Every year or so, I share data showing that a European-sized welfare state requires massive tax increases on lower-income and middle-class household.
Let’s add another to the list.
Here’s a chart comparing tax burdens on middle-class Americans and middle-class people from France.
As you can see, French households are being pillaged at much higher rates than American households.
interestingly, the chart comes from an editorial in the Washington Post. Here are some excerpts.
Like other European countries, France doesn’t tax only the rich at higher rates than the U.S. It also taxes ordinary workers more too, OECD data show. A lot more. The average single French worker gets to keep only 53 percent of his or her pay after taxes, compared with 70 percent for the average single American worker. For average one-earner families with two children, the tax burden is almost twice as high in France as in America. And those figures are only for taxes on labor. They don’t include the burden of France’s national value-added tax, with a standard rate of 20 percent on consumer purchases of goods and services. (Compare that with the average U.S. sales tax rate of 7.53 percent.) France’s massive welfare state was not built by taxing the rich. It was built by taxing the rich and everyone else at far higher rates than Americans would ever tolerate.
It’s not just that the French pay higher taxes.
They also have lower levels of income, which is another point I’ve repeatedly made.
France also has lower average gross wages (adjusted for purchasing power), a much higher unemployment rate and much slower economic growth than the U.S. These stats of shame are all related.
Just in case you don’t believe that French living standards are lower, here’s a chart showing per-capita GDP (featuring data from the IMF, World Bank, United Nations, and Maddison).
In other words, ordinary people in France are victimized two ways. They get less income and they have to pay more tax.
I’ll close by noting that France also tries to squeeze the rich (in some cases with tax rates above 100 percent!). But those tax rates generally don’t generate much revenue because of the Laffer Curve, as I noted just five days ago.
The bottom line is that nations with big welfare states have to target middle-class and lower-income taxpayers. Simply stated, there are not enough rich people to finance big government. Not in France, not in America, not anywhere.
