5 ms·

Just nitpicking one thing: > taxes are very high Doesn't seem so: Croatia's tax to GDP ratio is 26.6 %. Compare that to 46.8 % in Belgium, 43.4 % in Austria,

Just nitpicking one thing: > taxes are very high Doesn't seem so: Croatia's tax to GDP ratio is 26.6 %. Compare that to 46.8 % in Belgium, 43.4 % in Austria, 40.6 % in Germany, 45.8 % in Sweden. 26.9 % in U.S. which is internationally known as a low-tax regime. Surely some taxes are high, and taxation is not necessarily fair, but I'd say that Croatia's taxes overall are not high. I would also expect that the "black market" GDP is higher there than in "old" EU countries, say Germany or even France, or the U.S. Though I admit this is mostly based on just prejudice. (Using Heritage Foundation figures in http://en.wikipedia.org/wiki/List_of_countries_by_tax_revenue_as_percentage_of_GDP http://en.wikipedia.org/wiki/List_of_countries_by_tax_revenu... - OECD numbers are slightly different but not that much)

adventured 12y ago
The US is not regarded internationally as a low tax economy, it's regarded as a medium tax economy. There are about 110 countries with lower tax takes per GDP than the US. Singapore (14% of GDP) and Hong Kong (13% of GDP) are low tax economies. Japan and Australia are similar to the US, and are not considered low tax countries. The US and Japan also share the distinction of having among the highest corporate tax rates on earth.
- ptaipale 12y ago
  You are right, but in comparison to European countries, U.S. taxes are low. There's only one European country (Lithuania) where tax per GDP is clearly lower than U.S. E.g. in Scandinavia, the horrors of U.S. are attributed to its "extremy low" tax status. Horrors like that rich people only live in compounds surrounded by walls and armed guards, and the poor are dying because of no health care and no food, and the middle class does not exist. Yes, I know it sounds rather extreme but this is common rhetoric in countries where the tax rates are >40%. Election time is never far away.
  - adventured 12y ago
    What are you talking about? "Horrors like that rich people only live in compounds surrounded by walls and armed guards, and the poor are dying because of no health care and no food, and the middle class does not exist." The poor have essentially universal free healthcare in the US and have for a long time. I should know, I've used it before, and it's very easy to use. The poor also have the benefit of the one of the largest welfare states on earth, including the largest food and subsidized housing programs. The US has the world's largest true middle class, with a median income among the highest of any country. A mere 1% of US labor earns the minimum wage, and the majority of those people are below the age of 25. The US also has a higher labor force participation rate than nearly all of Europe - while simultaneously having a high median income. The US has a lower unemployment rate than: Sweden, Finland, Denmark, the Netherlands, Belgium, France, United Kingdom, Spain, Portugal, Greece. And while Europe rolls around in a near depression, with Europe's GDP still at 2007 levels (since 2007 the US has added $3.5 trillion to its GDP) and high unemployment, US wages are expanding at the fastest pace in a decade, while unemployment keeps falling, which will drive even faster wage growth in the next few years.
    - ptaipale 12y ago
      I'm talking about rhetoric that's used, particularly in the countries you mentioned in the unemployment list. I didn't say I believe the rhetoric. I just say that elections are never far away, and that kind of talk - how bad the U.S. is - gets votes.
    - juliangregorian 12y ago
      My b.s. meter is tingling at a lot of what you said (enough that on reddit I'd accuse you of being a shill), but you're being blatantly disingenuous about healthcare. It's true that emergency rooms won't turn anyone away (and maybe you bailed on the resultant bill as a "poor" college student), but Medicaid does nothing for most and even for those who qualify it gives nothing in the way of preventative care.
      - hueving 12y ago
        I don't think you know what the word "shill" means. You can't just use it as a term for people that have a different political view than you.
- intopieces 12y ago
  >The US and Japan also share the distinction of having among the highest corporate tax rates on earth. This is an often-repeated myth that doesn't hold up when you consider the tax breaks afforded to corporations in the U.S. The corporate tax rate is high in number, but when you factor in exemptions, the U.S. is quite competitive in this regard. Reuters reported in 2013 that corporations utilized $180B in tax breaks. [0] [0] http://www.reuters.com/article/2013/04/15/us-usa-tax-corporate-breaks-idUSBRE93E18320130415 http://www.reuters.com/article/2013/04/15/us-usa-tax-corpora...
briandear 12y ago
The U.S. is known as a low tax regime? They have among the highest corporate taxes in the world. Taxation as a percentage of GDP is not a good measure because that doesn't address the tax burden as a percentage of income, but as a percentage of GDP. That also doesn't measure the value received for the tax burden endured. As an extreme example, if you are receiving value from those taxes (perhaps education or public transport,) then you would pay less out of pocket for those services. However if you had a low tax rate but we're required to pay for everything directly (such as paying for education,) then the real value of those taxes to the citizen is much less. So at the end of the day, you may pay lower tax, but you spend more because those taxes aren't delivering value. The raw ratio is meaningless; the value derived per dollar is much more meaningful. And yes, the Baltics do have a bad ratio of taxes collected, versus value received.
- ptaipale 12y ago
  Yes, value derived per dollar is meaningful, but it is rather difficult to measure reliably. A lot depends on how much corruption there is. However, I'd claim taxes in proportion to GDP are a fairly good indicator of taxes in proportion to income, because income and GDP are strongly related. In fact, one way to define GDP is "the sum of primary incomes distributed by resident producer units" and the same number may be called GDI, "gross domestic income".
- rbehrends 12y ago
  > The U.S. is known as a low tax regime? They have among the highest corporate taxes in the world. Nominally, yes, but the effective corporate tax rate is much lower [1]. US income tax is at the low end for the developed world, too (both nominal and effective). [1] http://money.cnn.com/2013/07/01/news/economy/corporate-tax-rate/ http://money.cnn.com/2013/07/01/news/economy/corporate-tax-r...
Sandman 12y ago
What hurts people the most is VAT (Value-added tax), and Croatia has one of the highest VATs of all the EU countries [1]. The US doesn't have a VAT, but it does have a sales tax, which is pretty low compared to VAT in most European countries[2] [1] http://en.wikipedia.org/wiki/Value-added_tax#EU_countries http://en.wikipedia.org/wiki/Value-added_tax#EU_countries [2] http://en.wikipedia.org/wiki/Sales_taxes_in_the_United_States#By_jurisdiction http://en.wikipedia.org/wiki/Sales_taxes_in_the_United_State...
- davidw 12y ago
  > The US doesn't have a VAT, but it does have a sales tax, As someone from Oregon... that definitely varies by jurisdiction, as your link shows :-)
- ptaipale 12y ago
  VAT hurts, but not as much as taxing income. People do not like consumption taxes, but even with high VAT, they still consume, while taxing employment or corporate incomes hurts economies more because they have a stronger impact on economic activity. Land value tax would be even better, because the land does not run away or stop working. How's that in Greece?
  - runj__ 12y ago
    VAT is easier to "cheat" than income tax. Just don't buy stuff in your own country. Land Value tax makes the rich pay a lot but hits the poorest really hard since the threshold to owning land (and creating wealth) is substantially raised.
    - josephlord 12y ago
      > Land Value tax makes the rich pay a lot but hits the poorest really hard since the threshold to owning land (and creating wealth) is substantially raised. That seems a bizarre statement. Firstly I don't see any connection between owning land and creating wealth. Secondly taxing land value is a deterrent to land ownership and should reduce the desirability of owning land and reduce the price of land. This will make it more cheaply available to productive use and reduce the incentive to hoard land unproductively. Finally the poorest cannot afford to own land anyway so are not affected by the land taxes. Have I missed something? BTW I largely agree about cheating VAT especially in a small country with neighbouring countries that can be cheaply visited.
velcro 12y ago
Taxes really are quite high - not sure how good of an indicator for this is tax to GDP ratio though. A lot of the people frequenting HN are (usually) well off IT workers - so I find the following list quite telling - it shows an effective income tax and social security rates on USD $100,000 of gross income (based on KPMG 2012 global tax rate survey): http://imgur.com/MUZlz http://imgur.com/MUZlz
- ptaipale 12y ago
  This is informative, even though we should remember that comparisons can be very difficult across different systems (for instance, does our IT worker have a spouse and children, and is there a child deduction in taxation, and what else there is in childrens' services and benefits). Usually different comparisons concentrate on "average" workers, i.e. lower income.

adventured 12y ago

The US is not regarded internationally as a low tax economy, it's regarded as a medium tax economy. There are about 110 countries with lower tax takes per GDP than the US. Singapore (14% of GDP) and Hong Kong (13% of GDP) are low tax economies. Japan and Australia are similar to the US, and are not considered low tax countries. The US and Japan also share the distinction of having among the highest corporate tax rates on earth.

ptaipale 12y ago
You are right, but in comparison to European countries, U.S. taxes are low. There's only one European country (Lithuania) where tax per GDP is clearly lower than U.S. E.g. in Scandinavia, the horrors of U.S. are attributed to its "extremy low" tax status. Horrors like that rich people only live in compounds surrounded by walls and armed guards, and the poor are dying because of no health care and no food, and the middle class does not exist. Yes, I know it sounds rather extreme but this is common rhetoric in countries where the tax rates are >40%. Election time is never far away.
- adventured 12y ago
  What are you talking about? "Horrors like that rich people only live in compounds surrounded by walls and armed guards, and the poor are dying because of no health care and no food, and the middle class does not exist." The poor have essentially universal free healthcare in the US and have for a long time. I should know, I've used it before, and it's very easy to use. The poor also have the benefit of the one of the largest welfare states on earth, including the largest food and subsidized housing programs. The US has the world's largest true middle class, with a median income among the highest of any country. A mere 1% of US labor earns the minimum wage, and the majority of those people are below the age of 25. The US also has a higher labor force participation rate than nearly all of Europe - while simultaneously having a high median income. The US has a lower unemployment rate than: Sweden, Finland, Denmark, the Netherlands, Belgium, France, United Kingdom, Spain, Portugal, Greece. And while Europe rolls around in a near depression, with Europe's GDP still at 2007 levels (since 2007 the US has added $3.5 trillion to its GDP) and high unemployment, US wages are expanding at the fastest pace in a decade, while unemployment keeps falling, which will drive even faster wage growth in the next few years.
  - ptaipale 12y ago
    I'm talking about rhetoric that's used, particularly in the countries you mentioned in the unemployment list. I didn't say I believe the rhetoric. I just say that elections are never far away, and that kind of talk - how bad the U.S. is - gets votes.
  - juliangregorian 12y ago
    My b.s. meter is tingling at a lot of what you said (enough that on reddit I'd accuse you of being a shill), but you're being blatantly disingenuous about healthcare. It's true that emergency rooms won't turn anyone away (and maybe you bailed on the resultant bill as a "poor" college student), but Medicaid does nothing for most and even for those who qualify it gives nothing in the way of preventative care.
    - hueving 12y ago
      I don't think you know what the word "shill" means. You can't just use it as a term for people that have a different political view than you.
intopieces 12y ago
>The US and Japan also share the distinction of having among the highest corporate tax rates on earth. This is an often-repeated myth that doesn't hold up when you consider the tax breaks afforded to corporations in the U.S. The corporate tax rate is high in number, but when you factor in exemptions, the U.S. is quite competitive in this regard. Reuters reported in 2013 that corporations utilized $180B in tax breaks. [0] [0] http://www.reuters.com/article/2013/04/15/us-usa-tax-corporate-breaks-idUSBRE93E18320130415 http://www.reuters.com/article/2013/04/15/us-usa-tax-corpora...

briandear 12y ago

The U.S. is known as a low tax regime? They have among the highest corporate taxes in the world. Taxation as a percentage of GDP is not a good measure because that doesn't address the tax burden as a percentage of income, but as a percentage of GDP. That also doesn't measure the value received for the tax burden endured. As an extreme example, if you are receiving value from those taxes (perhaps education or public transport,) then you would pay less out of pocket for those services. However if you had a low tax rate but we're required to pay for everything directly (such as paying for education,) then the real value of those taxes to the citizen is much less. So at the end of the day, you may pay lower tax, but you spend more because those taxes aren't delivering value. The raw ratio is meaningless; the value derived per dollar is much more meaningful. And yes, the Baltics do have a bad ratio of taxes collected, versus value received.

ptaipale 12y ago
Yes, value derived per dollar is meaningful, but it is rather difficult to measure reliably. A lot depends on how much corruption there is. However, I'd claim taxes in proportion to GDP are a fairly good indicator of taxes in proportion to income, because income and GDP are strongly related. In fact, one way to define GDP is "the sum of primary incomes distributed by resident producer units" and the same number may be called GDI, "gross domestic income".
rbehrends 12y ago
> The U.S. is known as a low tax regime? They have among the highest corporate taxes in the world. Nominally, yes, but the effective corporate tax rate is much lower [1]. US income tax is at the low end for the developed world, too (both nominal and effective). [1] http://money.cnn.com/2013/07/01/news/economy/corporate-tax-rate/ http://money.cnn.com/2013/07/01/news/economy/corporate-tax-r...

Sandman 12y ago

What hurts people the most is VAT (Value-added tax), and Croatia has one of the highest VATs of all the EU countries [1]. The US doesn't have a VAT, but it does have a sales tax, which is pretty low compared to VAT in most European countries[2] [1] http://en.wikipedia.org/wiki/Value-added_tax#EU_countries http://en.wikipedia.org/wiki/Value-added_tax#EU_countries [2] http://en.wikipedia.org/wiki/Sales_taxes_in_the_United_States#By_jurisdiction http://en.wikipedia.org/wiki/Sales_taxes_in_the_United_State...

davidw 12y ago
> The US doesn't have a VAT, but it does have a sales tax, As someone from Oregon... that definitely varies by jurisdiction, as your link shows :-)
ptaipale 12y ago
VAT hurts, but not as much as taxing income. People do not like consumption taxes, but even with high VAT, they still consume, while taxing employment or corporate incomes hurts economies more because they have a stronger impact on economic activity. Land value tax would be even better, because the land does not run away or stop working. How's that in Greece?
- runj__ 12y ago
  VAT is easier to "cheat" than income tax. Just don't buy stuff in your own country. Land Value tax makes the rich pay a lot but hits the poorest really hard since the threshold to owning land (and creating wealth) is substantially raised.
  - josephlord 12y ago
    > Land Value tax makes the rich pay a lot but hits the poorest really hard since the threshold to owning land (and creating wealth) is substantially raised. That seems a bizarre statement. Firstly I don't see any connection between owning land and creating wealth. Secondly taxing land value is a deterrent to land ownership and should reduce the desirability of owning land and reduce the price of land. This will make it more cheaply available to productive use and reduce the incentive to hoard land unproductively. Finally the poorest cannot afford to own land anyway so are not affected by the land taxes. Have I missed something? BTW I largely agree about cheating VAT especially in a small country with neighbouring countries that can be cheaply visited.

velcro 12y ago

Taxes really are quite high - not sure how good of an indicator for this is tax to GDP ratio though. A lot of the people frequenting HN are (usually) well off IT workers - so I find the following list quite telling - it shows an effective income tax and social security rates on USD $100,000 of gross income (based on KPMG 2012 global tax rate survey): http://imgur.com/MUZlz http://imgur.com/MUZlz

ptaipale 12y ago
This is informative, even though we should remember that comparisons can be very difficult across different systems (for instance, does our IT worker have a spouse and children, and is there a child deduction in taxation, and what else there is in childrens' services and benefits). Usually different comparisons concentrate on "average" workers, i.e. lower income.