Here is a short list of things we need to do as a country along with things many Americans suggest we do as a society.
Needless to say nothing on the list is actually free to anyone, but many Americans seem to ignore anything connecting what is provided by government and where government gets its revenue.
- Make Social Security sustainable
- Assure Medicare is sustainable
- Forgive student loans
- Make college tuition “free”
- Make child care “free”
- Make most health care “free”
- Increase Social Security benefits
- Provide minimum guaranteed income
So, do we want a society similar to say Denmark, the highest taxed country in the world with very extensive social welfare programs? Is there a valid tradeoff between high taxes and much of life’s necessities provided through government?
Denmark has the highest tax rate in the world, with a tax burden of 46.34%. This is attributed to their expansive welfare system that provides generous benefits to families and individuals, as well as investments in infrastructure and services such as healthcare, education, and public transportation.
Danish people pay taxes on their income, consumption and property acquisition, with higher paid citizens paying more taxes due to a progressive taxation system. Furthermore, Denmark also imposes an inheritance tax of up to 15% on estates worth more than 321,000 Krone ($47,062) In addition to this, Denmark’s corporate tax rate has been steadily increasing over the years, reaching 22% in 2020.
As a result of these high taxes, Danish citizens benefit from an extensive social safety net that includes free education from primary school through university level, generous maternity leave and parental leave policies, affordable healthcare options for all citizens and residents of Denmark regardless of income level or citizenship status, and generous pension schemes for retired individuals. The goal behind all these taxes is to create social equality among the population by providing shared access to resources which are seen as necessary for the collective good within society.
NOTE: The inheritance tax does not apply to a spouse. Only close relatives such as children pay the 15% rate. Anyone else pays 25% less what was paid on the 15%. The untaxed portion is quite insignificant by USA standards.
The ten countries with the highest tax rate are :
1. Denmark – 46.34%
https://wisevoter.com/country-rankings/highest-taxed-countries/
2. France – 45.4%
3. Belgium – 42.92%
4. Sweden – 42.91%
5. Italy – 42.45%
6. Austria – 42.44%
7. Finland – 42.19%
8. Cuba – 42%
9. Norway – 39.93%
10. Netherlands – 39.33%
The Danish tax burden includes a 25% value added tax (VAT)
Does include state sales taxes or property taxes .
While comparing the United States to a country the size of Denmark has its flaws, Denmarks national debt to GDP percentage is about 30% while the USA debt to GDP percentage is about 121% and rising.
Who is mismanaging what?
QUINNSCOMMENTARY 
The incarceration rates that you guys discuss could be attributed to the war on drugs. I haven’t looked at any studies addressing that but if my memory serves, crack cocaine was the new rage. Just a thought. Anyway, my opinion is that incarceration rates are still too low. And poverty is not the reason for all the Wild West shoot ‘em ups we have on a daily basis nor any of the assorted rapes, robberies, car jackings and burglaries.
The other idea of free healthcare across the board is a non starter due to insufficient healthcare staff. I wouldn’t dare guess what the total cost would be if it were implemented. Free college is a joke. The whole concept of college was for students with the intellect and desire for further education. The free post secondary ed should include apprenticeships, technical school and a recognition that some jobs require a little ojt and pay accordingly.
The tax to pay for whatever is going to hurt no matter who pays.
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An honest and accurate summary of the costs and tradeoffs is what is lacking in most political messages. The American left would have us think we can duplicate Denmark’s generous government provided benefits by only hiking taxes on the “rich”, where the reality is that every taxpayer would pay substantially more. I have no expertise in economics, but the way I view insurance compared with others may be instructive. What I want from insurance is protection from a catastrophic event, not first dollar coverage for expected costs. This is true for health care, home and auto coverage. I am most interested in knowing what my annual maximum out of pocket cost would be for a worst case scenario, and plan to have enough cash available to meet such a cost, knowing there is a finite limit, after which insurance will protect my assets. Using that logic, I prefer our system to Denmark’s.
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The purpose of insurance is as you say, but especially for health “insurance” it has come to mean 100% coverage or it’s no good.
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No, every taxpayer would not have to pay more. Just the opposite. Every country is inequal, but some are more inequal than others. Even before taxation, income in Denmark is much less inequal than the U.S. That is not a bad thing. Then comes taxation and redistribution, from the richer to the poorer.
Although the U.S. may not be the richest planet on Earth, we do have a higher GDP per capita than most countries, including Denmark, and more redistribution would be beneficial. We could at the least aim for “average”. We would all, richer or poorer, be better off.
And yes, you can tax me. I am apparently higher (slightly) than the average household income
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No country with extensive social programs pays for them without the tax burden spread across the population.
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The very definition of redistribution is that some people pay and other people receive.
Receive. As in, not pay.
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47% of households already don’t pay an income tax, some receive refundable credits. How much do you think the other 50% have to pay more and to fund new, expanded social programs? There will always be some citizens in need and deserving of assistance, but not as defined by the progressive left.
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A new term I hadn’t considered ; social equality.
Because as “they” say, we don’t live in an economy, we live in a society.
“…by providing shared access to resources which are seen as necessary for the collective good within society.”
Resources like adequate food, clothing, shelter, healthcare, education, and more even to the poorest among us. Speaking of which, may I segue to… single parent families, one of the biggest causes of “poverty”.
In the U.S., In 1965, 24 percent of black infants and 3.1 percent of white infants were born to single mothers. By 1990 the rates had risen to 64 percent for black infants, 18 percent for whites.
The overall average for out of wedlock births in the U.S. is about 41 percent, same as the OECD average. Denmark is over 50 percent, FWIW. (Not that there’s anything wrong with that.)
The times are changing. Who is mismanaging what?
” Most people don’t know… ”
I like this one because it is literally off the charts…
https://i0.wp.com/okpolicy.org/wp-content/uploads/NATO_OK_2018.png?resize=640%2C370&ssl=1
The huge increase in U.S. incarceration rates began in the 80’s, by the way, about the same time the huge increase in income disparity.
Tax the rich. Decrease income inequality. Increase social equality. Don’t blame the guy on the bottom.
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What are you saying about incarceration rates? Not justified, innocent people? Tax the rich? Please define “rich.” There was nothing about blaming anyone. The point is that countries with strong social benefits have high taxes on everyone, not just the “rich” and that’s some many in the US can’t grasp and instead cry for just taxing the rich.
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Correlation does not –necessarily– imply causation, but I am inferring that, maybe, as there is less “social equality” as in reducing assistance to the neediest*, the neediest resort to desperation. Desperation economically and socially.
No, frankly I don’t know the answer, but the difference in incarceration rates compared to the civilized world is staggering. Why?
IMHO, the poor ARE being blamed, by many, because “I made it, why can’t you?” (and why should my taxes pay for you?), when the problem is a systemic income inequality ( or systemic societal problem, as in single parent families.)
I have nothing against the rich, except as Obama said, you didn’t make that by yourself. You had help. And a lot of that help was from under compensated lower level workers.
I am rich. In 1970 I could have been in the 40 percent marginal tax bracket. The top bracket was 70 percent. And most of the families I knew were one income families.
Denmark, et. al., does not have higher taxes on everyone. They have negative taxes on the lowest income. They have much more income redistribution than the U.S. Most OECD countries do.
*needy because, “if only you would work harder”
What happened in the 80’s?
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Of course, if your wealth is in the stock market or other investments as is the case with the top 10% or so you will get richer in terms of net worth, and income, so what? How does that take from anyone else? Wealth is not a finite pie. If my income is five times yours, what does that say? I’m somehow a bad, greedy person who doesn’t deserve my income?
And it seems to me the wealthiest among us are the ones creating jobs, even new industries.
As far as incarceration goes I have to ask why (other than a doubling of the population). I don’t know the answer, but if the increase is relevant we should understand why.
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Adam Smith, I think is largely credited with conservative economics, free market, with little or no government interference (and minimum taxes) but the Wealth of Nations may be more like the Bible in the diverse interpretations. If your income is five times mine, that doesn’t make you greedy or bad. Deserve? Meh!
Most of my life, I earned almost twice what my wife did, and frankly I believe that’s a failure of the “free market”. I worked hard. And I was lucky.
Back to Smith, as I understand, extreme wealth is a failure of the market system, not just because it may be somehow immoral, but because it is inefficient. And counter productive.
“Accordingly, when the economy is sound, wealth concentration should not occur. Only when profit-seekers have rigged the system through legislation do concentrations occur. Throughout, as I show, Smith states his expectation that fortunes would, indeed, not be high and that in any case they were prone to dissipation. Such a system cannot generate steep inequality.
Wages, at the same time, should rise with increased wealth. On this basis, Smith defends adequate labor wages, which had to be at least sufficient to provide the “necessaries,” covering lodging, food and clothes, the latter tailored to middle-class comforts.”
He was also a proponent of very progressive taxation.
https://blogs.lse.ac.uk/politicsandpolicy/adam-smith-and-inequality/#comments
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The difference in debt to GDP ration between Denmark and the USA says it all.
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The difference in tax to GDP says a lot, too.
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I lived and worked in the UK and paid their taxes. I did not like my low after tax income and high daily living expenses. If you want socialism, please move to one of the socialist countries and let the USA be a capitalist society (although with a bit more help for the poor). I’m with RD Quinn except where he thinks the USA should have a Value Added Tax. I experienced that also and no thank you.
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” (although with a bit more help for the poor). ”
That’s all I’m asking. “…Smith defends adequate labor wages, which had to be at least sufficient to provide the “necessaries,” covering lodging, food and clothes, the latter tailored to middle-class comforts.”
That is not happening for the working poor, as, I repeat, through no fault of their own.
Whether through wages or social assistance they have to have enough to provide for the “necessaries,” anything less is unsustainable.
Even at that, the life expectancy of the poorest Americans is 15 years less than the richest. May be that’s a blessing…
Woody Allen: “um… two elderly women are at a Catskill mountain resort, and one of ’em says, “Boy, the food at this place is really terrible.” The other one says, “Yeah, I know; and such small portions.”
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Some people start life with nearly insurmountable obstacles even though many to overcome them. However, to say “through no fault of their own” is an overstatement IMO. Life is full of choices and some of those voices result in a disadvantaged life. I graduated a high school with a good solid education. Today the math proficiency rate at that high school is 4% and the graduation rate 73% despite the system spending as much per student as several wealthy districts. This students/families are good candidates for a lower income future through whose fault?
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