most countries on both scales. Lower means lower tax and spending levels as a percentage of GDP. This is a positive development in my book because the government wastes a lot of resources and is less efficient. Dan also explains that. How does a government provide necessary services efficiently and effectively but keeps the politics and feeding of bureaucracy?
WSJ via Stephen Green:
The Organization for Economic Cooperation and Development’s annual review of taxes in its 36 members published on Wednesday showed the French government’s tax revenues were the equivalent of 46.2% of economic output, up from 45.5% in 2016 and 43.4% in 2000. The Danish government’s tax take, which was the highest among OECD members between 2002 and 2016, fell to 46% of gross domestic product from 46.2% in the previous year and 46.9% in 2000.
The U.S. government’s tax revenues also rose relative to the size of the economy as a result of a one-off tax on accumulated profits earned by American businesses overseas. But at 27.1% of GDP, only five countries had a lower tax take: Mexico, Turkey, Chile, South Korea and Ireland.
This is misleading. Taxes may be lower but the real burden is government spending because the spending must be paid for out of taxes eventually. So if tax rates are low but budget deficits continue, that excess spending must be paid for in the future. What good is that? It helps politicians now because they don’t have to raise taxes now or cut spending now. Its still socialism.
….I am a Tariff Man. When people or countries come in to raid the great wealth of our Nation, I want them to pay for the privilege of doing so. It will always be the best way to max out our economic power. We are right now taking in $billions in Tariffs. MAKE AMERICA RICH AGAIN
Tariffs are a tax paid by Americans on stuff they buy overseas, not the foreigners who are selling the stuff.
According to the President, the federal government is “taking in $billions”, but only because Americans are paying the tax. This is a total backfire on the Administration’s part.
As bad, there is no “raid”. The buying and selling is voluntary. Americans are deciding to buy from overseas. That is not a raid on the wealth of a nation.
UPDATE: Dan Mitchell weighs in.
The French government caved in after Paris’ worst rioting in decades and delayed an increase in energy taxes Tuesday — but it was seen as “too little, too late” by many protesters whose anger seems increasingly focused on embattled President Emmanuel Macron.
The grievances widen:
The protests began Nov. 17 with motorists upset over the fuel tax increase, but have grown to encompass a range of complaints — the stagnant economy, social injustice and France’ tax system, one of the highest in Europe — and some now call for the government to resign. . . .
One unifying complaint among the leaderless protesters, who come from across the political and social spectrum, has been the anger at Macron and the perceived elitism of France’s aloof ruling class.
Me: taxes are the most visible expression of government control by greedy politicians and bureaucrats. But these same people are playing a con game. They convince the general population into thinking they are helping you by taxing and regulating some trumped up, anonymous, evil person or corporation. But, those same taxes and regulations come back to bite you because those regulations and taxes trickle down to you in the form of reduced choices and higher prices. This time, the French people caught on. But remember, regulations work the same way but are less visible, so don’t sign up for that. And, a tax on one is a tax on all.
Read it all.
These examples are from a column by Stephen Moore. He writes from a partisan perspective to get Republicans on the right side of the public’s trust. But this is your government at work and it has been for longer than Donald Trump has been president. This is how your government works no matter who is president or in the majority. Its a bi-partisan effort.
Explore the source of the data: openthebooks.com. For example, click on a state and find the salaries of government employees at the state and federal level in that state. Find the spending in that state by the state and localities and the federal government. Find the contributors of campaign money. Find reports on local governments.
General Motors announced a plan to stop producing several models, part of a $6 billion reorganization plan, that would close plants in Michigan, Ohio, Maryland, and Canada.
Let me count the ways. First, the steel tariffs raised the cost of an input to automobiles. Second, keeping the plants open would be a misallocation of capital and resources and thereby make GM worse off.They’d be wasting scarce resources on automobiles they could not sell at all, or profitably. Third, American auto makers profit from tariffs on imported pick-up trucks, which they have focused on. But by doing so, they have lost the skills, knowledge, and competitive edge it takes to build smaller cars.
UPDATE: By all means, cut the subsidies, Prez T. That will take away a bargaining chip and push GM one step further away from government interference.
New Hampshire: 30% more for steel this summer.
Ohio: 19.1% more for structural steel.
Florida: $7 million more on dozens of highway and bridge projects.
Read the whole thing.