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AP English 11
Dr. Crotteau
April 16, 2014
Tax Rates and Their Effects on Country Success
As much as the public opposes taxes, the correlation between a higher tax rate and a
better standard of living is evident. When over a third of a countrys Gross Domestic Product
comes from income taxes, the literacy rate is consistently above 95%, and since the economy is
most likely more stable, current international trends suggest environmental and agricultural
problems can be fixed more easily. Though countries with a lower percentage of the GDP
coming from taxes can be very developed, in nations with higher income taxes, the health care
and education systems are more efficient and accessible by the public. By comparing countries
with 30% GDP from taxes and those with less than 10% GDP from taxes, the differences in
development stand out clearly.
Some countries with less than 10% of their GDPs produced by tax revenue include India,
Spain, and the United States. (Tax Rates Online). While the literacy rates in the U.S. and Spain
are both fairly high at 99% (Snell-Feikema) and 97.5% (United States) respectively, the
percentage of adults who can read and write in India is only 62.8%. (Mehta). This can be linked
to a lack of education in this nation. In many developed nations, funding for public schools
comes from taxes. In each of these three countries, the percentage of GDP used for education
expenditures is under 5%, and is comparable to the military expenditures in each country.
(India;Spain;United States).
When countries have a higher percentage of their GDP made up of tax money, such as
Germany, the Netherlands, Denmark, Finland, the United Kingdom, and New Zealand, the
literacy rates are extremely high and the expenditures on education reflect that. The literacy rate
is 99 or 100% in each of these countries, and the education expenses range from 5 to 9%,
reflecting a stressed importance on education. (Denmark; Finland; Germany;
Netherlands; New Zealand; Sharman). Since all of these countries have over 33% of the
total GDP from taxes, this means that more of the taxpayers money goes directly towards
education.
Though the literacy rates are typically high in any developed country, a higher percentage
of taxes correlates to a larger amount of money spent of the education system. Even if the
percentage of GDP spent on education expenditures is similar, since the countries with a larger
tax revenue have more taxes to use, more is being spent directly on public schools and learning
institutions.
Different levels funding from taxes is used for education, as well as for improving
healthcare programs. In those countries with less than 10% GDP from taxes, the healthcare
programs are not run efficiently with taxpayer money. The United States has recently instated a
new healthcare program, called the Affordable Care Act, which is attempting to reach more
people who had previously gone without coverage. The amount of the GDP spent on health
expenditures a year is 17.9% in the U.S., but this doesnt always affect the public. (United
States). In contrast, India uses only 3.9% of their GDP on health expenditures. This nation has
a universal healthcare program, which covers about only 70% of households in urban areas, and
63% in rural areas. (India).
In countries such as the Netherlands and Germany, which both have tax revenues over
30% of the total GDP, health expenditures added up to about 11 or 12% of the total GDP.
(Germany; Netherlands). Denmark has a healthcare program that is free for all residents and
covers 100% of all citizens, compared to the United States, has up until recently had a costly
program and covers less than 80% of the public. (Rosenmeier). Denmarks program is
completely funded by taxes, and can be so accessible to the public because this system has run
all private healthcare sectors out of business.
Another way of establishing the distinct characteristics of countries with different tax
levels is looking at their agricultural efficiency and problems. While it seems that Spains
agricultural sector is efficient, since 4.2% of the labor force works in agriculture and 4.2% of the
GDP is from agriculture, Spain is facing a severe desertification issue which is quickly
decreasing the amount of arable land that is available. (Snell-Feikema). Not only does this lead
to a decline in jobs but also a shortage of food. This desertification problem requires the
importing of a lot more food to feed the nation. Without established government programs to
regulate livestock grazing, which results in this loss of arable land, the issue could continue to
grow without limit. Also, in India, where agriculture thrives in small, community based markets,
the annual monsoon season threatens all family subsistence farming. (Mehta). Conversely, in the
dry season, many communities do not have proper irrigation to sustain their farms. Although the
government is trying to boost the nations agricultural economy, it has proven difficult to reach
out to the population of over 1 billion. ("India: Priorities for Agriculture and Rural
Development).
Even with over 33% GDP from tax revenue available to work on problems, some nations
still face agricultural issues. In Finland and Denmark, the climate does not allow for much
agriculture, thus most of the food to these Scandinavian countries must be imported. (Dotson;
McGough). Though in these countries there is a lack of agricultural problems since most
farming takes place outside the country, in contrast, New Zealand is facing a growing
agricultural issue. Since the country produces its own food and has a substantial agricultural
sector, they have to overcome agriculturally related problems. Half of New Zealands CO2
emissions are produced by transportation of goods from the cattle and dairy farms. (Landes).
There is a program, however, called the New Zealand Emissions Trading Scheme to provide
incentives to agricultural industries to reduce their CO2 emissions. ("The New Zealand Emissions
Trading Scheme). This is a government program funded by the same taxes that make up over
33% of the GDP.
The agricultural systems in countries both developed and developing have a great deal of
influence on the environmental well-being of those nations. For example, Spains problem with
desertification is a direct result of the environment changing, or one could argue that the
agriculture affected the environment. The taxes that these countries collect have to be used in
such a way that both agricultural and environmental issues, not to mention education and
healthcare, are attended to properly.
Countries with less tax revenue have less money to enforce protection and conservation
of the environment. Some very pressing environmental issues in India, Spain, and the United
States include water and air pollution. (Mehta; Snel1-Feikema). Though their respective
governments are working towards fixing these problems by setting limits on emissions, with
little tax money the federal government can only do so much. The United States is actually the
second largest emitter of carbon dioxide, the greenhouse gas plaguing the Earths atmosphere,
(United States) and India is not far behind, ranking as the fifth highest emitter (India). Spain
is a partner with China in an organization called the Sino-Spanish Association for Energy and
Sustainability, which focuses on waste management and renewable energy. (ASEES Report
2012). While these are important technologies to explore, the control of and decrease in
pollution is the most pressing matter for these countries to deal with, using as small a percentage
of taxpayer money as possible. In the United States, there are many organizations to aid in
preserving the environment, such as the branches under Environmental Protection Agency.
However, the EPA has so many problems to deal with, it can hardly spend much money or effort
on the issue of pollution. The most recent piece of legislation regarding pollution was the Clean
Air Interstate Rule, passed in 2005, which only covers about half of the fifty United States.
(Clean Air Interstate Rule).
Pollution is a common issue in all developed countries, and nations with a larger tax
revenue have the capability to devote more funding towards solving any environmental issue.
The countries of Sweden, Denmark, Finland, and Norway (of which Denmark and Finland have
tax revenues over 33%) are all part of an organization called Greenpeace Nordic. Some of the
goals of this group include phasing out all fossil fuel-based and nuclear energy, banning
processes like tar sands, and enforcing the limits on pollutant emissions. (Sander and
Christensen). Greenpeace Nordic achieves its goals through two to five year programs that have
proven successful, even though Finland is currently ranked in the top 5 carbon dioxide emitters,
and Denmark is still 63% dependent on fossil fuels. (Dotson; McGough).
Overall, it seems that countries with a higher tax revenue have better government
programs, be it the Denmark healthcare system or Greenpeace Nordic organization. These taxfunded programs can address more problems with more endowment. Countries with less than
10% GDP from taxes arent astonishingly far behind when it comes to education or healthcare,
but have yet to achieve completely efficient systems like universal healthcare that is free to the
public with taxes. Since environmental problems can vary based on global location, each country
handles their problems differently, whether it be with organized government programs or with
partnerships with other countries, each has attempted to face the most prevalent issues.
Tax revenue is useful to a country in ways that can address healthcare, education
programs, and improvements for the environment and agricultural systems. Countries with a
higher percentage of the gross domestic product provided by taxes, specifically more than a
third, tend to handle issues with better programs and, thanks to a more consistent economy, more
funding. Nations with less than 10% of the GDP produced by taxes have similar approaches to
issues, but arent always able to follow through on plans due to lack of funding and organization.
A higher percentage of taxes equates to well-organized, efficient government programs and
partnerships that have the capability to address issues in education, healthcare, agriculture, and
the environment.
Works Cited
"ASEES Report 2012." ASEES.org. Sino-Spanish Association for Energy and
Sustainability, 1 Jan. 2012. Web. 16 Apr. 2014.
"Denmark." Central Intelligence Agency, 11 April, 2014. Web. 17 April 2014.
"Finland." Central Intelligence Agency, 11 April, 2014. Web. 17 April 2014.
"Germany. Central Intelligence Agency, 14 April, 2014. Web. 17 April 2014.
"India." Central Intelligence Agency, 16 April, 2014. Web. 17 April. 2014.
"Netherlands." Central Intelligence Agency, 14 April, 2014. Web. 17 April 2014.
"New Zealand." Central Intelligence Agency, 15 April, 2014. Web. 17 April 2014.
"Spain." Central Intelligence Agency, 14 April, 2014. Web. 17 April 2014.
"United Kingdom." Central Intelligence Agency, 15 April, 2014. Web. 17 April 2014.
"United States." cia.gov. Central Intelligence Agency, 15 April, 2014. Web. 17 April
2014.
"Clean Air Interstate Rule (CAIR)." Clean Air Markets. U.S. Environmental Protection
Agency, 20 Mar. 2013. Web. 16 Apr. 2014.
Dotson, Amanda. Finland. Massanutten Regional Governors School. Mount Jackson,
VA. 7 April 2014.
"India: Priorities for Agriculture and Rural Development." Agriculture in South Asia.
World Bank, 10 Nov. 2011. Web. 16 Apr. 2014
Landes, Heather. New Zealand. Massanutten Regional Governors School. Mount
Jackson, VA. 2 April 2014.
McGough, Monique. Denmark. Massanutten Regional Governors School. Mount
Jackson, VA. 1 April 2014.
Mehta, Neil. India. Massanutten Regional Governors School. Mount Jackson, VA. 2
April 2014.
Rosenmeier, Christopher. "Health care in Denmark." denverpost.com. The Denver Post,
3 Sept. 2009. Web. 16 Apr. 2014.
Sander, Kirsten, and Mads F. Christensen. "Greenpeace Nordic 2012." Greenpeace.
Greenpeace Nordic, 1 Jan. 2012. Web. 16 Apr. 2014.
Sharman, Isabelle. England. Massanutten Regional Governors School. Mount
Jackson, VA. 7 April 2014.
Snell-Feikema, Rafael. Spain. Massanutten Regional Governors School. Mount
Jackson, VA. 3 April 2014.
"Tax Rates Online." KMPG. KPMG International Cooperative , 1 Jan. 2014. Web. 16
Apr. 2014.
"The New Zealand Emissions Trading Scheme." Climate Change Information: New
Zealand. Ministry for the Environment, n.d. Web. 16 Apr. 2014.