Without getting into the nitty-gritty of how U.S. income is taxed — e.g., a blue collar worker’s hourly wages versus an investor’s capital gains — it’s safe to say that, by and large, the most wealthy people in this country somehow manage to avoid paying as much as they should. Just ask Warren Buffett. Likewise, the biggest corporations sometimes escape taxation altogether. When you’re a little guy, you need every dime you can get your hands on; when you’re a multibillionaire many times over, it doesn’t matter what your income tax rate might be, because there will always be enough money left over to buy anything you could possibly want, let alone need.
Even so, as a group, the 1% are continually fighting to lower their tax rates; increases are unthinkable. This mindset despite the fact that the wealthy often benefit disproportionately from the things taxes pay for, such as infrastructure, for instance.
But what do we get for our taxes in this country? Deteriorating roads and bridges, outdated airports, woefully inadequate transportation systems on the one hand, and an obscenely bloated military on the other. We hear that the U.S. can’t afford single-payer healthcare, or free college tuition, or a universal basic income, or other facets of a social safety net. We are told that a Green New Deal isn’t possible, because its main thrust, transitioning from fossil fuels to renewable forms of energy, isn’t economically feasible, for a whole host of reasons.
How would the economic situation be different if we were in Canada? Individuals average an effective rate of about 6% more in income taxes than Americans, and the rate is higher in some cases. Their tax burden as a percentage of GDP is higher than Americans’ is, in most years. Even so, in Canada, there’s no national wailing and lamenting the cruelty of a government that expects its citizens to pay for what they get. Instead, as in many other advanced nations, the population may sometimes decry the tax bite, but overall, they know the cost of keeping infrastructure sound, providing for the neediest, and achieving an educated citizenry.
Would the average American be willing to pay more in taxes if there was an advantage to doing so? Assuming (and this is a very large assumption) that the wealthy actually paid taxes even at an average rate, with no exceptions, I would say the answer would be, “yes,” once the benefits of those taxes actually were extended to the 99%.
As an example, at my last job, I paid approximately $5,000 per year for health insurance for myself and my husband, on an “employer-sponsored” plan. The yearly deductible was about $5,300 each, meaning we each had to reach that amount in expenses before the 80/20 coverage kicked in. This plan was above-average, as corporate health insurance goes, according to the CEO. Those premiums and deductibles were only the starting point, however. There was still the 20% of incurred charges that the plan wouldn’t cover. Then there were the hassles with bills being rejected, “free” preventive care that wasn’t really free, and so on. If I could take the money I shelled out for healthcare insurance at my place of employment, hand it to the government in the form of taxes, and be assured that I’d never have to worry about a doctor or hospital charge, never have to suffer the threat of losing everything I own because of a serious illness, I’d do it in a heartbeat. In Canada, I’d have that peace of mind.
I’d also be confident that bridges I crossed were in good repair, and I’d enjoy spacious, accommodating airports, plus immaculately kept large cities, among other advantages. I’d be able to travel on excellent urban transportation systems, including light rail and bright, clean subways, as well.
What we see in the U.S. is that our taxes are wasted on an ever-more-grasping military-industrial complex. We see that Congress is in thrall to the 1%, and our leaders are only too eager to lift their tax burden; inequality grows steadily, while the vast majority of the country pays the price. In contrast, our neighbors to the north may have a greater initial outlay, but they’re not continually seeking to reduce it. Instead, they acknowledge what it takes to keep a country together, and they get what they pay for.