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Countries well known for low taxation on its people are Greece, Italy and the United States (24% of GDP). The average tax burden for OECD countries is 35%. During a recession, many countries use government programs to stimulate job growth, create employment benefits and incentives to companies not to lay-off its employees. Most “socialist” European countries have a tax burden between 38 – 42% of GDP, see chart. The North European countries have well-funded pensions for the retirees. The Mediterranean countries on the other hand do not. The people will not pay their fair share of income tax and the pension funds are lacking in assets.
UNITED STATES TRADITION: TRICKLE DOWN ECONOMIC WEALTH
The debt deal between Congress and President Obama does not break with tradition. The Bush years determine tax care for the wealthy, destruction of the middle-class, lower incomes for main street and salvation for the financial institutions that caused the economic breakdown of 2008. A large part of the deficit was caused by a war of choice in Iraq and relief of taxation for the upper class. For the American people one thing is certain: coming election of 2012 will be tough on incumbents in Congress and the White House!
Cause of decline in U.S. financial position
Bush tax cuts added roughly $2 trillion to the national debt over the last decade. Second, the wars in Iraq and Afghanistan added an additional $1.1 trillion or so. And third was the Great Recession, which led both to a collapse in revenue and to a sharp rise in spending on unemployment insurance and other safety-net programs. A Bloomberg analysis in May 2011 attributed $2.0 trillion of the $9.3 trillion of public debt (20%) to additional military and intelligence spending since September 2001.
The Chart That Should Accompany All Discussions of the Debt Ceiling
"But I will not let myself be reduced to silence."
