I failed to complete my homework this week. If the goal was to re-think my attitude towards taxes, I’m still just as ambivalent, confused and uncertain as I was at the start of the week. But I did begin to donate some thinking time to what I believe about paying taxes. I managed to do some poking around to help me formulate my thoughts. Or at minimum, my questions.
An inordinate amount of time was spent here where I played around comparing African countries, parts of Europe, a selection of Middle Eastern places with the taxes Americans pay. I discovered a few interesting things; e.g., the average individual income tax doesn’t vary as wildly as I might have assumed — especially not across Europe. At the same time I also learnt that there are countries with no individual income tax whatsoever. Like Oman and other Gulf States (in Oman there’s also almost no sales tax either. The country pretty much runs on the taxes that corporations have to pay, not individuals. Hhhmmmm…)
I did get a bit confused by the US tax information provided on the global tax rates website where I was busy having so much fun. The US rate averaged at 35%. This is almost exactly the same, if a bit higher, than the European average (albeit 5-10% lower than Western European countries like the UK, Germany and France). The bit that confused me is whether the 35% average includes State income tax or just Federal? If only Federal has been counted, then contrary to popular belief and loads of arguments about which system is better, many Americans pay the same as Western Europeans — about 40% (and this is WITHOUT having the national healthcare system to show for it.)
Anyway, here I am sounding all vaguely knowledgeable about things I’ve rarely stopped to consider properly (despite all the complaining about taxation in which we’re all prepared to engage).
But what I really want to know is whether this chart can possibly be true?
In digging around to work out US tax rates, I stumbled across this piece of information and was stunned. What? Really? No wonder so many people are seriously pissed off. This is madness. I am not someone who believes the rich should pay dramatically higher tax rates, but if this chart is true, then clearly that point of view is totally besides the point.
PS After a day of seasonal parties yesterday, which started about 3:00 pm, it’s a miracle I have anything at all to say this morning, never mind about taxes. Until tomorrow, when I eagerly await another joyous financial task to pull off in the week before Christmas.