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Your real tax rate: 40%

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Re: Your real tax rate: 40%

#131

Post by yummyfajitas »

jsankey wrote: post #128
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…

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 g…

The data I gave is adjusted for cost of living. (Fun fact: adjusting for cost of living hurts Sweden, living there is more expensive, not less.) This blog post describes the methodology:

http://super-economy.blogspot.com/2010/03/income-distributio...

As you can clearly see from the graph linked to in my previous comment, the bottom 15% or so of Swedish Americans are slightly poorer than Swedes. The top 85% or so are richer. That's the effect of inequality.

As for quality of life/satisfaction - I'll focus on wealth since I don't really know what you mean when you say "quality of life" or "satisfaction" (they are fairly subjective terms).

Re: Your real tax rate: 40%

#132

Post by jbooth »

yummyfajitas wrote: post #130
jbooth wrote: post #124

Earlier quoted context omitted.

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 eit…

Oh, I wasn't accusing you at all, just noting it was funny that we were talking about the Danish with their blonde hair and blue eyes, in the context of genetic determinism -- been reading about Hitler and Stalin's respective rises to power recently, so it's on my mind.

As far as the Asian American thing, I'm personally partial to social factors there as well. At the risk of being a stereotyping a-hole, there's a lot of Asian Americans in SAT prep classes. Correlation with ethnicity doesn't necessarily mean that asians are genetically predisposed to be better at the SATs.

Really, I just wanted to highlight those satellite pictures of Denmark.

EDIT: Also, RE: the impoverished and hardworking immigrants, I agree, it's not like they were Saudi princes when they came to America, but those who did come were the ones who had the motivation to pull off the journey -- then, now that they've bitten it off, they're obligated to succeed. Still self-selecting to some degree to me.

Re: Your real tax rate: 40%

#134

Post by jsankey »

yummyfajitas wrote: post #131
jsankey wrote: post #128

Earlier quoted context omitted.

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 g…

The data I gave is adjusted for cost of living. (Fun fact: adjusting for cost of living hurts Sweden, living there is more expensive, not less.) This blog post describes the methodology: http://super-economy.blogspot.com/2010/03/income-distributio... As you can clearly see from the graph linked to in my previous comment, the bottom 15% or so of Swedish Americans are slightly poorer than Swedes. The top 85% or so are…

Thanks for linking to the post with the methodology, it was interesting. It does show the difficulty of trying to get accurate numbers, although the author has clearly made an effort to.

Re: the effect of inequality: sure, that's the effect on income. But that is obviously not all that matters.

Yes, the things I am referring to are subjective. Yes, they are hard to measure. But this doesn't mean we should just ignore them, and focus on what we can easily measure. Sounds like a recipe for optimising the wrong thing.

Re: Your real tax rate: 40%

#135

Post by muzz »

rada wrote: post #65

The actual paper is here: http://www.kotlikoff.net/sites/default/files/Does%20It%20Pay... and perhaps the most practical bit is here: The paper provides four main takeaways. First, thanks to the incredible complexity of the U.S. fiscal system, it's essentially impossible for anyone to understand her incentive to work, save, or contribute to retirement acounts absent highly advanced computer technology and software. S…

> First, thanks to the incredible complexity of the U.S. fiscal system, it's essentially impossible for anyone to understand her incentive to work, save, or contribute to retirement acounts absent highly advanced computer technology and software.

If the article is arguing that everyone pays roughly the same taxes, that would mean we have a de facto flat tax anyway so the incentives should be clear.

> Second, the U.S. fiscal system provides most households with very strong reasons to limit their labor supply and saving.

That would mean unemployment would be low, given the lower labor supply.

> Third, the system offers very high-income young and middle aged households as well as most older households tremendous opportunities to arbitrage the tax system by contributing to retirement accounts.

If one had a crystal ball, yes. Marginal tax rates are at some the lowest in 60 years, so it is entirely possible that they will be higher at the time of retirement withdrawal.

> Fourth, the patterns by age and income of marginal net tax rates on earnings, marginal net tax rates on saving, and tax-arbitrage opportunities can be summarized with one word - bizarre.

Doesn't sound very objective.

Re: Your real tax rate: 40%

#136

Post by stinkytaco »

patrickgzill wrote: post #27
cperciva wrote: post #19

Earlier quoted context omitted.

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…

Canadians also pay much more for gasoline than Americans. Of course, not all of this is in taxes. To check this: find a "gas buddy" site for a place in Canada, then find one for the nearest US city/town close to it (to control for price disparity due to shipping). Multiply cost per liter by 3.6 to get equivalent US Gallon; then adjust it by current exchange rate. Example: lowest for Vancouver, BC: http://www.vancouve…

Canadians also appear to pay more for books that Americans. $30 for a hardcover, are you nuts?

Re: Your real tax rate: 40%

#137

Post by stinkytaco »

randallsquared wrote: post #34
mcknz wrote: post #29

It's not like the entire tax goes into a black hole -- it would be interesting to see what the return is on the average tax rate: how much benefit is derived from state, federal, and city services (roads, water, security, libraries, parks) and benefits (unemployment, social security, disability).

It's not like the entire tax goes into a black hole It's arguable that we'd be better off were that so... part of the tax burden is all the people employed by those taxes who don't actually contribute anything to society on net (that is, whose jobs wouldn't be done at all on the free market)... in this way, taxes can have something like double their cost in harm, potentially.

This is an interesting idea. What jobs would not exist on the free market? Let's just take, for example, a traffic engineer. Someone whose job it is to make sure the network of roads runs smoothly, interconnects between states and more or less provides a consistent infrastructure for the transportation of goods. It's quite possible this wouldn't exist in the free market, just look how long it's taken to standardize the web. Of course, we were able to standardize on TCP/IP, but that was probably government influence.

I'm not trying to troll, but I'm curious how different the world would look if we left things like infrastructure to the free market.

Re: Your real tax rate: 40%

#138

Post by smeatish »

byrneseyeview wrote: post #101
JoeAltmaier wrote: post #99

Earlier quoted context omitted.

Really rich people have little or no income. The dodge comes in taking your jet, car, residence, living expenses etc as work expenses. While you OWN billions, your income may be thousands.

If you own "billions," you presumably own equity or debt (maybe some commodities, but it's not likely). If you own debt, you're paying taxes on the interest. If you own equity, the value of that equity is the net present value of future cash flows--meaning it's 'taxed' at the rate at which corporations are taxed. In addition, spending a lot of money and then making it a 'work expense' still requires lots of income. Y…

As a side note, one interesting difference between owning equities from a company that you started versus that you purchased from savings is that your work invested into the company is NOT taxed.

If you can create $100k of value a year in your own company or earn a salary of $100k (which after taxes nets you only $60k that you can contribute to purchasing assets), it will take you a lot longer to build up the value of your assets. Of course, capital gains distributions from either asset are taxed the same.

Re: Your real tax rate: 40%

#139

Post by billswift »

erikpukinskis wrote: post #70
_delirium wrote: post #50

Earlier quoted context omitted.

The people who do live in Denmark seem pretty happy about doing so, though ( http://www.sciencedaily.com/releases/2006/11/061113093726.ht... ). One reason might be that they're fairly wealthy to begin with, so it's taking a large percentage out of a large pie (Denmark's per-capita GDP is ~DKK 375,000 = ~$62,000). The social safety net is also rather strong as a result of the government's large amount of income, and i…

And interestingly their unemployment rate is lower than ours* (at least since 2004). Evidence that providing more government services doesn't lead to people just sitting on their asses and cashing their welfare checks. * http://globaleconstats.com/wp/2009/08/25/the-unemployment-ra...

I bet that if you put 30% of Americans on the public payroll, our unemployment rate would go way down too.

Re: Your real tax rate: 40%

#140

Post by stinkytaco »

randallsquared wrote: post #104
coreymull wrote: post #86

Earlier quoted context omitted.

Airlines wouldn't exist in the "free market". Are you arguing that air travel has no net value?

I'm willing to entertain the argument, though I'm not familiar with any arguments that airlines are inherently unprofitable without using force on someone.

Depends on where you are. Airlines wouldn't fly into rural North Dakota because it would simply not be worth their while. That doesn't mean that people supporting energy and agricultural production don't need to fly. If you weren't subsidizing them with your tax dollars, you would be with your airline tickets. This would probably lead to fewer people flying, less tourism dollars, etc. thus requiring the government to come in and subsidize them again :)

If you took the government out of the airline industry now, the country would look very different.

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