A taxing situation

There are those in America who see great inequity in our system, its rigged, the rich don’t pay their fair share, inequality is the culprit, our social safety net is inadequate.

What they don’t say much about is taxes, except for implying more stuff can be free for everyone if only the wealthy pay more. Guess what, it doesn’t work that way … anywhere. What may appear free to the end user is buried in everyday taxes of one kind or another. Think gasoline and VAT taxes.

What actually happens is citizens turn over close to half their income to government and then trust their bureaucrats and politicians will redistribute their money in their best interest.

So, do you want to go from 27% to 46% in total taxes to get more free stuff?

The Or­ga­ni­za­tion for Eco­nomic Co­op­er­a­tion and De­vel­op­ment (OECD) re­leased its an­nual Rev­enue Statistics re­port this week, and France topped the charts, with a tax take equal to 46.2% of GDP in 2017. That’s more than Den­mark (46%), Swe­den (44%) and Ger­many (37.5%), and far more than the OECD av­er­age (34.2%) or the U.S. (27.1%, which in­cludes all lev­els of govern­ment).

France doesn’t col­lect that rev­enue in the ways you might think. De­spite the stereo­type of heavy Eu­ropean in­come taxes on the rich, Paris re­lies dispropor­tion­ately on so­cial-in­sur­ance, payroll and prop­erty taxes. So­cial taxes ac­count for 37% of French rev­enue; the OECD av­er­age is 26%. Pay­roll and property taxes con­tribute 3% and 9%, com­pared to the OECD av­er­ages of 1% and 6%.

Then Eu­rope adds a re­gres­sive con­sumption tax, the value-added tax. In France, VAT and other consump­tion taxes make up 24% of rev­enue, and that’s on the low side com­pared to an OECD av­er­age of 33%. Consump­tion taxes of­ten fall hard­est on the poor and mid­dle class, who de­vote a greater pro­portion of their in­come to consumption.

Wall Street Journal, All the Taxes in France, December 7, 2018