Hillary Clinton raised more than a few eyebrows yesterday, when she aired her own views (and not necessarily those of the Obama administration, she said) on federal tax policy, saying she feels the rich “are not paying their fair share in any nation that is facing the kind of employment issues [like the U.S.] – whether it’s individual, corporate or whatever the taxation forms are.” CNN reports Secretary Clinton pointed to Brazil, long known for its high taxes, as a model of successful economic policy. “Brazil has the highest tax-to-GDP rate [35.3 percent] in the Western Hemisphere and guess what – they’re growing like crazy,” Clinton said. “And the rich are getting richer, but they’re pulling people out of poverty.”
Clinton implies a high tax rate is necessary, or at least very useful, to lifting the poor out of poverty. China and India, whose current tax-to-GDP ratios are 18.3 and 18.8, however, have experienced rapid economic growth in recent decades corresponding with widespread reductions in poverty. Colombia experienced even higher growth than Brazil prior to the financial crisis, and has a tax-to-GDP ratio of just 19.8 percent. There may be something to Clinton’s thesis that greater redistribution generates growth and reduces poverty, but the Brazilian example in and of itself is not compelling.
Peyton R. Miller, editor of the Harvard Salient, is an intern at THE WEEKLY STANDARD.
