NEWMAN! said: "I would be interested in seeing the numbers and wonder if they include local and province taxes in Europe, because while the US has a moderately progressive federal tax system (and I find in hard to believe we beat Sweden on that), our local taxes are incredibly regressive beyond belief, especially in states like Texas and others without an income tax.
>> Sweden is the exception to this rule -- progressive tax
system and big spending.
I find it hard to believe that a single Mom making about $15,000 per year in Texas, facing insanely marginal high tax rates at the federal level (I'll cite a certain Max Sawicky on this one) and something like a 15% effective tax rate based on local and state taxes (CTJ analysis) faces a worse situation anywhere in Europe.
And if you subtract medical spending and associated taxes from the European analysis (since we pay for medical care in even more regressive private ways), I've seen analysis that the level of US spending is actually not that out of line with many European states.
>You also have to figure out how to compare pension systems between
countries
>with state spending on them versus mandated pensions at businesses versus
>our system of government subsidies for them.
>>> It's true -- a mandate on the private sector could have
--similar cost and distribution implications as an explicit
--spending program. But if the presumption is that public
--spending is preferred to privatization (cuz that's what it
--is), then the size of the revenue system is the key.
Actually, I have no presumption that public spending is better than private spending- maybe a point where we differ - since it depends on how the funds are managed. It also matters what the distribution of pensions are among the population, not just the total dispersed. US pensions are hardly a wonderful model but there are probably privately mandated systems that could be better than many of Europe's funded systems.
Who pays and who gets the funds matters far more than whether the government is spending a certain percentage of GDP. If the government just taxes the middle class, then hands that same middle class its money back, there seems little gain - beyond a certain amout of uniformity and social solidarity. But to the extent that the government is an engine for redistributing income, tax policy and spending equity are critical points.
--- Nathan Newman
-- Nathan Newman
Max and you make the argument that tax fairness is less important than increasing total spending, but I think the causation is the exact opposite. It was only when massively progressive tax systems were adopted in the US back in the 1930s that social spending started to grow. And as the progressivity was dismantled starting in the 1950s and accellerating in the 1970s, including the decrease in corporate taxes as a percentage of the budget, social spending came under increasing pressure.
>> Correlation is not causation.
The income tax never pushed the U.S. public sector
higher than abt 30% of GDP (Fed, state, and local;
20% for Feds), whereas the Euro's are between 35 and 55%.
The tax revolt in California and across the country was all about the failure of the Left to deal with the tax issue. -- Nathan Newman
>> Even if true, this leaves to the imagination
what the best response would have been.
mbs