Considering the Cost of Lower Taxes<br />In 1969 Neil Armstrong walked on the moon, Jimi Hendrix played “The Star-Spangled Banner” at Woodstock,<br />and federal, state and local governments in the United States raised about the same in taxes, as a share of the economy, as the government of the average industrialized country: 26.6 percent of gross domestic product, against 27 percent among the nations in the Organization for Economic Cooperation and Development.<br />Most of the tax cuts were aimed at those below the top tier of earners: over all, 19 countries cut marginal income-tax<br />rates for those not in the highest bracket, aiming to increase the take-home pay of average workers.<br />For instance, countries that have cut corporate tax rates have also raised taxes on dividends — shifting<br />the tax burden from corporations to their shareholders, and collecting the tax revenue somewhere.<br />Bruce Bartlett, who helped conceive the 1986 tax overhaul under President Ronald Reagan but has become a critic of Republicans, characterized claims<br />that corporate tax cuts would increase the income of the middle class as “complete nonsense.”<br />Beyond this criticism, though, the debate offers an opportunity to look closely at the mechanics —<br />and consider the motivations — behind the nation’s great divergence with the other market democracies of the West.<br />Citizens of many countries that were poorer and little taxed in the 1960s, like Spain<br />and Japan, today pay a much larger share of their incomes in taxes than their American counterparts.<br />countries that changed their top income-tax rates for 2016 and later years, nine increased them and only six reduced them, the O. E.C.
