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US takes 'richest nation on earth' crown from Switzerland

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Re: US takes 'richest nation on earth' crown from Switzerland

#201

Post by C1sc0cat »

hvidgaard wrote: post #174
jlangenauer wrote: post #172

Earlier quoted context omitted.

Wait, you have to pay income tax on income you could theoretically receive? I'm fascinated to know what possible justification there is for this? (Genuine, not rhetorical question.)

Think of it as a tax just like on land, but for buildings. The reasoning is that housing represents an asset that should not be bought just for speculation, i.e. buy it and let it sit empty until the price is high enough for the investor to make a good profit. Of course they're free to do just that, but all housing which people can live in, are taxed as if you had that income.

I could see the argument for a second home but for a home you are living in it seems counterintuitive if not against natural justice

Re: US takes 'richest nation on earth' crown from Switzerland

#202

Post by C1sc0cat »

quentindemetz wrote: post #182
jlangenauer wrote: post #172

Earlier quoted context omitted.

Wait, you have to pay income tax on income you could theoretically receive? I'm fascinated to know what possible justification there is for this? (Genuine, not rhetorical question.)

It’s the same in the Netherlands. Instead of counting how much you earn from your capital, the tax administration estimates that you earn about 5% and taxes you on that (about 30% iirc). But hey, if you make above their estimation, you don’t pay extra. But if you don’t invest, you still pay... I really like how simple it makes the tax calculation (at least when you know how to value your assets).

Can the Dutch Tax Authorities show me where I can with relative safety make 5% ? my 5 figure portfolio (uk) returns about 3.4% income.

Its also odd that if say you get a ten bagger and turn 5k into 50k for a 45k capital gain you don't pay tax on that capital gain.

It would make sense and be firer to tax income and capital gain different and on actuals.

Re: US takes 'richest nation on earth' crown from Switzerland

#203

Post by ferdek »

DuskStar wrote: post #47
tempsy wrote: post #37

One of the more baffling statistics I’ve seen lately is that consumer debt continues to increase and credit card interest rates are at multi year highs despite the fed funds rate being at historical lows. Things don’t add up.

Sounds like the credit card companies are expecting a vanishing fraction of the people for whom credit card interest is relevant to actually pay them back... (At least among my family, common knowledge is to treat credit cards like debit cards or charge cards - make the full payment, every time, and if you can't make the full payment you shouldn't have made the purchase)

Same here - I'm using credit card only for extra protection (chargeback and so on) always making the full payment at the end of the period.

Re: US takes 'richest nation on earth' crown from Switzerland

#204

Post by C1sc0cat »

Reason077 wrote: post #28
defertoreptar wrote: post #12

Earlier quoted context omitted.

I like how they calculated consumption, rather than income or net wealth. That's a more honest way of comparing poverty in different countries.

I'm not sure it's an entirely fair way to define poverty. In many parts of Europe you can have a relatively high standard of living without consuming (or even owning) all that much. For example, you can have a high standard of living without owning a car (and all the 'consumption' that goes along with that), in cities that have good public transport, and a good infrastructure/environment for walking and cycling. In m…

But that does depend on luck say 20 years ago you brought a council flat in London in Westminster or those ones next to blackfriars with a view of the Thames - yes you can.

Living centrally in Paris, London etc is not cheap.

Re: US takes 'richest nation on earth' crown from Switzerland

#205

Post by brownbat »

jcheng wrote: post #118
brownbat wrote: post #71

> But debts in the Alpine country are far higher than in the US... Debts make this comparison difficult to make meaningful. A few cases: - Minimum wage earner barely scrapes by but does not seek any credit. - Someone in a high cost of living area takes out a mortgage. - A young neurosurgeon with fresh educational debt takes on a very high paying job. - A billionaire borrows to finance a major real estate project The…

When you take out a loan, it doesn't decrease your net worth, right? If I'm worth $X, then I take out a $1MM loan, at that moment I'm still worth approximately $X (because the $1MM the bank gave me and $1MM I owe the bank cancel each other out). So I'd rank them as: - Billionaire - Home owner - Minimum wage earner - Neurosurgeon

Good point, especially as to the homeowner, I think we can tweak the cases.

Though naturally the billionaire bribes an appraiser to undervalue all the new assets for tax purposes though, right? :)

Ok, half joking. More seriously I expect some large investment projects we could use have a value that will only materialize after significant work and capital are burned.

You buy a run down warehouse, the debt and building wash out, but you spend a ton of work turning it into the hip new place for aspiring restauranteurs... there's a gap before it's really obvious to the world what you're accomplishing. The debt for the building washes, but early expenses for clean up, refurbishing and advertising would look on paper like they're disappearing.

Maybe I should use a hypo like that instead.

The biggest problem is that ability to carry debt correlates with expected ability to pay in the future. If someone trusts you to borrow in a way where you immediately burn the money and spiral yourself way negative, however you manage to get there, odds are you are very well off or very convincing.

Net worth might be like a horseshoe. The best off might be those both way at the high end and millions in the negatives.

Re: US takes 'richest nation on earth' crown from Switzerland

#206

Post by yorwba »

mantap wrote: post #193
nwellnhof wrote: post #180

Earlier quoted context omitted.

It's simply a fairer way of taxation. Suppose that you own a house that you rent out and live in another house for rent. Then you obviously have to pay taxes on rental income. If you live in a house that you own, you don't have to pay taxes in most countries, although your financial situation is basically the same.

It makes sense as a way of taxing a secondary residence, but for a primary residence it makes no sense. What if you are old, or disabled, or unemployed? Are you forced to sell your house to pay this tax?

You could also rent it to someone other than yourself, pay your taxes on that income and use the profit to pay for a cheaper accomodation.

That does mean you can't use your own home as a safety for when you're old and poor, but that doesn't necessarily make the tax bad. It just means you have to change strategies and invest your money productively. In practice I'd expect the number of people who suddenly find themselves unable to afford even just the tax on what they'd have to pay to rent their own property to be quite small.

Re: US takes 'richest nation on earth' crown from Switzerland

#207

Post by rayiner »

DanBC wrote: post #192
adev_ wrote: post #170

Earlier quoted context omitted.

My Apologies for my early morning grumpy post, without re-reading. Here is the more fixed one : > Over a career, the value of tuition free college for the average American comes nowhere near the extra taxes and lower income they’d have in France That is so bullshit. What matter is not, of course, the difference of cost between tuition fees and taxes. What matter is that everybody, even the ones that can not afford th…

> My Apologies for my early morning grumpy post You're responding to someone who consistently misrepresents the facts about healthcare and healthcare spending in different countries, so a level of grumpiness is somewhat expected.

If there is a statistic you want to correct please suggest one. That said, the blatant misrepresentation of the US system as one where everyone is going bankrupt despite having health insurance makes me pretty grumpy too.

Re: US takes 'richest nation on earth' crown from Switzerland

#208

Post by dillonmckay »

rayiner wrote: post #58
dillonmckay wrote: post #52

Earlier quoted context omitted.

and affordable highspeed internet.

France has much slower internet on average than the US: https://www.akamai.com/de/de/multimedia/documents/state-of-t... It’s almost as if it’s part of a pattern, where the top 75% in the US do better than France, while the stronger French safety net is better for the bottom 25%.

I also said ‘affordable’.

Re: US takes 'richest nation on earth' crown from Switzerland

#209

Post by rayiner »

AstralStorm wrote: post #126
rayiner wrote: post #114

Earlier quoted context omitted.

The point is that the cost of healthcare doesn’t eat up the income difference between the typical American family and typical European family. Note also that trying to compare health outcomes between countries is extremely difficult. Asians in the US live longer than Asians in countries with excellent healthcare systems like Japan.[1] Puerto Rico has a similar life expectancy to Denmark or Germany, even though if it…

Did the cost match when you add the school debt, a thing that in general does not exist in EU? Did you use PPP to evaluate value?

School debt amounts to very little. Most Americans have no student loans. For the people who do, the median debt is $25,000, which is less than the average American new car loan. Even for recent graduates, 1/3 have no student loans and the average loan is $30,000. And the government limits repayment to 10% of disposable income.

Re: US takes 'richest nation on earth' crown from Switzerland

#210

Post by rayiner »

AstralStorm wrote: post #123
rayiner wrote: post #82

Earlier quoted context omitted.

That’s also consistent with the pattern. 75% of Americans have either employer paid insurance or Medicare. For those people, premiums and out of pocket costs are on average less than the extra taxes they’d pay in Europe for health insurance: https://www.assembly.ca.gov/sites/assembly.ca.gov/files/Arch... (page 18, showing 5.2% of household income spent on premiums and out of pocket costs). (Note that France doesn’t h…

Sorry, but this is completely factually incorrect. France pays 1100 Euro per year per capita for healthcare. Private insurance is a tiny cost of average 30 Euro and reimburses you for damages. Does not pay for healthcare. Entirely different kind of insurance. In US, a single copay with health insurance can take triple this, most common ones are few hundred USD, baseline insurance is still expensive. However, yearly i…

> Sorry, but this is completely factually incorrect. France pays 1100 Euro per year per capita for healthcare.

Please try to understand the specific statistic I am citing. I’m talking about non-premium out of pocket costs: https://www.oecd.org/health/health-systems/OECD-Focus-on-Out... (chart on page 1).

The reason I quote that figure is because there is a myth that even though Americans mostly have private health insurance paid by their employer, they somehow still spend all this money on deductibles and co-pays.

The other figure I’m citing (the 5%) are not what Americans pay in total, but what Americans have to pay out of their salaries. The reason I cite that is most Americans have employed-paid insurance, which is not counted in their income. So if you just take income and subtract the total cost of healthcare per person, you get an incorrect number, because people don’t pay most of that cost out of their income. You have to look at what people pay out of pocket on premiums and copays.

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