Americans also tend to pay more in local and state taxes, as well as property taxes. Americans also pay hidden taxes, such as $300 billion annually in federal tax breaks given to businesses that provide health benefits to their employees -- that's $1000 for every man, woman and child in the United States, 45 million of whom don't have any health coverage at all. That amount could go toward financing a real universal health care system covering every American, since it's already coming out of every tax-paying American's pocket.
The Bigger Picture of Our Tax Burden
A thorough "tax analysis" would need to create a ledger in which all the supports and services Americans receive are listed on one side of the ledger, and the amount of taxes and any additional out-of-pocket expenses, fees and surcharges we pay are listed on the other. And then compare that to what other countries pay and what they receive. When you sum up the total balance sheet, it turns out that Americans pay out as much as those "high-taxed" Europeans -- but we get a lot less for our money.
Unfortunately these sorts of complexities are not calculated into simplistic analyses like Forbes' annual Tax Misery Index, which shows European nations as the most "miserable" and the low-tax United States happy as a clam down near the bottom on their index -- right next to Indonesia, Malaysia and the Philippines. That's because the Forbes Tax Misery Index only takes into account income tax, Social Security or retirement tax, corporate tax, sales tax or VAT and a few other minor taxes. It doesn't consider the vast amounts that Americans are paying out-of-pocket, nor what people are receiving for those payments in terms of supports for families and individuals.
Ideologically-bound Americans counter that, at least in the U.S. it is discretionary about whether or not you purchase these services. The government isn't picking your pocket through higher taxes or forcing you to purchase any particular form of assistance. That's undeniably true. But in this economically insecure age, are services like health care, higher education or some kind of skilled job training, child care, sick leave, parental leave, retirement and senior care really discretionary? Or are they increasingly essential to ensure healthy, happy and productive families and employees?
An extreme tax-phobic position also ignores sound economic arguments about the most efficient way to organize the agencies and bureaucracies that people increasingly depend upon. Because the Germans, Swedes, Canadians and Japanese collect sufficient revenue via taxes, they can use that money to design comprehensive webs of "social insurance" -- health care, child care, university education, senior care, and so on -- in a way that allows them to reach economies of scale and design more cost-effective bureaucracies. They often do this in partnership with the private sector, and they can offer these services for a lot less money per capita than we can in the U.S., with our very decentralized, hodgepodge systems that are inefficient and comparatively expensive. That's why Americans pay more per capita for health care, child care, university education and more. And that makes U.S. businesses less competitive compared to many of their international counterparts.