9 ms·

Why We Hate Taxes, and Why Some People Want Us To

41 points by headalgorithm 7y ago

gregdoesit 7y ago
I live in a country that's one of the highest taxed in the world, the Netherlands, paying up to 51.75% tax on my earnings. And I actually think it's fair and would not lobby for lower tax rates. It's probably because of how taxes and the government works is different in many ways to the US: 1. You feel it on your own wallet how your tax is spent and redistributed. Even though I pay a large amount in tax, being a high earner, I also get support from the government, paid monthly, for childcare and mortgage interests. Also, the government supports programs like no-downpayment mortgages, that are unheard of in many countries. 2. Public services are visible and efficient. This is true from healthcare to garbage collection and schools. Schools are actually a good example: while daycare in amsterdam would cost around $2,000/month for a child, schools are "free". Of course, once you paid for daycare, you know that it's not free, but paid for from tax, and have a good idea how much goes back into it. 3. Tax returns are ridiculously simple. They can also be done up to five years in the past, in case you forgot to claim refunds. 4. Thanks to how taxes are spent, there is less inequality across society. The government invests in social housing nationwide and has strong social net support, redistributing wealth via taxes from high earners to the low earners. For example, the $2,000/month childcare costs: for low earners the government pays up to 97% of this, dropping to 33% for people well off. Contrast this with places that don't have any of this and the inequality can be seen in all parts of life.
- paulsutter 7y ago
  Taxes can be just as high in the US, but without the services. Top rate for California is 50.3% (37% federal + 13.3% state), and New York City is 49.7% (37% fed, 8.82% state 3.876% city) The US government actually spends more per capita on healthcare($4,197/person/year) than most countries with free excellent healthcare (Switzerland $4178/pp/y, Canada $3074/pp/y, UK $2802/pp/y). Netherlands govt spends barely more than the US govt at $4495/pp/y. https://www.visualcapitalist.com/u-s-spends-public-money-healthcare-sweden-canada/ https://www.visualcapitalist.com/u-s-spends-public-money-hea...
  - wry_discontent 7y ago
    Is there good analysis on the differences in where the money goes?
  - birdmanjeremy 7y ago
    This is misleading. Top tax rates can be as high as 50.3%, but the parent comment says they are paying 51% of their earnings. These are two different things, because of tax brackets. I was both taxed a marginal rate of 48.3% and had an effective tax rate of 40.6% (CA resident).
    - paulsutter 7y ago
      While you obviously have an above average income, there really are people that pay very close to the marginal rate ($10M income etc). Asymptotically, the marginal rate is the top rate.
      - birdmanjeremy 7y ago
        I would bet you most of those people are paying a lower tax rate than I am, as they're smart enough (and have the means) to shift most of their earnings to capital gains and take advantage of other tax avoidance strategies.
        paulsutter 7y ago
        "Those people" are usually folks with a onetime windfall. For example a startup employee with options not stock. And I don't see what bearing that has on the top rate.
        birdmanjeremy 7y ago
        Most people who's earnings are over $1mm a year are spending significant time & resources planning their tax strategy and are not paying 50% effective tax rates. Source: Trump's tax returns. Actual source: https://www.nytimes.com/2011/08/15/opinion/stop-coddling-the-super-rich.html https://www.nytimes.com/2011/08/15/opinion/stop-coddling-the...
- ggambetta 7y ago
  Had a similar experience in Switzerland, except the taxes were lower.
- maximente 7y ago
  a lot of these things are also investments in the sense that healthier, better educated people earn more (=> pay more taxes) and are less likely to develop chronic conditions that the state then has to pay for in some form or another ("welfare", crime, etc.) on the back end.
  - sgeisler 7y ago
    Yeah, but that only works if you view your citizens as your "property" that works for you and doesn't move in and out of your country. If you view them as autonomous agents that move between jurisdictions to optimize their benefits in their current situation it doesn't. For example (as a German citizen) you can go to university in Germany for free and move to a low tax country afterwards for work. When you are old and fragile you come back and use the healthcare system since your foreign insurance becomes too expensive (I'm not entirely sure about that loophole, but I heard it existed). Of course there is some friction involved (friends, family in the home country). But which percentage of the population has to act rationally for the system to become unsustainable in the long run? Most countries haven't adapted their policies to the reality of globalization yet. I fear some might go the way of the former GDR and try to keep their citizens from leaving. I heard even the US is doing something like that, it's said to be quite hard to get rid of a US citizenship (and the IRS).
- alkonaut 7y ago
  Same for Sweden. Even higher taxed. Now, if we had 5% GDP on defense spending (especially if it looked like money wasted on wars or projects missing budget goals) I'd be fuming. I'm not getting rich (which my job would make me in the US) But I have a great work/life balance, have had 2 kids delivered free, spent 1.5 years off with each (shared with my wife) and now I use the remaining days off to pad my summer holiday from 4 to 7 or 8 weeks. Every year until the kids are 8. Daycare and schools including higher ed is free. My kid was born with an illness and has had 3 ambulance trips and 20 other ER visits with hospitalization in 6 years - still ZERO out of pocket, regardless of whether I was employed at the time. I'd have a comfortable life in the US too (even more comfortable) but what makes me happy to pay the 50%+ taxes is that the nursing assistants tending to my daughter in hospital also afford daycare, higher education and healthcare for their kids just as easily as I can.
- gamblor956 7y ago
  Once you add in Norways's VAT (equivalent to a sales tax) of 25%, which applies to most purchase and services, the effective tax rate is significantly higher than 51.75%. For most Norwegians, the effective tax burden is close to 75%!!!
stevenalowe 7y ago
Perhaps because taxation is theft?
- news_to_me 7y ago
  [Citation needed]
  - stevenalowe 7y ago
    https://reason.com/2013/04/18/taxation-is-theft/ https://reason.com/2013/04/18/taxation-is-theft/
    - dctoedt 7y ago
      The gravamen of the linked argument is that if you get paid for doing something, you're supposedly entitled to keep all of it, because somehow all of the hidden costs of your doing what you did have been taken care of by others. That's a flawed assumption. Elizabeth Warren's famous 2012 campaign talk hit the nail on the head: You shipped your goods to market on roads the rest of us paid for; you employed workers that the rest of us paid to educate; you didn't have to worry (excessively) about marauding bands stealing your stuff because of police and military that the rest of us pay for.
      - stevenalowe 7y ago
        An argument which implicitly assumes that the status quo is the only possible solution. Nice try.
        dctoedt 7y ago
        > An argument which implicitly assumes that the status quo is the only possible solution. Nice try. I'm not at all opposed to considering changes to the status quo. But libeling (yes, libeling) taxation as theft is not going to persuade very many people to consider such changes.
      - deleted 7y ago
andrewstuart 7y ago
I don't hate taxes. I like having education, roads, community services, a safety net for those less fortunate, a strong military, infrastructure and the myriad other things that governments (should) spend money on. What I do hate is the obsessive hatred of taxes. No wonder governments get into massive debt - they don't have money. I also hate large companies avoiding and shirking tax and leaving it to people to pay - I really hate that. Apple, Amazon etc etc all guilty of this - they want our money, they want profit from our community, they don't want to contribute back - at all, if they can possibly avoid it.
- deleted 7y ago
  [deleted]
- whatshisface 7y ago
  "Shirking tax" is one of the weirdest moral calls I see regularly. Everyone structures their finances to avoid tax - if you can blame companies for anything it's that they lobby for extra loopholes. Further, sending money to the government is far from an effective way to help society, this blog post argues well for that: https://slatestarcodex.com/2019/07/29/against-against-billionaire-philanthropy/ https://slatestarcodex.com/2019/07/29/against-against-billio... Further, the government is one of the few entities that can spend money to make the world worse. You can donate to charities to help people in countries you haven't heard of, you can buy a yacht and leave them alone, but if you pay that money in taxes then part of it will go to blowing them up for some inscrutable reason. Again, it's not that companies are saints or that they couldn't do better, it's that hammering them for tax avoidance is probably not the best thing to pick from the long list of corporate ethical failures.
- yodsanklai 7y ago
  > I also hate large companies avoiding and shirking tax and leaving it to people to pay I agree with you, but I don't think we can blame "companies", but who should blame the politicians (or people who voted for them maybe, or the people who buy stuff from these companies). Politicians are the ones who set up the laws allowing companies to avoid taxes. I see corporations as complex autonomous entities whose behavior isn't dictated by any single person, but rather by a "system" that lets them operate.
malandrew 7y ago
> ...arranged for the checks to prominently display the funding source—“UNITED STATES GOVERNMENT.” The funding source is not the United States Government. The funding source is US taxpayers.
- dctoedt 7y ago
  > The funding source is not the United States Government. The funding source is US taxpayers. The right wing likes to proclaim this in support of their dislike of taxes and of government generally (at least when government is telling them what they can and can't do; it seems quite different when they control government and get to tell others what they can't do). But if we're going to work our way backwards through the chain of funding sources, why stop there? Seems to me that taxpayers' employers could make the same argument about being the funding source — and then the employers' customers — and so on, stretching all the way back to the Big Bang ....
golemiprague 7y ago
I don't hate or love them, I see them as a necessity but I always remember that at the end of the day taxing is taking money by force from people, so it should be limited to whatever is deemed necessary and should be used in the most efficient way. Therefore it is important to keep a watchful eye and be vigilant when people want to raise it and in general to be strict on the definitions of what is necessary.
thstart 7y ago
I would like to see where my tax $’s are going -itemized. I would like to see where any donations for any non profits are going - itemized...
- alkonaut 7y ago
  You mean you can’t see where the money is going? If you know how much money you pay on different levels (local, national and so on) surely also those governments have itemized budgets? You can roughly say what amount you paid for different services then. Transfers between different levels of government could complicate it though.
- gamblor956 7y ago
  A) You can. The US government generates an itemized budget every year. It's several thousands of pages long, and usually the result of several large pieces of legislation. All of these are freely available online. To a lesser extent, the states also generate itemized budgets. Most but not all of the state-level budget information is available online. B) You can, to a lesser degree of detail, since non-profit tax returns are made available for public viewing by law. You can use Charity Navigator (fee required) or visit your nearest IRS office to view them. Many states also require non-profits above a certain size to make their financials available upon request.
bradstewart 7y ago
I don't hate paying taxes. I hate that I have to "decide" how much I owe. I hate the persistent, nagging feeling that I did it wrong and the IRS may come after me a few years later. I really wish the legislation allowing the IRS to actually tell you how much you owe would have survived...
- jobigoud 7y ago
  It works like this in many places. You log on the website, and all the fields are already filled in by default based on the employer's declarations. Only if you have had special extra income or you want to subtract expenses you have to spend more than 10 minutes on it.
outside1234 7y ago
I don't hate taxes, I hate rich and largely old people asking for taxes to be cut -- but wanting the same services -- such that the buck is passed on to us.
jasonless 7y ago
I think the spirit of what Syon is writing about is the root issue of taxes. It's not about paying for education, roads or safety. Syon is addressing the root issue of taxes in his view is about force. Why must citizens of a free country be coerced? Thats the premise he things most struggle with. If you want to solve for paying for education, roads or safety toss this issues into the private sector and Syon can agree the quality of those services would go up and the USA would be more free. So it just depends if you believe in freedom. Some do. Some do not.
- jobigoud 7y ago
  I often wonder about a system where a given percentage of the budget, say 10%, would be allocated by people voting directly for it on their tax returns. So individuals can decide that x% of their taxes should go towards education or military or whatever. Has this been tested anywhere, even locally?
swayvil 7y ago
I hate taxes because I'm getting poor service for my dollar and I have no choice of alternative service providers.
mieses 7y ago
nothing is free. there are other ways to pay for things than government and taxes.
pg_bot 7y ago
The federal government does too many things, and does them poorly. Our entitlement programs are broken by design, we spend an insane amount on our military, and there are countless federal programs that fritter away taxpayer money. The government should do more with the money we give them instead of constantly demanding more from our citizens.

41 points by headalgorithm 7y ago

I live in a country that's one of the highest taxed in the world, the Netherlands, paying up to 51.75% tax on my earnings. And I actually think it's fair and would not lobby for lower tax rates. It's probably because of how taxes and the government works is different in many ways to the US: 1. You feel it on your own wallet how your tax is spent and redistributed. Even though I pay a large amount in tax, being a high earner, I also get support from the government, paid monthly, for childcare and mortgage interests. Also, the government supports programs like no-downpayment mortgages, that are unheard of in many countries. 2. Public services are visible and efficient. This is true from healthcare to garbage collection and schools. Schools are actually a good example: while daycare in amsterdam would cost around $2,000/month for a child, schools are "free". Of course, once you paid for daycare, you know that it's not free, but paid for from tax, and have a good idea how much goes back into it. 3. Tax returns are ridiculously simple. They can also be done up to five years in the past, in case you forgot to claim refunds. 4. Thanks to how taxes are spent, there is less inequality across society. The government invests in social housing nationwide and has strong social net support, redistributing wealth via taxes from high earners to the low earners. For example, the $2,000/month childcare costs: for low earners the government pays up to 97% of this, dropping to 33% for people well off. Contrast this with places that don't have any of this and the inequality can be seen in all parts of life.

paulsutter 7y ago
Taxes can be just as high in the US, but without the services. Top rate for California is 50.3% (37% federal + 13.3% state), and New York City is 49.7% (37% fed, 8.82% state 3.876% city) The US government actually spends more per capita on healthcare($4,197/person/year) than most countries with free excellent healthcare (Switzerland $4178/pp/y, Canada $3074/pp/y, UK $2802/pp/y). Netherlands govt spends barely more than the US govt at $4495/pp/y. https://www.visualcapitalist.com/u-s-spends-public-money-healthcare-sweden-canada/ https://www.visualcapitalist.com/u-s-spends-public-money-hea...
- wry_discontent 7y ago
  Is there good analysis on the differences in where the money goes?
- birdmanjeremy 7y ago
  This is misleading. Top tax rates can be as high as 50.3%, but the parent comment says they are paying 51% of their earnings. These are two different things, because of tax brackets. I was both taxed a marginal rate of 48.3% and had an effective tax rate of 40.6% (CA resident).
  - paulsutter 7y ago
    While you obviously have an above average income, there really are people that pay very close to the marginal rate ($10M income etc). Asymptotically, the marginal rate is the top rate.
    - birdmanjeremy 7y ago
      I would bet you most of those people are paying a lower tax rate than I am, as they're smart enough (and have the means) to shift most of their earnings to capital gains and take advantage of other tax avoidance strategies.
      - paulsutter 7y ago
        "Those people" are usually folks with a onetime windfall. For example a startup employee with options not stock. And I don't see what bearing that has on the top rate.
        birdmanjeremy 7y ago
        Most people who's earnings are over $1mm a year are spending significant time & resources planning their tax strategy and are not paying 50% effective tax rates. Source: Trump's tax returns. Actual source: https://www.nytimes.com/2011/08/15/opinion/stop-coddling-the-super-rich.html https://www.nytimes.com/2011/08/15/opinion/stop-coddling-the...
ggambetta 7y ago
Had a similar experience in Switzerland, except the taxes were lower.
maximente 7y ago
a lot of these things are also investments in the sense that healthier, better educated people earn more (=> pay more taxes) and are less likely to develop chronic conditions that the state then has to pay for in some form or another ("welfare", crime, etc.) on the back end.
- sgeisler 7y ago
  Yeah, but that only works if you view your citizens as your "property" that works for you and doesn't move in and out of your country. If you view them as autonomous agents that move between jurisdictions to optimize their benefits in their current situation it doesn't. For example (as a German citizen) you can go to university in Germany for free and move to a low tax country afterwards for work. When you are old and fragile you come back and use the healthcare system since your foreign insurance becomes too expensive (I'm not entirely sure about that loophole, but I heard it existed). Of course there is some friction involved (friends, family in the home country). But which percentage of the population has to act rationally for the system to become unsustainable in the long run? Most countries haven't adapted their policies to the reality of globalization yet. I fear some might go the way of the former GDR and try to keep their citizens from leaving. I heard even the US is doing something like that, it's said to be quite hard to get rid of a US citizenship (and the IRS).
alkonaut 7y ago
Same for Sweden. Even higher taxed. Now, if we had 5% GDP on defense spending (especially if it looked like money wasted on wars or projects missing budget goals) I'd be fuming. I'm not getting rich (which my job would make me in the US) But I have a great work/life balance, have had 2 kids delivered free, spent 1.5 years off with each (shared with my wife) and now I use the remaining days off to pad my summer holiday from 4 to 7 or 8 weeks. Every year until the kids are 8. Daycare and schools including higher ed is free. My kid was born with an illness and has had 3 ambulance trips and 20 other ER visits with hospitalization in 6 years - still ZERO out of pocket, regardless of whether I was employed at the time. I'd have a comfortable life in the US too (even more comfortable) but what makes me happy to pay the 50%+ taxes is that the nursing assistants tending to my daughter in hospital also afford daycare, higher education and healthcare for their kids just as easily as I can.
gamblor956 7y ago
Once you add in Norways's VAT (equivalent to a sales tax) of 25%, which applies to most purchase and services, the effective tax rate is significantly higher than 51.75%. For most Norwegians, the effective tax burden is close to 75%!!!

stevenalowe 7y ago

Perhaps because taxation is theft?

news_to_me 7y ago
[Citation needed]
- stevenalowe 7y ago
  https://reason.com/2013/04/18/taxation-is-theft/ https://reason.com/2013/04/18/taxation-is-theft/
  - dctoedt 7y ago
    The gravamen of the linked argument is that if you get paid for doing something, you're supposedly entitled to keep all of it, because somehow all of the hidden costs of your doing what you did have been taken care of by others. That's a flawed assumption. Elizabeth Warren's famous 2012 campaign talk hit the nail on the head: You shipped your goods to market on roads the rest of us paid for; you employed workers that the rest of us paid to educate; you didn't have to worry (excessively) about marauding bands stealing your stuff because of police and military that the rest of us pay for.
    - stevenalowe 7y ago
      An argument which implicitly assumes that the status quo is the only possible solution. Nice try.
      - dctoedt 7y ago
        > An argument which implicitly assumes that the status quo is the only possible solution. Nice try. I'm not at all opposed to considering changes to the status quo. But libeling (yes, libeling) taxation as theft is not going to persuade very many people to consider such changes.
    - deleted 7y ago

andrewstuart 7y ago

I don't hate taxes. I like having education, roads, community services, a safety net for those less fortunate, a strong military, infrastructure and the myriad other things that governments (should) spend money on. What I do hate is the obsessive hatred of taxes. No wonder governments get into massive debt - they don't have money. I also hate large companies avoiding and shirking tax and leaving it to people to pay - I really hate that. Apple, Amazon etc etc all guilty of this - they want our money, they want profit from our community, they don't want to contribute back - at all, if they can possibly avoid it.

deleted 7y ago
[deleted]
whatshisface 7y ago
"Shirking tax" is one of the weirdest moral calls I see regularly. Everyone structures their finances to avoid tax - if you can blame companies for anything it's that they lobby for extra loopholes. Further, sending money to the government is far from an effective way to help society, this blog post argues well for that: https://slatestarcodex.com/2019/07/29/against-against-billionaire-philanthropy/ https://slatestarcodex.com/2019/07/29/against-against-billio... Further, the government is one of the few entities that can spend money to make the world worse. You can donate to charities to help people in countries you haven't heard of, you can buy a yacht and leave them alone, but if you pay that money in taxes then part of it will go to blowing them up for some inscrutable reason. Again, it's not that companies are saints or that they couldn't do better, it's that hammering them for tax avoidance is probably not the best thing to pick from the long list of corporate ethical failures.
yodsanklai 7y ago
> I also hate large companies avoiding and shirking tax and leaving it to people to pay I agree with you, but I don't think we can blame "companies", but who should blame the politicians (or people who voted for them maybe, or the people who buy stuff from these companies). Politicians are the ones who set up the laws allowing companies to avoid taxes. I see corporations as complex autonomous entities whose behavior isn't dictated by any single person, but rather by a "system" that lets them operate.

malandrew 7y ago

> ...arranged for the checks to prominently display the funding source—“UNITED STATES GOVERNMENT.” The funding source is not the United States Government. The funding source is US taxpayers.

dctoedt 7y ago
> The funding source is not the United States Government. The funding source is US taxpayers. The right wing likes to proclaim this in support of their dislike of taxes and of government generally (at least when government is telling them what they can and can't do; it seems quite different when they control government and get to tell others what they can't do). But if we're going to work our way backwards through the chain of funding sources, why stop there? Seems to me that taxpayers' employers could make the same argument about being the funding source — and then the employers' customers — and so on, stretching all the way back to the Big Bang ....

golemiprague 7y ago

I don't hate or love them, I see them as a necessity but I always remember that at the end of the day taxing is taking money by force from people, so it should be limited to whatever is deemed necessary and should be used in the most efficient way. Therefore it is important to keep a watchful eye and be vigilant when people want to raise it and in general to be strict on the definitions of what is necessary.

thstart 7y ago

I would like to see where my tax $’s are going -itemized. I would like to see where any donations for any non profits are going - itemized...

alkonaut 7y ago
You mean you can’t see where the money is going? If you know how much money you pay on different levels (local, national and so on) surely also those governments have itemized budgets? You can roughly say what amount you paid for different services then. Transfers between different levels of government could complicate it though.
gamblor956 7y ago
A) You can. The US government generates an itemized budget every year. It's several thousands of pages long, and usually the result of several large pieces of legislation. All of these are freely available online. To a lesser extent, the states also generate itemized budgets. Most but not all of the state-level budget information is available online. B) You can, to a lesser degree of detail, since non-profit tax returns are made available for public viewing by law. You can use Charity Navigator (fee required) or visit your nearest IRS office to view them. Many states also require non-profits above a certain size to make their financials available upon request.

bradstewart 7y ago

I don't hate paying taxes. I hate that I have to "decide" how much I owe. I hate the persistent, nagging feeling that I did it wrong and the IRS may come after me a few years later. I really wish the legislation allowing the IRS to actually tell you how much you owe would have survived...

jobigoud 7y ago
It works like this in many places. You log on the website, and all the fields are already filled in by default based on the employer's declarations. Only if you have had special extra income or you want to subtract expenses you have to spend more than 10 minutes on it.

outside1234 7y ago

I don't hate taxes, I hate rich and largely old people asking for taxes to be cut -- but wanting the same services -- such that the buck is passed on to us.

jasonless 7y ago

I think the spirit of what Syon is writing about is the root issue of taxes. It's not about paying for education, roads or safety. Syon is addressing the root issue of taxes in his view is about force. Why must citizens of a free country be coerced? Thats the premise he things most struggle with. If you want to solve for paying for education, roads or safety toss this issues into the private sector and Syon can agree the quality of those services would go up and the USA would be more free. So it just depends if you believe in freedom. Some do. Some do not.

jobigoud 7y ago
I often wonder about a system where a given percentage of the budget, say 10%, would be allocated by people voting directly for it on their tax returns. So individuals can decide that x% of their taxes should go towards education or military or whatever. Has this been tested anywhere, even locally?

swayvil 7y ago

I hate taxes because I'm getting poor service for my dollar and I have no choice of alternative service providers.

mieses 7y ago

nothing is free. there are other ways to pay for things than government and taxes.

pg_bot 7y ago

The federal government does too many things, and does them poorly. Our entitlement programs are broken by design, we spend an insane amount on our military, and there are countless federal programs that fritter away taxpayer money. The government should do more with the money we give them instead of constantly demanding more from our citizens.