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Your real tax rate: 40%

articles.moneycentral.msn.com

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Re: Your real tax rate: 40%

#121

Post by elai »

einarvollset wrote: post #52
dminor wrote: post #15

Earlier quoted context omitted.

Well we do pay double per capita what Canada pays for healthcare, so it wouldn't surprise me at all.

That surely can't be for premiums? I remember paying $95/month for full coverage ($179 for a family?) with low (no?) deductible when I lived in BC. I wish, WISH, for that kind of coverage here in CA. I've got catastrophic coverage only for like $200/month.

MSP is only in BC. The rest of the provinces just include it in their tax base and don't do the entire unnecessary exercise of an MSP bill.

Re: Your real tax rate: 40%

#122

Post by btilly »

cperciva wrote: post #19
btilly wrote: post #10

Earlier quoted context omitted.

Really? Effective US tax rates are about a third higher than Canadian rates? I find that difficult to believe, but I'd be greatly amused if it was true.

Well, it depends in part on what you include. The 26% I mentioned is for income taxes, payroll taxes, and (income-based) sales tax credits; but Canadians also have to pay a federal sales tax of 5% and provincial sales taxes (typically around 7-8%) on most purchases. I believe the total tax burden ends up being fairly similar between the US and Canada -- while Canada spends far more (per capita) on social services and…

I've read that a critical difference between the US and Canadian budgets is that Canada consistently balances its budget while the US does not. In the short term this means that the US can avoid collecting taxes on its full expenses, while Canada has to collect expenses in full. In the long run the tax implication should reverse.

Re: Your real tax rate: 40%

#123

Post by VladRussian »

the true tax rate = total government spending divided by GDP.

This is why Republicans, who've historically increased government spending, thus have increased real tax rate (while of course giving narrowly targeted breaks to themselves)

Re: Your real tax rate: 40%

#124

Post by jbooth »

yummyfajitas wrote: post #116
VBprogrammer wrote: post #88

Earlier quoted context omitted.

Because America is the greatest country in the world people outside America couldn't possibly be happy with the way they do things?

To be fair, in the few cases where I've seen good data, most groups do better in the US than in their native countries. For instance, Asian Americans have average income of $65,000. Japan, the richest country in Asia, has average income of about $40,000. Japanese Americans also live 2 years longer than Japanese. Swedish Americans are also considerably richer than Swedes, as I discovered today: http://super-economy.bl…

Yeah, but that's a self-selected group. People who are capable of moving their families to another country to pursue a career are more likely to be successful. Similarly people who grow up in poor, backwards communities (trailer parks and projects, meth and crack), tend to wind up poor and backwards. Maybe I'm a reactionary liberal but I have an easier time believing that than the inherent genetic superiority of the danes (oh and that's just SO close to certain ideologies I'm always wanting to accuse the Tea Party of harboring).

Wanna see something really cool? Look at a satellite image of Denmark. It's almost entirely farmland, with little spots of ultra-dense village or city every so often. No suburban wasteland. I'd be 20% happier just for that.

Re: Your real tax rate: 40%

#125

Post by brc »

FrankBlack wrote: post #119
alexyim wrote: post #59

Earlier quoted context omitted.

What does the US have?

Bombs. Lots and lots of bombs. And, apparently, we love to use them. Prisons. We're good at those. Oh, and flags. We like to wave those a lot, too. Especially about the fact that we are "free" compared to those "socialist" menaces around the world. So, we pay an average of 40% in taxes, but does that pay for your higher education or your kid's higher education? Not likely. Does it pay for your health care? Probably n…

I've often tried to point this out to US taxpayers I've met. While in my country the tax rates are about the same, or perhaps a bit lower, our defence force is miniscule in comparison and thus social spending takes place instead.

Though, to be fair on countries like mine (and Denmark) we receive positive externalities from excessive US Defense Force spending, because we don't have to maintain a full sized force due to our treaties with the USA. As a negative, we're compelled to join in on such adventures as Iraq and Afghanistan as a result.

However, many of the smaller nations with similar tax bases and larger social benefits compared to the USA tend to forget about the effective subsidies paid by the US taxpayer for our national defense.

Additionally, there is definitely a component of the US Defense spending that is arguably social policy - even if it is part of the military-industrial complex. It does provide a lot of people with taxpayer-funded positions, and allows otherwise-jobless areas to enjoy employment opportunities with establishment of bases.

I clearly think there is a case for a reduced defense force in the USA - just one or two less Nimitz class carriers could build a lot of public hospitals, for one example, and removing bases from Europe and Japan would be another saving. But I don't think you can have an honest and full comparison with other countries until you start looking at the massive US defense force spending, and it's effects on other countries who effectively get to forgo that same spending.

Re: Your real tax rate: 40%

#126

Post by jsankey »

rubashov wrote: post #85
donohoe wrote: post #51

Earlier quoted context omitted.

Yes, but to be fair to the Danes their quality of life and the health of their society as a result is amazing.

As a result of their tax rate and size of government? That's ridiculous. Denmark is wealthy and comfortable because it's full of Danes. I bet you Danes in the US are even wealthier and more comfortable than Danes in Denmark.

To be honest your point seems completely vacuous (far more ridiculous than the point you are responding to). It appears to reduce to "Danes are magical - I think". What makes Danes special? Is this not related to the sort of government they would create and support?

Re: Your real tax rate: 40%

#127

Post by brc »

houseabsolute wrote: post #56
btilly wrote: post #7

Earlier quoted context omitted.

The author didn't do that. Instead he reported on research that found that the effective marginal tax rate across a broad range of incomes and life situations was generally close to 40%. So no matter what your income, your marginal tax rate is probably close to 40%.

To put it simply: if you earn a dollar more of income, about forty percent of that dollar will end up going to the government.

Or, in other words, in a 5 day week, Monday and Tuesday you work for the government. Wednesday through Friday is for yourself.

Re: Your real tax rate: 40%

#128

Post by jsankey »

yummyfajitas wrote: post #116
VBprogrammer wrote: post #88

Earlier quoted context omitted.

Because America is the greatest country in the world people outside America couldn't possibly be happy with the way they do things?

To be fair, in the few cases where I've seen good data, most groups do better in the US than in their native countries. For instance, Asian Americans have average income of $65,000. Japan, the richest country in Asia, has average income of about $40,000. Japanese Americans also live 2 years longer than Japanese. Swedish Americans are also considerably richer than Swedes, as I discovered today: http://super-economy.bl…

Comparing average incomes is meaningless for at least two reasons:

1) The cost of living will not be the same; and 2) Income is no measure of quality of life/satisfaction.

As an example, what if average incomes are higher, but so is income inequality? What effect does this have on the society (and the standard of licing of those within it) as a whole?

I also think jbooth has a point in that these are self-selected groups.

Re: Your real tax rate: 40%

#129

Post by bmcleod »

kenjackson wrote: post #110
rada wrote: post #89

Earlier quoted context omitted.

Tax arbitrage means using the difference in tax rates to make extra money. If the tax rate when you contribute to a tax-deferred investment account is higher than the tax rate when you pull the money out, voila, you've profited from tax arbitrage. So I am not sure why you are thinking of income vs. other taxes. The authors are simply saying, if you are a high earner in a top federal tax bracket, it really pays to put…

OK, I thought the takeaways were implying that you were finding some inefficiency in the system. Rather they were simply saying that retirement accounts work as advertised. Just an odd takeaway, since that's the expressly stated purpose of most retirement accounts. But fair enough.

The strange thing here is that retirement accounts with a tax deferment policy benefit the higher earners much more than they benefit people in lower tax brackets.

This isn't very consistent when the social issue that has really driven these polices into existence is trying to convince lower earners to save for retirement so that the state doesn't have a huge outgoing on pensions etc.

Re: Your real tax rate: 40%

#130

Post by yummyfajitas »

jbooth wrote: post #124
yummyfajitas wrote: post #116

Earlier quoted context omitted.

To be fair, in the few cases where I've seen good data, most groups do better in the US than in their native countries. For instance, Asian Americans have average income of $65,000. Japan, the richest country in Asia, has average income of about $40,000. Japanese Americans also live 2 years longer than Japanese. Swedish Americans are also considerably richer than Swedes, as I discovered today: http://super-economy.bl…

Yeah, but that's a self-selected group. People who are capable of moving their families to another country to pursue a career are more likely to be successful. Similarly people who grow up in poor, backwards communities (trailer parks and projects, meth and crack), tend to wind up poor and backwards. Maybe I'm a reactionary liberal but I have an easier time believing that than the inherent genetic superiority of the…

Swedish Americans are the descendents of lower class agricultural workers who left religious repression in Sweden between 1860 and 1910. In the case of Japanese Americans, they are descended from manual laborers who left Japan between 1882 and 1924.

http://en.wikipedia.org/wiki/Swedish_emigration_to_the_Unite...

http://en.wikipedia.org/wiki/Japanese_American#Immigration

In any case, I don't get how you could read either of my factoids and suggest I was pushing genetic determinism. Clearly, some environmental factors are important. For example, living in the US rather than Sweden or Japan seems to cause people to earn 50% more money. Using US health care rather than Japanese health care seems to increase life expectancy by 2 years (no, I don't actually believe this latter point).

But on the other hand, ethnicity does also seem to have some measurable effects. Asian Americans beat whites on most social measures in spite of the head start whites had.

Feel free to call me a racist tea partier if you like.

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