As a country becomes more enfranchised, the tax rate increases. | Cameron Barrett/The Cougar
Democracy and taxes remain fairly dry topics as a whole, but as someone interested in economics, these concepts are at the center of the field.
However, in this particular case, I wanted to test whether or not more democratic societies tend to have higher rates of taxation. This is compiled data where the Democracy level of a country is correlated with the top-level income tax rate of the country.
As one might tell, this correlation is fairly strong at around .49 (1 is the strongest, zero is the weakest). Essentially, the findings of the regression show that as a country becomes more enfranchised, the tax rate increases.
This is explained by a number of factors.
One, the more people involved in the political process from the bottom-up, the more generous social services people will receive, meaning the tax rate must compensate to sustain these programs.
Two, the more politically apathetic the people, the more leeway the government has to implement corrupt systems like crony capitalism or neo-socialism. Plainly, a more watchful people will lead to a more generous government, leading to a higher tax, generally.
Of course, like with all studies, there are limitations. One, the population of countries is not complete because (1) not all countries have in-depth, easily accessible information about their tax systems (North Korea, Cuba, etc.), and (2) the democracy index, while generally correct by personal judgment, is fairly arbitrary, and it always will be.
However, this study provides an interesting insight into the democratic process.
Perhaps the old statement “freedom isn’t free” rings true in more ways than one. Perhaps the social stability gained with things like a well-trained military, a large police-force, fire-fighting services, welfare-system, etc. have a reasonable cost, leading democracies to tax more.
There is a lot of room for further study in this field, and I hope to see some promising literature regarding this subject in the future.
Columnist Cameron Barrett is an economics senior and can be reached at [email protected]
Our Country has a history of being that lighthouse in the fog to many people.
And for most of that history, churches and charity groups, were the main providers of social services to the people. The late 1920’s and the Great Depression brought about government social services, and its corresponding need to increasingly draw from the tax base rather than rely solely on relief organizations.
FDR, if it were not for World War II, would have been classified wholly as a Failed President. He grew government sharply, and his private sector unemployment rates were never below 14 percent. Roosevelt doubled taxes, and employers found it difficult to hire new workers. It’s like the forced $15 minimum wage, which plays havoc with employers tried and true mehotd of dealing with the traditional cost of labor, upkeep, and meeting the demands of government.
Obama grew government so much, that the people could see his greed in the exercise of his power. He blinded many by using race as a tool to gain his power, and many judged him solely on race, rather than examine his ideology. If only the people had listened to Dr. King, and believed content of character over race, we’d be even much better of.
Democrats appeal to the weak minded who blindly vote for them every two years with the promise of Santa Claus, and other government goodies. While at the same time Democrat leaders award there rich friends by supporting them with fat government grants. Does Solyndra ring a bell? And it’s the very definition of crony capitalism. Which the fake news, excuse me, very fake news media is not motivated to report against Democrats.
Government responsibilities that Cameron noted are necessary and do require taxation, but we also must exam how government spends the peoples money. Audits are needed across the board to note government overlaps in services, finding wasteful spending and fraud, so that reasonable taxation can be accessed, thus allowing society to engage in their self-interest and thrive.
There is always room for streamlining services that allows government to run more smoothly, but it requires a reverence for law, and an ability to see Americans as citizens capable of supporting themselves in our economic system. A good majority of citizens are capable of looking after their own needs, but are on government benefits of some sort, which was encouraged by Obama job killing policies.
Now if we can just get teachers to instill confidence in their students that they are capable and should be confident in their abilities. But, alas, the Teachers Unions have a heavy hold over the schoolhouse.