The only two sure things, according to Ben Franklin’s “Poor Richard,� are death and taxes. But if by taxes we Americans mean the money we pay to various governmental entities in the United States, we need a broader definition of the term, because we pay a heck of a lot more taxes than that.
Anti-taxers are fond of telling us that Great Britain’s taxes are far higher than America’s.
Anti-socialists — who are often the same people as the anti-taxers — are fond of scaring us about socialized medicine, such as exists in Great Britain.
The two matters are, of course, interrelated. Federal taxes are indeed higher in Great Britain than in the United States, precisely because the British government pays for such things as national health care, so individuals don’t have to pay for it.
Would you pay more to the U.S. government in order to have a guaranteed level of health care for yourself and your family? Polls show that most Americans would do so gladly. But how much more? A thousand dollars a year? Would you be willing to pay as much in taxes as you currently pay in private health-care insurance premiums, today in the range of $500 per month per person?
You also lay out more than that in deductibles and out-of-pocket expenses. Let’s call it $7,500 a year per person. Would you pay an equivalent sum to the government if in return you would not have to worry, because of the potential cost, whether you should go to the doctor or the hospital with an unexplained ache or pain? How about paying half that much in additional taxes, for such a benefit? One quarter that much?
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My point is, we already pay a health-care tax for an inefficient industry in which middlemen like HMOs make a bundle, and in return we get health care that, on average, is not significantly better than what is rendered in Great Britain in terms of survival rates, comfort rates, infant mortality rates, almost any objective measure that has been assayed.
We similarly pay a transportation tax each year. Yes, some of what we shell out at the pump does go to various federal and state governments. (More about that sort of tax, below.) However, most of what we lay out at the pump, and in our heightened airfares, goes to big oil. That’s our big oil tax.
But there are other transportation taxes. For instance, when you buy a new American car, $1,000 of its cost is the advertising that has nudged you to buy it. File that under the Madison Avenue tax. We also pay a good hunk of the car’s price to support the manufacturers’ lousy business practices, e.g., steadfastly refusing to produce cars with higher miles-per-gallon capacity, although they know how to do so. Suppose half of the $1,000 paid for advertising had been used to underwrite the production of more efficient and environmentally cleaner cars? Without that happening, we pony up the gas guzzler impost.
There’s another hidden tax in the car’s sticker price: the amount we pay for auto workers’ health care, which is itself inflated because of our bloated-cost health-care system. Which means that lowering our health-care costs by a single-payer government program would lower the cost to the consumer of a car and, not incidentally, lower our car manufacturers’ production costs, making them more competitive with overseas car manufacturers whose current costs are lower because their governments do provide their workers with health care.
Our total tax bill also includes many actual hidden, pass-along taxes that we pay without knowing that we are doing so, for instance, the fees that companies pay to have their products or services certified as state inspected or federally inspected, which happen at the gas pump, but also in many other places. Did you know that the big drug companies pay the FDA for investigating a new drug to determine whether it will be allowed to go to market? Guess to whom that cost gets passed along as higher drug costs. This is the hard-to-swallow pill tax.
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Adding in all those sorts of taxes, our total tax bill is as high or higher than that of other industrialized nations. Some of those nations are more transparent in tax policy. They have fewer varieties of taxes. Just two, in the best of them: federal, state and local fees are rolled into one; and the second tax is a VAT, value added tax, a fee that is passed along through the system, with each sub-manufacturer or wholesaler paying it on to the next step up toward the retail sale. It is eventually added to the retail sale price that the consumer pays. The VAT absorbs and eliminates all other sales and previously hidden taxes in the system, at least when it is working properly — it is almost as difficult to extract all the hidden taxes from the system as it is to perfect a vacuum.
Part of our problem in the United States is that all our governmental jurisdictions jealously guard their fiefdoms and their right to collect taxes. To me, this is analogous to over-packaging — we all know that smaller and more numerous boxes mean we pay more per ounce. We pay extra for convenience. If we are willing to buy in bulk, our costs go down.
We could do this, in taxation, by paying in a more wholesale manner. While I don’t think we can go so far as to pay federal, state and local taxes all in one, we ought to pay taxes only to the federal government and to the local government, eliminating the intermediate-size package, the state tax.
Funds to operate the states would be sent to them from the central government, after having been collected in the form of federal taxes — as currently happens in those Old World socialist enclaves, France and Great Britain. The funds are forwarded to their departments and counties in proportion to each jurisdiction’s population numbers, as leavened by other factors such as the need to keep rural areas viable.
Of course, that would reduce the size of state governments, but isn’t reducing government what the anti-taxers and anti-socialists want?
Salisbury resident Tom Shachtman has written more than two dozen books and many television documentaries.
