One for you nineteen for me
Sometimes I think I’m a masochist. As I mentioned in my last politically inclined post, I listen to a lot of podcasts from all over the political spectrums. One of these is Bill O’Reilly’s radio program (The Bill-O The Clown Show, if you listen to Keith Olbermann). Now, I should point out that I generally listen to O’Reilly for the entertainment value - I like it when he yells at people and calls them pinheads. O’Reilly is long on vitriol and short on facts.
As long as you recognize this, you can enjoy O’Reilly’s show for the humor of it and it is an indication of what’s going on in the mind of the Far Right. The problem is that a lot of people don’t seem to reognize that O’Reilly is one of the great comics of his generation. They take him seriously. They go to him for news and analysis of the news. That’s some kind of scary. It’s not the narcissism, you get used to that, it’s the repetitiveness. O’Reilly seems to subscribe to that idea that the Right has taken on recently that if you repeat something often enough it becomes true. No spin indeed.
O’Reilly’s ranting this week has been based a lot on the current economic woes. He likes to repeat the same accusations against his bogeymen - “the liberal media”, the “Far Left loons” and “socialist Europe” who offer “cradle-to-grave entitlements, big federal apparatus, high taxation, all the things that the Democratic Party wants to introduce here in the United States”. One of his shows this week was about taxes. How the Dems want to raise everyones taxes to pay for their social entitlement programs - standard Right Wing chatter from the “independent” O’Reilly. He cites the crippling tax rates in Europe and other “socialist” countries with enititlements like single-payer health care that prevents their citizens from dying.
A lot of what O’Reilly had to say this week didn’t ring true. I’m now paying taxes in my third different country and I’ve never really felt that there was that much of a difference in the amount that I pay in taxes in any of the three. So, I decided to do a bit of research into tax rates in various countries. I used my income as a gauge and compared the individual income tax rates in a “low” tax country like the U.S. with a “socialist” country like France and a couple in between - Britain and Australia - where the tax rate is higher, but government services are more plentiful. Things like single payer health insurance, government subsidized maternity leave and generous unemployment benefits. I’m not going to tell you exactly what I make, but let’s just say it would put me solidly in the middle class. When did that happen? When did I become a member of the bourgeoisie?
- In the USA someone earning what I do would pay 28% of their salary as federal income tax. Depending on the state in which I lived, I may owe up to another 10% in state income tax. Again, depending on the state, I would pay between 0 - 10% on all goods as a sales tax. For example, if I lived in Utah (god forbid) I would pay about 33% of my income in taxes before sales tax. If I lived in California, that pre-sales tax rate would be 38%.
- In Britain, I would be paying a whopping 40% of my income in tax as well as 17.5% on top of goods that I purchase (except necessities like food).
- In that bogeyman of the right, France, I would also be paying 40% income tax rate and 19.6% of goods and services, so similar to the rate in Britain. But as in the UK, health care would cost me virtually nothing.
- In Australia, I’ll be paying 26% of my income back to the government and a surcharge of 10% on top of goods. At my income rate, I add another 1.5 % of my income that goes toward the national health service - so a grand total of 27.5% before sales tax.
So, Bill-O’s got it half right - people in “socialist” France or “capitalist” Britain do pay more to the government - but depending on what part of the U.S. you live in, not much more. And if you tack on the amount you pay for health insurance in the U.S., the amount of money you lose when you take time off for maternity leave or are unwillingly out of work and the like, I’d be willing to bet that you’re paying more.
That’s the thing, I really resented paying taxes in the U.S. because it wasn’t clear to me what they were paying for - sure, I want to support the NIH, NSF, NEA - but in 2007 nearly 20% of the federal budget went to pay for defense and an equal amount went to pay down the national debt. In the same year in Britain the top two budget items were health and education. This is why, even though my tax burden in Britain was higher, I didn’t mind paying it.
Australia was a surprise. Before you consider any government “entitlements”, I’m going to pay less in taxes in Oz than I would be in the U.S. Now, the Australian health care system is not as good as Britain’s or France’s. We may in fact, once Dr. O’C starts working, be required to buy private health insurance or pay an additional 1% of my salary in taxes. A Free Man, who is a big advocate of nationalized health services, was not impressed by this. Nonethess, the biggest budget item in Australia is social welfare programs. Unfortunately, number two is “general government services”, in other words the massive Aussie bureaucracy. So, Down Under, I’m paying less but maybe getting less as well. 
The take home message? “You get what you pay for?” “In this world nothing can be said to be certain, except death and taxes?” I guess so. More importantly, be careful about what you hear, especially in this election season. The other day, Bill-O was shouting about buying land in Ireland if Obama raised his tax rate to 60%. Now, I know you’re probably calculating whether or not it would be worth it, but let’s take a look at reality.
I looked at Obama’s website for information about his tax plan. Unfortunately, it is notably lacking in specifics, facts or hard numbers. So, Bill-O could be right as far as I know. But, the highest tax rate in the world is in Denmark at 63% and even though the Danes are the happiest people in the world, I doubt that Obama will be looking to Copenhagen for his tax policy. For comparison, I looked at McCain’s website and the Republican nominee is more specific. He says that he will lower the corporate tax rate from 35% to 25% and will “keep the [individual] tax rate low”. These were the only numbers on either candidate’s fiscal pages. Unfortunately, McCain fails to point out that only the largest corporations pay a 35% tax rate.
The fact of the matter is that no matter who gets elected, most people will pay about what they paid in taxes last year. This is about what people in most of the rest of the Western world pay - plus or minus a few percentage points. What may be worth looking at is just what you’re getting for your money.
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