U.S. has one of world's lowest tax burdens?!?

[Nords]

http://moneycentral.msn.com/content/Taxes/P148855.asp

I don't feel so bad about the taxes I paid next to Belgium's 55% tax burden.

It must account for all those extra social services they're getting like,... uhm,... er,... gimme a minute here,... ah... geez, I wonder what they're getting for their extra tax money?

 

[Brat]

I wonder what their debt is Our tax burden is what we are ((spending + debt)- what we are taking in)* (1+interest rate) until our kids pay it back....

There is no free lunch

 

[Cool Dood]

Looks like there's a pretty clear inverse correlation between taxes and the countries' wealth.

 

[kramer]

I wonder what their debt is Our tax burden is what we are ((spending + debt)- what we are taking in)* (1+interest rate) until our kids pay it back....

There is no free lunch

US public debt as % of GDP is less, on average, than the European countries. US standard of living is about 50% higher and the gap is increasing yearly. And US debt as % of GDP is below its post-world-war-II average and the situation has improved over the last decade.

Here are a couple of quick links I googled with statistical info:

European stats: (blue bars in chart)
http://www.brusselsjournal.com/node/933

US stats:
http://www.heritage.org/Research/Budget/bg1820.cfm

Chart of US public debt as % of GDP:
http://www.heritage.org/Research/Budget/loader.cfm?url=/commonspot/security/getfile.cfm&PageID=74361

The real thing to fear is future pension & entitlement liabilities -- these make today's debt statistics less important, relatively speaking. In this case, the US is positioned far, far better than almost all the other countries mentioned in the article. The reason is because US government spending is starting out as smaller % of GDP, US economy is growing faster in real terms via free market policies, and US is increasing in population more rapidly, largely via immigration.

As long as the US can keep these three things up, we should be OK. The difference between 2% real GDP growth and 3% real GDP growth compounded over 30 years is 34%. So for constant government spending as % of GDP, there is 34% more to spend in fast growth environment in 30 years. This is why, IMO, economic growth and the free market policies that encourage it is so important in the long run.

Kramer

 

[mb]

And with the opposing opinion we have (drum rolls please) . . . MAX

 

[mathjak107]

as i see it theres 2 ways for the government to pay bills y...taxes and print it(includes borrowing)......since taxes are low because thats good politically borrowing and very quietly printing has been going on for decades....kind of gives us the look of low taxes

 

[tomz]

http://moneycentral.msn.com/content/Taxes/P148855.asp

As far as I can tell, the numbers in the table don't include state income taxes, property taxes, sales taxes, gasoline taxes, telecomm taxes, and all the other revenue enhancements that we see every day.  Tax burden in NY is different from Florida, for example.  Also, what you get for your tax dollars is different in every state.  IMHO, articles like this one, though provocative, are next to useless when you want to do a real apples-to-apples comparisons.  :

 

[d]

As far as I can tell, the numbers in the table don't include state income taxes, property taxes, sales taxes, gasoline taxes, telecomm taxes, and all the other revenue enhancements that we see every day.

Perhaps, but not immediately following the taoble: "In 2003, total federal state and local taxes in the United States were 24.2% of our gross domestic product, ranking among the lowest in the world, with only Mexico at 19.5% with a lower tax rate.

 

[2B]

Perhaps, but not immediately following the taoble: "In 2003, total federal state and local taxes in the United States were 24.2% of our gross domestic product, ranking among the lowest in the world, with only Mexico at 19.5% with a lower tax rate.

The US has had a federal debt under every president except Andrew Jackson.  Right now the US debt is on the far low end as a % of GDP.  During the depression, the Roosevelt administration set up many "make work projects" and implementented a number of massive engineering works to "put people to work."  They also raised business taxes to crushing levels to avoid raising the deficit.  Business continued to struggle all during his administration and the deficits continued to rise.  It wasn't until the "cost plus" attitude in gearing up war production that business capital started to flow and the depression ended.

However, as d points out, tax federal tax rates by themselves can not guarantee a vibrant economy.

 

[mathjak107]

wheres the .80 cent tax on every gasoline we buy in nyc here and sales tax figured?

 

[2B]

wheres the .80 cent tax on every gasoline we buy in nyc here and sales tax figured?

There are studies that supposedly include all state and local taxes, fees and other "user supported activities." I don't want this to be seen as bragging but I believe our Texas politicos have raised hidden taxes and fees to a new level.

Taxes are an interesting aspect of ER or any form of retirement living. Federal taxes we're stuck with. State taxes and fees in all forms are another. Once we're not tied to a job's location, we can manipulate our taxes by officially living in one state and traveling amonst others. Live in Florida (no income tax) via a UPS Store "box number." Visit NY (lots of income tax) for 8 months to see the grandkids. Travel to California (more income tax) the other 4. Without earned income, you can avoid the income taxes.

Of course, it's hard to own a residence in any state and say you aren't a resident. Texas is the worst place to have a residence because of oppressive property taxes. In my ER budget, DW seems committed to staying in our oversized house. That forces a property tax budget line item of $700 per month. Throw in the extra utilities and maintenance and it's almost half of a "bare bones" ER budget.

 

[Eagle43]

I got this at: BOORTZ The Libertarian and Fair Tax Wizard.

He quotes this INDUSTRY WEEK ARTICLE BY Michael Evans.

Total federal income taxes collected last year:  $932 billion.  That works out to $6,650 per employee.
In addition to income taxes, the federal government collected another $1.286 trillion in taxes, mostly Social Security taxes. 
The total state and local tax burden amounts to $1.14 trillion.
The grand sum here -- paid by employees and proprietors -- is $3.358 trillion.  That's $3,358,000,000,000.00
This works out to $24,000 per employee. 
The total compensation earned by employees and individual proprietors last year was $8.2 trillion.   
This means that 40% of income goes to taxes of some sort.
That rate, of course, is much higher for those earning higher incomes.  Much lower for those in low income brackets.
Nice, huh?
Now ... grab this fact.  Where did most of this money go?  National defense?  Homeland security?  Hardly.   In terms of Federal expenditures you have:

$495 billion for national defense.
$272 billion spent by the federal government for the purchase of goods and payment of employees
$1.69 trillion sent to someone else.  $1.69 trillion in income redistribution. This is just fine with those on the left who believe that income is distributed, not earned.  For the rest of us?  Well, I don't know about you, but I have a wee bit of a problem with all of this.  UNQUOTE.

Anyway, we may pay less taxes than Europe, but we're not where we should be, by any means.  My preference is 10%.  If the government would make do with 10%, we'd all thrive.  Increase taxation in times of crisis only.  

And I agree Texas has confiscatory property taxes. 

BTW:  I saw in this morning's paper that Dick Cheney is getting 2 million tax refund.  Not bad, huh?

 

[2B]

BTW:  I saw in this morning's paper that Dick Cheney is getting 2 million tax refund.  Not bad, huh?

That sounds so damning. Evil Dick taking money away from the "poor" and increasing the deficit. How much did he pay?

If I got a $2MM tax refund, there would be some accountants looking for a new job.

 

[rs0460a]

http://moneycentral.msn.com/content/Taxes/P148855.asp

It must account for all those extra social services they're getting like,... uhm,... er,...

It's interesting since you bring up the subject.  I work for a multi-national firm, with HQ in Sweden.  When I was there a few months ago, I had an opportunity to talk to a Swede that had spent 5 years living in London, during his "pre-family/post-university" years.  The subject had come around to "culture" and is a favorite item to discuss, since I've worked with many national cultures over the last 10 years.

Since it was right after the Christmas/New Years holiday, we spoke of our individual unit's "holiday gatherings" (both personal and business).  I brought up the fact that we had a Xmas tree in the lobby of our building, with cards/names of children from one of the local social agencies (primarily day-care for low-income families).  I said that it must have been a very good year since we collected enough gifts to fill over one school bus with gifts.

He responded that he had done the same type of "volunteerism" when he lived in London.  However, when he tried to do the same in Sweden, or look for the opportunity, his wife (who never lived out of the country) could not understand why he would do such a thing.

Why, because under the Swedish tax system, all "social service activities" (such as programs for those "more needy folks") were filled by "professionals" within the government.  His wife felt that it was not necessarily her (or her families) responsibility to "look after" the needy (since their taxes were paying for it...)

I'm not going to go into additional discussion as to what the Swede's have "lost" through this method of caring for the unfortunate, but you also have to remember that being a "socialist government", the more jobs that are generated are better for the populace.

Anyway, that why Sweden's 60%+ tax rate is much higher than the US.  In addition, there is less incentive to "save for retirement" since their "government pensions" and social services cover most/all of their needs.

For more information on this subject, for Sweden, go to:

http://www.avso.org/en/activities/RESEARCH/Legal Framework/countryreports/03_Sweden-final.pdf

- Ron

 

[Maximillion]

rs, i could kiss you, you are totally correct.

My dear Mother, not well schooled but pretty damn smart, said that the US pays just as high a Tax but it is disguised as Health Care Insurance, Property Taxes, University Tuition, etc.

My Mother said at the end of the day, we all pay the same, but Canadians are told you will have Health Care, a year Maternity Leave, affordable schools etc, whereas the American can decide for him/her self if that is what they want.

America needs more Women in Politics, get rid of those 50's hangovers like Bush etc, put a woman in control she will start to realign the US direction.

US Industries cannot compete because they have to factor in costs that in all other countries are payed for by the Tax Payers.

GM is every bit as efficient as Toyota, take away its' health and pension costs.

Speaking of Bush, Neil Young's latest CD calls for his impeachment.

 

[Gone4Good]

I got this at: BOORTZ The Libertarian and Fair Tax Wizard.
BTW:  I saw in this morning's paper that Dick Cheney is getting 2 million tax refund.  Not bad, huh?

I quess they didn't also point out that he made ~$8.8MM in 2005, of which he gave ~$6.9 to charity and had ~$2.5MM withheld for taxes in 2005. So prior to getting a refund, Cheney's 2005 cash flow was negative $800,000 . . . but I guess that doesn't make as good a headline as saying he got a $1.9MM tax refund.

 

[2B]

America needs more Women in Politics, get rid of those 50's hangovers like Bush etc, put a woman in control she will start to realign the US direction.

US Industries cannot compete because they have to factor in costs that in all other countries are payed for by the Tax Payers.

GM is every bit as efficient as Toyota, take away its' health and pension costs.

Speaking of Bush, Neil Young's latest  CD calls for his impeachment.

There's just so much here.....

My experience in the working world is that there is nothing more ruthless and cutthroat than a career focused female. What I've seen of US female policos doesn't change my view. Of course, ruthless and cutthroat works for me if they're on my side.

I agree than the US tax code works against US industry in the world arena. The ways to correct it are obvious but undone.

And how can't we all get behind that great intellect of Neil Young. Barbara S. has better credentials. Like I care what the opinion is of someone with accomplishments in a totally unrelated area. Maybe he should run for congress and submit the bill himself.

 

[Gone4Good]

wheres the .80 cent tax on every gasoline we buy in nyc here and sales tax figured?

$0.80 per gallon is a down right bargin compared to what petroleum taxes are in Europe. The last time I drove in Europe was about 3 or 4 years ago and I remember paying something like 2-3 Euro per litre (a.ka. 7-12 Euro per gallon).  I can only imagine what they are paying now.

 

[Nords]

BTW:  I saw in this morning's paper that Dick Cheney is getting 2 million tax refund.  Not bad, huh?

Let's see, last year's money markets were paying about 3-4% so he gave up roughly $60-$80K in interest alone? 

I wonder how much he paid the accountant who figured out his witholding...

 

[Maximillion]

3 years, in the UK it will cost about $120 to fill a tank of a normal sized car, but then they do not drive the distances we do in NA.

Gas in the US is a BARGAIN,I can never understand why people are complaining, Americans get off easy.

 

[Alan]

3 years, in the UK it will cost about $120 to fill a tank of a normal sized car, but then they do not drive the distances we do in NA.

Gas in the US is a BARGAIN,I can never understand why people are complaining, Americans get off easy.

Agreed.  I have just come back from 2 weeks in Europe.  I drove in Engalnd, and the cost was about $6.50/ US gal (~4 litres).  However, the car I had was a manual, diesel, small car (Renault Megane) that, over a week and 350 miles managed 58 miles/UK Gallon  (~45 mile /US gal I think).  In Europe I went most places by train. 89 euros got from Lille to Calis and then next day from Calais to Amsterdam.

 

[rs0460a]

the car I had was a manual

Wow, I'm Impressed 

I've driven in Scotland and Ireland (on the "wrong" side of the road  )

While I can drive with a manual transmission, I would not attempt both at once! 

(That's why I rented a "rare" automatic...  8))

- Ron

 

[Alan]

The sales taxes are also very high in Euro countries, and the article didn't seem to go into the burden of VAT which is a sales tax.  In the UK it is 17.5% on just about everything you buy.

Government pensions in the Euro countries are also much, much smaller than our own Social Security.  Most of the taxes go into Social programs as mentioned in the reply on how it is in Sweden

 

[free4now]

The article says:

Noncompliance is hard to estimate, but by most international comparisons, Americans are paying the highest fraction of what they owe, experts said.

This I find absolutely amazing. The American tax code is rife with opportunities to fraudulently hide tax liability. I always thought that one of the main benefits of simplifying the American tax code would be to increase compliance dramatically. I suppose corruption must be the explanation for why other countries would have low compliance.

 

[lets-retire]

Corruption, yes. Mainly in the form of not reporting cash sales and many sales are done that way. When in Turkey, I was talking with a local friend of mine. I asked about checks. She gave me a blank stare and said "What's that?" Many stores did accept the credit cards. The places I went it was either credit or cash. If you paid cash you were normally able to negotiate a better deal than credit.

I had read somewhere that when the tax burden hits about 40% an underground economy develops, leaving the tax man in the cold.