[moki]

I'm still not buying it; I don't consider US taxes to be a bargin, I think taxes are too high already. I consider the federal government to be bloated, and I find the increased spending while our deficit/national debt balloons to be irresponsible. Granted, running deficits in bad economic times is fine, but our national debt is reaching the point of ridiculousness.

from: http://moneycentral.msn.com/articles...asics/9196.asp

.....

No kidding: U.S. taxes are a bargain
As you struggle through your taxes and grumble you're over-taxed, remember this: it could be worse. You could live in Sweden. Truth is, U.S. taxes are lower than those in virtually all industrialized nations.
By Jeff Wuorio

With April 15 right around the bend, here's something to bear in mind as you scratch your Dixon Ticonderoga Number Two along your 1040: We Americans don't know how good we have it when it comes to taxes.

See the numbers
that lenders see.
Get a free credit report.


According to 1999 figures from the Organization of Economic Development and Cooperation, America ranks No. 28 out of 30 industrialized nations for total federal (or central government) tax burden. Tax revenue accounts for a relatively skimpy 26.02% of U.S. gross domestic product. Only Korea (24.3%) and Mexico (17.15%) had lower tax burdens.

By comparison, gold, silver and bronze medals in the tax-burden finals went to Sweden (52.38%), Denmark (49.42%) and Finland (46.27%). (The data do not include state (or provincial) and local taxes.)

Most Americans have no clue about this reality. Indeed, of MSN Money readers who answered a poll on whose taxes were highest, 79% put the United States in the top 15, and 18% thought we had the biggest tax burden.

Is the disparity that great?
Why does America seem to be sipping Slim Fast while much of the rest of the world is scarfing down triple taxburgers with extra cheese? First, the disparity between Americans and others simply isn't as great as figures might suggest.

Many other countries build "cradle to grave" benefits into their heavy tax bills, most notably free health care and higher education. Adding those significant items to an American family's overall expense bill pushes it a good deal closer to the family's overseas -- particularly European -- counterparts.

"We have to remember that the United States is a rather low service country," notes Doug Shackelford, an accounting professor at the University of North Carolina who has examined the tax ramifications of the European Union. "If you were to put the cost of health care on an American's tax plate, it would dwarf anything else that was on there."

Health care in this country is often financed through the workplace. Education is generally considered a family's obligation, although the many financing mechanisms available bring these costs down.

European situation may be worse than reported
However, even some of the higher tax rates in other countries in the OECD report may, in fact, be a bit on the low side. To illustrate: The report pinpoints tax revenues in the Netherlands at 41.6% of GDP, which places it eighth overall. However, by Shackelford's estimation (he lived in Holland during his EU research), the average Dutch worker earning $40,000 or more (U.S. dollar equivalent) per year should be ready to hand over some two-thirds of that to his government.

While Americans might think the little Dutch boy would have been better off to yank his finger out of the dike and be done with it, that level of taxation does have some pluses, including:
Free medical care.

Free university schooling.

Generous unemployment benefits. Dutch unemployment benefits average 78% of the minimum wage, the highest such rate in Europe where it averages 64%.
A hefty government presence in the corporate world also spawns lengthy worker holidays -- Sweden requires that companies provide no less than 32 paid days off every year. The United States, which has no such mandate other than national holidays, averages 16 days annually.

They take care of their own
Observers say demographic homogeneity also plays into the function of greater taxes. Compared with other countries where the lion's share of the population is much the same, America's melting pot simply doesn't lend itself as readily to a consensus that more money in the government's hands will benefit all.

"It's really a cultural tradition," notes Andy Pike, a law professor who teaches comparative taxation at American University in Washington, D.C. "They take care of one another."

But that care comes at a hefty price tag. Witness Sweden: For a start, base income taxes are 32%. Horrific as that may seem to most Americans, it quickly gets worse. The effective top marginal rate tops 50%, and an employee hits that rate at roughly 200,000 krona -- only a bit more than $19,000.

Then there's the infamous Value Added Tax (VAT). Introduced in France, the VAT builds taxes into goods and services in intervals along the production chain, with the eventual cost being borne by the consumer (its ultimate anonymity in the price paid by the buyer makes it an "invisible" tax). However invisible, the VAT has a palpable sting; in Sweden, the VAT can run as high as 25% for some items. (So, a book that might cost $10 before taxes in this country would cost $12.50.)

"The value added tax is a real revenue machine," notes Pike. "But, since it's built in, you don't feel as though you're paying anything more."

Maybe, maybe not. For instance, the cost to have a shirt sent to a Swedish laundry is $4 a pop. Want to buy a Danish lottery ticket? About a third of the price goes toward VAT and other taxes. And, if those sorts of costs drive you to drink, you may want to take the pledge -- thanks to alcohol taxes that can top 90% depending on the drink, you can pay a sobering $15 for a draft beer in Sweden. And if taxes really leave a bad taste in your mouth, don't drink the bottled water in Denmark -- taxes make up 82% of its cost.

Drawbacks for investors
For all the array of free services, cost of goods isn't the only drawback. Not surprisingly, expectation of a significant tax burden isn't what you would call an incentive for entrepreneurs and others looking to start and build a business.

To illustrate: According to 1997 figures from the Union of Industrial and Employers Confederation of Europe, companies in the European Union spent an average of 60% less on research and development than stateside firms -- evidence, say economists, that high taxes strangle startups and overall incentive.

"You definitely find less entrepreneurial activities in Europe," notes Shackelford. "The thinking is ?What's the use of it?'"

It also helps explain why European-based companies are interested in expanding in the United States and elsewhere where the cost of doing business is less than in their home counties. It may also explain why the dollar has been consistently strong against the euro even as interest rates in this country have fallen.

Don't look for things to change much in the foreseeable future. While the United States has maintained a fairly steady tax rate (26.75% in 1982, versus the current 26.02%), other countries' rates have steadily risen. Over the same timeframe, Sweden's taxes rose some four percentage points, while Italy's jumped nearly nine percentage points.

Still, there are signs of change. Except for France, most European nations since 1990 have reduced the government's share of the economy.

"A lot of the social programs in Europe are getting attention because people are realizing they're frightfully expensive," says Pike.

Costly they may be, but the bottom line to the disparity between Americans' tax burdens and those of other countries really addresses a more salient topic -- the fundamental difference between Americans as a people and others. Tax rates may rise and dip, but Americans' core values, even some 200 years down the line from the Founding Fathers, manifest themselves in our view of government and the ongoing role it should have in its citizens' everyday lives.

"This reflects the roots of the people who came to this country," notes Michael Donihue, an economics professor at Colby College and a former senior economist on the Council of Economic Advisors. "We've always had a generally negative attitude toward our government."

"We tend to forget that we were founded from a rebellion over taxes," adds Shackelford. "Americans love the fact that we do get to take home most of what we earn. I see the United States as a 22-year-old who makes mistakes but has unbounded energy. Europe is the 52-year-old who's kind of tired and accepts that what he has is what he has."

Federal tax burden as a % of GDP (as of 1999)


Country
% of GDP
Country
% of GDP

SWEDEN
52.4
GREECE
36.9

DENMARK
49.4
POLAND
36.4

FINLAND
46.3
SLOVAK REPUBLIC
36.0

BELGIUM
45.9
ICELAND
35.9

FRANCE
45.5
NEW ZEALAND
35.8

AUSTRIA
43.8
SWITZERLAND
35.0

ITALY
42.7
SPAIN
34.8

NORWAY
41.8
PORTUGAL
34.2

LUXEMBOURG
41.7
IRELAND
31.9

NETHERLANDS
41.6
TURKEY
30.8

CZECH REPUBLIC
39.3
AUSTRALIA
30.2

HUNGARY
38.9
JAPAN
26.7

CANADA
38.0
UNITED STATES
26.0

GERMANY
37.5
KOREA
24.3

UNITED KINGDOM
37.0
MEXICO
17.2
Source: Organization for Economic Development and Cooperation

[moki]

Speaking of the US national debt, which currently stands at about $6.5 trillion, the interest payments needed to service the debt are the second largest item in the budget, second only to income redistribution.

Last year (FY02) the U. S. Government spent $333 Billion of your money on interest payments* to the holders of the National Debt. Compare that to NASA at $14 Billion, Education at $32 Billion, and Department of Transportation at $51 Billion. And now this fiscal year (since 1 October 2002) we've already spent $181 Billion on interest payments!

While this isn't all bad -- it keeps investment money in the US in the form of US savings bonds -- it is a drain on the taxpayers, and thus the economy. Think we'll ever get fiscal responsibility in Washington? Colour me skeptical.

from: http://www.federalbudget.com/

Related story: http://news.bbc.co.uk/2/hi/business/380923.stm

[maxelson]

As with all else, it all depends upon how much cow juice and cookies one gets for their milk money.
Comparing the tax rate in Sweden to that in the US is just plain deceptive without a discussion on services.

[boots]

Originally posted by maxelson:
As with all else, it all depends upon how much cow juice and cookies one gets for their milk money.
Comparing the tax rate in Sweden to that in the US is just plain deceptive without a discussion on services.

True. But he did qualify his comment with federal governement "bloat." Actually, even if you think the services of the others is worth the tax rate, it doesn't let the US tax/spend system off the hook. Too much waste to call it a bargain. Cut the fat and it would be much more of a bargain.

[maxelson]

I'm with you. EIther cut the bloat- or pony up with REAL services. All for it.

[Timo]

Originally posted by moki in his article:
"Truth is, U.S. taxes are lower than those in virtually all industrialized nations....Most Americans have no clue about this reality. Indeed, of MSN Money readers who answered a poll on whose taxes were highest, 79% put the United States in the top 15, and 18% thought we had the biggest tax burden."

And a lot who think they have a clue are quick to call the comparisons irrelevant.

[nvaughan3]

[moki]

Originally posted by maxelson:
As with all else, it all depends upon how much cow juice and cookies one gets for their milk money.
Comparing the tax rate in Sweden to that in the US is just plain deceptive without a discussion on services.

Sure. But read the article, they do indeed mention said services.

[finboy]

Originally posted by maxelson:
As with all else, it all depends upon how much cow juice and cookies one gets for their milk money.
Comparing the tax rate in Sweden to that in the US is just plain deceptive without a discussion on services.

And a discussion on growth and incentives to invest. With high enough tax rates, there will be no growth because there are few incentives to invest. It's really not much more complicated than that.

[BRussell]

Originally posted by moki:
Speaking of the US national debt, which currently stands at about $6.5 trillion, the interest payments needed to service the debt are the second largest item in the budget, second only to income redistribution.

What do you mean by "income redistribution?" Social security is paid in just about equally between rich and poor, and same with medicare. Medicaid is for the poor, but that money gets paid to doctors and hospitals, not poor people.

Here's another tidbit.
Some people think taxes have been on the rise in the US, but according to that report:

In 2003 total federal revenues as a share of the economy will fall to their lowest level since the end of the Eisenhower Administration. Based on the latest Congressional Budget Office estimates of revenues (CBO?s latest estimates include a range) and the Joint Committee on Taxation?s estimate of the cost of the tax-cut legislation signed into law on May 28, 2003, federal revenues this fiscal year will equal between 16.4 percent and 16.7 percent of the Gross Domestic Product. (The Gross Domestic Product is the basic measure of the size of the U.S. economy.) The last time that revenues as a share of the economy fell below 17 percent was in 1959.

We didn't have much of the federal spending back then that we have now - how can we pay for our spending if we don't collect the revenues? Especially when not collecting the revenues adds to the debt, which increases our federal spending.

[Logic]

Originally posted by finboy:
And a discussion on growth and incentives to invest. With high enough tax rates, there will be no growth because there are few incentives to invest. It's really not much more complicated than that.

Not to say you are wrong but......

GDP real growth rate: Sweden 1.8%, US 0.3%

Industrial production growth rate: Sweden 0.9%, US -3.7%

CIA Factbook

[finboy]

Originally posted by Logic:
Not to say you are wrong but......

GDP real growth rate: Sweden 1.8%, US 0.3%

Industrial production growth rate: Sweden 0.9%, US -3.7%

CIA Factbook

Sure, I'm wrong...

that's why most of the world is selling their family to be able to move to... Sweden.

that's why Sweden is still the world power that we all know and love.

[Logic]

Originally posted by finboy:
Sure, I'm wrong...

that's why most of the world is selling their family to be able to move to... Sweden.

that's why Sweden is still the world power that we all know and love.

Actually, Sweden is one of the more popular places refugees want to go to. I have absolutly no idea why though

I wasn't trying to show you wrong. I actually feel the same way you do(I guess) about on companies. I would like to see very low taxes on smaller companies and somewhat bigger on the big corporation. I only showed that example because there is something else than just taxes that is involved in growth of companies and investments. I have no idea but I guess it has something to do with how educated the population is, where the primary market is and etc.

I think we are on the same page on corporate taxes(if that is what it is called) even if we disagree about personal taxes and what we should pay taxes for.

No need to get upset, I just wanted to throw that our so people could discuss. It is IMHO very interesting to see those two stats in a discussion about taxes and company growth and investments.

[finboy]

Originally posted by Logic:

I think that there are so many incentives to succeed in this country that it outweighs the burden of taxes. That, and the personal freedom with other things as well. I'm not knocking Sweden, I just think it's an anomalous case. I noticed that 87% of the population is Lutheran -- I wonder if that helps control the socialistic incentives to sponge off of the system.

Thanks for the link, BTW. (I know it's there, but I almost never take time to read it). It was interesting to read in the CIA Factbook entry for the US that the CIA is obviously concerned with the "two-tiered" employment situation in this economy. Me too. That's something to watch, especially given all the wonderful opportunities that exist for people to get themselves out of the lower tier.

[nvaughan3]

Originally posted by Logic:
Not to say you are wrong but......

GDP real growth rate: Sweden 1.8%, US 0.3%

Industrial production growth rate: Sweden 0.9%, US -3.7%

CIA Factbook

data taken at least 18 months ago.

[Logic]

Originally posted by nvaughan3:
data taken at least 18 months ago.

So? Have taxes changed much since then?

Care to find some more recent figures?

[nvaughan3]

Originally posted by Logic:
So? Have taxes changed much since then?

Care to find some more recent figures?

My comment simply meant that using 18 month old data when we are undergoing a very econmically tumultuous period may be slightly misleading. I'm not sure what taxes have to do with this?

Current data: http://www.whitehouse.gov/fsbr/output.html


Shows seasonally adjusted real GDP growth at +1.9% for 1Q 2003 (If I'm reading that right).

Regarding sweden, this suggests the 2003 real GDP to be about 2.1%. http://jpn.cec.eu.int/english/press-info/4-1-2-07.htm

More on the EU: http://www.econ.pncbank.com/neotext.htm

[i]
In particular, the European Union’s (EU) economy has remained in the doldrums, with real GDP growth averaging just 1.0 percent in 2002.... Germany’s economy, the largest in the EU, is set to grow around 0.5 percent in 2003, the third consecutive year of near economic stagnation....

[SimeyTheLimey]

Originally posted by nvaughan3:
. Germany?s economy, the largest in the EU, is set to grow around 0.5 percent in 2003, the third consecutive year of near economic stagnation....

AFAIK, Germany has slipped back into recession. I don't have the link, but I believe the last figure was around -0.2%.

[voodoo]

I think the economic stagnation is Microsoft's fault. Nothing works anymore!

[macvillage.net]

Originally posted by SimeyTheLimey:
AFAIK, Germany has slipped back into recession. I don't have the link, but I believe the last figure was around -0.2%.

That's what I thought (don't know for sure though).


US taxes really aren't that bad... MANY countries are worse as far as taxes go.

The US is pretty balanced, there is a lot of infrustructure that our taxes cover, and it's all pretty good (Roads, Schools, etc.)... For what we pay, we get pretty good service.

People always complain about traffic, schools are bad, this is bad, something else is bad...

but nobody wants to take that tax hike to get the funds to build another road, or increase teachers salary.... So I guess it isn't to bad then is it? It's not worth a few extra dollars a year?

Taxes in the US ain't that bad.


THe big problem is Social Security, and how most people paying right now (below the age of 30), are paying... and will never see a penny back, as the SS program is pretty much doomed. There's no way of saving it without the cost overtaking the benefit.

That's really the only bad part about our taxes. And that's only for a limited group.

[malvolio]

Isn't it interesting, though, that those countries with the highest tax rates also have citizens who are better educated, healthier, and have a greater life expectancy than the US.

[macvillage.net]

Originally posted by malvolio:
Isn't it interesting, though, that those countries with the highest tax rates also have citizens who are better educated, healthier, and have a greater life expectancy than the US.

That's because of all the bloat and burocracy in the government (state seems to be the worst these days, but federal isn't much better).

They really need to clean up their act. Efficiency is the key. Clean and smooth operations. To many organizations have so many levels of operations fromt he bottom to the top it's rediculus... partly to blaime for 9/11 intelegence being missed. There is no need for 10 people doing 1 persons job.

[Angus_D]

Originally posted by malvolio:
Isn't it interesting, though, that those countries with the highest tax rates also have citizens who are better educated, healthier, and have a greater life expectancy than the US.

Except for the UK, of course.

[SimeyTheLimey]

Originally posted by Angus_D:
Except for the UK, of course.

That's because the smart and healthy ones emigrated.

[macvillage.net]

If we had a president who during their term focused on cleaning out the government, federal and state...

They wouldn't be popular during their term, definately not get relelected.

But 20 years after, would be praised.


There is so much waste in the governmnet it's silly. Not only does it make the government slow an inneficient, it's costly.

Imagine getting more for the same amount of taxes. Your dollar is worth $0.98 rather than $0.50 as far as price:service ratio goes... wow. That would be nice.

Sadly, no president thus far has made that part of their agenda. Some go as far as to make things more bloated (Homeland Security). Here we have several netoriously inefient departments. Rather than creating a bill allowing them to work together, we put them all in one large sum. So that when the information reaches what *was* the top... it's now only at middle mangement. Ah... that's better. Now we have a giant department, who doesn't even know who is who... working in a jumbled up mess... now any message has to travel twice as far to get from the top of command to the bottom (and vice versa). That's quality.

Solution would have been for Bush to create a DHS that was in charge of everyone, and forced them to work together... but remain single. DHS then could take some time and clean out the waste... evaluate each department, and clean out the waste. Then based on those evaluations, decide how they should interact together, and which should merge into larger sub-departments. All under DHS control... but the top is still the top The DHS is simply managing, and overseeing. Not becoming part of the mix.

All the departments could really use a good cleanup. Get rid of those performing badly, and replace with good. There are quite a few in this country who are unemployeed, and would like a nice secure government job, since it does have some benefits. They could be trained from the beginning to perform to standards.

The top of the government doesn't hold everyone below up to standards. That's why the jobs are so secure... because you really have to be bad to get fired. What's needed is a situation where performance is required, and operations are lean. Everyone should have a slightly smaller budget than needed. Let them work as leanly as possible to make due with what they have... and give towards the end of the year, to compensate for the rest.

They should be held to simlar standards as corporate america: Efficiency is the key to success.

[nvaughan3]

Originally posted by malvolio:
Isn't it interesting, though, that those countries with the highest tax rates also have citizens who are better educated, healthier, and have a greater life expectancy than the US.

so we are fat, smoke, drink a lot, and kill each other with guns many times every year. The solution to that is what, raise taxes so after banning everything we can put even more people in jail?