OCR Text |
Show Nations Shifting To Indirect Tax Base While the United States has been debating the 10', Federal surtax, other nations have been turning to indirect taxes in order to finance their spending programs. This point was made in the latest Utah Foundation analysis of "Taxes In the World Today." nations, for example, much of the capital investment is financed out of taxes. Moreover, More-over, the generally higher social soc-ial welfare expenditures In some of these nations Is another an-other factor in the generally higher tax levels. In summary, the Foundation report concludes by observing that "lower tax levels tend to reflect a type of society that favors individual making, initiative, in-itiative, and freedom in a nation's na-tion's economy." "Higher tax levels," according to the report, re-port, "are an expression of a society in which the influence of the state Is more dominant." The Foundation study indicates in-dicates that the shift to indirect indi-rect taxation was In evidence earlier this year in Great Britain Brit-ain where the "extremely severe" se-vere" increases in taxation fell primarily on spending. These increases took various forms of indirect taxation on alcohol, tobacca, and gas, as well as selected purchase Increases on most popular consumer goods. Foundation analysts point out that the new British tax policy reflects a growing recognition re-cognition in most European nations, including the socialist social-ist countries, that the heavy social welfare commitments incurred during recent years can no longer be financed from direct taxes on income. The study reveals that the proportion of gross national product absorbed by taxation has risen In every major nation, na-tion, including the United States, during the past ten years. Particularly sharp Increases In-creases took place in Sweden, Belgium, and Denmark, while Japan experienced the smallest small-est tax Increase during this period. Although the United States does make use of indirect taxes, the Foundation report notes that these are found mainly at the state and local levels and usually not at the Federal level. More than 85 of the Federal taxes in the United States are derived from direct taxes on Individual Individ-ual and corporate Income and on estate and gift taxes. The study observes that income in-come received by an individual individ-ual is a measure of what he and his property have produced, pro-duced, or, in other words, what he has put into the economy. Personal consumption expenditures, expend-itures, on the other hand, are a reflection of what is taken from the economy, pirect taxes tax-es on income, therefore, tend to discourage production, or contributions to the economy, while taxes on consumption tend to discourage spending. During 1966 Federal, state, and local taxes In the United States were equal to 28.27r of the gross national product. Although Al-though the percentage was substantially lower in Japan (19.3-7,) and Switzerland (21.77 ), it was higher in most of the other major industrialized industrial-ized nations of the free world and ranged up to 41.0 In Sweden. The study points out that the wide variation In the proportion pro-portion of national income absorbed ab-sorbed through taxation tends to reflect the social structures and national traditions of the respective countries. In some of the socialistically-oriented !" - - . . - . |