[lbo-talk] Tuff Lib'rul

Wojtek Sokolowski sokol at jhu.edu
Fri Jan 30 14:21:36 PST 2004


Luke:
> Don't know why you would say that. I believe that maximum federal
income
> tax rate is now around 35%--which I think is exceptionally low by
first
> world standards (though I'm sure there are outliers).

Any comparisons are difficult because of the so-called "third party government" or government delegating its functions to private parties. Therefore, what is purchased with tax dollars in Europe (health care, education, transportation etc,) - in the US is purchased by a combination of tax dollars and private premiums (which from economic point of view are taxes i.e. payments for collective goods). So to compare the actual rate of taxation (=total payments for collective goods). We should add all kinds of private premiums (insurance, cost of education, transactions costs of car ownership, and various other transactions costs associated with private financing of public goods) that an average US-ers must pay to receive the level of service comparable to that in Western Europe.

I have a hunch that once we account for such premiums, the _actual_ level of taxation (both public and private) will be higher in the US than in Europe.

Wojtek



More information about the lbo-talk mailing list