In a remarkable editorial, the New York Times complains that revenues in America are too low. This is a stunning claim since a cursory look at budget numbers shows that revenues are at an all-time high in both nominal dollars and inflation-adjusted dollars. But the most remarkable part of the editorial is that the Times actually argues that low taxes mean that America is “ill prepared to compete":
…the taxes collected last year by federal, state and local governments in the
United States amounted to 28.2 percent of gross domestic product. That rate was one of the lowest among wealthy countries - about five percentage points of GDP lower than Canada's, and more than eight points lower than New Zealand's. …the meager tax take leaves the United States ill prepared to compete. From universal health insurance to decent unemployment insurance, other rich nations provide their citizens benefits that the U.S. government simply cannot afford. …revenue will prove too low to face the challenges ahead.
The editorial conveniently forgets to explain, though, how America is less competitive because of supposedly inadequate taxation. Is it that our per capita GDP is lower than our higher-taxed neighbors in Europe? No, America’s per capita GDP is considerably higher. Is it that our disposable income is lower? It turns out that Americans enjoy a huge advantage in this measure. Is our economy not keeping pace? Interesting thought, but America’s been out-performing Europe for a long time. Could higher rates of unemployment be a sign of American weakness? Nice theory, but the data show better job numbers in the United States.
But give the New York Times some credit. It is not easy to argue that higher taxes are good for growth. So if you’re going to make a fool of yourself, you may as well cast evidence to the side and jump into the deep end of the pool.