News / Economy

OECD Adds Its Voice to US Debate on Taxes

OECD Adds Its Voice to US Debate on Taxesi
|| 0:00:00
X
Mil Arcega
June 28, 2012
The Organization for Economic Cooperation and Development is weighing in on the U.S. political debate over whether the wealthy should be taxed at a even higher rate than they are now. In its latest report on the U.S. economy, the organization, which represents 34 of the world's biggest economies, says the U.S. recovery is gaining traction but that the country faces steep challenges due to rising income inequality between rich and poor. Mil Arcega has more.

OECD Adds Its Voice to US Debate on Taxes

TEXT SIZE - +
WASHINGTON - The Organization for Economic Cooperation and Development is weighing in on the U.S. political debate over whether the wealthy should be taxed at an even higher rate than they are now.  In its latest report on the U.S. economy, the organization, which represents 34 of the world's biggest economies, says the U.S. recovery is gaining traction but that the country faces steep challenges due to rising income inequality between rich and poor.

Economically, the United States remains one of the strongest countries in the world, but there are signs its competitive edge is slipping.  Despite a reputation as a global leader in technology and innovation, OECD Deputy Secretary-General Richard Boucher says the U.S. is falling behind in education.

"The United States is one of three countries out of the 34 (in the OECD) that we've studied that spends less on education of disadvantaged students than we do on other students.  Usually it's the other way around," Boucher said.

It's a situation the OECD says has led to rising income disparity -- with those in the highest income brackets receiving a better education and, therefore, greater opportunities to succeed.  
Another contributing factor is what the OECD calls "tax code distortions".

"There are elements of the tax code that are favoring the kind of income that the richest people make.  We come at it somewhat from the inequality point of view but also from the fact that we think the government tax system ought to be a lot more neutral," Boucher said.

Perhaps unwittingly, the OECD appears to have inserted itself in the middle of a hot political debate...one exemplified by billionaire Warren Buffet, who once remarked that he paid a smaller percentage in taxes than his secretary.

"I think that people at the high end, people like myself, should be paying a lot more in taxes," Buffet said.

Earned income in the U.S. is taxed at a higher rate than investment income. That disparity is at the heart of President Barack Obama's proposal to impose higher taxes on Americans earning more than $250,000 a year.

Republicans call that a tax grab -- akin to declaring war on the country's job creators, says rising conservative star Paul Ryan.
 
"Class warfare will simply divide the country more.  It will attack job creators and it doesn't grow the economy," Ryan said.

President Obama disagrees. "If asking a millionaire to pay the same tax rate as a plumber makes me a class warrior, a warrior for the working class, I will accept that.  I will wear that as a badge of honor," Obama said.

The issue could further divide the country in an election year.

Republican presidential candidate Mitt Romney, who co-founded a private equity firm, admits he paid less than 14 percent on his investment income in 2010.  Compare that to some wage earners who paid 35 percent. Romney proposes bigger cuts in government spending and lower taxes for all.  It's a position that runs counter to the approach favored by President Obama: fewer cuts to social programs, and more infrastructure spending - paid for in part, by higher taxes on the rich.

You May Like

Multimedia Relatives of South Korean Ferry Victims Fire at Authorities

36 people are confirmed dead, but some 270 remain trapped on board More

War Legacy Haunts Vietnam, US Relations

$84 million project aims to clean up soil contaminated by Agent Orange More

Wikipedia Proves Useful for Tracking Flu

Technique gave better results than Center for Disease Control (CDC) and Google’s Flu Trends More

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
Ukraine, Russia, United in Faith, Divided in Politicsi
X
Michael Eckels
April 19, 2014
There is a strong historical religious connection between Russia and Ukraine. But what role is religion playing in the current conflict? In the run-up to Easter, Michael Eckels in Moscow reports for VOA.
Video

Video Ukraine, Russia, United in Faith, Divided in Politics

There is a strong historical religious connection between Russia and Ukraine. But what role is religion playing in the current conflict? In the run-up to Easter, Michael Eckels in Moscow reports for VOA.
Video

Video Face of American Farmer is Changing

The average American farmer is now 58 years old, and farmers 65 and older are the fastest growing segment of the population. It’s a troubling trend signaling big changes ahead for American agriculture as aging farmers retire. Reporter Mike Osborne says a new report from the U.S. Census Bureau is suggesting what some of those changes might look like... and why they might not be so troubling.
Video

Video Donetsk Governor: Ukraine Military Assault 'Delicate But Necessary'

Around a dozen state buildings in eastern Ukraine remain in the hands of pro-Russian protesters who are demanding a referendum on self-rule. The governor of the whole Donetsk region is among those forced out by the protesters. He spoke to VOA's Henry Ridgwell from his temporary new office in Donetsk city.
Video

Video Drones May Soon Send Data From High Seas

Drones are usually associated with unmanned flying vehicles, but autonomous watercraft are also becoming useful tools for jobs ranging from scientific exploration to law enforcement to searching for a missing airliner in the Indian Ocean. VOA’s George Putic reports on sea-faring drones.
Video

Video New Earth-Size Planet Found

Not too big, not too small. Not too hot, not too cold. A newly discovered planet looks just right for life as we know it, according to an international group of astronomers. VOA’s Steve Baragona has more.
Video

Video Copts in Diaspora Worry About Future in Egypt

Around 10 percent of Egypt’s population belong to the Coptic faith, making them the largest Christian minority in the Middle East. But they have become targets of violence since the revolution three years ago. With elections scheduled for May and the struggle between the Egyptian military and Islamists continuing, many Copts abroad are deeply worried about the future of their ancient church. VOA religion correspondent Jerome Socolovsky visited a Coptic church outside Washington DC.
Video

Video Critics Say Venezuelan Protests Test Limits of Military's Support

During the two months of deadly anti-government protests that have rocked the oil-rich nation of Venezuela, President Nicolas Maduro has accused the opposition of trying to initiate a coup. Though a small number of military officers have been arrested for allegedly plotting against the government, VOA’s Brian Padden reports the leadership of the armed forces continues to support the president, at least for now.
Video

Video More Millenials Unplug to Embrace Board Games

A big new trend in the U.S. toy industry has more consumers switching off their high-tech gadgets to play with classic toys, like board games. This is especially true among the so-called millenial generation - those born in the 1980's and 90's. Elizabeth Lee has more from an unusual café in Los Angeles, where the new trend is popular and business is booming.
Video

Video Google Buys Drone Company

In its latest purchase of high-tech companies, Google has acquired a manufacturer of solar-powered drones that can stay in the air almost indefinitely, relaying broadband Internet connection to remote areas. It is seen as yet another step in the U.S. based Web giant’s bid to bring Internet to the whole world. VOA’s George Putic reports.
AppleAndroid

World Currencies

EUR
USD
0.7217
JPY
USD
102.17
GBP
USD
0.5949
CAD
USD
1.1009
INR
USD
60.326

Rates may not be current.