6 ms·
The US Is the Lowest Taxed Large Developed Economy in the World
- amaccuish 8y agoI'd rather have cheap healthcare thanks
- User23 8y agoI'd rather have an economy where healthcare, housing, and education are so affordable that anyone with a high school diploma or better that is willing to work can afford to cover a family of 4 with money left over for entertainment and savings. We know this is possible, because the USA used to have it in living memory.
- tensor 8y agoIt's possible today in Canada.
- User23 8y agoOnly with heavy government subsidies. The situation I describe didn't require that.
- germinalphrase 8y agoFactually untrue: post-war housing was massively subsidized by the US government directly through FHA/GI Bill to buyers and significant infrastructure spending (US highway system, water/sanitation, etc). The US social contract was largely predicated on the idea that subsidizing citizens to obtain housing would lead them to be stable and productive workers/consumers and avoid communist tendencies. Of course, communism is not now a threat and we are likewise not seeing such public investment in any common vision for a renewed social contract.
- User23 8y agoNo doubt the mostly defense spending you describe provided fiscal stimulus to the economy and led to the benefits you list, but that's not the same as a subsidy, which would mean something like Section 8 vouchers. The real driving force was that wage growth massively outpaced costs. After the war ended it was routine to pay off a 15 year mortgage a decade early, because real wages rose so much. Similarly, our current lousy situation is the result of median real wages staying flat for decades.
- kgwgk 8y agoI'm not sure housing is more affordable in Canada than in the US.
- humanrebar 8y agoTo be fair, that was in the post war economy. The U.S. had a massive competitive advantage in having a not-bombed infrastructure. Young workers had a competitive advantage in not having to compete with people who died in the war. And there was a baby boom and a more economically engaged female population, creating new kinds of demands and opportunities for productivity.
- oxide 8y agoSo, the problem is a prevented, or maybe just a repeatedly delayed, World War III.
- TomK32 8y agoWell, Germany had the advantage of having to build a 100% new infrastructure and that helped a lot to overtake those European countries that were on the winning side.
- toomuchtodo 8y agoIt seems like there’s a dark joke to be had here about US infrastructure.
- flukus 8y agoI don't know when it ended in the US but this was doable into the 80's and possibly 90's in Australia (outside of Sydney), even if it was well on track to become not so doable. House prices becoming investment vehicles was the single biggest blow to this. It started getting out of control when the WW2 dead would have been retiring.
- ecolonsmak 8y agothe war didn't cause that, us exports in the post war years didn't experience a wild surge. it was the progressive tax rates, 90% on income in excess of 400k/yr that forced investment into societal infrastructure, education and research and development in a way we haven't seen in the last 30 years.
- kevin_b_er 8y agoIt was possible, but nowadays the money only trickles, not flows, down.
- jedberg 8y ago> We know this is possible, because the USA used to have it in living memory. If you look back at your history, you'll see that this only applied to the already wealthy part of the US for the most part, and for the most part the white people only.
- User23 8y ago> If you look back at your history, you'll see that this only applied to the already wealthy part of the US for the most part This happy state of affairs was during the adulthood of the generation that grew up during the depression. The vast majority of the US population was poor, including those living in the cities. > for the most part the white people only. The USA was something like 95% white at the time, so how is this a helpful contribution to the conversation?
- evgen 8y ago> The USA was something like 95% white at the time, so how is this a helpful contribution to the conversation? Is it really so hard to do simple research? In 1945 African-Americans were 10% of the population vs the current 12.6%.
- jgoodhcg 8y ago20th century white population had a maximum of 89%. https://en.m.wikipedia.org/wiki/Historical_racial_and_ethnic_demographics_of_the_United_States?wprov=sfla1 https://en.m.wikipedia.org/wiki/Historical_racial_and_ethnic...
- cma 8y agohttp://i2.cdn.turner.com/money/dam/assets/120928062309-chart-us-tax-rate-over-the-years-story-top.jpg http://i2.cdn.turner.com/money/dam/assets/120928062309-chart...
- test6554 8y agoWe could have laughably affordable health care if a medical license was not required to practice medicine.
- zacharytelschow 8y agoSo.... -> Make premiums deductible for people, not companies, severing the tie to employment. -> Require service providers to post prices so people know what the hell things cost. -> Allow sales across state lines to increase competition. -> Educate the public on what insurance is for (unexpected costs they can't afford). Your auto insurance doesn't cover oil changes. The problem isn't lack of government - the problem is government. Government provides services very poorly. And if you'd rather they did provide health care? Immigrate somewhere where they do.
- deleted 8y ago[deleted]
- amaccuish 8y agoI'm not a US citizen. Merely the reason why I wouldn't move to the US. Low taxes don't attract me, stable government and good public services do. I guess just a different point of view :)
- zacharytelschow 8y agoI can entirely respect that. The... somewhat jab at the end was directed towards those in the US constantly complaining about how "such and such country does it better." My reply has become: so move there! Virtually every country in the world accepts immigrants who are willing to contribute. If someone believes another country is far preferable based on their policies, I believe they should vote with their citizenship and move there.
- amaccuish 8y agoI suspect you're being downvoted for the blutness of your jab, but I understand the sentiment :) I've moved once and I'm preparing at some point to do it again. But sadly not everyone can afford that, and that's the same people who stay awake at night worrying about their healthcare costs.
- moorhosj 8y ago
- woolvalley 8y agoHealthcare would be cheaper as a percentage of GDP of it was single payer. If you put healthcare as part of the gov't GPD graph, the USA would be higher than places like Canada. South Korea also has single payer and has equal gov't GDP consumption as the USA.
- zacharytelschow 8y agoGovernment spending, not taxes, are the proper measure of the burden of government. Ultimately, the debts will have to be paid whether that be outright, through devaluation of the currency, or a combination of both.
- User23 8y agoNo they don't. A monetarily sovereign government with a productive economy, such as the USA, can roll over its debt indefinitely. In fact, the global financial system relies on US debt. Foreign countries call it "reserves." Also, remember that the size of the public sector's balance sheet isn't what controls inflation, it's too much money chasing too few goods and services. Most money isn't even created by the government, it's created by banks with keystrokes.
- zacharytelschow 8y ago> A monetarily sovereign government with a productive economy There's a reason we have a massive trade imbalance - our number one export is debt. > Also, remember that the size of the public sector's balance sheet isn't what controls inflation, it's too much money chasing too few goods and services. I forget the percentage, but a meaningful amount of US treasuries have maturities of 2 years or less. The only thing that controls inflation is the willingness (foolhardiness?) of countries or people willing to buy our debt at very low interest rates. If that ever changes, we are in for a very rude awakening.
- User23 8y agoForeign countries have to buy our debt, because they want to run a current account surplus against us. The alternative is to just sit on the reserves they accumulate from that surplus, which pay no interest. Given the choice of 0% or 2% every sovereign is going to choose the latter. China isn't the USA's bank. The Federal Reserve is the USA's bank. China is just another depositor at the Fed. The Federal Reserve sets USD interest rates, not China or any other foreign sovereign.
- jklinger410 8y agoThe promise that we will retain a healthy divide between the rich and poor is one of the keys to global trade. That and our hilariously large military.
- rs999gti 8y ago> That and our hilariously large military. Due to treaties, the US protects one quarter of the world -https://www.washingtonpost.com/news/worldviews/wp/2015/05/30/map-the-u-s-is-bound-by-treaties-to-defend-a-quarter-of-humanity/ https://www.washingtonpost.com/news/worldviews/wp/2015/05/30... Also, provides defense to the world's oceans. And employs millions as a massive jobs program - https://www.csmonitor.com/Business/Robert-Reich/2010/0813/America-s-biggest-jobs-program-The-US-military https://www.csmonitor.com/Business/Robert-Reich/2010/0813/Am...
- jklinger410 8y agoThis is why conservatives are always trying to convince their base that the largest military budget in the world is not big enough.
- leereeves 8y agoI often wonder what would happen if the US lowers military spending to European levels. Will China invade Taiwan? North Korea invade the South? Russia invade Ukraine? Who will take up the burden the US bears?
- sremani 8y agoCouple of observations, - most of the countries are in the band of 25% to 30% and its just happens US is a the lower one in that band, so there is no "daylight" per se. - Greece is around 38-39% and is notorious for tax evasion. The graph demonstrates American is low, but not completely out of whack.. now France.. well they are French!
- mhkool 8y ago"Low Tax" sounds great. Everybody would want that. Just a pity that so few people benefit from low tax.
- zacharytelschow 8y agoMore than half the country doesn't pay federal income taxes at all. How is that "so few?"
- mhkool 8y agoLook around you. Do you see an overwhelming crowd of people delighted to pay low tax?
- test6554 8y agoThat's depressing considering how much I pay in taxes each year.
- moorhosj 8y agoOdd that you only mention federal income taxes, there are a bunch of other taxes that people pay (payroll, sales, excise and property to name some).
- test6554 8y agoOnly people who are paying taxes can benefit from lower taxes.
- moorhosj 8y agoOr those who require zero government services. Your implication is that lowering taxes would have no impact on the services people receive. Does that seem right?
- 8note 8y agoI don't think there are people who require zero government services. no matter what, you'll be benefitting from something -- at the very least, that no other army will invade
- HoochieKoo 8y agoI find it interesting that Ireland is the lowest taxed country yet they have bet the farm on providing a haven for companies to avoid paying taxes back home. It’s a gamble they’ve made which seems to paying off but I’ve heard that if other countries closed this loophole they it would absolutely devestate the Irish economy.
- test6554 8y agoI know it feels a little unfair to people of higher tax countries who feel like they deserve certain services from their government and (at least the majority) are willing to pay for those services through their taxes. But another cost of these government services that they need to be aware of is that it makes it more difficult to attract large multi-national employers to the country. Large companies can choose which country they are taxed in just like you and I can choose which market we shop at. If your preferred market decides to raise prices while another decides to lower them, this would not be considered a loophole. It would be considered business savvy or competition.
- moorhosj 8y ago==Large companies can choose which country they are taxed in just like you and I can choose which market we shop at. If your preferred market decides to raise prices while another decides to lower them, this would not be considered a loophole. It would be considered business savvy or competition.== To complete your market analogy, can you explain what "services" the country provides the company?
- koliber 8y agoWhen I compare my tax burden in one country vs. what I would be paying had I been living in another country, I would not use the measure of "Tax revenue as share of GDP". This is the first time I came across such a way of defining the total tax percentage. Is this include corporate income tax, capital gains tax, personal income tax, social-security payments rolled into one? If so, then it makes sense, as the US has low corporate and cap gains taxes.
- ThJ 8y agoEarlier today, I made a little scatter plot comparing the tax burden (tax revenue to GDP ratio) of a bunch of countries against their UN World Happiness Index. This is the result: https://snabeltann.no/system/media_attachments/files/000/429/904/original/80a9d0c9fbaa8be7.png https://snabeltann.no/system/media_attachments/files/000/429...