Editor’s note: This commentary is by Lee Russ, who is the lead author/editor of the third edition of “Couch on Insurance.” He lives in Bennington.
[W]hat could our country have done with an additional $7 trillion in revenue?
I have yet to hear a mainstream media source even mention this, and none of the GOP candidates in either of the debates on Thursday thought to tell you about it, but here’s a fact that directly bears on our national debt, our crumbling infrastructure and our national priorities: Had the U.S. simply kept pace with Germany on per capita taxation, our country would have had an additional $7.1 trillion in tax revenue between 2007 and 2013. You can see the data yourself here (takes you to a chart; click the tab for a table)
I say “kept pace” because the per capita tax revenue immediately before 2007 was virtually the same in both countries. It began to diverge in 2007, and the U.S. per capita tax revenue has remained well below that of Germany through 2013. This is based on all tax revenue at every level, so it’s impossible to tell how that “missing” $7 trillion-plus would have been divided between fed, state and local levels, but it is desperately needed at all three.
The additional trillions stowed away offshore in tax havens has further deprived the U.S. of badly needed tax revenues. A recent Asia news commentary puts the total at somewhere between $21 trillion and $32 trillion in U.S. dollars.
Now the great libertarian and conservative movements stand atop this mountain of foolishness, surrounded by an ever-growing number of people unable to provide for themselves, traveling on infrastructure that crumbles as you read this, and screams “You’re taxing the rich to death!!”
Again, no one but the people who have stowed those trillions away knows for sure which countries have been deprived of how much revenue, but the total amount stowed away is staggering. It’s safe to assume from the size of the U.S. economy that a good chunk of those trillions would have been taxable in the U.S.
And let’s not forget that we combined a mania for tax cuts with the need to finance two extremely expensive wars. That is an idea so foolish that, to my knowledge, no country in history had ever before done something so obviously harmful to the nation’s finances.
Nor should we forget the depressing effect that offshoring of work has had on the wages of American workers. The lower those wages, the less the workers contribute to the funding of Social Security and Medicare. The people at the top of the economic totem pole, on the other hand, who have soaked up most of the increased wealth over the past decades, are not likely paying any additional taxes into Social Security, because the Social Security tax is capped: for 2015, it is not imposed on income over $118,500. And, of course, no Social Security tax is imposed on capital gains (or rental income).
Now the great libertarian and conservative movements stand atop this mountain of foolishness, surrounded by an ever-growing number of people unable to provide for themselves, traveling on infrastructure that crumbles as you read this, and screams “You’re taxing the rich to death!!” Or “You’re killing the country with debt!!!” Or “Social Security is unsustainable!!!”
And so, finally, the $7 trillion question: How do they get away with it? Or, in the alternative: Exactly who is kidding who?
