It is not at all uncommon nowadays to hear people upset about the state of taxes. People throughout the USA yell it loud and often: “Taxes are too damn high!” The stand I propose to take here is unusual and antithetical to many, but I believe logic is on my side, and with a little luck, I just might be able to convince you where our true problem lies.
Taxes as you and I pay them are fine, and if they are to be adjusted, they should be increased. Our current tax rates are quite low, both historically and in comparison to other, modern, 1st world, non-socialist countries. Not too long ago, taxes were different, and, at times, exceedingly high, but in the last few decades, taxes have fallen dangerously low. The average American pays about 27% of their income in the form of various taxes.
“FOUL!” I hear you cry, “How dare you call 27% ‘dangerously low?’ 27% is almost ⅓ of my income! How can that be dangerously low?” Consider this: Worldwide, America is the leader in terms of a combination of economic power and low taxes on its citizens. Germany, as a counter-example, taxes not at 27%, but at 36%, and Switzerland taxes at 44%. Other European countries tax similarly.
“That’s why we’re the best!” you cry, “We’ve the lowest taxes and an enormous world economy!” And yes, I reply, It would seem so, but one crucial aspect doesn’t quite line up: Americans claim to have already cinched their financial belt as tight as possible. How is it that Europeans, taxed at 8-15% more than us, still have wiggle room, still take vacations to Thailand, and still have as much as or more that we do? How can we not take a 2% tax hike? The Europeans pay 10% more on taxes, pay $7.00+/gallon for gasoline, and stay out of debt.
“Impossible…” I hear you mutter, and now I’ll tell you exactly what the problem is; you don’t have enough money in your pocket. You don’t have enough money in your bank account. You don’t have enough money squirreled away for retirement, for your kid’s college fund, to pay off your debts and leave this world in the black. To be concise: you don’t have enough disposable income. Disposable income is your salary minus taxes. You use it to pay your bills, buy food, clothe your children, gas your car, save for retirement, and have fun pursuing your hobbies. Disposable income is how much money you have after taxes but before you do anything else, and the problem is that taxes take too much of it, right? Wrong! As I’ve already explained, Europeans pay 10% more on taxes than we do. Is stuff cheaper over there? Hardly. $7.00 or more per gallon of normal gasoline. Keep that in mind. No, the secret is that there are not one, but two ways to increase disposable income. The first is to lower taxes. The second is to increase the number you start with before taxes. To be blunt: get a raise.
“FOUL!” I hear you cry, “Companies don’t have the money to pull all of their employees out of the red and to keep them safely in the black! If they had that much money, we’d see record profits, rapid expansions, and (if it’s specifically an American thing) an over representation of American companies worldwide!”
Exactly.
Posted by Raurin 
