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As an aside, I learned something recently. The US actually has the most progressive income tax system for a developed nation. Shockingly so, compared with the
by retrac 6y ago
As an aside, I learned something recently. The US actually has the most progressive income tax system for a developed nation. Shockingly so, compared with the flat and regressive tax systems in countries like Sweden. There they basically have two income tax brackets -- everything over the basic deduction gets a flat ~35% tax up to about $60,000 equivalent. There's also an additional bracket for incomes above that point. Plus a flat VAT charged on most purchases. I suppose whether spending is progressive or regressive to economic equality is far more important than whether the tax system is.
- iamatologist 6y agoThis factoid keeps getting discovered in the comment sections on the Internet. I guess the Scandinavian centre-right think tanks have got some reach. They are also quite pleased with how supposedly socialist America already is. It seems almost like a reverse psychology trick.
- retrac 6y agoWell, I was actually going to use the comparison to Canada (where the topic came up the other day in a discussion I was having) but while Canada's system is less progressive than compared to the US, the gap is less dramatic than with Sweden.
- jetrink 6y ago> The US actually Are you speaking about the US as a whole or just the federal government? If you only consider federal income taxes, then yes, our system looks progressive by comparison. However, US citizens pay federal, state and often city taxes and the tax rate become more flat in many locations when all levels of taxation are considered. Also, for the full picture, you really should consider benefits. For example, even as someone with no major health problems, my health insurance and healthcare costs between 10% and 20% of my pre-tax income - as it does for many Americans. Other nations have comparable healthcare systems that are funded by taxes, so excluding that benefit skews the comparison.
- CameronNemo 6y agoThere are also the payroll taxes to think about. Medicare and Social Security are regressive taxes.
- retrac 6y agoYes, I believe the numbers were specifically with federal taxation. Comparing taxation etc. in countries with subnational entities that can raise revenue is always a headache. While I gave Sweden as an example, I was initially comparing against Canada as that's where the topic came up in the discussion I had. We also have some flat income tax provinces too. A straightforward comparison would not be easy.
- BurningFrog 6y agoYou can think of the Scandinavian systems as mostly a forced savings scheme. Everyone pays in a solid fraction of their earnings, and when in need, the state steps in and pays. This routes around the case where people saves nothing and have be bailed out, while those who do save get nothing.