Belmont Club

More vs less, guns vs butter

These charts from the Heritage Foundation illustrating the inexorable increase of government spending illustrates the terrible tension between tax rates and government “help”. Federal spending grew much faster than median income.

As defense spending continues to fall as a percentage of GDP.

There’s another graph which attempts to describe the tax burden in terms of the day of the year when a taxpayer has earned enough to pay all his federal, state and local taxes and begins to work for himself. It’s called Tax Freedom Day. The concept is not without its detractors, who say that the large tax bills of the upper income scale overstate the actual date. It is but one of the metrics that can be used. But at any rate it went from March 7 in 1940 to April 23 where it is today. Here’s a graph of its fluctuation over time from the Tax Foundation.

In global terms, the  US is still, in the view of some, undertaxed, as may be seen from this Tax Freedom day table from Wikipedia. Hence, the argument is that there’s room for less “selfishness” and more redistribution or more seriously, that the drop in taxes coupled with an increase in Federal Government spending set up the conditions for the bad economic conditions experienced today.

Country Days to earn taxes % Tax burden Tax Freedom Day
Sweden 209 57% 29-Jul
Norway 210 57% 29-Jul
France 197 54% 16-Jul
Israel 197 54% 15-Jul
Germany 190 52% 8-Jul
Poland 175 48% 25-Jun
Slovenia 168 46% 17-Jun
Canada 165 45% 14-Jun
Croatia 164 45% 13-Jun
Czech Republic 161 44% 11-Jun
Belgium 161 44% 10-Jun
United Kingdom 153 42% 2-Jun
Lithuania 150 41% 30-May
Brazil 147 40% 27-May
Slovakia 142 39% 22-May
New Zealand 141 39% 21-May
Spain 141 39% 21-May
Hungary 140 38% 20-May
South Africa 132 36% 12-May
Uruguay 141 36% 11-May
Estonia 114 31% 24-Apr
United States 113 31% 23-Apr
Australia 112 31% 22-Apr
India 74 20% 14-Mar

(For those Americans in the upper income brackets, whose actual tax burden may be greater than 50%, Tax Freedom day will be somewhere in July.)

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