Monday, June 10, 2019

Democrats' Welfare State Cannot by Paid for By The Rich (and they know it).

Heritage foundation makes the point that the sort of European welfare state that Democrats envision cannot be had without significant increases in taxation on the people who pay relative low tax rates today -- the middle class. Of course, Democrats cannot be honest about this because there is no support for raising taxes. The claim that all of this will be paid for by The Rich is simply a lie.

Taxes on the rich cannot raise the necessary revenue to fund large European-style welfare states. If left on the current trajectory, U.S. government expenditures will require large tax increases on middle-class Americans. The current progressive agenda to further increase spending on health care, education, environmental policy, and income supports will require even higher taxes on a larger share of taxpayers. If America’s spending continues to look more and more like that of Europe, U.S. tax policy will also need to shift. In European countries, lower-income and middle-class taxpayers pay an average marginal wage tax rate of 49 percent on income above $37,000 a year, and an average value-added tax (VAT) of 20 percent. Those same U.S. taxpayers face a marginal wage tax of 32 percent and an average sales tax of 6 percent.