What is the line between public and private spending?
Via the Washington Post:
Here’s David Cay Johnston, interviewed by Joshua Holland (link from Joseph Delaney), in response to a question about “why we have a very low tax burden overall, relative to other wealthy countries, but a lot of Americans feel that they’re being taxed to death?”:
Well, one of the reasons some Americans feel they’re being taxed to death is that if you add up our taxes, which are low compared to other modern countries, and then you add in private expenditures for things the tax system pays for in other countries — a lot of our health care costs, higher education costs, admissions and fees and tickets and licenses for a lot of things — lo and behold, we end up being a relatively high-tax country. But it depends on how you analyze the data.
And let me give you one killer figure: We spend so much money on our health care in this country — or as I prefer to think of it, sick care in this country — that for every dollar that the other 33 modern economies spend for universal coverage, we spend $2.64. And this is done using something called “purchasing parity dollars,” so they’re truly comparable. So we spend $2.64 per person and still have almost 50 million people with no coverage and 30 million with limited coverage, and these other countries spend far less with universal coverage.
But what interests me (and Delaney) here is the difficulty of putting a line between public and private spending…
And then, of course, there’s that Defense budget.
I’ve heard this argument before in a slightly different form. Americans may not spend all that much in taxes, but they perceive that they are receiving relatively little in return. In a country with good unemployment benefits, child benefits, health care benefits, infrastructure and transit projects and so on, you can look at your taxes and see what you are getting. In the US, you get a gigantic but surprisingly ineffective military, a subsidized but overpriced health care system, deteriorating roads and related infrastructure and so on. Clearly taxes are way too high.