"America's Flight From Fiscal Reality" by Jeffrey Simpson at the Globe & Mail

[applegrove]

America's Flight From Fiscal Reality

by Jeffrey Simpson at the Globe & Mail

http://www.theglobeandmail.com/commentary/americas-flight-from-fiscal-reality/article4524658/?utm_medium=Newsletter&utm_source=The%20Globe%20and%20Mail&utm_type=text&utm_content=TheGlobeandMail&utm_campaign=97536689

"SNIP........................................

U.S. taxes aren’t what they seem on paper – rather steep in some areas and redistributive in others. When you glance below the surface, however, the tax code is shot full of complications and loopholes, tilted to the rich and the very rich, producing less revenue than any other OECD country (except Mexico and Chile) as a share of the total economy and, critically, relying less on consumption taxes than other countries. Were the Americans to impose a 5-per-cent national sales tax on themselves (the Canadian rate, and the lowest among countries with national sales taxes), the country’s fiscal crisis would be on the way to resolution.

Such a tax is unthinkable in a climate where Americans feel themselves overtaxed, despite the evidence that, in 2009 (according to the OECD), Americans paid the third-lowest share of their national income in tax within that organization.

Republicans whine about high corporate taxes and, on paper, these taxes are high – a top rate of 39 per cent. Yet, so many exemptions, credits and other loopholes – many resulting from ubiquitous corporate lobbying on Capitol Hill – pockmark the corporate tax code that U.S. business pays one of the lowest effective tax rates in the advanced industrial world.

Lobbying, too, is among the reasons why the tax code favours the rich. (See the small rate of personal income tax paid by millionaire presidential candidate Mitt Romney.) Republican tax proposals in this election would offer even more tax advantages to the rich.

........................................SNIP"