News media have heralded that the population of the USA is now 300 million. This is a good year to be a student of economics, because it is easy to calculate per-capita figures.
For example, the GDP, total output, of the U.S.A. is $12.6 trillion, which divided by 300 million, yields a per-capita GDP of $42,000. By comparison, the world GDP is about $61 trillion, which for about 6.55 billion persons is a global per-capita GDP of about $9,300.
The U.S. government debt is $8.5 trillion, which is $28,300 per person. Each new baby born in the U.S. is inflicted with this average debt as a future taxpayer.
About half the US population is in the "labor force," those who are either employed or actively seeking employment. That puts the U.S. national income per worker at $84,000. About two-thirds of national income is wages, one sixth is land rent, and one sixth a return to capital goods, so the average gross wage is $56,000, before taxes.
Total state and local taxes in the U.S. are about $4100 per capita. Federal taxes are $8100 per capita, Total U.S. taxes are about 30 percent of GDP, a total of $3,800 trillion, $12,200 per person. Total property taxes in the U.S. are about $330 billion, which is easy to calculate as $1100 per capita. The Tax Foundation provides a table of state property taxes, the latest data being from 2004. Alabama has the lowest tax on real estate, while New Jersey has the highest. However, Louisiana has a homestead exemption on the first $75,000 of the value of a person's home, the biggest real-estate tax exemption in the US., which may make its real-estate taxes the lowest in the USA.
The cost of regulations in the U.S. is about $1.2 trillion, or $4000 per person. The government burden, taxes plus regulation, is thus over $16,000 per person.
About 12 percent of the U.S. population is of age 65 or older, and children to the age of 17 are 25 percent, making the population aged 18-64 at 63 percent of the total. The total square miles of the U.S. is about 3.5 million (9.6 million square kilometers), so about .02 square miles per person, or 50 per square mile. Total land value in the U.S. (capitalizing the rent at 6%) is some $33 trillion, $110,000 per person, and $9.4 million per square mile or $14,500 per acre.
Government revenue from land rent would only tap the land value of real estate, exempting buildings, while also getting revenue from the economic rent of material land such as oil, coal, water, and minerals. Severance taxes, based on the extraction of natural materials, are about two percent of state revenues, but the total tax revenue from material land would also include a portion of income taxes and gasoline taxes. Total gasoline taxes in the U.S. are $60 billion, or $200 per person. Total land rent is about 16 percent of GDP, so about $2 trillion, or $6600 per person, enough to pay for all the goods and services provided by all levels of government if we exclude transfer payments such as Social Security, medical programs, and farm subsidies.
The social cost of pollution in China has been estimated at around ten percent of GDP. Data from Redefining Progress indicate an annual U.S. social cost from pollution at around $1.5 trillion, over 10 percent of GDP. We can add to that about $300 billion per year in congestion costs from crowded highways and streets, so $1000 per capita. One can roughly figure that pollution and congestion charges to reduce the environmental damage to an optimal, where the cost of more damage equals the cost of reducing more damage, at around 10 percent of GDP, or $4200 per person, paid for only by polluters and congesters.
Thus pollution and congestion charges plus land rent plus voluntary user fees would provide all current government revenue, enabling the elimination of all taxes on wages, interest, profits from operations, sales of goods, and produced property.
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FRED E. FOLDVARY, Ph.D., is an economist and has been writing weekly editorials for Progress.org since 1997. Foldvary's commentaries are well respected for their currency, sound logic, wit, and consistent devotion to human freedom. He received his B.A. in economics from the University of California at Berkeley, and his M.A. and Ph.D. in economics from George Mason University. He has taught economics at Virginia Tech, John F. Kennedy University, Santa Clara University, and currently teaches at San Jose State University.
Foldvary is the author of The Soul of Liberty, Public Goods and Private Communities, and Dictionary of Free Market Economics. He edited and contributed to Beyond Neoclassical Economics and, with Dan Klein, The Half-Life of Policy Rationales. Foldvary's areas of research include public finance, governance, ethical philosophy, and land economics.
Foldvary is notably known for going on record in the American Journal of Economics and Sociology in 1997 to predict the exact timing of the 2008 economic depression—eleven years before the event occurred. He was able to do so due to his extensive knowledge of the real-estate cycle.