Raise Taxes To Improve Living Standards (!)

[MechAg94]

I didn't get into the details, but do all these countries define "poor" and "poverty" the same way? 

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?

One other thing to consider is that the vast majority of the federal spending in the US is not for those things but for social security stuff.  Granted, some of that spending helps provide for stability, but it is very inefficient.  I do agree that stability is extremely important.  If I put $5000 into investments, I want to be sure that I still have $5000 in 10 years as well as get some interest.  I don't want to see my investment confiscated by the govt, burned down, or stolen.  That is why a lot of foreign money is invested in the US. 

[MechAg94]

The problem with the article's attitude is they are basically saying "screw the individual for for the greater good."  That sucks and discourages hard work, innovation, and leadership.

[doczinn]

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.

I don't think you'd find very many people on this board who think our tax rate in the US is "reasonable," or "good." Thirty percent is better than forty percent, that's all.

[Monkeyleg]

Thirty percent, forty percent...it doesn't matter. As Art pointed out, the actual tax rate for a middle-income worker is more like 50%. Taxes are a shell game: the pols can claim to be holding down income taxes while they raise property taxes, sales taxes, excise taxes, and fees.

In the 1950's, the federal income tax rate for the average "middle class" family was 5%. Don't even suggest that it has not gone up.

If you want an idea of just how confiscatory our tax system is, take a product, particularly a product with a base material that is imported.

Let's use a tire as an example, and assume that tires are still made with real rubber.

Goodyear imports X number of pounds of rubber to make a tire into the US, and pays a tariff (tax) on that import. The company then pays its employees to turn that piece of rubber into a tire. The company pays the co-FICA, FUTA, UC, and other taxes on those employees wages. Plus, the employees pay taxes on their wages paid to make the tire.

Goodyear then sells the tire to a distributor, and pays corporate taxes on the profit made on the sale.

The distributor sells the tire to a dealer, and pays a corporate tax on the profit.

The dealer sells the tire to a consumer, and pays the tax on the profit. The consumer also pays sales tax and excise taxes, from his wages earned after federal, state and FICA taxes were withheld from his paycheck.

How much of the $150 that the consumer paid for the tire was consumed by taxes? I've read that, with some products, the total percentage could go as high as 85%.

I hate long posts, and usually avoid them. So I'll just continue this one by replying to it.

[Monkeyleg]

M67, it may well be that Norway is richer than the US, if in no other terms than personal income.

There's a small Middle Eastern country that has oil revenues so immense that almost no citizen in the country works. Nearly all work is done by people from other countries. Every citizen gets a "paycheck" from the government for doing nothing.

I don't remember the country, and the report was from a "60 Minutes" show from over a decade ago, so the situation may have changed by now. In fact, I'd bet it has.

Nonetheless, there are some similarities between this small ME country and Norway. One is the relatively small population. And, of course, there's the issue of ethnic and cultural "diversity."

My guess is that you don't often encounter people of other races in your country.

One of the greatest blessings of the US is our cultural, religious and ethnic diversity. It's also one of the sources of our greatest problems. Cultural, religious and ethnic tensions exist in every country that has any blend of those at all. Here we have the greatest blend of those in the world.

And those tensions cost taxpayer money. At the very base level of each ethnic group is a criminal underclass that has, does and will do whatever it takes to defeat others in order to gain control of booze, marijuana, razor blades, shrimp, lobster, fur coats, or whatever else provides them money.

It costs a lot to employ police to control these people. And it costs taxpayers a lot of money to pay for the damages done, whether by violence, or just in terms of the loss of a tax base when businesses decide that the area they're in is just too dangerous.

And then there's the poverty issue. I've lived in poverty, although I didn't realize I was poor at that time. I just thought things were tough.

Poverty is a relative term. I know people who are on public assistance and some are, in at least a few respects, living better lives than my wife and I. Others are just living borderline.

I live in a nice neighborhood. My neighbor next door has figured out how to run the system, and get the city to partially pay to have new siding and windows on his house, as well as a new garage.

And, then, there's the cost for the US military, which I'll just mention in another post.

[Monkeyleg]

M67, what portion of Norway's GDP is spent on defense?

I don't ask that question antagonistically, just rhetorically. And you know where I'm going.

It costs a lot to be the world's policeman. We've spent over a third of our federal budget deploying troops to countries most people have never heard of, defending countries that call us allies, and defending areas that were not in our immediate interests, but only in our strategic interests.

One of those strategic areas was Scandinavia. We spent trillions of dollars to keep the Russians from knocking on Scandinavia's doors, as well as the doors of the western European countries. Hell, we spent trillions of dollars to keep the Soviets from knocking on any country's door.

And it looks like we'll still be spending trillions to help defend our friends on the western part of the European continent.

Is this some sort of selfless committment?

No. It's in our best interests to make sure that Norway, Britain, France, and every other allied government is stable and unharmed.

While we pursue these efforts for what are admittedly selfish interests, we are also helping.

And we'll go on.

But there's no end to the criticism, which drives me mad. If we go in, we're the bad guys. If we don't, we're the bad guys.

When a tsunami hits a tiny island, everybody asks "where's the US?"

When a bunch of warlords decide to start slicing and dicing people in some tiny African country, people say, "where's the US?"

We went into Iraq not to free Iraq, but to establish a stable government, one that we could use to project our power in the region. If we'd had the excuse, we should have invaded Saudi Arabia, or Iran, or Syria. But Iraq was the only excuse we had.

We need to be there, and do to the Middle East what we did to western Europe and the Pacific rim: bring them under our fold. Impossible? No. Improbable? Unless the citizens of the western cultures understand the stakes at hand, we won't succeed.

All of the above is a very long answer to your short questions.

I'm paying 20 to 30 cents from every dollar I make to support military actions in other countries. I'm paying untold amounts of money to keep blacks and whites and hispanics and Asian gangs and others from killing each other. Or at least paying for the crime scene investigations.

I'm paying for people who say they can't work to have things that I sometimes consider to be luxuries, such as large-screen TV's.

I'm paying my senator to agree to vote for another senator's pork project if that senator votes to approve my senator's pork project.

I'm paying my senator--who happens to be the wealthiest member of the US Senate, and one of the wealthiest people in my state--a pension benefit that, if he serves 20 years in the Senate, will pay him $160,000 a year plus cost of living adjustments for the rest of his life. Of course, that's chump change for my senator.

I'm paying for local, state and federal employees to be able to screw up their work completely, or do nothing at all, and still be able to collect some of the best pension and health care benefit plans known to Man.

Think I'm kidding? There's an old range buddy of mine who's now living out of state, who worked for the city, who never worked very hard (his words), and is still collecting disability payments after over 25 years. The guy isn't disabled at all. He's living very comfortably, at taxpayer expense.

Is our tax rate too high?

Nah.

[Ben]

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.

Exactly. Why didn't they look at any of the Western European countries below Scandanavia? They all have very high taxes and lots of social programs. They also have lots more uneducated and unskilled people coming in to use those social programs, and their economies are declining because of it. I recently read that in Germany, doctors are ex-pating like crazy because they can do much better, make more money, and pay less taxes in a host of other countries. Most of my family still live in Germany, and cousins I stay in contact with complain about paying taxes to fund people who won't work at least as much as we complain about it here. It's not uncommon to see unemployed Turk families with lots of kids living in a nice, new, state funded house and driving in a Mercedes while working families are living in a 200 year old multi-generational house and driving Volkswagons.

The statistical sample set in this study is simply bogus. The Scandanavian countries should not be excluded, but they should definitely have included other European countries to fairly evaluate and present their thesis.

[doczinn]

Monkeyleg, that's an excellent illustration of what I've been trying to explain to people for years about taxes. Mind if I steal it?

[Silver Bullet]

More taxes = more government.

[Art Eatman]

M67:  Our government has an official definition of "poverty".  SFAIK, it's a family income below $20,000 per year.  However, all those subsidies I mentioned are not included as income.  Those subsidies have a monetary value, right?  Ergo, we have legally-defined "poverty-stricken" people whose equivalent income is well above this artificial definition's amount of money.

Examples:  If the common rent is around $600/mo for lower-quality housing, but the poverty person only pays $200 a month, that's a $4,800/yr benefit that's not counted.  Same for a subsidy on electricity of some $200 a month, for another $2,400/yr.  Then there are food stamps, which SFAIK may well be above $300/mo or $3,600/yr.  So, easily another $11,000/yr added to that $20,000.

I admit to probable inaccuracies, since I've never been that poor.  However, the numbers do get bandied about from time to time in the media, and I'm certainly in the ballpark...

Physical standard of living:  One study showed that the added buying power of shopping at a WalMart for groceries is some $2,400 per year for the "average family", as compared to one of the big chain grocery stores.  We have many discount stores with many necessary items which sell for roughly 2/3 the WalMart price.  (My wife knows the inventory in all of them. )

Medicine:  For all the weeping and wailing about health insurance, if you're sick you just go to any hospital's emergency room and by law you must be treated.  If you can't pay, you don't pay.  How "nationalized" can you get?  That's  an un-constitutional "unfunded mandate", of course, but our Congress is uninterested in our constitution.

A lot of stuff would be quite affordable if the government would just stay out of it.  I have watched, these last forty-some years, as the federal government got into education.  Costs have gone up; quality has declined.  In medicine, costs in the last 25 years have more than quadrupled.  That's a numbers-fact from my own observation--and in my other life I was a cost-estimator for engineering projects I designed.  Numbers are my world, you might say.

When government gets into daily life, things become more complex and less efficient.  That should be expected; government has no need to hold down costs nor turn a profit.  Government should restrain itself to calling for goals, but stay the hell out of telling folks how to achieve those goals.  "How to" is not an area of governmental expertise.  Never has been.  Never will be.  The smarter people are in the private sector, making more money.

Art

[MechAg94]

Don't forget that low income people pay very little or nothing in income taxes.  That is another benefit.

[Matthew Carberry]

Or actually get an "earned income tax credit" , a rebate on taxes not actually paid.

Which is also not counted in poverty calculations.

[Monkeyleg]

doczinn, after reading my posts, I thought they sounded like I was rambling on mindlessly. If you want to "steal" them, though, be my guest.

[doczinn]

I meant this part, in particular:

Let's use a tire as an example, and assume that tires are still made with real rubber.

Goodyear imports X number of pounds of rubber to make a tire into the US, and pays a tariff (tax) on that import. The company then pays its employees to turn that piece of rubber into a tire. The company pays the co-FICA, FUTA, UC, and other taxes on those employees wages. Plus, the employees pay taxes on their wages paid to make the tire.

Goodyear then sells the tire to a distributor, and pays corporate taxes on the profit made on the sale.

The distributor sells the tire to a dealer, and pays a corporate tax on the profit.

The dealer sells the tire to a consumer, and pays the tax on the profit. The consumer also pays sales tax and excise taxes, from his wages earned after federal, state and FICA taxes were withheld from his paycheck.

How much of the $150 that the consumer paid for the tire was consumed by taxes?

[M67]

I didn't mean to start a quarrel with anyone. You know, my daddy can beat up your daddy kind of stuff.

I agree with you. Let me quote from my own post: "That said, those Canadian authours are wrong. Scandinavians are not rich because we pay a lot of tax. (...) 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 was just saying that we all pay taxes. Tax is a necessary evil in all successful economies. And the success isn't determined by whether we pay 30 or 40 per cent, there are other factors that are more important.

The problem with the article's attitude is they are basically saying "screw the individual for for the greater good."  That sucks and discourages hard work, innovation, and leadership.

I agree with that as well. But the suckage level isn't determined by tax level alone. The picture is more complicated.

[M67]

Monkeyleg

My guess is that you don't often encounter people of other races in your country.

Yes, I do. We have people from more than 180 countries living here as resident aliens, some groups in large enough numbers to make a significant impact on a population as small as ours.

M67, what portion of Norway's GDP is spent on defense?

I don't have the numbers, but for the past couple of decades it has been the second highest in NATO, which probably makes it the second highest in the civilized world.

When a tsunami hits a tiny island, everybody asks "where's the US?"

You have military capability in much of the world to do the "manual labour" in the first stages. But when it comes to the final price tag, we pay more than you do.

Politicians with pork projects? That's what in other contexts is referred to as representative government. I'm sorry to disappoint you, but it's not unique to the US.

[M67]

Art, I think poverty is usually defined as income under a certain level compared to the average or median income of the country in question. At least for industrial countries.

The way it works in Norway is a bit like a sewer. What you get out of it depends on what you put into it. Or like insurance, if that's a more tasteful comparison.

If you loose your job, you may receive unemployment pay from the government. I don't know how much, I've never been there. But I think they look at your average income for the last three years, and you get a certain percentage of that. For up to one year. If they find you a job, any job, and you won't take it - the payment stops. After a year, or if you haven't had any taxable income, you get a minimum welfare check. That will keep you alive, it won't pay for any big screen TVs or cars. Some people are of course better than others at "working the system", and some even work it in ways that make them go to prison if they're caught.

Disability pensions are also based on your taxable income before being disabled, sort of like the size of an insurance premium.
We have government retirement pension, which is also based on your income, percentages and averages going back 20 to 40 years.
Most people do of course have additional private insurance and savings, company pension funds.

Our medical care is a mix of private sector and public sector, but it's paid for with tax money. Primary health care is handled by doctors who run private businesses. If I see my doctor, I pay a small fixed fee for each consultation, she then gets the rest of the fee from the government, which means I get some of my tax money back. Good doctors get more patients than bad doctors, so it pays to be good and efficient. Hospitals are mostly public, some private. In theory the money follows the patient. Within practical limits you can choose which hospital you want to go to, and your tax money pays for your treatment. Well, people who haven't paid any tax get treated too, in which case someone else's tax money follows the patient...

Our education system is a mix too. State run colleges and universities don't charge tuition, you pay for them through your taxes. Admission is based on merit. If you're not smart enough to get in, you can always pay the fees and go to a private college. (Guess where I got my degree. )

A less than perfect system? You bet. But it's better than most.

Sorry about the rambling, but that's what internet forums are for, right?

[Matthew Carberry]

I think we're using two different viewpoints for "diverse" as well...

http://en.wikipedia.org/wiki/Demographics_of_Norway

Ethnic and/or national origin: ethnic Norwegians 92.7% Swedes 0.7% Danes 0.6% Peoples of the former Yugoslavia 0.5% British 0.3% Americans 0.2% Germans 0.2% Iraqis 0.2% Pakistanis 0.2% Somalis 0.1% Finns 0.1% Iranians 0.1% others 3.7%

That ain't diverse.

http://193.160.165.34/english/subjects/00/minifakta_en/en/main_03.html

As of 2005, only 6.5% of the Norwegian population was 1st generation (legal) immigrants.

That's a far sight from the US, where we have hundreds of thousands of immigrants a year that are entirely undocumented in addition to our legal immigrant citizens and resident aliens.

http://www.cis.org/topics/illegalimmigration.html

The Immigration and Naturalization Service (INS)  estimates  that  in  January of 2000  there  were
7 million illegal aliens living in the United States, a number that is growing by half a million a year. Thus, the illegal-alien population in 2003 stands at at least 8 million. Included in this estimate are approximately 78,000 illegal aliens from countries who are of special concern in the war on terror. It is important to note that the 500,000 annual increase is the net growth in the illegal-alien population (new illegal immigration minus deaths, legalizations, and out-migration). 

All of them (the illegals) are using what services we provide without equivilent compensatory tax input.  Almost are are functionally illiterate in English, so they will not raise their education level and earning potential and more and more have no incentive to assimilate.

What France is going through now is, unfortunately, on the way for Scandanavia.  Just be happy that in this case anyway, you guys (Northern Europe) have a buffer between you and the Third World.       

[K Frame]

"It costs a lot to be the world's policeman."

I've made that point over and over and over to Eurosocials over the years, Monkey.

Good luck.

At one point in time the United States was spending more on Western Europe's anti-Soviet defenses than all of the nations in Western Europe -- COMBINED.

Through most of the 1950s the United States footed virtually every penny of France's military budget for it's Indo China fiasco.

The American tax payer is DIRECTLY responsible for the rise of the modern European Social State.

It all started with the Marshall Plan, which pumped, in today's dollars, hundreds of billions in hard currency and goods into jump starting the European economy.

After that, American defense dollars allowed many European nations to keep their military structures correspondingly weak and pump those dollars into social programs.

Before World War II Holland actually had a relatively decent military. It was an international state, and had a small, but highly capable and very well led white water Navy.

After World War II? The Dutch military is UNIONIZED, for Christ's sake!

Now that the Spectre of the Bear is gone, you'd think that we'd be able to start spending some of that money at home.

Nope, now it's the Spectre of the Raghead with a bomb in his turban.

[Art Eatman]

M67 said, "If you loose your job, you may receive unemployment pay from the government."

Yeah, same here.  However, that's a "safety net" deal.  We have a pretty good system, overall, as to how it's all paid for. 

What has a lot of us irate is that we have generations living on the dole, full time, without ever having worked.  The mindset of that sub-set of society is, "But we're entitled!"  They know of no other way of life.  And much of it was directly caused by the ways our welfare laws were written by the "help the poor" crowd.  The unintended consequence is that we've created a sub-culture where grandmothers of age 30 years is common.

Art