On Taxes: What Should Your Government Do?

Taxes have always been a topic of much debate when it comes to government. There seem to be never-ending discussions of what the best solution would be for improving wealth distribution and fueling economic growth. All of this begs the question: what should your government do when it comes to taxes?

We’ve already discussed whether or not the U.S. income tax system is fair. Let’s take a look at the ways various governments handle taxes in their countries, and what that means for citizens at large.

Modern U.S. Tax Situation

In the developed world, Americans pay among the lowest tax rates. The topic is one of much debate–after all, many congressional Republicans contend that tax breaks for the rich incentivize the wealthy to use their extra cash to invest in programs and projects that create jobs.

Yet throughout the past few years–and since the rise of Reaganomics and the Bush tax cuts–we haven’t seen this theory come to fruition. Unemployment is at all-time highs across the country, the country has record debt, and key social programs like Medicaid and Planned Parenthood–even educational TV channels like PBS–have had to continually handle cuts and scrounge for funds to stay in operation.

The fiscal cliff deal passed earlier this month made some changes in our current tax system. There are now seven income tax brackets: 10 percent, 15 percent, 25 percent, 28 percent, 33 percent, 35 percent and 39.6 percent. How the tax rate works depends on income and marital status, but the U.S. still pulls in a lower rate of tax revenue than other countries. Just how much?

Taxes Around the World

According to the New York Times, the United States has one of the lowest tax burdens in the developed world. The graph below, from 2009, shows how U.S. tax rates compare to the rest of the world’s developed countries.

Source: Infectious Greed

These numbers mean we have to take other issues into account, as well. It’s important to always be asking questions when it comes to your government. For instance, what do high taxes mean for any one of these countries’ social programs? What about national wealth distribution–is it equal? How do taxes affect the health care systems? Do all citizens have access to care? While the U.S. takes in less taxes than other countries, we have clear problems with wealth distribution, income inequality, health care, and weakening social programs. Can we attribute these problems to our tax system? Or are other issues at play?

Making Your Voice Known

We can see how taxes vary from country to country, and how this ultimately affects citizen’s lives at the most personal level. If we’re going to vote for politicians who create our tax laws, it’s important for citizens to be keenly aware of both their own tax rates and what’s happening to other citizens worldwide.

Ensuring that your voice is heard in politics is the key to keeping your leaders honest with your tax money. With PeopleCount’s new tax profiles, citizens can express their opinions on tax philosophies, income tax, income tax deductions, and other pressing tax issues.  If citizens come together to see how we’re being taxed, determine where our tax money is going, and become vocal regarding our ideas of fair taxation, we can avoid a system that leaves important social programs unfunded or otherwise negatively affects citizens. Remember–citizens make up this country, not politicians! Don’t delay in letting your voice be heard.

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