NCPA - National Center for Policy Analysis


January 9, 2008

Americans today are still struggling with record levels of taxation.  The plain and simple fact is that Americans need tax relief, says Dick Armey, Former House majority leader and chairman of the FreedomWorks Foundation.


  • This year, the tax burden hit a 25-year high and polls indicate that overwhelming majorities think taxes are too steep and the system by which we pay them too complex.
  • Two-thirds believe that the death tax should be eliminated, and only 10 percent say they would be willing to accept a tax hike big enough to eliminate the deficit.

Still, many have argued that the deficit justifies raising taxes, but in reality, says Armey:

  • The deficit declined from $477 billion in 2004 to $163 billion in 2007, even with Bush's tax cuts in place; lower than during most of President Clinton's first term.
  • Much of the decline is attributable to the sharp jump in federal revenues, lifted by a significant rise in corporate profits.

If the country's high corporate tax rates persist, however, America might risk losing its global competitive edge:

  • Corporate tax rates in the United Kingdom, Germany, New Zealand and even Sweden have all been slashed to 30 percent or less; the average corporate tax rate in the European Union is 26 percent.
  • Compare this with that of the United States, where, if state-level taxes are included, the average corporate tax rate stands at an unfriendly 40 percent -- hardly an encouraging number for businesses or investors.

Deficit worries and other economic anxieties are best addressed with spending cuts, says Armey.  Pork-barrel spending and runaway entitlement costs are the enemy, not low taxes.

Source: Dick Armey, "Opposing view: 'Americans need tax relief,'" USA Today, January 9, 2008.


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