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Friday, August 27, 2010

TAXES, STATE-SPENDING, AND THE UNIVERSITY OF CALIFORNIA'S 10 CAMPUSES

Today's First Buggy Topic

Prompted by a lead-off commentary at Economist's View by a professor at UC Berkeley, Michael O'Hara, the bug-stuff added some different perspective to the laments and criticisms of the California tax-payers that both O'Hara and Professor Mark Thoma, the talented head of Economist's View, himself voiced about the alleged stingy, selfish California tax-paying public. . . a line of bawling-out rebuke that was followed in the thread by dozens of other posters. 

Not by the buggy prof though.  His two posts will explain why.  Click here for both.

Something Else

Prof bug tried to widen the discussion with a third post that dealt with the highly progressive nature of the US tax-system, compared to the systems that flourish in the more advanced welfare-state systems on the Continent of Europe.  To that end, he drew on a recent 2009 study by two sociologists at Northwestern University --- both, incidentally, thanking several prominent left-wing liberals and Social Democrats for their comments on the study's manuscript.  It showed clearly, based on extensive data-analysis, that if you added to the national income-tax in the USA the other sources of tax-revenue ---meaning state and local government income-taxes, sales taxes, fees, property taxes, and business taxes and their equivalent elsewhere in Europe, Canada, and Australia --- the American tax system is by far the most progressive.

To drive home its findings, the two sociologists' study --- which prof bug did comment on at length in an earlier post at Economist's View back in January 2010: click here for that commentary---  showed that if you took the least progressive year between 1981 and 2006 for taxes in the USA (1994), and compared it with the most progressive year of all the European countries'stax payments  in those 25 years (Germany in 1989), 64% of the top 20% of income earners in the USA would have to have failed to pay taxes at all in order to equalize American tax payments with those in Germany. 

Their Moral?

If left-wing liberals and Social Democrats want to see the USA emulate the more systematic welfare-spending and reduced inequality of income that exists on the Continent of West Europe, then these political advocates are going to have to persuade Americans to shift from high property taxes and income-taxes and state-and-local sales taxes and so on to a highly regressive Value Added Tax system that exists in Europe and elsewhere for raising government revenue