Re:Maine

If you’ve done your income taxes already – most of us don’t, using preparers because of the tax code’s bewildering complexity – you know that tax time is just as amazing this year as last.

Thanks to the last-minute extension of the middle class (and working class) tax cuts from the Obama recovery act – along with the much-less-justifiable Bush tax cuts for millionaires – you may find yourself with zero tax liability, or even with the government owing you money. That’s particularly true if you have children under 18 (a well-nigh permanent tax credit), or in college (the generous, but temporary, Hope credit.)

If your middle-class mind thinks this is too good to be true, you’re onto something. The federal government cannot permanently run without revenue from a large proportion of its taxpayers, and it probably isn’t the way the president wanted to do it.

But Republicans have made “stimulus” a nasty word, even though just about every reputable economist said it averted a depression, and Barack Obama concluded that while he couldn’t convince the GOP to increase spending, they would go for more tax cuts. Either government spending or tax cuts can help an economy in a deep, deep hole get out of it – and the recovery is now under way.

Historians will undoubtedly scratch their heads over the events of 2009-10, when, after federal taxes had been reduced to their lowest level in three generations, the most dramatic political result was the Tea Party, claiming – somehow – that we are overtaxed.

The “overtaxed” mantra had some validity back in the Carter-Reagan years. Tax brackets, unadjusted for inflation, were producing unlegislated tax increases every year, and despite a number of top-rate reductions, Americans were still paying a higher proportion of income to the government than that had a decade earlier. This was the origin of “tax and spend,” but we indexed taxes to inflation, and no one “taxes and spends” any more.

America remains the land of low taxes, by any objective measure. The gold standard is the international organization known as OECD – Office for Economic Cooperation and Development – which was founded as part of the Marshall Plan for European recovery after World War II. That great effort is proof, denials to the contrary, that government spending, even when financed by taxes, really does work.

How low are our taxes? The OECD keeps numbers for 34 member states, which include all our peer nations. Russia and China, with their very different, and in the latter case, secret, economies are not included.

The highest taxing countries are, no surprise, in Scandinavia. Denmark holds the top spot, with taxes representing 48.2 percent of the national income, followed by Sweden at 46.4 percent.

Then we descend to a middle tier, with most European countries fitting into this band. The United Kingdom and the Czech Republic are on the low end, at about 34 percent, with Italy the highest, at 43 percent.

The lowest taxing countries come in around 30 percent. These include Canada, Israel, New Zealand and Spain at 31 percent, descending to Australia, Japan and South Korea at about 28 percent.

The United States is almost at the bottom – at 24 percent, we’re the biggest skinflints around. Of OCED states, only Mexico is lower, and, as the economic flight north across our border testifies, there’s no way we’d want to swap economies. And since the figures are two years old, taxes are currently even lower than 24 percent.

This may all sound like an academic exercise, but tax rates have real consequences. In this case, it accounts for much of our budget deficit and all of our chronic under-investment in infrastructure, including collapsing bridges, tawdry airports, and minuscule passenger rail network.

Two generations of ideological hostility to taxes have left America unable to invest in its future. The Obama administration has made so little headway against prevailing tax aversion that it won’t even propose raising the gasoline tax, unchanged since 1993 and losing 40 percent of its value to inflation in the meantime. Transportation Secretary Ray LaHood instead suggests raising tolls, a mere drop in the bucket.

In Maine, tax-phobia has Gov. LePage insisting that, while state workers and retirees must take it on the chin to the tune of $400 million, it’s absolutely essential to simultaneously cut taxes — which have not been raised in decades — by $200 million.

Governments, like families, can balance their budgets by raising revenue, cutting spending, or a combination of both. Trying to run state and federal governments only by cutting spending, year after year, will put us on the road to ruin.