Taxes

OECD Sees More Tax Increases Coming For US, Eurozone

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Credit: cflm/wikimedia

A paper released Tuesday by economists from the Organization for Economic Cooperation and Development says that the U.S., Japan, and the U.K. will find it difficult to reduce government debt in order to reach long-term growth targets.

From The Wall Street Journal:

In a paper by its economists, the OECD said that of its 34 members, the three have the largest combination of spending cuts and tax hikes to make if they are to reduce government debt to 60% of gross domestic product by 2060.

The OECD said they will also have to rely more than other members on measures that are either bad for growth or income equality in order to reach that goal…

The economists said that the U.S. will likely have to rely heavily on tax increases, although cuts to spending on health and pensions may also play a role.

"Consumption, environmental and inheritance taxes, as well as personal income taxes, appear to offer considerable potential," the economists said.

The OECD's analysis predicts countries will prioritize tax hikes rather than spending cuts: 

Across all countries, the OECD's analysis suggests tax hikes will play a significant role in cutting budget deficits. That runs contrary to the preferences of policy makers at the onset of austerity, when spending cuts were typically preferred as a source of between 75% and 80% of all fiscal consolidation

The economists sent a different message to countries in the European Union and Australia:

Another group–comprised of 16 countries—Austrialia, Italy, the Netherlands, Spain and Sweden–can reach the 2060 goal using measures that are least harmful to growth and equality. A group of six countries–including France, Greece and Ireland–can reach the 2060 goal without too much use of harmful measures.

The Wall Street Journal report cites government spending cuts as what the OECD identifies as harmful measures, while tax increases offer "considerable potential." At least one country's auditor may disagree—last week, the Cours des Comptes told the French government to start cutting its spending, which is now 56 percent of the nation's GDP.

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  1. cites government spending cuts as what the OECD identifies as harmful measures, while tax increases offer “considerable potential.”

    The fuck? Potential for what?

    1. Potential for fucking over the greatest economies in the world, of course. That’s what they want, after all.

  2. Tax increases always work to increase government revenues, because people never alter their behavior in response to changing costs.

    1. That’s also why companies can charge whatever price they want for their products btw, which explains why iPhones cost $1 million each.

      1. I’ve explained this to you ad nauseum, Hugh. That wasn’t an iphone. You paid a homeless man $1 million for a stale turd rolling around in a cigar box.

        1. But it gets the same cell reception as an iPhone!

          1. And has a surprisingly large app library, considering it’s just a piece of shit.

            But the joke’s on you; in a few months they’re going to release the Turd P (the p stands for “peanuts”), and your standard Turd won’t be worth anything.

  3. Is there a link to the OECD report rather than the WSJ pr?cis?

    1. Get access to reports, statistics and embargoed publications via our password-protected website.

      This password-protected site is for journalists only.

      Emphasis in original.

      1. I post links here sometimes that others have not yet seen. By the standards of digital media, I am a journalist, and I demand access!

      2. Not everyone can be a journalist.

        /Dick Derpin

        1. Not everyone can be a journalist.

          /Dick Derpin

          Indeed! Only a select few who tout the government line relentlessly and without reservation are entitled to the protection of the 1st amendment.

          Remember the Chris Matthews and E.J. Dionnes of this world are born with this talent….you can’t just pick it up on the fly!

  4. Cut spending and regulations, and tax revenue will increase plenty without a single rate change.

  5. “That runs contrary to the preferences of policy makers at the onset of austerity, when spending cuts were typically preferred as a source of between 75% and 80% of all fiscal consolidation”

    Very few countries made actual cuts and this mind set is why we are all doomed.

    1. They may have been “preferred” but they never actually “happened.”

    2. When statists describe “cuts”, they refer to nail clipping as full amputation.

      1. Usually a “cut” is increasing a budget by 3% instead of 4%. Sometimes it’s (horror of horrors) being forced to spend only as much as you did a few years ago.

  6. How many places have engaged in actual cuts as supposed to lower spending increases?

    1. A few. And guess what? On average, those are the countries that are doing better.

  7. The OECD along with the IMF, World Bank, and other international organizations have a special tax deal where they don’t pay many of the taxes that ordinary citizens pay. This might explain why they all seem to have no problem recommending higher taxes, they don’t pay them.

  8. Cuts? You think these votes are going to buy themselves?

  9. The poor U.K. is struggling under the horrible burden of low taxes. Who knew?

  10. I predict that we will see considerably higher taxes in the next few decades. Based on demographics, and current political conditions, I predict that we will never have another Stupid Party Republican president. The dems will likely impose much more taxes onto us to pay for even more wasteful programs. I actually have more hope for Europe, I see what’s happening in Britain and France, with the UKIP and the National Front as a good sign. Europeans may just save themselves.

  11. Dude knows he is talking a LOT of smack. Wow.

    http://www.Privacy-Planet.com

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