European and American Tax Perspectives

[Ms2001]

@MindWanderer

See this is what I don’t get. The Government when it provides services like that doesn’t offer choice, so under the scenario you like, everyone would get the same thing, or an amount based on how many children. So X amount of bread, y amount of this, no steak, none of this, lots of that.

See, that’s an example of my lifestyle being affected by taxes. If paying more taxes meant having a limited selection of poor quality products, then I’d be worse off doing so. But the problem is not the percentage I’m paying, but rather the quality of services I’m getting in return. If the only difference were that I paid my money to the government instead of to private businesses, but I got all the same stuff in return (as unlikely as that may be), everything would be fine.

And of course, for many services, I don’t care about choice. I don’t get to choose between multiple police forces, fire departments, library systems, and road maintenance crews, and that’s fine with me. I only need one of each, and the one my taxes pay for is good enough.

The other thing, is it seems you and the others in this thread supporting any and all tax rates believe that the government will automatically do everything well as long as it has a mandate from the people. You have a huge amount of faith in your government from my perspective.

When did I say that? If the government could provide everything as well as the private sector, I’d have no trouble paying my money to them instead of to businesses. I doubt they actually could, but that’s beside the point, which is that I have no ideological objection to any particular tax rate. It’s just a number.

Once you have 100% taxation, government has a easier way to get rid of many civil rights, by threatening that you will have no food if you speak out against them.

They already control the army and the police. They could already threaten to kill me if I speak out against them. But I don’t see that happening… do you?

I don’t believe it is possible for government to provide us everything. Its funny how the more taxation there is, the more benevolent the government is seen for “providing” us with things when in fact it is just the tax money that would allow us to have at least some of what we want which is being taken from us.

If I didn’t pay taxes, do you really think I’d be able to use that extra money to pay private businesses to provide all the things that the government currently provides (or “provides”, if you prefer the quotes) for me? Law enforcement, fire protection, libraries, road work, courts, etc.?

[MindWanderer]

@Mr2001

If I didn’t pay taxes, do you really think I’d be able to use that extra money to pay private businesses to provide all the things that the government currently provides (or “provides”, if you prefer the quotes) for me? Law enforcement, fire protection, libraries, road work, courts, etc.?

I usually don’t hear people complaining about how much the services they receive cost, only how much they are getting. Thats why “progressive” taxation is so clever, it offers something to people without any cost to them by taxing a smaller number of people more heavily. Of course people will vote for that.
I have no problem with law enforcement, roads, courts, etc. I agree that private companies can’t really provide that well. Its the other stuff, like goverment control of agriculture, manufacturing, etc, etc that gets rid of choice. If government owned all car manufacturing plants and didn’t allow private businesses to run them, we’d have a lot less choice of car. My main point is at 99 or 100% taxation, automatically we lose a lot of freedom because government has no way of knowing what we want, they can only assert that we should have one thing or another.

[Ms2001]

@MindWanderer

I have no problem with law enforcement, roads, courts, etc. I agree that private companies can’t really provide that well. Its the other stuff, like goverment control of agriculture, manufacturing, etc, etc that gets rid of choice. If government owned all car manufacturing plants and didn’t allow private businesses to run them, we’d have a lot less choice of car. My main point is at 99 or 100% taxation, automatically we lose a lot of freedom because government has no way of knowing what we want, they can only assert that we should have one thing or another.

All right. But still, the problem in that situation is the loss of choice, not the tax rate itself.

Let’s say there’s no possible way for the government to collect 100% income tax and still provide citizens with the same variety and quality of goods and services that they receive today. Well, what tax rate would be able to support that same variety and quality? 98%? 75%? 50%? 10%? Those are still just arbitrary numbers, and they say nothing about the efficiency of the programs funded by that tax revenue, or any other market regulations.

The point at which taxes are too high is the point where taxes prevent citizens from getting the goods and services they want, but you can’t put a number on that, because there are so many other factors. And of course, not all desires are created equal: maybe if I’d gotten a bigger tax refund, I could’ve bought a 36" TV instead of a 27" TV, but I think I’d rather have the government services that those tax dollars pay for than a bigger television - taxes may have prevented me from getting something I want, but everything else I got made up for it.

[Alien]

Well, I see that Rune has joined in with his usual foaming around the mouth, so I’ll try to balance things out a bit from the perspective of Norway:

First, we have a Social Securiy Plus Plus tax on gross income, at 7.8%.

Now, the rest of the personal tax system is based on net income. However, net income isn’t gross minus expenses. Most tax payers can deduct a standard 20% to cover all expenses (with a ceiling), plus an additional fixed sum which is about 10%-15% of the average industrial wage. Interests are deductable too, of course. The net income is taxed with 28%.

Based on a little rough math, I would reckon that an average earner pays around 25% in personal taxes, however, those who make twice that amount would have to pay around 40%. One who makes about 10%-15% or less of an average income does’t have to pay any taxes at all. The max personal tax is about 50%.

The point of this tax system is that you don’t pay as much if you have average or lower income, but if you’re making millions, you pay substantially more. It’s the opposite of a flat system.

Of course, we have other taxes as well. Some areas (cities mostly) has property taxes; and gas, tobacco, alcohol and some other goods are taxed pretty steep as well. VAT is a strange beast, from 0% to 25%, dependent on the type of service/merchandice.

As for cars, they are heavily taxed historically for one reason: Since we don’t make cars, and they are expensive items, they do have an impact on the trade balance, as is the case with some other items. Actually, in the years following WWII I think people had to apply to buy a car from abroad, but that just might be parts of fragmented memory whispering in the wind.

Two good questions were asked in this thread earlier: Am I satisfied with the services provided by the government? Overall, yes I am. It feels good to be sent to the hospital, being patched up, and sent home with a $15 service fee. To send my imaginary kids to university for next to nothing ($100) and watch they get a cheap government loan on top of that. To know that the food I eat is safe, and to be able to walk pretty much wherever I want without fear of being attacked. I can never accomplish these things on my own, so I have noe problem with paying the government to do this.

Another good question: How much tax is too much? Personally I have to say that when it tips 40% I don’t feel well, and at 50% I’m pretty sure I’d be physically ill. But it really depends on what you’re used to.

[MindWanderer]

@Mr2001

The point at which taxes are too high is the point where taxes prevent citizens from getting the goods and services they want, but you can’t put a number on that, because there are so many other factors. And of course, not all desires are created equal: maybe if I’d gotten a bigger tax refund, I could’ve bought a 36" TV instead of a 27" TV, but I think I’d rather have the government services that those tax dollars pay for than a bigger television - taxes may have prevented me from getting something I want, but everything else I got made up for it.

Its really hard to measure how well government services are doing, except in certain areas. Military you only know you spent enough after a war. You never really know that you spent too much. I think a lot of people in the US government still have a WW2 model of military spending and style, because that’s the last war in which the entirety of our military capacity was needed.

When it comes to welfare, things can change really fast in terms of how much people need, from anothe great depression to another boom. Its essentially impossible for government to look long term because there are factors that will effect things beyond one lifespan. And presidents serve 8 years at most.

That makes it hard for me to calculate how much I’m getting from the government. Its easy to underestimate or overestimate. Military spending at current is more than enough to win any non-nuclear war of aggression on us soil. Nuclear weapons however represent a threat still, should there be something that changes the geopolitical situation of europe or nuclear nations in asia.

Health care is a big situation that has huge costs to private individuals right now, but its hard to say just how much more tax we’d need to nationalize it.

I’m ambivalent on the question of government funding of science, on one hand a lot of the things we’ve done in science are funded that way, but that certainly makes it easy to prevent or slow research in certain areas like stem cells and a variety of other areas disliked by the republicans.

Roads are handled at a state level except interstates. They seem funded quite a bit for construction of new ones, and maintenance of old ones. One funding source relevant to me is support for additional mass transportation in metro denver. Recent propositon on that issue have succeeded, and that is an area I definitely support spending on. I don’t support spending on sports stadiums, but I understand that they create a lot of small businesses and commerce near the stadium, as well as being a boost for tourism which is something emphasized in colorado often.

[hildea]

Another citizen of a high-tax country checking in. Overall, yes, I’m reasonably satisfied with government services. But, of course, they could be better, and I’d be happy paying more taxes if that resulted in better services. Some things I’d like to fund via more taxes:[ul][li]Better welfare for the poorest. Poor is relative – you won’t starve to death here – but it can be pretty humiliating to be poor in a rich country.[/li][li]Free (tax funded) kindergarden/day care available for all children (say, age 1 and older). (My own children are school age, so I wouldn’t benefit from that personally, but I think it would be a good thing for society.)[/li][li]Better treatment of asylum seekers (but this might be a question of political will more than lack of money).[/ul]My current living standard is somewhere in the middle of the middle class. I wouldn’t mind giving up some luxuries – say, giving up the plans of building an extension on the house to get an extra bathroom and a bigger kitchen. I would mind significant reductions in living standard, though – say, having to work overtime to get by, or giving up the few weeks at a summer cabin every year.[/li]
I sometimes wonder how much I’d go down in standard of living if wealth was redistributed to get all people on the planet the basics neccessities of life, and whether I’d be willing to pay that price… I hope I would.

I really like the freedom that my high tax/high welfare country gives. The freedom in knowing that if I lose my job, things will get uncomfortable but not dire. Knowing that no matter what happens financially my family will have access to health care, and my children to education (including university level). The freedom I had to choose whether to say at home or work after my children were born.

[Mehitabel]

Interesting article from the Sunday NY Times: Nyahh, nyahh, nyahh!, or if you prefer, “We’re Rich, You’re Not. End of Story.”

After I moved here six years ago, I quickly noticed that Norwegians live more frugally than Americans do. They hang on to old appliances and furniture that we would throw out. And they drive around in wrecks. In 2003, when my partner and I took his teenage brother to New York - his first trip outside of Europe - he stared boggle-eyed at the cars in the Newark Airport parking lot, as mesmerized as Robin Williams in a New York grocery store in “Moscow on the Hudson.”

One image in particular sticks in my mind. In a Norwegian language class, my teacher illustrated the meaning of the word matpakke - “packed lunch” - by reaching into her backpack and pulling out a hero sandwich wrapped in wax paper. It was her lunch. She held it up for all to see.

Yes, teachers are underpaid everywhere. But in Norway the matpakke is ubiquitous, from classroom to boardroom. In New York, an office worker might pop out at lunchtime to a deli; in Paris, she might enjoy quiche and a glass of wine at a brasserie. In Norway, she will sit at her desk with a sandwich from home.

So he’s a little obsessed with the lunch thing, but otherwise there’s some interesting points.

[amarone]

@Mr2001

Personally, there is no percentage of taxes I feel is “too much” - what matters is how my lifestyle is affected by paying those taxes. I’d be happy to pay 100% of my income in taxes if it meant I’d able to get all the goods and services I enjoy today, and more, for free.

Paying for things with 100% of your income is a very strange definition of “free”.

[Ms2001]

@amarone

Paying for things with 100% of your income is a very strange definition of “free”.

It gets less strange as your income gets closer to zero. I suppose I could’ve said “for no additional cost”, but everyone else seems to have caught my meaning just fine.

[hildea]

Thanks for that link, Mehitabel - it made me rediscover the author’s site which I’ve read before and forgot how to find again. Parts of his articles on European anti-americanism cut uncomfortable close to home, but then I can get back in smugly patriotic mode by reading why he lives in Norway, not USA. (His marriage to a Norwegian is valid here, but not there.)

Some aspects of the article seem shallow, such as claiming that Spaniards live better than Norwegians and citing the price of drinks as his only example. And the matpakke is a cultural thing – I could eat as much as I wanted (including hot meals) in our employee resturant for about an hour’s wages a month (the employer sponsors the rest), but at the thought of giving up my matpakke, phrases like “from my cold dead hands” and “my preciousss” spring to mind.

I’ll concede some of his points. Some public services are clearly underfunded, and are part of what I had in mind when writing that I’m no more than “reasonably satisified” with government services, and that I’d happily pay more taxes for improvements.

He also mentions the phrase “the world’s richest country”. A Google search for the Norwegian version (“verdens rikeste land”) gives one reference to a UN statistic (placing Norway as number five globally), and the rest of the page is filled with various versions of “if we’re supposed to be the world’s richest country, why is it that [insert description of specific problem which could be solved by more funding]”. Several of them adress poverty. I wonder, though: In how many countries will you find articles describing the existence of poverty as a problem that the government could reasonably be expected to solve?

This statement, while exaggerated, is a pretty good insight:

@Bower in NY Times

… the Scandinavian establishment … serves up a picture of the United States as a nation divided, inequitably, among robber barons and wage slaves, not to mention armies of the homeless and unemployed. It does this to keep people believing that their social welfare system, financed by lofty income taxes, provides far more in the way of economic protections and amenities than the American system. Protections, yes -but some Norwegians might question the part about amenities.

The main point of the welfare state is IMO to provide protection, first and foremost. Lottery dreams aside, I’m not especially concerned about being rich. I do think it’s important not to be poor, and I want a tax level that can assure that noone is. If I can get that (and we’re not there yet in Norway), others are welcome to their inexpensive drinks, new cars and fancy quiches.

[Shalmanese]

@Mehitabel

Interesting article from the Sunday NY Times: Nyahh, nyahh, nyahh!, or if you prefer, “We’re Rich, You’re Not. End of Story.”

So he’s a little obsessed with the lunch thing, but otherwise there’s some interesting points.

Which brings up another interesting point, namely that “rich” and “happy” don’t neccesarily have a 1 to 1 mapping. A lot of what makes us “happy” is not absolute richness, but relative richness. So, if your in the US and you have a 2003 model car and everyone else has a 2005 model car, you would be less happy despite the fact that the 2005 car has no additional features that you would want to use. If you live in norway OTOH and everyone owns a 2003 model car, then your much happer even though you own the same car.

[DrDeth]

Years ago I saw a study, where they compared overall “tax burden” counting *all *taxation. Of the “Western Industrialized nations”- America had the lowest overall burden, except Turkey. :eek: