With a 45% tax rate and a 20% VAT, something that costs $1 would require an income of $2.18.
But your effective tax rate is already 40% at 125k.
For example with a 20% VAT, a $1 priced item is really an $.83 item, and to pay for it at a 45% tax bracket would require $1.81 of income.
The numbers themselves are meaningless. Only the total ratio of income required to goods received is important, and it remains unchanged.
So what you're saying is pretty wrong.
In Canada tax rates are similar, although we do have lower VAT. In other EU countries income tax is more aggressive but they have more social benefits.
The US suffers from both a high tax burden and poor services. We just tend to nickel and dime our taxes more but it doesn’t really matter if you’re paying 1$ to the feds in income taxes, pay 1$ to use a state’s toll road, or 1$ to a “fee” your town tacks on the water bill.
Looking at total government spending as a percentage of GDP doesn’t show differences in services but it does show just what it all costs.
And yes, it does have everything to do with govt policies because you are getting value back.
It is like saying taxes are high in Nordic countries, ignoring the fact that most of what you pay is returned to you. Saying that doesn't impact demand or the price level is not accurate, and misunderstands (again) at a fundamental level how govt operates.