Talkin' Taxes

The barrage of candidate lawn signs on nearly every street corner of Maine makes it official: The 2010 governor’s race has begun. One recurring (albeit hardly new) campaign theme has already emerged amongst the dozen or so candidates vying to replace outgoing Governor, John Baldacci: Taxes. As in, Maine pays too much of ‘em. Now candidates from both parties seem locked in an all-out bidding war for who will reduce the state’s tax rate the most. The rhetoric is the same as always: Candidates, particularly the Republicans, claim Maine’s outrageous income taxes force business leaders and recent college graduates out of the region.

But are Mainers’ taxes really as high as some politicians would have us believe? For that matter, how do Americans’ overall tax levels compare with the rest of the industrialized world? Are we really “Taxed Enough Already” as the ubiquitous “Tea Partiers” claim?

The results are not particularly surprising for those who have dared consider these questions before. Compared with most of Europe and Canada, income tax rates in the United States are actually quite low. Studies since 2000 have placed countries like Canada (where the top rate of income tax is roughly 40%) and Denmark (60%) as the most heavily taxed nations, while the U.S. falls near the bottom of the list under Japan and the U.K. Updated statistics from the Bureau of Economic Analysis and the Organization of Economic Development show only slight shifts in this low-tax trend, with the U.S. eclipsing Japan in tax rates yet still remaining at the lower end of the scale.

Such nationwide statistics make the Tea Party’s anti-tax screeds ring rather hollow. Of course, as the 2000 study indicates, the reason for America’s relatively low tax rates can mostly be attributed to the number of socialized (Gasp! Not the “S-word”!) services countries like Canada, Denmark and Sweden offer their citizens. Such services (like universal healthcare, and extended employee vacation and sick-time for example) are absent here where private sector business and free-market ideology dominate.

Right-wing accusations of President Barack Obama’s “socialist” tendencies aside, the truth is the current administration has taken no steps to promote such nationalized services here. (Question: What self-respecting Marxist would vote for the trillion dollar taxpayers’ bailout of Wall Street, as Obama did? A true socialist would have let the capitalist institutions go under.) Yes, citizens in these countries have more money taken out of their paychecks, but consider the array of services and benefits they receive in exchange.

Additionally, overall happiness and quality of life measurements are typically higher in nations that pay more taxes. The first U.S. city listed on a 2010 Quality of Living worldwide ranking by Mercer is Honolulu at number 31. Seattle, New York, Chicago and Washington are all at the bottom. Conversely, Vienna, Zurich, Geneva and Vancouver are listed as the top four—all from countries with some form of nationalized services.

And I have not neglected a state-wide perspective in this analysis. As a state, Maine is not amongst those with the highest sales tax (that honor goes to California), or with the greatest tax burden (that would be New Jersey). Maine is ranked amongst the states with the highest cigarette tax ($2.00), however is absent from most of the other categories. In general, little indication was found that presents Maine as particularly outstanding for its level of taxes in the country.

Statistics aside, it seems evident Mainers’ aversion to high taxes is little different than that of the rest of the nation. The Tea Party personnel (I hesitate to call them activists), according to a recent story in the New York Times, primarily consists of middle-aged, white conservatives, a majority of whom claim the plight of African-Americans in this country has been “overstated.” These people care only about maintaining their level of income, and are contemptuous of the plight of the poor, minorities, or offering basic social services to those who cannot afford them. It is thus, natural Maine politicians will attempt to capitalize on this sentiment.

If there is an area where taxes should be reduced, it is the one members of the Tea Party never mention—the bloated military-spending budget. Currently about 54% of taxpayer money goes to military expenditures, including money for the ongoing wars in Iraq and Afghanistan. Indeed, if there is an area where U.S. taxes need to be redirected, it is here.

Maine residents, and Americans overall, must get over their aversion to taxes if we are to ever move away from being a society of self-oriented consumers, to a prosperous country of civic-minded citizens. Despite all the patriotic chanting and militaristic jingoism present during yesterday’s Memorial Day celebrations, America is not “Number One” on the world stage. Not anymore. The countries that are outranking us in quality of life, societal benefits and overall happiness are all socialist, to one degree or another. And their citizens all pay much higher taxes than we do.

Unfortunately, I doubt Mainers will hear any of the gubernatorial candidates promise to raise taxes anytime soon. Hey, here is a Bill Maher-inspired, “New Rule”: Those conservative Americans opposed to higher taxes should not be allowed to enjoy the services they pay for. Next time your house catches on fire, you will just have to sit back and watch it burn, as the fire department runs on taxpayer money.