How much would taxes be in a progressive US

Great Debates
#1

I use the word progressive because democratic and liberal may not be good choices.

Right now ‘tax freedom day’ falls on April 17th, which means the tax rate is about 29%, roughly 29% of income goes to taxes in 2005.

However the progressive agenda (which I support) involves things like universal healthcare, eliminating the deficit, increasing humanitarian aid to foreign countries, putting more R&D into energy independence and medical research, increasing funding for higher education and things like that. What would the tax rate be if we started doing all of these things? Eliminating the deficit alone would require about a 4% tax hike.

I would assume it would be closer to 37-40%, but the savings we would get on not paying as much privately for healthcare and education would mostly make up for the higher tax rates.

#2

Tax rates could be substantially lowered by broadening the base of the current taxes.

#3

First of all, I disagree strongly with this:

Having the government do something is nearly always more inefficient and expensive than having the private sector do it. Government education and healthcare would be much more expensive than private education and healthcare, and less effective also.

As to tax rates: I don’t know, but I’m afraid the answer would be high indeed. Bill O’Reilly used to ask this question of all of his guests: “If you were in charge, how much would I pay in taxes.” It was interesting to see the responses. Al Sharpton basically said “a lot”. O’Reilly asked “seventy, eighty percent?”. Sharpton agreed.

#4

Not so sure. Look at the monster we’ve created with health care. Doctors and hospitals spend more and more of their time each year negotiating with insurance companies and trying to keep up with policy changes. The insurance companies have huge staffs that do nothing but second-guess doctors. It seems to me that all of this is unproductive labor. If we could eliminate all of this with a single payer system, it just might be more efficient.

How surprising that Bill O’Reilly baited Al Sharpton.

#5

No, not really. American healthcare is extremely inefficient and wasteful as compared to just about every other industrialized country out there and it’s mostly because of the endless healthcare bureaucracy created by HMOs and insurance companies.

#6

Here is an article providing evidence for what the last two posters said in regards to health care costs:

#7

Hey, I’m not going to argue that our existing system is efficient. I’m just saying that the government running it would be even worse. At least now we are getting the highest quality health care in the world. Here in Boston, I’m near the best doctors and hospitals anywhere. People with money and means from around the globe come here for treatment.

IMO, if the government starts running the show then you’ll see the same and worse inefficiency and waste but lose the high quality of care that we currently enjoy.

#8

And people with money and means are the only ones getting the best treatment in the country. There’s a reason we have one of the highest infant mortality rates and lowest life expectancies in the industrialized world. The average person gets the same treatments he’d get in another country.

So even though every other industrialized country with national healthcare programs has a more efficient and less costly system, somehow the United States would get even worse? Even though most of those other countries have bureaucracies in every other area that are inefficient even by US bureaucracy standards? Riiiiiiiiiiiight.

#9

I thought the current health care system was regulated by the government…am I wrong about that? It doesn’t seem to be a free market private health care system from my point of view. Assuming I’m right, seems that folks are saying ‘well, the current health care system (partially run and regulated by the government) is a mess and costs a ton. Thats bad so lets let the government run the whole thing!’. I’m in complete agreement with the point that our healtcare system as it is today costs too much and provides too little. Where I disagree is in the thinking that the government, who NEVER runs a good or efficient program, will suddenly change its spots if given full control of health care. It will be the bridges to no where and water levees in NO all over again as each congress critter scrambles to get a piece of the pie for THEIR state, with more money spent and even less results in the end. Just MHO here.

As for the OP’s question I’d say that taxes would go up across the board substantially for all that. Universal Health care alone would cost more than our current system…at least any of the plans I’ve seen in the past. And its debatable if it would provide more or better coverage to the maximum number of people. Oh, it would certainly provide more coverage at the low end…but the low end isn’t exactly the majority of folks in this country. If by providing more coverage to the low end you provide less (or worse) coverage to the mid and high levels what have you gained really except our school system in medicine (i.e. bringing everyone down to the lowest level)? Even if I’m wrong its still going to cost more and you can only squeeze so much out of the rich.

Increasing humanitarian aid to foreign countries…devil is in the details here. How much and why exactly? Do we not contribute enough and how much is enough exactly? How much would you be asking for? Reguardless I see more dollar signs here and that money has to come from somewhere.

Putting more R&D into energy independence and medical research. A good and worthy thought but…how much? And should the government be doing this directly or through subsidies or tax breaks (or perhaps by tightening things up law suit wise towards drug companies) for private companies?

Increasing funding for higher education and things like that. Not increased funding in general education? Depends on how much you want for this and what you are trying to achieve with it. There is already quite a bit of funding (both governmental and private) for higher education in the country for folks who take advantage of it. Its what put me through college.

-XT

#10

Yeah, syrup is better than jelly

Humanitarian aid: increase it to 0.7-1% of GDP, which would make it about 70-110 billion a year. That is an extra 50-90 billion a year.

Energy research: I have no idea how much is needed to promote not only energy independence but cleaning up the environment (ie helping to pay for clean coal plants and nuclear plants). It could run 50-100 billion a year, I don’t know.

As far as healthcare and education I feel that taxes would go up and private spending would go down, so it’ll even out. No country spends near what we spend as a percentage of GDP for healthcare. We spend 15% (8% publicly, 7% privately) while most other countries spend about 10-11% (9% publicly, 1-2% privately). So universal healthcare will save money, offsetting some of the private expenses.

The idea/feeling that private is always better than public is just an emotional opinion due to cultural upbringing. There are people in communist countries who feel that public is always better than private, but neither opinion is automatically true. I read an article I’m trying to find that showed privately run for profit hospitals are less efficient and cost effective than publicly run non profit hospitals.

the government already pays for 50-60% of healthcare costs, including a good deal of medical and pharmaceutical R&D. The idea that that 50-60% in public funds is flushed down the toilet while the other 40-50% in private funds which is paid for mostly by private insurance companies is a paradigm of efficiency is a joke. That 40-50% is mostly insurance companies that do their best to not provide coverage for the sick and ill in the first place. That is not efficient. If you are trying to charge high premiums and avoid covering people and avoid even offering coverage to those who actually need it that is very very inefficient and inhumane. Offering coverage only to those who don’t need it and not covering those who do need it (which is what the private sector does) is not efficient at all and I don’t see how people can assume that system is more effective than covering everyone.

Of course, at the end of the day, if everyone ate healthy, exercised, reduced their stress and had good personal relationships healthcare costs would drop dramatically irrelevant of who ran the system.

So if a person makes 100k in today’s system they probably pay about 8k for healthcare in taxes and 7k privately (in withheld income, insurance premiums, and copays). In a universal system they’d pay about 10-11k privately and 1-2k privately. Their taxes may jump from 29k to 40k, but they wouldn’t be giving a deficit to their kids, their private spending for education and healthcare would drop about 5-7k a year.

#11

NOAA and the USGS kick ass. The private sector is decades behind them.

Enjoy,
Steven

#12

Not a bad guess:

EU25 overall tax burden at 40.3% of GDP in 2003 (pdf)

Public satisfaction with health care and public education is generally quite a bit higher in the EU than in the US.

The dogma that the government “NEVER runs a good or efficient program” is just a market-fundamentalist belief, not a fact.

Sure, it’s true that the government can never run an effective program that depends on market competition, because the government has no competition. The government thus has certain fundamental inefficiencies built into its centralized structure that a competitive market system doesn’t have.

However, that doesn’t mean that markets are intrinsically well adapted to meet all human needs. There are numerous services, such as education, health care, environmental protection, law enforcement, basic research, drug development, etc., that for-profit systems simply don’t handle effectively. They have no market incentive to be truly comprehensive in their coverage of the population or the field. They make more money cherry-picking high-profit clients and research areas, and letting the rest of the society fend for itself.

Government systems can frequently be more “good or efficient” than that. And not just by providing genuinely universal services, but in other ways as well. For example, universal coverage combined with lack of competition means that the government saves big bucks with standardized, streamlined protocols. Overhead costs for the Social Security program, for instance, are much lower than for most private investment plans. Similarly, the government saves in its scientific and pharmaceutical research all the money that for-profit firms have to pour into their advertising and marketing programs.

And, as others have pointed out, government-run single-payer healthcare systems save huge amounts of money simply by being able to reduce the paperwork and bureaucratic mess involved in a multi-payer, employer-based, private health insurance system.

#13

I’m not sure where this attitude comes from and why it’s always taken as a given. Evidence has already been provided that it is not the case regarding health care in the US, and it’s been pointed out here in the past that this is wrong. Canada Post makes a profit, for example, as does the LCBO (Ontario’s Liquor Control Board). I’m not saying government management is always better, just that it’s not always worse.

#14

Unfortunately, it seems like some people are so wedded to their ideological preconceptions that they don’t let little details like facts and data get in the way! :wink:

#15

99% of the time it’s worse.

Look, the private sector can act just as stupidly as the government at times. I’m not denying that there’s a lot of faults in human nature all around. However, the difference is that the private sector has inherently built into it ways of fixing such inefficiencies. Xerox and IBM foolishly didn’t realize the next trends with personal computers. Rather than just be stagnant forever though, new companies filled the void like Microsoft and Apple.

The difference with the government is that there’s nobody to step into the void. Government agencies don’t have to show a profit, or even show results. There isn’t anybody to step into the void and pick up the slack. It’s great that the LCBO makes a profit. But, what if they get lazy or incompetent and suddenly don’t?

Private companies have to stay strong to survive. They compete and grow and we all benefit from it.

Do you guys seriously think that if the government started making shoes they would ever be as desirable as Nikes? Or if the government started making computers they would ever be as good as Dells?

If the government can do everything just as good as the private sector then why don’t we just let the government run all industry?

#16

Because most people don’t want the government running everything. And efficiency is only part of the situation. Things like how humane or how good of a short & long range plan are just as important if not more important than pricetags to alot of people. For example the private sector ‘wants’ to eliminate environmental policies because they raise prices on goods and services. But in the long run people will pay far more for those things and people are usually morally opposed to making the environment toxic. So the gov. steps in and regulated toxin production.

#17

Nope. What the private sector has built into it are ways of fixing certain kinds of inefficiencies. The private sector does not have any inbuilt remedies for classic market failures such as externalized costs and asymmetric information.

No, but that’s because shoes and computers are pretty typical market-model consumer goods. Other kinds of public needs, such as pollution control, basic scientific research, universal vaccination, and health insurance, are not served as well by the market model.

That’s silly. Nobody here is saying that the government can do everything just as well as the private sector.

The whole point is that there are some human needs that are served very well by commercial markets and should be left to the private sector, while others are less market-compatible and should therefore be handled by government.

#18

I’m not saying the government has no role in business. Of course regulation of things like the environment are nessesary.

Why?

#19

Because there are some things that the government is intrinsically not as good at as competitive markets. Nobody denies that (at least, nobody but hardcore socialists and communists, of whom I doubt you’ll find any in this thread.)

The trouble is that you’re trying to oversimplify the comparison between government and markets: you seem to be claiming that government must either be more efficient or less efficient than the market, across the board.

That’s not the way it works. The point is that there are different kinds of human needs, some of which fit very well into a market model, and some of which don’t.

#20

Because I’m unsure that jshores cite proves anything more than that the US’s healthcare overhead is more than Canada’s. Simply showing that its more doesn’t explain WHY its more…or what role our own government has in making it so. If you want to flat out assert that Canada’s health care is better than the US’s then define what ‘better’ means to you and I’ll either agree or I’ll dig up some cites.

As for the rest, again I’m not sure what it proves that 2 Canadian government agencies make a profit because there is nothing to compare it too. Was there a free market version of Canada Post that lost money? Was there a free market version of LCBO that lost money? If not, how could we compare the two to see if indeed the government is more efficient than a free market corporation in a similar field? Even if there was, neither of those are US agencies…perhaps Canada’s government is more efficient/effective than the US. Or maybe the fact that Canada is a smaller nation comes into play. Or maybe there is some other factor we don’t know about that makes Canada unique.

I’m willing to be convinced though. Are there any US government agencies that can be shown to do something better than a free market private organization did it (or does it)? If my position is simply dogma then it should be easy to show me this I’d think. I think healthcare would be a bad example due to government involvement and the high state of regulation. The US Postal Service would probably be a bad example as well, as its only quasi-private, still being highly regulated. I can’t think of anything myself but if someone else can I’ll certainly check it out.

Where were these facts? Did I miss them? I will conceed that putting ‘NEVER’ in there was wrong and also not true. I’m sure the government can and does run a good program occationally…and there are many things the government does that only it can do (thus the reason for having the thing in the first place). And as far as efficient goes, well…how would you judge? Only if the government does something that we can compare to a private company could we decide that. Even when there is such a comparison (I can look at the amount of money the government spent on its X-15 project and compare that to Space Ship One for example), its probably not a fair comparison as the government broke the ground originally in most cases.

Generally speaking though I can look at our government programs, especially many of the social programs, and I think even the proponents of heavy socialization can admit (if they are being honest) that they aren’t the most efficient things under the sun and that there is a lot of waste in them. The school system in particular is a good example of this, and its also perhaps an example that could be used as a comparison between private and public. One could compare the real costs, and also compare the product produced (i.e. the grades of the students and perhaps chart which system produced more College level graduates, etc).

As for dogma, I’m not so sure that this isn’t a case of the pot calling the kettle black (I’ll be nice and let you pick if you want to be kettle or pot, though my own preference is kettle). Certainly from my world view government is generally not going to be more efficient than private industry in doing something. I suppose that basing my assumptions on that is ‘dogma’. However, the converse is also true, as I’ve seen none of these ‘facts’ proving the reverse position that the government would be more efficient than a private company at a given task.

-XT