Tax and Spend

You probably are aware that the USA has the lousiest social programs of all the western industrialized nations. Were you also aware that most American citizens consider themselves to be incredibly highly taxed?

Let's look at all this.

How heavily taxed are Americans really? According to the Central Intelligence Agency, the total rate of all income taxes, fees, payroll taxes, excise fees comes to 8.46% of GDP. That seems like a lot of scratch, but how does it compare? Certainly it is higher than Burma's 3.27%, but also less than Algeria's 45.26%. Perhaps it will make sense if we only include in the comparison western industrial nations.

35.05% Denmark

31.67% New Zealand

28.46% Britain

28.20% Norway

25.55% Belgium

24.17% Australia

23.61% Hungary

22.91% Ireland

22.78% Netherlands

22.62% Italy

22.13% Portugal

21.44% France

21.39% Finland

20.17% Austria

19.83% Greece

19.00% Sweden

18.59% Turkey

15.81% Brazil

14.82% Czech Republic

14.20% Argentina

12.93% Canada

11.94% Japan

11.79% Germany

10.71% Spain

10.00% Switzerland

8.46% United States

Interestingly, the figure for the USA would be quite different and more realistic if it were to include fees for things that are not charged for in the other countries on the list. For example, a university education carries no fee in the Netherlands, but is incredibly expensive in the US. In Britain there is no fee for medical care, but in the US there is. In a very real way, medical care does carry a fee either by taxation, or by user fee, or by payment to an insurer who then pays the fee. Interestingly, in the United States when people complain about the high tax rate they are talking about their 8.46% of GDP, and not what they pay as individuals for education, health, and such.

Of course, it doesn't seem like only 8.46% to them, as that is not what it feels like to the ordinary joe. Taken in this way, it most likely seems to them that taxes take about 1/3 of their income. However, even with this illusory point of view, their taxes are still nowhere near the highest of the industrialized western nations.

They do, however, get the least return on their dollar in terms of tangible benefits. What they do get is a bloated military.

The following are the ten countries with the largest military budgets; USA, China, Russia, Britain, France, Japan, Germany, India, South Korea, and Saudi Arabia.

Did you know that the highest spender on the list is the United States, and that they spend 12% more than all the other countries on that list combined? (in 2011 $682 billion versus $608.5 billion for all the other countries)

Beyond the top ten list of spenders, there is really no serious threat. The remaining 186 countries of the world have a combined military budget of $385.5 billion.

Do they really need to spend that much? Let's just play another little numbers game, and add up all the world's military budgets other then the USA, and then remove a few that it would be ridiculous to consider a potential enemy to the United States (long-time NATO allies, Australia, New Zealand, Japan, South Korea and a couple of others). You then have three piles of money to compare; USA budget at $682 billion, super-friendlies at $540 billion, and the entire-rest-of-the-freaking-planet at $454 billion.

Can you even think of a fictional scenario whereby the USA has to fight the entire planet that movie goers could swallow? Neither can I, but if it were to happen, leaving out the super-friendlies, the USA has almost a 50% superiority over the rest of the world.

Let's devise a non-batshit-paranoid-level of spending for the USA to maintain and call it just regular-paranoid spending. Let's take the top ten spenders who are not on the super-friendlies list (four countries), and then have the US match that amount. It comes to almost exactly half of what the USA is spending now.

That implies a 50% slashing of the US budget with no real-world weakening of the US in terms of world power, at a saving of over $1000 for every man, woman, and child in the United States per year, forever.

That could easily mean improving government programs, along with bitching tax reductions.

Say, for a family of four. A few thousand more in their pockets to spend, and the kids get to go to college free.