A year! One simple year! We’ve been through a lot in this last year. A lot of stuff has happened. Do I really need to make a list, or can you fill in the blank yourself? Wow! But here we are today, getting ready to celebrate the 245th year of the existence of the greatest nation on earth. And yes, even with its problems, and there are many, it is STILL the greatest nation on earth.
Want proof? Here’s a simple one. Think of all those celebrities who claimed they were going to move out of the U.S. because they couldn’t stand it here any longer? Where did they all move to? Hint. They didn’t move. They couldn’t find any place on God’s green earth with more freedoms than the good ol’ USA.
How about comparing the USA from a tax perspective? Here are some interesting statistics on why, as crazy as it is, our U.S. Tax System is still the one of the best in the world.
First. Voluntary compliance. Yes, the IRS has set up a complicated system of matching information reports, employer withholding, etc. to “nudge” the average U.S. taxpayer into “voluntary compliance.” But, given the actual chances of being audited by the IRS, one would think that tax cheating would be rampant in America. In fact, it is not. Americans have this crazy idea of “civic duty” and “citizenship” that drives our subconscious to want to make sure we have paid the correct amount of taxes we owe. Currently, the U.S. voluntary compliance is rated at just under 90%. That means that almost 90% of U.S. taxpayers try really hard to file their tax returns on time and accurately.
A recent study by the IMF indicates that, as a percentage of GDP, the U.S. loses only about 1.13% of GDP to tax avoidance. China by comparison, loses 0.75% of GDP to tax avoidance. (You cheat on your China taxes; you might end up disappearing.) Most European countries are at 1-2% of GDP.
Another way of measuring our tax system is by total tax revenue as a percentage of GDP. The U.S. is at 27.1% of U.S. GDP. China’s total tax collections are lower at 17.5% of their GDP. France’s total tax revenues as a percentage of GDP is 46.2%. (The world’s highest.) Germany is 37.5%. Russia is 24.2%.
My point? If you haven’t figured it out yet, is simple. As much as we Americans love to complain about our tax system, it’s really not that bad compared to any other country in the world. Would you like to live in China in order to pay lower taxes? Not me! Would you like to live in France so you can pay the highest taxes anywhere? Not me! How about Russia? Nope! Why is that? Because freedoms are the greater measure of a reason to live anywhere, taxes being only one small determining factor.
Freedom! That is what we celebrate on July 4! Breathe the free air of America.
Did you hear? Psalms 73:5 says, “They are free from burdens of men, neither are they plagued like other men.”
Kelly Bullis is a certified public accountant in Carson City. Contact him at 882-4459. On the web at BullisAndCo.com. Also on Facebook.
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