News / Economy

OECD Adds Its Voice to US Debate on Taxes

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

Lesotho Faces New Round of Violence, Political Crisis

Brutal killing of military officer has sent former leaders back into S. Africa where they're watching anxiously as regional officials head in to try to restore peace More

Video US Diplomat Expects Adoption of Bosnian Massacre Anniversary Resolution

Samantha Power says there's broad consensus about killings in Bosnia's war, but Russia calls resolution 'divisive,' backs UN countermeasure More

UN Report Exposes Widespread Boko Haram Atrocities

Damning report graphically details pattern of vicious, widespread atrocities committed by Islamist militants More

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
Olympics Construction Scars Sacred Korean Mountaini
X
July 02, 2015 4:10 AM
Environmentalists in South Korea are protesting a Winter Olympics construction project to build a ski slope through a 500-year-old protected forest. Brian Padden reports that although there is strong national support for hosting the 2018 Pyeongchang Winter Olympics, there are growing public concerns over the costs and possible ecological damage at the revered mountain.
Video

Video Olympics Construction Scars Sacred Korean Mountain

Environmentalists in South Korea are protesting a Winter Olympics construction project to build a ski slope through a 500-year-old protected forest. Brian Padden reports that although there is strong national support for hosting the 2018 Pyeongchang Winter Olympics, there are growing public concerns over the costs and possible ecological damage at the revered mountain.
Video

Video Xenophobia Victims in South Africa Flee Violence, Then Return

Many Malawians fled South Africa early this year after xenophobic attacks on African immigrants. But many quickly found life was no better at home and have returned to South Africa – often illegally and without jobs, and facing the tough task of having to start over. Lameck Masina and Anita Powell file from Johannesburg.
Video

Video Family of American Marine Calls for Release From Iranian Prison

As the crowd of journalists covering the Iran talks swells, so too do the opportunities for media coverage.  Hoping to catch the attention of high-level diplomats, the family of American-Iranian marine Amir Hekmati is in Vienna, pleading for his release from an Iranian prison after nearly 4 years.  VOA’s Heather Murdock reports from Vienna.
Video

Video UK Holds Terror Drill as MPs Mull Tunisia Response

After pledging a tough response to last Friday’s terror attack in Tunisia, which came just days before the 10th anniversary of the bomb attacks on London’s transport network, British security services are shifting their focus to overseas counter-terror operations. VOA's Henry Ridgwell has more.
Video

Video Obama on Cuba: This is What Change Looks Like

President Barack Obama says the United States will soon reopen its embassy in Cuba for the first time since 1961, ending a half-century of isolation. VOA White House correspondent Luis Ramirez reports.
Video

Video Hate Groups Spread Influence Via Internet

Hate groups of various kinds are using the Internet for propaganda and recruitment, and a Jewish human rights organization that monitors these groups, the Simon Wiesenthal Center, says their influence is growing. The messages are different, but the calls to hatred or violence are similar. VOA's Mike O’Sullivan reports.
Video

Video US Silica Sand Mining Surge Worries Illinois Residents, Businesses

Increased domestic U.S. oil and gas production, thanks to advances known as “fracking,” has created a boom for other industries supporting that extraction. Demand for silica sand, used in fracking, could triple over the next five years. In the Midwest state of Illinois, people living near the mines are worried about how increased silica sand mining will affect their businesses and their health. VOA’s Kane Farabaugh has more in this first of a series of reports.
Video

Video Blind Somali Journalist Defies Odds in Mogadishu

Despite improving security in the last few years, Somalia remains one of the most dangerous countries to be a journalist – even more so for someone who cannot see. Abdulaziz Billow has the story of journalist Abdifatah Hassan Kalgacal, who has been reporting from the Somali capital for the last decade despite being blind.
Video

Video Texas Defies Same-Sex Marriage Ruling

Texas state officials have criticized the US Supreme Court decision giving same-sex couples the right to marry nationwide. The attorney general of Texas says last week's decision did not overrule constitutional "rights of religious liberty," and therefore officials performing wedding services can refuse to perform them for same-sex couples if it is against their religious beliefs. Zlatica Hoke reports on the controversy.
Video

Video Rabbi Hits Road to Heal Jewish-Muslim Relations in France

France is on high alert after last week's terrorist attack near the city Lyon, just six months after deadly Paris shootings. The attack have added new tensions to relations between French Jews and Muslims. France’s Jewish and Muslim communities also share a common heritage, though, and as far as one French rabbi is concerned, they are destined to be friends. From the Paris suburb of La Courneuve, Lisa Bryant reports about Rabbi Michel Serfaty and his friendship bus.
Video

Video Saudi Leaks Expose ‘Checkbook Diplomacy’ In Battle With Iran

Saudi Arabia’s willingness to wield its oil money on the global diplomatic stage appears to have been laid bare, after the website WikiLeaks published tens of thousands of leaked cables from Riyadh’s Ministry of Foreign Affairs. VOA's Henry Ridgwell reports.
Video

Video In Kenya, Police Said to Shoot First, Ask Questions Later

An organization that documents torture and extrajudicial killings says Kenyan police were responsible for 1,252 shooting deaths in five cities, including Nairobi, between 2009 and 2014, representing 67 percent of all gun deaths in the areas reviewed. Gabe Joselow has more from Nairobi.

VOA Blogs

World Currencies

EUR
USD
0.9009
JPY
USD
123.09
GBP
USD
0.6387
CAD
USD
1.2524
INR
USD
63.605

Rates may not be current.