Senator Sanders likes to Tweet that the United States is the richest country in the world and thus can afford to provide extensive social programs emulating Scandinavian countries.
Senator Warren Tweets that corporations and billionaires do not pay their fair share and thus deprive us of the expanded social programs we deserve.
I’ll leave you to decide if these individuals are sincere with their rhetoric or playing divisive politics. Or, are they simply ignorant of the facts… not likely IMO.
The really sad thing is that many Americans believe their promises including that only others will foot the bill and that average Americans can escape higher taxes.
One thing is very clear, they are unfairly misleading Americans. Scandinavian citizens knowingly trade discretionary income for social benefits. They pay much higher income taxes, higher payroll taxes and consumption taxes in the form of value added taxes (VAT).
The United States is one of the lowest taxed developed countries in the world.
If Americans were aware of the accurate story of taxes and social benefits, would they make the choice to trade more of their income for government benefits? That’s the question we should ask the good senators and all other progressives.
Scandinavian countries are well-known for their broad social safety net and their public funding of services such as universal health care, higher education, parental leave, and child and elderly care. High levels of public spending naturally require high levels of taxation. In 2019, Denmark’s tax-to-GDP ratio was at 46.3 percent, Norway’s at 39.9 percent, and Sweden’s at 42.8 percent. This compares to a ratio of 24.5 percent in the United States.
So how do Scandinavian countries raise their tax revenues? A first breakdown shows that consumption taxes and social security contributions—both taxes with a very broad base—raise much of the additional revenue needed to fund their large-scale public programs.
Source: Tax Systems of Scandinavian Countries | Tax Foundation
Why does US business complain they are taxed too much? US corporations (1%) pay over 82% less than Norway corporations (5.7%).
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That caught my eye too. My guess is that most US businesses are taxed above the companies in the 3rd world labor markets therefore making it harder to complete. But Norway seems to manage. Is it because those companies do not have to pay for benefits and that most large US company pay for? Is that not reflected in the chart? Or is it due to a complex IRS tax code that has given lots of tax breaks to many industries reducing the overall tax collection even though the actual corporate tax rate is high in the US. Think about all the tax breaks a company gets if they build a factory just to get the jobs.
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The percentages you are quoting relate to portion of GDP that corporations pay, not their tax rates. From the source document, “All Scandinavian countries’ corporate income tax rates are lower than the United States’ rate. In 2020, both Denmark’s and Norway’s statutory corporate income tax rates were 22 percent and Sweden’s corporate income tax rate was 21.4 percent. The U.S. tax rate on corporations is slightly higher at 25.8 percent (federal and state combined).” That is what the complaints are.
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A government big enough to give you everything you want, is strong enough to take everything you
have. — Thomas Jefferson
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Attribution is sometimes given to Thomas Jefferson and sometimes Gerald Ford however it is uncertain who originated it.
In my opinion the statement is valid.
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Ceding ever more power and wealth to federal bureaucrats and politicians is a bad trend. The taxation rate is not a good measure of meeting the needs of citizens. Meaning we all know the bloating of government agencies. The mission drift/creep, the easy political corruption, featherbedding, and constant claim of increased demands on the public treasury to do their job right.
However, we all want to improve life, improve our standard of living over time, and decrease the complexity of living. IOWs best to have easy to conform regulations. It’s a complicated world. We inadvertently developed a social system that punishes and disincentivizes the less wealthy. Our current social system affords too much sympathy and financial incentive for losing and indirectly establishing poor moral behavior. We have so much complexity that works against the disadvantaged such as those less educated, less motivated, and less uninformed.
Understanding our American heritage and exceptionalism we would be better off fighting against the trend to run to federal solutions especially at the personal level. It should be a Constitutional amendment to forbid the federal government to establish payouts to private citizens. As we all can see the current system is way corrupt to empower politics to buy votes. The power for citizen payout should occur at the state level. States should be in charge of helping citizens and by doing so we would develop more talent and invent better methods.
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