Flipping through our world almanac we came across a rather interesting chart entitled “Tax Payments in Selected Countries”, compiled from data provided by the Organization for Economic Cooperation and Development (OECD). It breaks the tax payments down into three categories- income tax, social security, and total payment (all are a percentage of gross wage earnings). The U.S. takes 15.7% in income tax and 7.7% in social security for a total payment of 23.4%. It sits at number 2o out of 30 countries ranked. Germany is number one, taking 42.7% total and Mexico is number 30 taking 5% total.
This is all very interesting in relation to the recent news that for the first time since World War II the U.S. is no longer the world’s number one economy. Before the new winner is revealed I encourage you to sit back for a minute and think about all the tax cut rhetoric that’s come out of this election. Based on what conservatives say, which country do you think unseated the premire global economic power for the last six decades? Is it Mexico? The country that only demands 5% from its citizens? Wrong. The new number one economy in the world is the EU. The very same EU of which Germany, a country that demands nearly that collects 21% of gross wage earnings in social security alone, is a part.
Admittedly, we’re not economists here at All Night Returns but we think the point is still a valid one. The tax cut rhetoric that is an easy sell on election day is not the cure all. Those slighty off balance individuals who advocate the repeal of the income tax all together and a return to something resembling a tariff based economy are just out for votes and their sense of history extends no further than tomorrow. Of course if the last few days are any indication it’s not looking like the professionals have any idea what they’re doing either.