I think that part in bold is an important reason why Americans think their taxes are being wasted.Yet Americans’ aversion to taxes runs deeper. We’ve been collecting less in taxes than other rich countries at least since the early 1970s, relative to size of the economy. But according to Gallup, only three times since the 1950s have more Americans said their taxes were “about right” than said they were “too high.” Scholars have resorted to cultural traits to explain our reluctance to pay for our government.Alberto Alesina, an Italian-born economist at Harvard, contrasts American individualism rooted in the belief that effort brings success with Europeans’ belief in state redistribution — born of Europe’s long history of inherited wealth. Americans who think they have a fair shot at striking it rich vote against high taxes on their expected future wealth. Europeans who believe wealth is mostly a matter of luck and connections are less resistant to paying taxes for collective welfare.Support for taxes also depends on how the money is spent. In Italy and throughout Western Europe, every time a voter goes to the doctor, he or she sees taxes at work.By contrast, the ethnic, linguistic and cultural diversity of the United States can sap support for government redistribution. Ten years ago, the sociologist William Julius Wilson wrote that American whites rebelled against welfare because they saw it as using their hard-earned taxes to give blacks “medical and legal services that many of them could not afford for their own families.” (emphasis mine) In more homogeneous European countries, taxpayers may be more willing to pay for social programs because recipients are similar to themselves.Where does this leave American society? Many conservatives in the Tea Party movement believe the government is already too big. Mr. Romney and most Republicans in Congress have even signed a formal pledge not to raise income taxes. Will no administration ever again dare raise taxes on the middle class?
Wednesday, August 15, 2012
What's Up With Americans And Taxes?
NYT, via Ritholtz:
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I don't think it traces back to Europe's history of inherited wealth - most Europeans have no experience of inherited wealth. I think it traces back to Europe's long history of serfdom and indentured servitude - two yokes we Americans threw off a long time ago. Europeans aren't used to democracy; they'e used to having someone who owns them make their decisions for them. Many of them still owe allegiance to a king or queen.
ReplyDeleteAmericans aren't much better at it -- we still haven't figured out how to deal with the inherent conflict of interest when we vote on taxing and spending. In each case, some of us will benefit financially, some of us will lose. If it were any other circumstance, each of us would have to abstain because of the financial conflict. Instead, the winners of the vote (whichever way it goes) choose to ignore the conflict, and the losers of the vote get to complain about it.
So stay angry; otherwise you might have to think.
My opinion is that a progressive tax system with infrastructure investment and some income distribution ends up benefiting everyone. Rich people may pay more in taxes, but they will still be richer than everybody else. But, this leaves more money for poorer people to use to consume the goods which made the rich people rich, thus further enriching them. Give up a little, but still end up with the money again. Rinse. Repeat. Win win.
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