Most European countries have total tax revenues over GDP above 40%. In the US, total tax revenues (federal, state and local) are about 25% of GDP.
And yet Republicans keep vetoing any tax raise. Go figure.
Average US worker pays $14,460 in tax; government spends $16,897.
To begin with the revenue side, the average employed worker paid $12,748 to the Federal government in the fiscal year ending September 2009. The
company he or she works for chipped in $1,712/worker in the form of corporate income taxes. So that works out to $14,460 per employed person in Federal
government revenue. In case you are curious about total per capita, every man, woman and child in America pays just over $6,000 in taxes annually.
So, against that $14,460 per employed tax payer, how much does the government spend on their behalf? Let’s step through the most well-known programs for the 2009 fiscal year.
- Social Security: $4,180 per worker
- Medicare: $3,745 per worker
- Medicaid: $1,892 per worker
- Educational Programs: $1,436 per worker
- Defense Vendors: $2,935 per worker
- Federal Salaries: $1,341 per worker
- Unemployment Benefits: $894 per worker
- Food Stamps: $384 per worker
Source: Nicholas Colas at BNY ConvergEx
Private equity firm TPG got a heavy tax bill from Australian government.
MELBOURNE, Nov 25 (Reuters) - Australia’s tax office has hit U.S. private equity group TPG [TPG.UL] with a $628 million bill for tax and penalties, in a dispute that threatens to deter further foreign investment in the country.
TPG last month sold its stake in top Australian department store chain Myer (MYR.AX) in an initial public offering, netting a profit of A$1.58 billion ($1.46 billion). The dispute centres on how to tax those gains.
The Australian Taxation Office’s claim hinges on two issues: whether private equity asset sales should be taxed as a capital gain or as business income, which would mean a higher rate, and whether TPG’s structure using tax havens was designed to avoid tax.
It is shocking how much money is spent in the private equity industry on tax advisors and consultants to structure deals in supposedly safe tax-friendly countries, just to discover at the end that it is useless and damaging.
The value of simplicity is vastly underestimated.
