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Old April 9th, 2011, 02:29 AM   #1
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I advocate replacing income taxes with a general consumption tax to whatever extent feasible. An intelligently drafted consumption tax is simpler and superior to an intelligently drafted income tax. Our income taxes ain’t all that intelligently drafted.







Improving our income taxes should not and will not hinder our efforts to (the greatest extent feasible) simultaneously shifting portions of our income taxes to a general consumption tax. If it’s feasible to finally eliminate our entire income tax systems then our federal income taxes will cease to exist.







We’re going to be dealing with income taxes for a long time. We should do our best to improve them.







Respectfully, Supposn
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Old April 9th, 2011, 04:52 AM   #2
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Sounds regressive supposn, a consumption tax will hurt working people because working people tend to spend their entire checks. Consumption tax over an income tax will favor the wealthy over the working poor in this country. I do like that it’s simple though.
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Old April 9th, 2011, 05:00 AM   #3
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Does "consumption" mean things actually consumed, or could it apply to services, or what?



Is this similar to a VAT?
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Old April 9th, 2011, 05:10 AM   #4
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Sounds regressive supposn, a consumption tax will hurt working people because working people tend to spend their entire checks. Consumption tax over an income tax will favor the wealthy over the working poor in this country. I do like that it’s simple though.


A VAT is a consumption tax. We have a problem here, Fayt.



Socialistic superstar states such as Sweden (25 percent) and Germany (19 percent) have a VAT. How do you square that with your praise for those countries?
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Old April 9th, 2011, 05:22 AM   #5
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Does "consumption" mean things actually consumed, or could it apply to services, or what?



Is this similar to a VAT?




I've said something about this before, a consumption tax is basically what has been done more often in modern history. It's a more "normal" way to tax. For example you tax on roads. One can argue that it's a more fair way to tax because it's a tax by consumption. Basically if you use something you pay for it like tolls. Everyone hates to pay tolls but one can argue that's a fairer way because you’re paying for what you’re using.



Now a V.A.T. tax is similar to the Fair Tax in that it's a tax on consumption. For example, if someone creates a sheet of steel to go on an car, that supplier will have to charge a tax to the manufacturer, then manufacturer has to charge a sales tax on top of that one when he sale it to the people. So the V.A.T. tax is that on every step along the way in a process of something being constructed, built on product being delivered there's a V.A.T. tax. Everyone along the way charge a tax of course to the value added to the intermediate product. It's very common in Europe.



Now when I as a progressive who supports the progressive income tax hears conservatives yell about the V.A.T. tax, (which is really a step in the direction towards a consumption tax (which the conservatives are championing with the Fair Tax) it's my definition of insanity. This is doing the same thing over and over again and expecting to get a different result is the first or saying that you hate something but in the second breath saying that you want it but I'm in no way saying Supposn is that.





Now here's my favorite. An income tax is basically a form of social engineering. Which I'm sure conservatives see it as a form of socialism. But the one reason why this country has been so stable is that WE the people and our leaders decided that we want a middle class. We don't want to have this big gap between the have and the have not. Allot of people on the conservative side want to remove (and already have) that safety nets plus more.



An income tax (which is graduated) charges more tax on the amount of money that you make or in other words, the more income you make the more you're taxed and which is a form of redistribution. Which is really from a social engineering prospective, is a way to keep everybody on the field and wanting to play the game. It's the most fair of all the other ways and it's proven to be that way.



Now we can end up like some south America or some other 3rd world countries like Chili, Brazil, Mexico, and etc were they have this big gap and basically no middle class. And you have a situation where there are a lot of very poor people with nothing to lose who necessarily don't want to play the game (and that's why you have revolutions). When a society gets to a point where the people don't have any hope left for their children (not to mention themselves), their children has little or non chance of achieving the fruits of THEIR society, why should you participate? Why should you play the game?
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Old April 9th, 2011, 05:42 AM   #6
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I've said something about this before, a consumption tax is basically what has been done more often in modern history. It's a more "normal" way to tax. For example you tax on roads. One can argue that it's a more fair way to tax because it's a tax by consumption. Basically if you use something you pay for it like tolls. Everyone hates to pay tolls but one can argue that's a fairer way because you’re paying for what you’re using.



Now a V.A.T. tax is similar to the Fair Tax in that it's a tax on consumption. For example, if someone creates a sheet of steel to go on an car, that supplier will have to charge a tax to the manufacturer, then manufacturer has to charge a sales tax on top of that one when he sale it to the people. So the V.A.T. tax is that on every step along the way in a process of something being constructed, built on product being delivered there's a V.A.T. tax. Everyone along the way charge a tax a course to the value added to the intermediate product. It's very common in Europe.



Now when I as a progressive who supports the progressive income tax hears conservatives yell about the V.A.T. tax, (which is really a step in the direction towards a consumption tax, which the conservatives are championing with the Fair Tax) it's my definition of insanity. This is doing the same thing over and over again and expecting to get a different result is the first or saying that you hate something but in the second breath saying that you want it but I'm in no way saying Supposn is that.





Now here's my favorite. An income tax is basically a form of social engineering. Which I'm sure conservatives see it as a form of socialism. But the one reason why this country has been so stable is that WE the people and our leaders decided that we want a middle class. We don't want to have this big gap between the have and the have not. Allot of people on the conservative side want to remove (and already have) that safety nets plus more.



An income tax (which is graduated) charges more tax for the money that you make or in other words, the more income you make the more you're taxed and which is a form of redistribution. Which is really from a social engineering prospective, is a way to keep everybody on the field and wanting to play the game. It's the most fair of all the other ways and it's proven to be that way.



Now we can end up like some south American or some other 3rd would countries like Chili, Brazil, Mexico, and etc were they have this big gap and basically no middle class. And you have a situation where there are a lot of very poor people with nothing to lose who necessarily don't want to play the game (and that's why you have revolution). When a society gets to a point where the people don't has any hope left for their children (not to mention themselves), their children has little or non chance of achieving the fruits of THEIR society, why should you participate? Why should you play the game?


Quote:
The cruel joke about Brazil was that it was the country of the future — and always would be. But now, Brazil is meeting its potential like never before.





Impressive economic growth, a booming commodity sector and the country's popular government are receiving worldwide attention. The country's center-left president, Luiz Inacio Lula da Silva — who as a boy shined shoes on the street — has led a crusade against poverty.



Innovative state programs, along with the economic growth, are lifting millions of Brazilians into the middle class and making the country a model for the developing world.


http://www.npr.org/templates/story/s...ryId=120940918



Chile and Mexico have seen growth in the middle class, too.



Can you explain why you're comfortable with government social engineering? It's a trait liberals and neoconservatives share, and a trait paleoconservatives and libertarians abhor.
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Old April 9th, 2011, 06:12 AM   #7
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http://www.npr.org/t...oryId=120940918



Chile and Mexico have seen growth in the middle class, too.



Can you explain why you're comfortable with government social engineering? It's a trait liberals and neoconservatives share, and a trait paleoconservatives and libertarians abhor.




Well thanks imaginethat, I now know that Brazil and some what Mexico are not considered 3rd world. But they're still considered a developing country due to its huge gaps in wealth distribution and human development rates, Chile as well. My point still stands. I'm a progressive imaginethat, I'm comfortable with the progressive tax system. We still have a "progressive" tax based system today but you know what has happen to that past the last 30 years.
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Old April 9th, 2011, 06:33 AM   #8
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Well thanks imaginethat, I now know that Brazil and some what Mexico are considered 3rd world. But they're still considered a developing country due to its huge gaps in wealth distribution and human development rates, Chile as well. My point still stands. I'm a progressive imaginethat, I'm comfortable with the progressive tax system. We still have a "progressive" tax based system today but you know what has happen to that past the last 30 years.


I'm aware of your position on a progressive income tax, but back to topic and a question I asked.



A VAT is a consumption tax. Socialistic superstar states such as Sweden (25 percent) and Germany (19 percent) have a VAT. How do you square that with your praise for those countries?
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Old April 9th, 2011, 06:58 AM   #9
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I'm aware of your position on a progressive income tax, but back to topic and a question I asked.



A VAT is a consumption tax. Socialistic superstar states such as Sweden (25 percent) and Germany (19 percent) have a VAT. How do you square that with your praise for those countries?


Simple, I’m against the total annihilation of the progressive tax system imaginethat. Countries like Germany and Sweden both have a progressive tax system. Sweden taxes are almost twice as much as ours in the U.S. and Germany top tax rate are in the high 40 percent range. (46% I believe). To add, Germany has some of the highest unionization rates in all of the OECD countries. Sweden’s minimum wage is between $18 and $20 dollars an hour. Our wages in the U.S. has been stagnated for over 30 years, unionization rates are lower than ever, and to add we have a terrible trade polices that allowed our good well paying manufacturing jobs to move overseas. I’m against adding something as regressive as the Consumption Tax (aka, National Sales Tax) like I’ve explained. The working American poor can’t afford it.



(Oh and correction Brazil and Mexico are not considered 3rd world, I forgot to add not.)
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Old April 9th, 2011, 08:59 AM   #10
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I against having both an income tax and a VAT tax. I have yet to become convinced that the VAT tax is a better way to go.
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Old April 9th, 2011, 09:35 AM   #11
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I against having both an income tax and a VAT tax. I have yet to become convinced that the VAT tax is a better way to go.


Well what you suggest Govna?
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Old April 9th, 2011, 09:47 AM   #12
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Well what you suggest Govna?




I'll get to that in a thread in political ideology section. I'm not trying to be coy; however, I am trying to keep my initial display of my total philosophy in one place. My first thread was today and it has my first two plans in it.
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Old April 9th, 2011, 10:05 AM   #13
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I'll get to that in a thread in political ideology section. I'm not trying to be coy; however, I am trying to keep my initial display of my total philosophy in one place. My first thread was today and it has my first two plans in it.


well give me the link because I can't find it and I'll respond
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Old April 9th, 2011, 10:12 AM   #14
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Check the new postings on the right side towards the bottom of the page. Not sure what I did wrong, but I cannot find it in Political Ideologies. If that doesn't work for you, then



http://www.defendingthetruth.com/top...-constitution/
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Old April 9th, 2011, 10:20 AM   #15
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Check the new postings on the right side towards the bottom of the page. Not sure what I did wrong, but I cannot find it in Political Ideologies. If that doesn't work for you, then



http://www.defending...n-constitution/




Thanks for the link. I can see you have a list of things that I can debunk. I'll give you a good responds later.
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Old April 9th, 2011, 10:23 AM   #16
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Simple, I’m against the total annihilation of the progressive tax system imaginethat. Countries like Germany and Sweden both have a progressive tax system. Sweden taxes are almost twice as much as ours in the U.S. and Germany top tax rate are in the high 40 percent range. (46% I believe). To add, Germany has some of the highest unionization rates in all of the OECD countries. Sweden’s minimum wage is between $18 and $20 dollars an hour. Our wages in the U.S. has been stagnated for over 30 years, unionization rates are lower than ever, and to add we have a terrible trade polices that allowed our good well paying manufacturing jobs to move overseas. I’m against adding something as regressive as the Consumption Tax (aka, National Sales Tax) like I’ve explained. The working American poor can’t afford it.



(Oh and correction Brazil and Mexico are not considered 3rd world, I forgot to add not.)


Interesting reading here, Fayt, all emphasis added by me.



Belgium - As will be seen throughout this article, most of the world’s highest tax rates can be found in western European nations. Belgium tops the list, with a marginal tax rate that goes as high as 54%. Despite such a high tax rate, Belgium ranks relatively highly on various economic measures. NationMaster.com, for instance, reports that Belgium’s $392 billion GDP ranks 18th out of 203 countries, and exports over $322 billion worth of goods and services yearly. However, other statistics show Belgium’s high tax rate coming back to haunt it. The International Monetary fund ranks Belgium 18th on its list of Gross Domestic Product based on purchasing power parity, at $36,416. It is also noted that Belgium was “likely to have negative growth, growing unemployment, and a 3% budget deficit.” Canada’s Trade Commissioner Service similarly reported “a slowdown of the activity in all sectors” during the last two quarters of 2008. In sum, it seems that Belgium’s high tax rates stifle economic vitality to some extent, despite the social safety net it provides.





[font="'Lucida Grande"]Finland - [/font]With a marginal tax rate of 46.6 on average workers, Finland has the fourth highest such rate in the world. However, unlike many similarly taxed countries, Finland has managed to have a stronger overall economy despite its taxation. Unemployment currently sits at 6.8% – surprisingly low given the current economic crisis and double-digit unemployment in the United States. Additionally, Finland’s $36,320 GDP per capita ranks 20th on the International Monetary Fund’s list. The CIA Factbook likewise states that Finland has “a highly industrialized, largely free-market economy with per capita output roughly that of the UK, France, Germany, and Italy.” It is also worth noting that Finland has been one of the best performing economies in the entire European Union in recent years, owing in no small part to the country’s having avoided the worst of the banking crisis.





Germany - Clocking in just beneath Finland is Germany, with a 45% marginal tax rate on average income workers. Despite having the largest national economy in Europe (and the fourth largest in the world measured by nominal GDP), Germany has effectively traded off having a comprehensive social safety net against more robust economic growth. Its GDP measured by PPP is $35,539 according to the International Monetary Fund – 21st on the list, behind Belgium. As recently as 2007, TheNewEditor.com reported that Germans were emigrating at their highest rate since the 1940?s, resulting in a “brain drain” on the nation’s brightest and most motivated people. As a result of “high taxes and bureaucracy, thousands of Germans have upped sticks for Austria and Switzerland, or emigrated to the United States” — 155,290 during the year in question, which rivals “levels last experienced in the 1940s during the chaotic aftermath of the Second World War.” Furthermore, emigrants are generally said to be highly motivated and educated, while those immigrating to Germany are increasingly poorer and less educated — perhaps more inclined to consume Germany’s generous social benefits.







Denmark - Denmark clocks in as having the fourth highest tax rate in the world at 44.4%. On the surface, high taxes have not had the chilling effect on Denmark that they appear to be having on other highly taxed nations. An ABC News story, for instance, reports that “Danes Rank Themselves as Happy and Content” – indeed, the happiest nation on Earth – despite the tax burden they bear. Furthermore, the high taxes mean that “a banker can end up taking home as much money as an artist” so that “people don’t chose careers based on income or status.” However, outsiders are skeptical of whether high taxes impose a bigger burden than is acknowledged. The New York Times (hardly an enemy of high taxation) reported in 2007 – the same year of ABC’s story – that Denmark’s tax structure was worsening a labor shortage. As in Germany, the Times found that “the Danish labor force had shrunk by about 19,000 people through the end of 2005? (significant in a country of less than 6 million) because “Danes and others had moved elsewhere.” To its credit, Denmark does boast the 16th highest GDP per capita at $37,304 – impressive for a small and highly taxed nation.







Italy - As of 2006, the highest tax rate in Italy has been roughly 43%. Unfortunately, Italy also has the lowest GDP per capita of any country covered so far — $30,631, good for 27th on the International Monetary Fund’s list. Various economic indicators portray Italy negatively, not the least of which is debt as a percentage of GDP being higher than 100%, according to EconomicsHelp.org. Italy also appears to have a sluggish male work population. According to Mint.com’s article on bizarre tax breaks around the world, Italy once toyed with the idea of offering males 30 and over a tax incentive to leave their mother’s homes and start their own lives. The problem, Mint writes, is ” is apparently so bad that a third of all men over 30 live at home” in Italy. Naturally, this segment of the population is not participating in economic growth by having their own homes or apartments, utility bills, and the like. The case could be made that overly generous government benefits have softened the population’s will to work.





France - Finally, no discussion of highly taxed nations would be complete without including France. With a top marginal tax rate on average workers of about 40% (and a top tax on high-income workers of nearly 50%), France is long-known for sacrificing economic growth to social benefits handed out by government. As Charles Wheelan writes in his book Naked Economics, “France is a good place to be a struggling artist, and a bad place to be an Internet entrepreneur.” Despite being the fifth largest economy in the world, France’s GDP per capita stands at just $34,205 – only 23rd on the IMF’s ranking. A study done several years ago by the Organization for Economic Cooperation and Development found that “France’s tax burden as a percentage of gross domestic product last year rose to 43.7%, from 43.4% a year earlier”, according to ThisFrenchLife. A 2009 Wall Street Journal piece likewise finds France’s popular universal healthcare system “has been in the red since 1989?, with an expected 2010 shortfall of €15 billion.







On the other side of the coin:





Switzerland - Perhaps unsurprisingly, the country with the lowest marginal tax rate on average income workers — Switzerland, at 20% — also boasts the world’s 7th highest GDP per capita at $43,196. The UK’s Times Online called attention to Switzerland’s “benign tax system” in a 2009 article about the nation’s “low tax high life” that invites people to escape 50% tax rates by moving there. Contrary to general assumptions, the Times explains, Switzerland has found a way to maintain a high standard of living alongside an extremely low personal income tax rate. BusinessWeek likewise reported in 2009 that Switzerland was “openly and legally urging multinationals to relocate” — and succeeding, while other nations buckled beneath staggering debt. Switzerland’s low tax rates have not stopped it from having some of the leading universities in the world, a highly educated work force and less than 3% unemployment as of 2009.







USA - The United States is still relatively tax-friendly, with a marginal tax rate of around 27% on average income workers. As the world’s largest economy by far, the economic vitality and high standards of living in the U.S. speak for themselves. The United States boasts the 6th highest GPD per capita in the world at $47,440 and serves, in the words of Wikipedia, as “the epicenter of world trade.” Total GDP stood at over $14 trillion for 2008, which is more than three times that of the world’s second-largest economy (Japan). American citizens also have the highest income per hour worked of any nation surveyed. By any objective measure, the United States and its relatively low tax rates offer the best of both worlds — reasonable social safety nets, and extraordinary economic capacity stemming from essentially free market policies. The standard of living in the US is evidenced by consistently being the most immigrated-to nation on earth — 38,355,000 immigrants currently call the US home, more than double that of Russia, which is second on the list.





Australia - Australia, with a 31.5% marginal tax rate on average income workers, manage to clock in at 17th on the IMF’s GDP per capita ranking with $36,918. The island nation is bouncing back surprisingly strong from the worldwide economic meltdown, with the BBC reporting on January 14, 2010 that had fallen to 5.5% at a time when similarly situated nations are struggling with double-digit unemployment. According to Deputy Prime Minister Juliar Gillard, the BBC’s findings “provide further evidence of how Australia has outperformed virtually every other advanced economy during the global recession.” With a tax rate similar to that of the United States, Australia has long provided incentives for the hard work, entrepreneurship and risk-taking that are fundamental to sustained economic growth and high standards of living.







Canada - Canada is taxed in a manner similar to that of the United States, imposing a 31.2% marginal tax rate on average income workers. Despite a $39,098 GDP per capita (good for 13th on the IMF’s list), Canada has struggled amidst the current economic crisis. The Canadian government’s statistical agency, Statistics Canada, reported on January 8, 2010 that the national unemployment rate sat at 8.5% – slightly below the double-digit rate of the U.S., but still troubling. Canada-based CBC Newsalso reported in early 2009 that the International Monetary Fund had “slashed Canada’s GDP growth for 2009 and 2010.” Like Japan and several other nations so far discussed, Canada maintains universal healthcare coverage for all its citizens in addition to other social programs. Canada has also, according to Reuters, ruled out raising taxes to ease the national deficit, but rather, would “constrain public spending” instead.





Japan - Japan is an interesting case on several fronts. Despite being the second largest economy on Earth, Japan’s GDP per capita is just 24th on the International Monetary Fund’s list, at $34,116. Canada’sParlimentary Research Service offers some answers. One explanation for Japan’s recently diminished economic vitality could be that “Japan was the country with the lowest government revenue-to-GDP ratio (31%) and the second-highest government net debt-to-GDP ratio (78%).” Nonetheless, it’s 33% marginal tax rate on average income workers represents one of the lowest in the world. Japan’s unemployment rate also stood at a manageable 5.5% as of late October 2009, according to the BBC. To its credit, Japan boasts a strong standard of living, including a hybrid system of public and government-subsidized health insurance for all its citizens.





[font="'Lucida Grande"]UK - [/font]With a 32% marginal tax rate imposed on average income workers, the UK still qualifies as a relatively low-taxed nation, but only amidst the rest of highly-taxed Western Europe. With a GDP per capita of $36,358 (19th on the IMF’s ranking), Great Britain stands as the sixth largest economy in the world by this measure. The United Kingdom provides universal healthcare to its citizens, as do most industrialized nations in Europe, and Poverty.org reports that roughly 21% live below 40% of the country’s median income. The country is also a major financial hub in the world economy, with London housing various important stock exchanges and investment banks. Unemployment is manageable at 7.8%, as of the fourth quarter of 2009, compared with double-digit employment in many similarly situated nations. All told, London continues to offer one of the higher standards of living in the world, owing in part to its relatively low taxes and focus on economic growth.





http://www.businesspundit.com/12-cou...est-tax-rates/





Reading those, I can't draw any clear conclusions regarding taxation policies and overall economic vitality.
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Old April 9th, 2011, 10:32 AM   #17
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Thanks for the link. I can see you have a list of things that I can debunk. I'll give you a good responds later.


I thought some might want to attempt to debunk my ideals. You are free to try.
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Old April 9th, 2011, 11:27 AM   #18
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Interesting reading here, Fayt, all emphasis added by me.



Belgium - As will be seen throughout this article, most of the world’s highest tax rates can be found in western European nations. Belgium tops the list, with a marginal tax rate that goes as high as 54%. Despite such a high tax rate, Belgium ranks relatively highly on various economic measures. NationMaster.com, for instance, reports that Belgium’s $392 billion GDP ranks 18th out of 203 countries, and exports over $322 billion worth of goods and services yearly. However, other statistics show Belgium’s high tax rate coming back to haunt it. The International Monetary fund ranks Belgium 18th on its list of Gross Domestic Product based on purchasing power parity, at $36,416. It is also noted that Belgium was “likely to have negative growth, growing unemployment, and a 3% budget deficit.” Canada’s Trade Commissioner Service similarly reported “a slowdown of the activity in all sectors” during the last two quarters of 2008. In sum, it seems that Belgium’s high tax rates stifle economic vitality to some extent, despite the social safety net it provides.





Finland - With a marginal tax rate of 46.6 on average workers, Finland has the fourth highest such rate in the world. However, unlike many similarly taxed countries, Finland has managed to have a stronger overall economy despite its taxation. Unemployment currently sits at 6.8% – surprisingly low given the current economic crisis and double-digit unemployment in the United States. Additionally, Finland’s $36,320 GDP per capita ranks 20th on the International Monetary Fund’s list. The CIA Factbook likewise states that Finland has “a highly industrialized, largely free-market economy with per capita output roughly that of the UK, France, Germany, and Italy.” It is also worth noting that Finland has been one of the best performing economies in the entire European Union in recent years, owing in no small part to the country’s having avoided the worst of the banking crisis.





Germany - Clocking in just beneath Finland is Germany, with a 45% marginal tax rate on average income workers. Despite having the largest national economy in Europe (and the fourth largest in the world measured by nominal GDP), Germany has effectively traded off having a comprehensive social safety net against more robust economic growth. Its GDP measured by PPP is $35,539 according to the International Monetary Fund – 21st on the list, behind Belgium. As recently as 2007, TheNewEditor.com reported that Germans were emigrating at their highest rate since the 1940?s, resulting in a “brain drain” on the nation’s brightest and most motivated people. As a result of “high taxes and bureaucracy, thousands of Germans have upped sticks for Austria and Switzerland, or emigrated to the United States” — 155,290 during the year in question, which rivals “levels last experienced in the 1940s during the chaotic aftermath of the Second World War.” Furthermore, emigrants are generally said to be highly motivated and educated, while those immigrating to Germany are increasingly poorer and less educated — perhaps more inclined to consume Germany’s generous social benefits.







Denmark - Denmark clocks in as having the fourth highest tax rate in the world at 44.4%. On the surface, high taxes have not had the chilling effect on Denmark that they appear to be having on other highly taxed nations. An ABC News story, for instance, reports that “Danes Rank Themselves as Happy and Content” – indeed, the happiest nation on Earth – despite the tax burden they bear. Furthermore, the high taxes mean that “a banker can end up taking home as much money as an artist” so that “people don’t chose careers based on income or status.” However, outsiders are skeptical of whether high taxes impose a bigger burden than is acknowledged. The New York Times (hardly an enemy of high taxation) reported in 2007 – the same year of ABC’s story – that Denmark’s tax structure was worsening a labor shortage. As in Germany, the Times found that “the Danish labor force had shrunk by about 19,000 people through the end of 2005? (significant in a country of less than 6 million) because “Danes and others had moved elsewhere.” To its credit, Denmark does boast the 16th highest GDP per capita at $37,304 – impressive for a small and highly taxed nation.







Italy - As of 2006, the highest tax rate in Italy has been roughly 43%. Unfortunately, Italy also has the lowest GDP per capita of any country covered so far — $30,631, good for 27th on the International Monetary Fund’s list. Various economic indicators portray Italy negatively, not the least of which is debt as a percentage of GDP being higher than 100%, according to EconomicsHelp.org. Italy also appears to have a sluggish male work population. According to Mint.com’s article on bizarre tax breaks around the world, Italy once toyed with the idea of offering males 30 and over a tax incentive to leave their mother’s homes and start their own lives. The problem, Mint writes, is ” is apparently so bad that a third of all men over 30 live at home” in Italy. Naturally, this segment of the population is not participating in economic growth by having their own homes or apartments, utility bills, and the like. The case could be made that overly generous government benefits have softened the population’s will to work.





France - Finally, no discussion of highly taxed nations would be complete without including France. With a top marginal tax rate on average workers of about 40% (and a top tax on high-income workers of nearly 50%), France is long-known for sacrificing economic growth to social benefits handed out by government. As Charles Wheelan writes in his book Naked Economics, “France is a good place to be a struggling artist, and a bad place to be an Internet entrepreneur.” Despite being the fifth largest economy in the world, France’s GDP per capita stands at just $34,205 – only 23rd on the IMF’s ranking. A study done several years ago by the Organization for Economic Cooperation and Development found that “France’s tax burden as a percentage of gross domestic product last year rose to 43.7%, from 43.4% a year earlier”, according to ThisFrenchLife. A 2009 Wall Street Journal piece likewise finds France’s popular universal healthcare system “has been in the red since 1989?, with an expected 2010 shortfall of €15 billion.







On the other side of the coin:





Switzerland - Perhaps unsurprisingly, the country with the lowest marginal tax rate on average income workers — Switzerland, at 20% — also boasts the world’s 7th highest GDP per capita at $43,196. The UK’s Times Online called attention to Switzerland’s “benign tax system” in a 2009 article about the nation’s “low tax high life” that invites people to escape 50% tax rates by moving there. Contrary to general assumptions, the Times explains, Switzerland has found a way to maintain a high standard of living alongside an extremely low personal income tax rate. BusinessWeek likewise reported in 2009 that Switzerland was “openly and legally urging multinationals to relocate” — and succeeding, while other nations buckled beneath staggering debt. Switzerland’s low tax rates have not stopped it from having some of the leading universities in the world, a highly educated work force and less than 3% unemployment as of 2009.







USA - The United States is still relatively tax-friendly, with a marginal tax rate of around 27% on average income workers. As the world’s largest economy by far, the economic vitality and high standards of living in the U.S. speak for themselves. The United States boasts the 6th highest GPD per capita in the world at $47,440 and serves, in the words of Wikipedia, as “the epicenter of world trade.” Total GDP stood at over $14 trillion for 2008, which is more than three times that of the world’s second-largest economy (Japan). American citizens also have the highest income per hour worked of any nation surveyed. By any objective measure, the United States and its relatively low tax rates offer the best of both worlds — reasonable social safety nets, and extraordinary economic capacity stemming from essentially free market policies. The standard of living in the US is evidenced by consistently being the most immigrated-to nation on earth — 38,355,000 immigrants currently call the US home, more than double that of Russia, which is second on the list.





Australia - Australia, with a 31.5% marginal tax rate on average income workers, manage to clock in at 17th on the IMF’s GDP per capita ranking with $36,918. The island nation is bouncing back surprisingly strong from the worldwide economic meltdown, with the BBC reporting on January 14, 2010 that had fallen to 5.5% at a time when similarly situated nations are struggling with double-digit unemployment. According to Deputy Prime Minister Juliar Gillard, the BBC’s findings “provide further evidence of how Australia has outperformed virtually every other advanced economy during the global recession.” With a tax rate similar to that of the United States, Australia has long provided incentives for the hard work, entrepreneurship and risk-taking that are fundamental to sustained economic growth and high standards of living.







Canada - Canada is taxed in a manner similar to that of the United States, imposing a 31.2% marginal tax rate on average income workers. Despite a $39,098 GDP per capita (good for 13th on the IMF’s list), Canada has struggled amidst the current economic crisis. The Canadian government’s statistical agency, Statistics Canada, reported on January 8, 2010 that the national unemployment rate sat at 8.5% – slightly below the double-digit rate of the U.S., but still troubling. Canada-based CBC Newsalso reported in early 2009 that the International Monetary Fund had “slashed Canada’s GDP growth for 2009 and 2010.” Like Japan and several other nations so far discussed, Canada maintains universal healthcare coverage for all its citizens in addition to other social programs. Canada has also, according to Reuters, ruled out raising taxes to ease the national deficit, but rather, would “constrain public spending” instead.





Japan - Japan is an interesting case on several fronts. Despite being the second largest economy on Earth, Japan’s GDP per capita is just 24th on the International Monetary Fund’s list, at $34,116. Canada’sParlimentary Research Service offers some answers. One explanation for Japan’s recently diminished economic vitality could be that “Japan was the country with the lowest government revenue-to-GDP ratio (31%) and the second-highest government net debt-to-GDP ratio (78%).” Nonetheless, it’s 33% marginal tax rate on average income workers represents one of the lowest in the world. Japan’s unemployment rate also stood at a manageable 5.5% as of late October 2009, according to the BBC. To its credit, Japan boasts a strong standard of living, including a hybrid system of public and government-subsidized health insurance for all its citizens.





UK - With a 32% marginal tax rate imposed on average income workers, the UK still qualifies as a relatively low-taxed nation, but only amidst the rest of highly-taxed Western Europe. With a GDP per capita of $36,358 (19th on the IMF’s ranking), Great Britain stands as the sixth largest economy in the world by this measure. The United Kingdom provides universal healthcare to its citizens, as do most industrialized nations in Europe, and Poverty.org reports that roughly 21% live below 40% of the country’s median income. The country is also a major financial hub in the world economy, with London housing various important stock exchanges and investment banks. Unemployment is manageable at 7.8%, as of the fourth quarter of 2009, compared with double-digit employment in many similarly situated nations. All told, London continues to offer one of the higher standards of living in the world, owing in part to its relatively low taxes and focus on economic growth.





http://www.businessp...west-tax-rates/





Reading those, I can't draw any clear conclusions regarding taxation policies and overall economic vitality.


It seems that article is somewhat misleading, low taxes lead to higher growth is a lie. Maybe you can explain what it's trying to say about the U.S. because the last time I checked we have the highest wealth gap out of all the developed countries. I trust this web-site more.



http://www.equalitytrust.org.uk/why/evidence
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Old April 9th, 2011, 12:30 PM   #19
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Originally Posted by Fayt View Post
It seems that article is somewhat misleading, low taxes lead to higher growth is a lie. Maybe you can explain what it's trying to say about the U.S. because the last time I checked we have the highest wealth gap out of all the developed countries. I trust this web-site more.



http://www.equalityt...uk/why/evidence


That's not what the quotes I posted said at all. Some countries with high taxation are doing well, some aren't, some with low taxation are doing well, some aren't.



And I can't access the data on your link without making a donation, or getting permission.
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Old April 9th, 2011, 12:44 PM   #20
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Originally Posted by Fayt View Post
It seems that article is somewhat misleading, low taxes lead to higher growth is a lie. Maybe you can explain what it's trying to say about the U.S. because the last time I checked we have the highest wealth gap out of all the developed countries. I trust this web-site more.



http://www.equalitytrust.org.uk/why/evidence




How can you say that so definitively?



IT's quote offers no clear connection between taxation and growth.



In any case what good is "growth" if someone cannot afford health insurance?
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