Health Care Costs and the Tax Burden in the US and Europe: "
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Bruce Bartlett argues that once you account for spending on health care, total tax burdens aren't that much different in the US and Europe:
What Your Taxes Do (and Don’t) Buy for You, by Bruce Bartlett: ...The table below shows total taxes, including state and local government taxes, as a share of G.D.P. in 2008, the latest year for which there is complete data. The table makes clear that the United States has very low taxes by international standards. ...
When Americans see these data they are usually incredulous that Europeans submit to such seemingly oppressive tax levels. Conservatives, in particular, tend to view freedom as a fixed sum: the bigger government is as a share of G.D.P., the less freedom there is for the people...
[A]lmost every other country has some form of national health insurance that covers, on average, 72 percent of all health costs. The comparable figure in the United States is 46.5 percent, and almost all of that is accounted for by Medicare and Medicaid, which largely benefit the elderly and the poor.
Average American workers must pay for health care out of their pockets, or through their employers in the form of lower wages. Europeans prefer to pay higher taxes and get government health care for every resident in return.
Conservatives universally believe that whenever the government provides a service it will be vastly more costly than if the private sector does so. ... But O.E.C.D. data show that Americans pay vastly more for health care than the residents of any other major country. ...
Because most people have little more choice about medical spending than they do about the taxes they pay, one can think of the two as being similar in nature. In the table below, I have added private health care spending as a share of G.D.P. to the tax data in the table above. This puts the United States and other countries on the same footing, by accounting for the fact that they get health care mostly through government while Americans mostly pay for it themselves. ...
Looking at taxes alone, the burden in the United States is 25 percent below the O.E.C.D. average, but including the additional health costs Americans pay, the United States is just 4.7 percent below average.
In short, a substantial portion of the higher tax burden that Europeans pay is really illusory. They are really just paying their health insurance premiums through their taxes rather than through lower wages, as we do.
Middle-class Europeans also get cash benefits from government that offset much of the tax burden in a way that the United States offers only for the poor. ...[T]he idea that Europeans are enslaved by high taxes, as most American conservatives believe, is just nonsense.
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