The “tea” in tea party is sometimes explained as “Taxed Enough Already.” Well, are we?
The left believes we — or at least “the rich” among us — are undertaxed, and wants to squeeze out more revenue. Just “spread the wealth around” to get wider health care coverage, better education, more mass transit, smaller budget deficits, less public debt, fully funded entitlements. Take your pick from this all-we-can-give-away buffet.
But what if I told you the average American already pays as much or more in taxes than the people in countries that do many of these things?
That’s the somewhat surprising revelation from Harvard economist Greg Mankiw. On his blog, he wrote that viewing taxes as a share of gross domestic product and concluding there’s more revenue to be had “may mislead us into thinking we can increase tax revenue more than we actually can.” That, he argued, is because “high tax rates tend to depress GDP.”
So, Mankiw did a simple calculation