But April 15th is the day we should step back and look at taxes in a different way. Because the truth is that for most people, taxation in America is relatively modest, and we get a lot for our money.
That doesn’t mean there isn’t plenty of waste in government, because there is. There’s waste in all economic sectors — business, non-profits, and government. Nor does it mean that there aren’t changes I’d like to make to our tax system, or that I wouldn’t re-order how government spends my tax money if I could. We all would. But on the whole, we don’t have nearly as much to complain about as you might think.
Let’s start by looking at how we compare to our peer countries. Given all the time we spend talking about cutting taxes, you might think that Americans are taxed at some of the highest rates anywhere. In fact, we have among the lowest tax rates in the developed world. Here’s a chart from Citizens for Tax Justice comparing countries in the Organisation for Economic Cooperation and Development:
Only South Korea, Chile, and Mexico have lower total taxes than we do. Of course, it isn’t as though countries in Scandinavia and western Europe are just flushing all those tax revenues down the drain; they use them for things their population wants, particularly a much more comprehensive system of social supports than we have in the U.S. You’d pay higher taxes if you lived in one of those countries, but you’d also get health insurance, child care, generous paid leave, and university education, all paid for by the government. They’ve made one kind of bargain, and we in the U.S. have made another: In the broadest terms, the conservative vision of taxation — relatively low taxes and less generous benefits — is the one that prevails here.
Conservatives might complain that the problem isn’t total revenues, it’s that our progressive system puts such terrible burdens on the noble job creators at the top. But that isn’t true either. While federal income taxes are indeed progressive — making the rich pay more — other kinds of taxes are either not progressive or in some cases deeply regressive. Payroll taxes and sales taxes hit people of lower incomes particularly hard, while taxes on investments and inheritances — enjoyed mostly by the wealthy — are light. The result is that if you total up all the taxes Americans pay, we have something resembling a flat tax, with all income groups paying a roughly similar proportion of their income to government.
That may help explain why Republicans have trouble convincing people that cutting taxes is such an urgent priority. According to the Pew Research Center, most American aren’t particularly angry about what they have to pay; they’re much more likely to be bothered by the idea of corporations and the wealthy not paying their fair share.
Now let’s think about benefits. Americans have a remarkable ability to wave away all the things they get from government as either not existing or being somehow “theirs” and therefore not having anything at all to do with government. Political scientist Suzanne Mettler refers to this phenomenon as the “submerged state,” where people get government benefits that don’t feel like government, whether it’s the mortgage interest deduction, tax-free savings accounts for college, and even Social Security and Medicare. We’ve all heard the stories of the little old lady who walks up to her member of Congress and says angrily, “Tell the government to keep its hands off my Medicare!” That isn’t just an anecdote — significant numbers of people who are on programs like that will tell pollsters they’ve never received a government benefit.
You can say, “Well that’s different, because I deserve my Social Security benefits. I paid into the system.” Yes, you did. But the government established and maintains the system that guarantees you that security. That’s not to mention all the other things government does that we take for granted while seldom thinking of them as something we paid for with our taxes. The roads you drive on, the schools your kids go to, the parks you play in, the clean air you breathe and water you drink, the electrical grid that delivers you power, the people who cart away your garbage, the military that deters foreign invasions, the police that maintain order, the system of laws and courts that enforce contracts and make commerce possible, the internet you use every day, the medical treatments that might save your life and the lives of those you love — these things and a thousand more were made possible by the taxes you and your fellow citizens paid.
It’s part of the American ethos for us to imagine ourselves as self-reliant, independent, beholden to no one as we make our own way with our smarts and hard work. But none of us really are. We can and should continue to debate where government’s limits ought to be, what government should spend money on and what it should leave alone. But no matter who you are and what you believe, whether you’re a committed socialist or an ardent libertarian, you’re benefiting from government each and every day. April 15th may be the best day to remind yourself.