Raise Taxes To Improve Living Standards (!)

[The Rabbi]

People in highly taxed countries better off: report
Last Updated: Wednesday, December 6, 2006 | 12:44 PM ET
CBC News

People who live in countries with higher taxes enjoy lower rates of poverty, have more equal income distribution, more economic security for workers and can expect to live longer, suggests a new study from a left-leaning think tank.

Written by two Toronto tax law professors for the Canadian Centre for Policy Alternatives, the report released Wednesday, is blunt.

"Tax cuts are disastrous for the well-being of a nation's citizens," say authors Neil Brooks and Thaddeus Hwong.

The study compares four high-tax Nordic countries (Sweden, Norway, Denmark, and Finland) with six low-tax Anglo-American countries (the U.K., U.S., Canada, Ireland, Australia and New Zealand).

The four Nordic countries scored better than the lower-taxed countries on most of the 50 indicators measured in the report, including:

    * Rate of poverty, equality of income distribution, and economic security for workers.
    * GDP per capita.
    * Rate of household saving and net national saving.
    * Innovation, including percentage of GDP spent on research and development.
    * Growth competitiveness as ranked by the World Economic Forum.
    * Rates of secondary school and university completion.
    * Rate of drug use.
    * Leisure time.

The more lowly taxed countries came out on top in seven of the 50 indicators, including their sense of freedom, their suicide rates and the number of people reporting they are very happy.
Continue Article
Canada below OECD average

Of the high-income OECD countries studied between 1990-2002, Japan and the U.S. had the lowest tax rates, at 26.8 per cent and 28.0 per cent of GDP respectively.

Canada was ranked in the low-to-intermediate level at 35.7 per cent, close to the levels recorded in the U.K., New Zealand and Spain.

Countries with higher tax revenues included Norway (41.9 per cent), France (43.4 per cent) and Finland (46.2 per cent). Sweden topped the list at 50.5 per cent.
Report compares Finland, U.S.

The report also compares social and economic conditions in Finland with those of the United States, which has one of the lowest tax rates of industrialized countries.

The U.S. has a greater percentage of people living in poverty, lower incomes for the elderly and the disabled, less economic security for workers, fewer women in professions and senior civil service and "shockingly" unequal income distribution, says the report.

In the U.S., 17 per cent of individuals live below 50 per cent of the country's median income; in Finland, that number is 6.4 per cent.

Finland, by contrast, reports a lower percentage of people living below the poverty line, more equal income distribution between the elderly and disabled and the rest of the population, high economic security for workers and more women in senior civil and legislative positions.

Americans also have one of the lowest life expectancies among industrialized countries, two years behind Finland and three behind Canada.

"The United States spends over twice as much of its GDP on health care than Finland (15 per cent versus 7.4 per cent), and yet U.S. health care outcomes remain far worse  indeed, worse than most other industrialized countries," it says.

Workers in the Anglo-American countries also spend more time on the job, clocking on average 1,824 hours per year. This is 274 hours more than the Nordic average.

Canadians spend 1,736 hours on the job every year.

"By cutting taxes, the Conservative government is taking Canada in the wrong direction," says Brooks. "It wants to make Canada more like the United States, yet our findings show that Americans bear severe social costs for living in one of the lowest taxed countries in the world."

Best known for its annual alternative budget, the Canadian Centre for Policy Alternatives has issued news releases in support of the Kyoto Protocol, and against the softwood lumber agreement and NAFTA.

http://www.cbc.ca/canada/story/2006/12/06/tax-policyalternatives.html

[Perd Hapley]

People who live in countries with higher taxes enjoy lower rates of poverty, have more equal income distribution, more economic security for workers and can expect to live longer, suggests a new study from a left-leaning think tank.

And just how will "more equal income distribution" make my life better? 

"Tax cuts are disastrous for the well-being of a nation's citizens," say authors Neil Brooks and Thaddeus Hwong.

  That's so sweeping it must be wrong, with or without statistics.

[Monkeyleg]

I remember back in the 1970's when Sweden decided to really make income distribution equal by raising the top income tax rate to 125%.

Lots of CEO's left the country.

For every failed socialist society, it seems there's another group of socialists in some other country saying, "yeah, it failed there, but we can make it work here."

[meinbruder]

Written by two Toronto tax law professors for the Canadian Centre for Policy Alternatives, the report released Wednesday, is blunt.

"Tax cuts are disastrous for the well-being of a nation's citizens," say authors Neil Brooks and Thaddeus Hwong.

http://www.cbc.ca/canada/story/2006/12/06/tax-policyalternatives.html

Of course it's disastrous, one can't give to the poor if one doesn't steal from the rich.  Just ask the Democrats.  :)
Income distribution is what it's all about.  I'm poor, donate to me, puh-lease!
}:)>

[Art Eatman]

My problem with this sort of infantile pap is the absence of any causal relationships which apply to the real-world reasons for the facts as stated.

Take the comment about Finland:  Finland does not have a large influx of uneducated, unhealthy, unskilled people.  There is no relationship between tax rates and immigrant health.  If you subtract first-generation, third-world* people from the US population, we'd shoot upward in the ratings for many categories.

Art

*  That includes Mexico; most who come here do not come from the developed parts of that country.

[RadioFreeSeaLab]

I don't WANT income distribution.  I like my income.  Someday, I hope to have more, but I'll do it myself, thanks.

[Headless Thompson Gunner]

Well, obviously!  Lots of people are too stupid to raise themselves out of poverty.  The only way their standard of living will improve is if someone improves it for them.  If they found a way to do so without stealing from the productive then they might be on to something.

[BakerMikeRomeo]

Anyone else notice that the two countries they berate for having he lowest tax rates (the US and Japan) happen to also be just awash in money? Covered in dollars bills? Yen out the yin-yang? Just happen to be the two biggest economies in the world, based on GDP ( http://en.wikipedia.org/wiki/List_of_countries_by_GDP_%28nominal%29 )?

Huh. Ain't that somethin'?

~GnSx

[Guest]

Nothing to see here. Just because two of the countries with lowest taxes are, by any realistic standards, the most successful, means nothing. Only "fairness" is of any statistical value!

[El Tejon]

On behalf of the productive who employ others, bleed tax money and create things, allow me to state--BITE ME!

[Art Eatman]

A liberal friend of mine brought up this very report, as a justification to increase social spending.  Jason M's comment about "fairness" is spot-on.  The big problem is that I don't see it as "fair" to me; my attitude is much like El Tejon's.

Art

[El Tejon]

Some days I like to do an "Atlas Shrug" and just wonder off into the wastelands.  Just try to run this country with the couch-sitting television-watchers that the Left so loves.

[Matthew Carberry]

Art,

That's the thing I end up yelling at the radio.  Homogenous societies with low levels of illiterate, uneducated, unskilled, unassimilated immigrants will always score higher.  You have to control for demographics to get any sort of useful picture. 

Do that and the situation changes, and also shows the ability for those "bottom enders" to integrate and improve themselves as opposed to those homogenous societies where the few immigrants allowed can never improve themselves beyond the dole.

[HankB]

Some years back, Garrison Keillor of Prairie Home Companion (an unfunny comedic radio program from the fictional Lake Woebegone, MN) made a big deal about moving to Sweden because it was SO much better than the USA to live.

He came slinking back, tail between his legs, just a couple of years later; I guess he found out that Sweden't confiscatory tax rate applied to him, too. 

Keillor voted with his feet, as so many others do.

Plus, look at the Nordic countries . . . they're not exactly brimming with our . . . uh . . . diversity.

[El Tejon]

Hank, ummm, I don't know I heard a lot of Turkish and Arabic last I was in Sweden.

[AZRedhawk44]

Of the high-income OECD countries studied between 1990-2002, Japan and the U.S. had the lowest tax rates, at 26.8 per cent and 28.0 per cent of GDP respectively.

Heck, I'm disgusted that our government system needs more than 1 in every 4 dollars spent in order to sustain its fat bloated self.  I figured we were probably closer to 15% if I had to guess...

Since I've now been given some information on the subject, let's drop the tax rate.  How about 15%?

[M67]

I am Scandinavian, or more precisely Norwegian.

GnSx:

Anyone else notice that the two countries they berate for having he lowest tax rates (the US and Japan) happen to also be just awash in money? Covered in dollars bills? Yen out the yin-yang? Just happen to be the two biggest economies in the world, based on GDP?

Jason:

Just because two of the countries with lowest taxes are, by any realistic standards, the most successful, means nothing.

  Based on GDP per capita, the US is number 8 and Japan number 14. The Scandinavian countries are found in 2nd, 3rd, 6th, 9th and 11th place. If GDP is a realistic standard, Norway is roughly 50% more successful than the US ($42,000 per person in the US compared to $64,000 in Norway).

That said, those Canadian authours are wrong. Scandinavians are not rich because we pay a lot of tax. If anything, we pay a lot of tax because we can afford to. I pay more tax than the average American, but at the end of the day I still have more cash in my pocket after tax. Personally I think I pay too much tax, but hey, that's what you get when you have a political system where half the voters are below average intelligent...

I'm too lazy to look for any statistics, but I'm pretty sure that there are a lot of countries out there with considerably lower tax rates than the US, but I doubt you would want to live there. To be a first world country, you need a certain level of infrastructure and stable government. For capitalism to be successful, you need stability and predictability. Minimum government interference is good - up to a point. There is a reason Somalia, which has no government at all, is not the richest country in the world.

Infrastructure and a stable governments cost money. Where to draw the line with regard to tax levels is a political question. Do you want roads? A military? Are you willing to pay for it?

I do find it slightly amusing when most of the posts above seem to imply that a tax rate of 30ish per cent is perfectly reasonable while a tax rate of 40ish per cent is the work of Satan (or Stalin or whatever, but I'm repeating myself). Does that make Americans only 28% Stalinist, while I'm 41% Stalinist? At what level should you be burned at the stake, 33 per cent?

Know what I would like to try? Flat tax. I think they're trying it in Estonia. Everyone pays the same percentage, regardless of income level. No deductions, no write-offs, minimal bureaucracy. If done properly, that would probably make the whole process so much more efficient that tax rates could be cut considerably.

Art:

Finland does not have a large influx of uneducated, unhealthy, unskilled people.

carebear:

Homogenous societies with low levels of illiterate, uneducated, unskilled, unassimilated immigrants will always score higher.

Aren't you guys paying attention? In 3 years, 8 months and 5 days, all of Europe, Scandinavia included, will be completely taken over by Muslems because we are letting in wave after wave of Middle Eastern terrorist immigrants. And we will deserve our fate, because we are all spineless yellow-bellied baby-eating Marxists anyway. I know it's true, because I read it on the Interweb, in a American sub section of Al Gore's greatest invention.

[Perd Hapley]

I am told that lower tax rates produce higher revenue.  How low could we lower our tax rates before revenues actually decrease or remain flat? 

[K Frame]

A pervasive, underlying theory behind the Socialist dogma is that wealth can't be created -- it's finite.

As a finite entity, that means if I earn $2, someone else, or a bunch of other people, have to earn less than $2.

That's the basis for the entire theory of wealth redistribution, which is, as we all know, nothing more than stealing from society's industrious.

[Modifiedbrowning]

that a tax rate of 30ish per cent is perfectly reasonable

Put down the crack pipe. That is a ridiculous tax rate and it pisses me me of every time I get my paycheck.

[Headless Thompson Gunner]

I am told that lower tax rates produce higher revenue.  How low could we lower our tax rates before revenues actually decrease or remain flat? 

The way to find out would be to continue lowering taxes until revenues stopped increasing.  The fact that we can, at present, lower our tax rates and cause increased revenues means that our taxes are too high.

[Perd Hapley]

Sounds nice, but I won't hold my breath.   

[Art Eatman]

More stuff that's left out of that "study":  Local, school, state; federal excise taxes; possibly FICA.  The US middle economic class tax burden totals around 50% of gross income.  (I ran the numbers, some ten or so years back, assuming I was in my old job at a current pay scale and with the usual urban house, two kids, etc.)

Also, note that in our system, the "poor" and/or "poverty" folks do not have such as rent subsidy, utility subsidy or food stamps included as "income".  For many of them--and I don't claim "all"--if these subsidies were included at cash-equivalent value, they'd be lower middle economic class.

I've travelled extensively in or lived in some 20 countries; Asia, Europe, plus three of the Americas besides the U.S.  To me, when folks have cars, booze and cigarettes, they may be poor but they ain't in "poverty".

Art

[Ron]

Norway is roughly 50% more successful than the US ($42,000 per person in the US compared to $64,000 in Norway).

Not a good comparison. Norway is about the size of the greater Chicago area population. New York city has twice the population of Norway.

I bet you can buy more for your money in the states also.

[M67]

Modifiedbrowning, I didn't say I think 30 per cent is reasonable, I said it seems a lot of Americans think so. Not because the number is 30 per cent, but because everything is good as long as it is different from whatever the Europeans are doing.

Ron, I started that sentence with "If GDP is a realistic standard". I have worked in the media, you don't fool me by qouting only part of a sentence.
I know you can't you can't compare countries without looking at the whole picture. But others do when claiming that the US is the richest country in the world simply because you have the largest economy.
Yes, you get more for your money in the US than in Norway, but not that much more.
We pay more tax than you do, and we're richer than you are. But then, according to the article above, the French pay more tax than either of us. And we're both richer than them. So there seems to more than one way to "success". And now we can turn this thread into a French bashing frenzy and forget all about taxes...

Also, note that in our system, the "poor" and/or "poverty" folks do not have such as rent subsidy, utility subsidy or food stamps included as "income".  For many of them--and I don't claim "all"--if these subsidies were included at cash-equivalent value, they'd be lower middle economic class.

Art, you're confusing me. You are saying that the poor are no longer poor because the government stole money from the middle class and gave it to the poor (as "subsidies"), making the ex-poor the new middle class? And now the government will steal their money and give it to the poor, who used to be middle class before their money was stolen? Dang, economy is complicated.

And now I confused myself. I started typing the paragraph above as a joke. By the time I finished, it occured to me that a lot of people in government, mine or yours, would probably see it as an argument that "the system works". Actually, that's not confusing as much as it is depressing. Or scary.