Does Per Cent Of Tax Matter?

[yakers]

On the twisted thread "Ten Things To Stop Doing In 2006 there seemed to be a tax discussion emerging:

Quote:

Originally Posted by MasterBlaster Yrs2Go: I have no data, but I read that the total tax bite for most people is around 40-50 percent when you add it all up.

And a lot of wringing of hands about taxes, tax rates and our future going to hell in a handbasket (whatever that metaphor is).

But I wonder, how important is the percentage of taxes we pay?

One way to look at this is that we are all wealthier than generations before us. Even the poorest on welfare are better off than folks many generations ago.

I think this may be a matter of political philosophy or opinion. Lets say you are making $50K a year and your taxes are 20% so your take home is $40 K. Now lets say that the economy develops and in constant dollars you are now making $100K but the tax is now 40%. So you take home $60k. Now some folks would be on the warpath that their taxes have doubled. Others could say they are making more than they ever have.

Europe, Japan and some other places have higher taxes but more services are included including govt medicine and education. So employeers pay is less but what is the workers purchasing power take home? I lived in Europe for a number of years and it seemed as prosperous as the US.

I'm just wondering what really counts; the percentage of taxes paid? Whether services are provided by the Govt or privately? The amount of tax paid? Or the amount and buying power of your resources regardless of the time, tax structure and political structure.

Now, as a reference, I have some *really* conservative relatives in rural Wisconsin who, as a matter or principle, would say no Govt services and low taxes as a % regardless of their actual quality of life, income and residual asset value.

But for me a I think a lot of folks I look at my quality of life and my disposable financial resources and not so much at tax rates and who provides services.

Another part of the thread I liked was

Quote:

Originally Posted by . . . Yrs to Go Do the math my friend. For a 20 year old if we assume 3% inflation, 4% spending growth, 5% wage growth, and 8% market returns an initial savings rate of 15% of income will result in a 4% SWR situation by his/her 55th birthday. These are not crazy assumptions. Early retirement is perfectly achievable for almost anyone who wants it and plans for it early enough. That people don't do it is irrelevant to the question of whether or not they can, or could have. [/quote This seems a rational way out of political/economic issues: save some % of what you make and when it is 25X what you need to live then you are FI. This would seem to work in any modern countries political/economic structure.