How Low Can You Go?

red arrow crashing through the groundWhile not surprising, it is still unsettling to learn, as we did upon reading this piece in The Atlantic, that the United States now has smallest government since the 60’s. Decades of attacks on government, tax cuts and finally a deep and lasting economic decline have taken their toll on our public structures. The US already had comparatively small government relative to other developed nations, but now we’ve reached a new low even by our meager standards. But, this distinction does come at a price. Some examples of the costs to our communities of such low public investment are laid out in this recent article in the New York Times.

“Citizens of most industrial countries have demanded more public services as they have become richer. And they have been by and large willing to pay more taxes to finance them. Since 1965, tax revenue raised by governments in the developed world have risen to 34 percent of their gross domestic product from 25 percent, on average.

The big exception has been the United States. In 1965, taxes collected by federal, state and municipal governments amounted to 24.7 percent of the nation’s output. In 2010, they amounted to 24.8 percent. Excluding Chile and Mexico, the United States raises less tax revenue, as a share of the economy, than every other industrial country.”

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