The statistics in this article creates a problem for Republicans who consistently blame taxes going up as a reason for job loss and credit taxes going down as a reason for job creation. It turns out that out of all 34 OECD countries, the United States ranks 32nd out of 34 in the world, only 2 countries have lower taxes than the United States, and they are Mexico and Chile. The highest taxed country in Denmark at 48.2% but has an unemployment rate of 4.3% in 2009
The United States citizens’ total tax bill equals 24% of GDP in 2009. The 2009 statistics is still relevant today, because the US tax code has not really changed overall. In fact the GDP of the United States has actually grown since 2009, thus today’s percentage of taxation to GDP ratio is even smaller.
Measuring taxation in parallel to GDP is a good analogy because the Republican and conservative argument that every dollar that is taxed is dollar taken out of circulation in the economy, thus halts job growth. This of course is a false premise to begin with, but we will use their own logic in this article.
The argument that the conservatives use is raising taxes, halts economic growth, but the statistics do not add up if we look at places like Germany, their unemployment according to the CIA world fact book was 7.4% and their taxes per GDP was a whopping 37%, 13% higher than the United States.
Unemployment in the United States in 2009 was 9.3%, yet our taxes to GDP was 24%.
Let’s now look at some other countries that are within percentage points of the United States’ taxation. In 2009 Chile’s taxes were 18.2% of GDP and their unemployment was 9.6%.
In Canada, the taxes were 31% of GDP and their unemployment in 2009 was 8.3%.
You get the point, taxation has little effect on unemployment or employment. The Republicans are using American’s ignorance of economics to further their agenda.
Rather than creating a environment that makes it economically difficult to justify leaving this country, through equalizing American labor with third world labor, they have told the American people, taxes are the problem.
We know better now. As more and more people are beginning to wake up to their scheme, it is getting harder for Republicans to justify lowering taxes. What the Republicans and Democrats need to do is re-write our trade agreements to protect our labor force. That is the real reason for our unemployment.
One last statistic, Mexico’s unemployment was 5.5% in 2009, with a tax to GDP percentage of 17%.
Factories moved down there from Canada and the United States, pay them peanuts and sell the goods to Americans, it’s a good deal for the corporate bottom line but a terrible deal for America’s labor force.