The United States has the highest effective corporate tax rate in the developed world, and the top individual income tax rate has been raised to 39.6 percent. We’re also saddled with a capital-gains tax and an excise tax. The overall tax burden is 24.8 percent of total domestic income, meaning that government confiscates nearly $1 out of every $4 earned.
Total government spending is another Achilles’ heel for the United States. It amounts to 42 percent of gross domestic product. That’s unacceptably high.
It shows no signs of abating. Under current policies, government spending is headed in one direction only: up.
That’s why we have to get serious about cutting government down to size, overhauling our tax system, and transforming costly entitlement programs. Or will this be our last year as a top-10 finalist in the index?
Ed Feulner is president of the Heritage Foundation (heritage.org).