WASHINGTON -- Believe it or not, Americans carry a light federal tax load when compared with citizens of other industrialized nations. But the government services payback for those tax dollars is lighter still, some tax experts say.
And for all those people who've said for years that the middle class always gets unfairly caught in the middle, experts tend to agree.
It is against this backdrop that Congress is pondering an idea gaining momentum: raise taxes for the wealthy (married couples with annual income exceeding $185,730, for example) to make them pay at the same rate as the upper middle class. Some lawmakers, mostly Democrats, are also discussing a 10 percent surtax for millionaires.
Taking the sting out of these changes would be a proposed cut in the tax on capital gains, which are profits made from selling investments such as stocks and real estate. But some taxpayers, no matter what country they live in, might insist that it is impossible to remove the sting from any system in which local taxes can add widely varying pain, depending on where one lives. Economists don't include local taxes in such calculations because they vary so widely within nations.
On the federal level, raising taxes on the highest incomes would reverse a pattern that for years has been putting an increasing tax burden on the middle and lower classes while easing the burden on the wealthy, say economists and tax experts.
The biggest culprit has been a steady increase in the Social Security tax. That tax is withheld from paychecks at the same rate for everyone, until one's income tops about $51,000. The income above that amount is not subject to the Social Security tax, meaning that poorer wage earners end up paying a higher percentage of their income into the Social Security pot.
Also to blame are increased federal excise taxes on gasoline and consumer goods, which affect rich and poor at the same rate.
"There has been a worldwide tendency in the past couple of decades to impose more taxes on workers and consumers, and this is reflected in the United States," said Eugene Steuerle, a tax analyst with the Urban Institute.
Changes in the income tax laws brought on by the Tax Reform Act of 1986 helped ease this trend, tax people say. But the remedy was far from total, according to 1987 statistics compiled by the House Ways and Means Committee.
The committee's numbers showed that the tax system tends to sharpen the losses of the poor and the gains of the rich. The before-tax income of the poorest fifth of income earners dropped by 8.8 percent between 1979 and 1987, and for after-tax income the drop was steeper, at 9.1 percent. For the wealthiest one-fifth, before-tax income rose 15.9 percent, while after-tax income increased 18.7 percent.
"It is fair to say that workers with children have increasingly borne a much larger share of the tax burden," Mr. Steuerle said.
But when compared with other industrialized nations, U.S. tax burdens are lighter across the board.
"We are a relatively lightly taxed country," said Henry J. Aaron, director of economic studies for the Brookings Institution. "But you say that to people and they get furious at you, because nobody thinks he's lightly taxed."
Other economists agree, and there are numbers to back them up.
Total tax receipts in the United States are about 30 percent of the nation's gross domestic product (GDP), a measure of a country's economic output and domestic consumer spending. Germany's tax receipts, by comparison, total 37.6 percent. France's are 44.8 percent, and Sweden leads the way with 56.7 percent.
The fairness, or progressiveness, of the U.S. tax system is tougher to compare.
On the one hand, income tax rates in most other countries are more progressive -- meaning they are higher for the wealthy and lower for the poor. The 28 percent tax rate for the wealthiest Americans (compared with a pre-1986 top rate of 50 percent) is far below the top rates in most other industrialized countries, which generally range between 60 percent and 70 percent and in some cases go higher.
On the other hand, Mr. Aaron and Mr. Steuerle point out, the United States offers fewer ways to shelter capital gains, and that broadens the tax base among the wealthy.
"The U.S. has actually done a remarkable job with trying to broaden the tax base," Mr. Steuerle said.
Also, other countries rely more heavily on consumer taxes that affect everyone at the same flat rate, such as the Value Added Tax prevalent in Europe.
But the easiest way for a government to help ease the effects of income differences is not through taxes but through the spending of those taxes, Mr. Aaron said -- and it is here, he said, that the United States comes out a relative lightweight.
"We tax ourselves less, we expect less from government, and we get less from government," Mr. Aaron said.