Phil Gramm and Steve McMillan note the irony of the call for more “fairness”in their article in the Wall Street Journal, The Real Causes of Income Inequality, 4/6/12.

Excerpt:

Nowhere is the political debate over income inequality more detached from reality than the call for the top 1% of American income earners to pay their “fair share.” The Organization for Economic Cooperation and Development (OECD) data on the ratio of the share of income taxes paid by the richest taxpayers relative to their share of income show that the U.S. has the world’s most progressive tax burden.

The top 10% of earners in the U.S. pay 35% more of the income tax burden than in Sweden and 22% more than in France. These figures—from the 2008 OECD publication “Growing Unequal?”—include all household taxes imposed on income at the federal, state and local level, including social insurance taxes.

In an eternal irony unique to large welfare states, it is the expansion of government in the name of the poor and middle class that always costs poor and middle-class families the most. When the U.S. collects 16.1% of GDP in income taxes, the top 10% of taxpayers pay 7.3% and the other 90% pick up 8.9%.

In France, however, they collect 24.3% of GDP in income taxes with the top 10% paying 6.8% and the rest paying a whopping 17.5% of GDP. Sweden collects its 28.5% of GDP through income taxes by tapping the top 10% for 7.6%, but the other 90% get hit for a back-breaking 20.9% of GDP.

If the U.S. spent and taxed like France and Sweden, it would hardly affect the top 10%, who would pay about what they pay now, but the bottom 90% would see their taxes double.

Since OECD members have significantly higher consumption taxes on average than the U.S., the total tax burden of bigger government is even more heavily borne by lower-income citizens in developed nations than these numbers suggest.

HKO Comments:

As Maragaret Thatcher noted, “The problem with socialism is that you eventually run out of other people’s money.” The hard reality is that there is not enough wealth in the top 5% to fund the disastrous spending path we are on. The tax burden that the bully pulpit in its populist speeches tries to aim at the rich will inevitably be born by the poorer segments of our society. Europe, as Gramm and Miller so appropriately note, is a prime example.

If the truth were told about the real results of the government spending this candidate would not carry a single state.

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