Taxes, Taxes Everywhere
The overwhelming fact about Danish public policy is that taxes in Denmark are really high. There’s a substantial VAT and also a substantial income tax. You pay taxes to buy a car, and you pay higher taxes for heavy cars. Gasoline taxes are high (gas costs almost $7.50 a gallon) as are taxes on electricity, which account for more than half the cost of electricity to consumers. In exchange for all this, the Danes have basically achieved all the stuff progressives say they want. The country is rich, clean, and highly egalitarian. The high taxes finance generous public services, and the high levels of expenditure allow the country to do without a lot of extraneous business regulation which helps keep the place economically dynamic. According to surveys, the people are all very happy, which is exactly what you would expect from a very rich, very egalitarian society. And as this trip has emphasized, they do it all while doing much less polluting than Americans do, despite a higher average material standard of living.
There’s more to that than taxes, of course, but the high taxes really are integral to the whole thing. And that includes the environmental piece. In part because there are directly pro-environment taxes. But also, I would say, in large part because it’s the egalitarian income distribution and robust redistributive state that makes the environmental policies tolerable. Cheap gas and electricity are, in part, what we do in the United States instead of real social policy.
All of which is just to emphasize a point I’ve been making a lot over the past few months: there’s no way to have a progressive renaissance in the United States unless progressives find some politically feasible way of directly making the case that higher taxes for better services can be a good trade. And it’s worth trying to be honest about this. The other American journalists I’m traveling with, all lefty environmentalist types, can’t stop complaining about how expensive basic consumer goods are here. And it’s true, stuff’s expensive! But college and preschool and doctors and hospitals are all free, and the carbon emissions are low. This is, I think, a good trade but it really is a trade. Low taxes plus cheap dirty energy and large numbers of poor people will give you cheaper restaurants.
72 Responses to “Taxes, Taxes Everywhere”
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October 8th, 2009 at 10:37 am
The other American journalists I’m traveling with, all lefty environmentalist types, can’t stop complaining about how expensive basic consumer goods are here.
I know it’s expensive, but I also would imagine if you actually live there, you learn where the bargains are, to the extent they’re available (which no doubt doesn’t include things like gasoline and electricity, but still).
October 8th, 2009 at 10:40 am
And as this trip has emphasized, they do it all while doing much less polluting than Americans do, despite a higher average material standard of living.
Obviously, they need to cut taxes and maybe run some ginourmous deficits. So they can stand prepared to repel an attack by polar bears.
max
['OW! What?']
October 8th, 2009 at 10:42 am
Now Matt doesn’t merely use straw man arguments, he is traveling with straw men.
October 8th, 2009 at 10:45 am
The other American journalists I’m traveling with, all lefty environmentalist types, can’t stop complaining about how expensive basic consumer goods are here.
Although such people do exist, here is one example:
http://yglesias.thinkprogress.org/archives/2009/09/why-is-soda-so-expensive-in-europe.php
October 8th, 2009 at 10:45 am
The key to public acceptance of taxes is getting value for money. I live in Massachusetts now but have lived in California in the past. With a 5% flat income tax and a ~5% sales tax I feel the generous public services available in this state are certainly worth the money compared with living in Texas or Florida for example.
However, having lived in California and having paid 7% sales tax and a greater than 7% income tax – I really don’t think I was getting value for money.
October 8th, 2009 at 10:45 am
Good luck with that. You’ve got 30 years of anti-tax brainwashing to overcome.
October 8th, 2009 at 10:48 am
Also, in America, I think the way our political economy is set up makes it harder to save money. It’s true you can buy a lot of cheap crap here — and that’s the type of stuff you can skimp on during hard times to economize, but a number of the staples of life, such as housing, transportation, healthcare, day care, and education, aren’t so easily amenable to economizing measures (I’d add leisure time to this list). I would imagine in a country like Denmark, the fact that the government helps average people with a lot of these major life necessitates not only enhances general economic security (and so minimizes stress), it also helps you save money — and that, in turn, lowers stress. Sure, the tax man takes a big bite, but that only encourages people to spend carefully on quality items that are well-made and last a long time. Anyway, the political economy of the US seems to weirdly under-weigh economic security and peace of mind in favor of cheap, ephemeral thrills.
October 8th, 2009 at 10:48 am
Obviously the Danes feel that they are getting their monies worth.
The problem in the States is that when we pay high taxes, we don’t feel like we get our monies worth.
Would you want to pay higher taxes and then see the rich get a tax cut because “cutting their taxes will stimulate the economy”? Would you want to pay high taxes in your city, so that you have nice stuff, then have the freeloaders from the suburbs come in, use the nice stuff, then go back to their low tax suburb? You would feel like you were subsidizing them and getting ripped off.
People want to feel like they are getting their monies worth, not that they are getting ripped off.
October 8th, 2009 at 10:50 am
Something’s rotten in the state of Denmark, in fact, it sounds as though a spectre is haunting Denmark, the spectre of Fascism! I bet they even have some tasteful vegetarian restaurants in Copenhagen. The horror.
October 8th, 2009 at 10:50 am
A lot of the high expense of goods in Denmark (which I’ve complained about as much as the next guy) is that they have their own currency which is very very strong. If you’re being paid in kroner then the cost isn’t as bad.
October 8th, 2009 at 10:51 am
Perhaps furthering your point on “random stuff is expensive” – the dollar is relatively weak right now. This helps make things seem expensive in a way that a native wouldn’t notice so much.
October 8th, 2009 at 10:51 am
Or maybe progressives should make sure we spend our tax dollars more wisely. Trim defense spedning (!), ag subsidies, but also lefty programs that aren’t effective (not all of them are).
October 8th, 2009 at 10:53 am
Here is the problem, and it is the issue I faced when exploring the possibility of getting a job in Europe: not only are the taxes higher, but the “egalitarian income distribution” means that you will make more money for specialized professional work in the USA than in Europe. And income taxes are higher. And consumer goods are more expensive.
Maybe you can advocate that the combination of two of these things with more and better government services and public amenities are good things. But if you put all three of them together, it sounds like you just end up with a lower standard of living. Denmark is unusual in that its taxes are significantly higher than in other western european countries.
October 8th, 2009 at 10:54 am
I would imagine in a country like Denmark, the fact that the government helps average people with a lot of these major life necessitates not only enhances general economic security (and so minimizes stress), it also helps you save money — and that, in turn, lowers stress.
But, but, life is just no fun if the poor and middle classes aren’t stressed. Just ask Charles Murray.
October 8th, 2009 at 10:54 am
To Jasper:
I’ve been living in Sweden for 6 years now and I don’t think I look for bargains as much as I look to spend my money differently. For instance, I eat out a lot less often. I don’t eat fast food, because it isn’t that much cheaper than a real restaurant. I certainly drink a lot less when I go out because it’s so expensive.
I think this is what people mean when they talk about soft paternalism, which isn’t a bad thing.
I understand how people can get upset at high prices and restrictive alcohol laws, especially as a tourist, but the public services make up for it for the people that live here. I fortunately have never needed any of these services but at least I know they’re there.
October 8th, 2009 at 10:56 am
Did you hear Barack Obama got AIDS from a monkey? The monkey was Michelle Obama’s brother.
October 8th, 2009 at 10:57 am
“Here is the problem, and it is the issue I faced when exploring the possibility of getting a job in Europe: not only are the taxes higher, but the “egalitarian income distribution” means that you will make more money for specialized professional work in the USA than in Europe. And income taxes are higher. And consumer goods are more expensive”
Funny, we have freidns who are nurse/doctor couple from Germany who want to move back to Europe because of (a) retirement benefits (b) future college costs for their kid. They did the math, and it’s a better option for them to move back to Europe.
October 8th, 2009 at 10:57 am
It means a lower standard of living if you engage in specialized professional work. Which is a small fraction of the population. For everyone else it’s a higher standard of living.
October 8th, 2009 at 11:00 am
eat out a lot less often.
I certainly drink a lot less when I go out because it’s so expensive.
but the public services make up for it for the people that live here. I fortunately have never needed any of these services but at least I know they’re there.
If you’re trying to sell it, you might want to rework your pitch.
October 8th, 2009 at 11:00 am
The problem with the U.S. approach is that it’s only inexpensive in the prices paid for things. But it’s actually quite costly – or will be quite costly – because at the same time this country has failed in various ways have a really rich social welfare system, it has done all kinds of ad hoc half-measures that cost a lot of money or are financed with massive debt that is unsustainable.
So restaurants and etc. will cost a lot in the years to come because there’s going to be a reckoning…
October 8th, 2009 at 11:01 am
This is why the public option is so important. People need to see what can be done on their behalf by the government in a way that they experience directly. The only Americans who regularly see the federal government affecting them in a good way are senior citizens and poor people. Even a lot of that goes through state governments.
People pay taxes for defense, farm subsidies, research grants, etc, but the benefits of that spending never appear with a “Brought to you by your Federal Government” tag line.
October 8th, 2009 at 11:01 am
I certainly drink a lot less when I go out because it’s so expensive.
Thomas: this is the kind of thing I’m talking about. I notice you modified “drink” with “when I go out.” So I’m guessing in Sweden one can imbibe much more cheaply at home than doing so when going out. I wasn’t really talking about “bargains” in the consumerist sense — you know, find the cheapest hypermarket (although that can be be part of it). I was just speculating that, when you live in a certain place, you learn how to maximize the utility your Euros will buy you. You learn to live well, in other words, as economically as possible, and are much more skilled at doing so than a bunch of visiting American bloggers.
October 8th, 2009 at 11:03 am
As an American visiting Denmark, you’re also paying American income and payroll taxes *and* the Danish VAT. While also having your American health insurance premiums deducted from your paycheck and saving up to pay your American deductibles and out-of-pocket costs. (I don’t know if you’re still paying off your American student loans, but if so, add that in too.) So you’re really getting the worst of both worlds, since you’re helping to fund the Danish system while not enjoying most of its benefits.
On top of *that*, most Americans make less money in the first place than a comparable Dane (even before taking the exchange rate into account) because of America’s super-freakishly-high Gini coefficient. (The exception is the few Americans who make way, way more than the comparable Dane or almost anyone else in the world, and they’re probably overrepresented in international tourism. But for the median American, they’d start out with more pre-tax income as a Dane.)
October 8th, 2009 at 11:04 am
“there’s no way to have a progressive renaissance in the United States unless progressives find some politically feasible way of directly making the case that higher taxes for better services can be a good trade.”
No way Americans will accept higher taxes as long as the assholes in D.C. continue to piss our money away on stupid useless wars, agribiz subsidies, bankster bailouts, pork, etc. As long as the budget is a slush fund for the plutocracy and a candy jar for campaign contributors there’s no fucking way Americans will, or should, tolerate higher taxes.
October 8th, 2009 at 11:05 am
I’m Glad MY puts this in the context of a trade – you give up certain living advantages for others. The United States is a different country that Denmark for a variety of reasons but principally for its size. We are vastly larger with a much larger number of poor people. And the poor people are not spread across the country evenly.
There are regions in this country where if you tried to impose the kind of taxes it would take to make the US into Denmark, the quality of life for a lot of people would be miserable. The poorest of the poor in this country aren’t thinking about college or daycare or carbon emissions. And their vote counts just as much as yours. They like (comparatively) cheap gas, cheap food a (mostly) unobtrusive Federal Government. The Danish approach might work in Redmond, Washington but it will not work in Biloxi, Mississippi.
October 8th, 2009 at 11:05 am
Could this be partly due to the fact that when you look at the prices, you perform an on-the-fly conversion to US dollars? If you worked in Denmark, and your employer paid your wages in kroner, things might seem more agreeable and hopefully some of your purchasing power would be restored (and, of course, american goods might seem dirt cheap).
October 8th, 2009 at 11:07 am
I’m danish and I think we pay way to much in taxes,
Just for the record.
/Limagolf
October 8th, 2009 at 11:14 am
The debate on taxes needs to be defocused. Instead of the simplistic and misleading debate of more taxes vs less taxes, there should be a focus on, “What range of tax rates supports a healthy economy?” Somehow that question never gets asked.
Consider for example a 1-2% tax rate. That tax rate would not support law enforcement, road construction and maintainance, a minimal military defense, etc. Similarly, a 98-99% tax rate would undercut a work-reward relationship. But what range of taxes is healthy?
Its a study and debate we desperately need in the United States.
October 8th, 2009 at 11:15 am
despite a higher average material standard of living
How are you measuring average material standard of living?
I would have thought that PPP adjusted per capita GDP would be the standard objective measure of this, but looking at the Wikipedia article, I see that the US is well ahead of Denmark by this measure.
October 8th, 2009 at 11:15 am
I think you have to factor in the Danish oil revenue stream before you start making conclusions about the efficacy of their system.
October 8th, 2009 at 11:15 am
Chris 23:
US GDP @ PPP = 47,440
Denmak GDP @ ppp = 37,304.
I’d really need to see some data to support your conjecture that “most Americans make less money in the first place than a comparable Dane”
October 8th, 2009 at 11:19 am
Matt,
Could you find out (cuz it’s not easy from stateside) whether these high environmental-type taxes are accompanied by lots of regulation? Or are the Danes using these taxes in place of environmental & energy-efficiency regulation?
October 8th, 2009 at 11:23 am
jmo, PPP is a bullshit measure in general, but especially applied to Chris argument.
Here are real numbers (as in, connected to something real):
#5 Denmark $62,097
#13 United States $47,440
October 8th, 2009 at 11:28 am
33 – If the Kroner was weak you’d try and adjust it the other way.
All three methods of calculating GDP per capital rank the US far ahead of Denmark.
http://en.wikipedia.org/wiki/List_of_countries_by_GDP_(PPP)_per_capita
I think the other political problem is that taxes that attempted to minimize inequality would by definition represent a massive transfer from states that have their shit together like Connecticut and Massachusetts to fucked up states like Arkansas and Mississippi.
http://en.wikipedia.org/wiki/List_of_U.S._states_by_GDP_per_capita_(nominal)
October 8th, 2009 at 11:33 am
I would think that a large fraction of the population also likes cheap consumer goods. Affordable gas, beer, and televisions go a long way to improving your quality of life.
The solution for those in Biloxy, MS likely revolves around improving things like basic infrastructure and economic opportunities. I am willing to entertain the argument that places like Denmark can afford more regressive VAT taxes because of their more egalitarian society. If we implemented those in the USA, boosting the prices of consumer goods, the results would squeeze the poor, who have more numerous per capita in the USA.
October 8th, 2009 at 11:37 am
jmo, if the Kroner was weak, PPP would still be bullshit; do you even know how it is calculated? (I guess not: “All three methods of calculating GDP per capital rank the US far ahead of Denmark.” huh, that’s three sources for the same method, PPP)
For example, notice that the GDP per capita for the US doesn’t change in PPP, that is because the dollar is almost always used as baseline; this introduces a bias in favor of American “purchasing power”.
October 8th, 2009 at 11:41 am
Actually, Denmark is a lot richer than the United Staates, not only on a median but also on a mean basis:
http://en.wikipedia.org/wiki/List_of_countries_by_GDP_(nominal)_per_capita
(note old numbers, Exchange rates even more favourable for Denmark today).
One could argue that the ppp numbers are better, but only if one does the same adjustment for the prices of goods instead of blameing taxes all the time.
So stop blameing it all on the taxes. Especially when you buy only at tourist traps….
October 8th, 2009 at 11:47 am
It is worth noting that the US squanders a lot of tax money on foreign wars. Take away one Iraq war and the US could spend all that money on social services and egalitarian measures close to Denmark and still have lower taxes.
October 8th, 2009 at 11:48 am
Why oh why,
do you even know how it is calculated?
I do, you obviously do not.
October 8th, 2009 at 11:48 am
Btw, the post at #30 is really ridiculous, when one compares the country with the United Staates…..
October 8th, 2009 at 11:58 am
I’m Glad MY puts this in the context of a trade – you give up certain living advantages for others. The United States is a different country that Denmark for a variety of reasons but principally for its size. We are vastly larger with a much larger number of poor people. And the poor people are not spread across the country evenly.
You know, it wasn’t that long ago that Denmark had a large number of poor people. Up until well into the 20th century it was mainly farmers and fishermen, most of them quite poor. At the end of WWII the entire country was poor. It’s just that the Danes saw that they had a lot of poor people, and they said “let’s make everyone not poor”, and we had a lot of poor people, and we said “let’s make a few people very very rich and keep a lot of other people poor.”
October 8th, 2009 at 12:01 pm
There are regions in this country where if you tried to impose the kind of taxes it would take to make the US into Denmark, the quality of life for a lot of people would be miserable. The poorest of the poor in this country aren’t thinking about college or daycare or carbon emissions.
What?? Poor people don’t think about daycare? Why? They don’t have kids? In fact, it’s the lack of affordable daycare that helps keep so many of the poor down — they’d have more job flexibility if they didn’t have to worry about having someone look after their kids.
And lots of poor people don’t think about college in the US precisely because it’s seen as not affordable — make it free, and they’d start thinking about it pretty quick.
October 8th, 2009 at 12:07 pm
That was not me.
October 8th, 2009 at 12:09 pm
And lots of poor people don’t think about college in the US precisely because it’s seen as not affordable
Not really, they don’t think about college because they are raised in an environment that doesn’t value education. The children of impoverished Asian immigrants don’t seem to have a problem getting into, staying in and affording college.
October 8th, 2009 at 12:18 pm
#33 and #34,
Frankly, neither PPP nor GDP nor even the Gini coefficient will tell you anything about whether if you pick a Dane at random and an American at random, which one will a) make more pre-tax income, b) make more after-tax income, or c) enjoy a higher standard of living. For this, you need the actual distributions of income, not just averages or other single-point statistics.
I could only find the 1998 income distrib for DK: http://www.gpn.org/data/denmark/denmark-analysis.doc
Here’s the U.S. in 2002:
http://www.heritage.org/Research/Taxes/bg1791.cfm
Using jmo’s numbers for GDP@PPP, the bottom quintile in the U.S., pre-tax, gets (0.035/0.2)*47,440 = 8300 dollars/yr, and the bottom quintile in DK gets (0.055/0.2)*37,304 = 10 259 dollars/yr.
For the combined bottom two quintiles, it’s DK 14922, U.S. 14589.
For the combined bottom three quintiles, it’s DK 19833, U.S. 21427.
So the crossover is somewhere in the middle quintile.
Of course, all this is pre-tax, since I couldn’t find comparable figures for post-tax income. And then you also have to look at the value of various public services. And economic mobility. In the U.S., one’s parents’ wealth determines about half of one own’s wealth, while in Denmark, it’s only one sixth. So if you’re born well-off in the U.S., your wealth is more secure, but if you’re born poor in Denmark, you have a better chance of becoming more comfortable.
October 8th, 2009 at 12:22 pm
I also wonder if anyone is aware of any studies that list income mobility and gini numbers by state.
I’d have to figure MA’s gini and income moblity numbers are much better than Mississippi/Florida/Texas.
October 8th, 2009 at 12:28 pm
Sock Puppet of the Great Satan @17: Funny, we have friends who are nurse/doctor couple from Germany who want to move back to Europe because of (a) retirement benefits (b) future college costs for their kid. They did the math, and it’s a better option for them to move back to Europe.
My (Dutch) boss and his wife are making the same decision. He’s a professor at one of the three most prestigious schools for biochemical/biophysical research in the U.S. who was put on a fast track to tenure (this is rare) and she is a consultant and makes more money than he does. For them, it was more about day care and health care for their children (I think he said something like “support for working parents with kids”).
And, of course, if you’re gay, the decision’s a no-brainer: http://www.nytimes.com/2009/10/03/your-money/03money.html
October 8th, 2009 at 12:33 pm
Not really, they don’t think about college because they are raised in an environment that doesn’t value education.
Again, one reason they are raised in an environment that doesn’t value education is precisely because education is rightly seen as unaffordable. If they can’t have it of course they don’t see it as valuable. If there’s something you want but know you can never afford, you quickly learn to develop a psychological defense mechanism that denigrates the importance of that thing.
The children of impoverished Asian immigrants don’t seem to have a problem getting into, staying in and affording college.
First, why are you not counting the children impoverished Asian immigrants as “poor people”, then?
Second, yes, the children of impoverished Asian immigrants do often have a problem getting into, staying in and affording college. There’s not some sort of special Asian gene that makes college magically affordable. I see plenty of young college age Asians working in restaurants and doing other forms of unskilled labor in my city. Now, children of non-impoverished Asian immigrants may have a relative advantage compared to other groups, but that’s often due to the fact that the immigrant parents were educated middle-class in their home countries.
October 8th, 2009 at 12:34 pm
Another reason Danes are happy is that they’re not religious.
October 8th, 2009 at 12:37 pm
As a specialized professional, I have no intention of moving to Europe, and European coworkers have commented on this issue. And I think this is a weakness in Europe. The egalitarianism is nice, but there is a difference between a very valuable skilled professional making 3-4x median income and a massively overpaid CEO making 1000x median income. The former I think is good to encourage people to develop useful skills, the latter is just a mis-allocation of resources.
We could get the economic security of health care, better retirement and cheaper education without going to extremely high Northern European tax levels. I think their is a best of both worlds possible here, and I really doubt the benefit of greater public service. Help me out if I have a major life crisis and a health problem. Otherwise, let people handle their own affairs.
October 8th, 2009 at 12:48 pm
In order to make an honest case for higher taxes for better services, progressives need to be upfront about true costs. Using the word “free” to describe collectively financed services does not aid that effort.
October 8th, 2009 at 1:36 pm
I think part of the problem may be that our tax base is not broad enough. I agree that we need higher taxes on the top 1% of the country, but it’s also clear that a large minority of our country doesn’t pay any tax. Measures like a VAT are an indirect way of making our tax code broader (and more regressive). There might be some moral qualms about it, but it could be politically easier to pass. And if it represents movement towards a new equilibrium where the poor are helped by the tax revenue, then it should be okay for most progressives.
October 8th, 2009 at 1:45 pm
“The high taxes finance generous public services, and the high levels of expenditure allow the country to do without a lot of extraneous business regulation”
How so? Since people pay high taxes, you don’t need rules about mine safety? Etc.?
Or are we talking about other business regulation? Which business regulations are extraneous?
October 8th, 2009 at 1:55 pm
Meanwhile, the Danish “Liberal-Conservative government introduced what it described as Europe’s strictest immigration laws in May 2002.”
October 8th, 2009 at 1:55 pm
Or are we talking about other business regulation? Which business regulations are extraneous?
If unemployment insurance covered 80% of your salary you should be pretty comfortable with at will employment.
October 8th, 2009 at 2:08 pm
GDP@PPP for the poorest 50% of Americans ~ 8,100.
GDP@PPP for the poorest 50% of Danes ~ 16,000.
Ten people who earn $100,000 per year have a better standard of living than someone who earns $10 milliion, and 9 paupers, despite the factor of ten difference in total income.
October 8th, 2009 at 2:09 pm
“…GDP@PPP for the poorest 50% of Danes ~ 16,000…”
should be ~ 13,000
October 8th, 2009 at 2:17 pm
[...] by blogging about Denmark as well, so here we go…. Not surprisingly, the Danes have very high taxes: The overwhelming fact about Danish public policy is that taxes in Denmark are really high. [...]
October 8th, 2009 at 2:21 pm
Njorl,
36.4% of those in the lowest income quintile vote while 63.1% of those in the higest quintile vote. I don’t see how you’re ever going to get support for massive transfer payments from the rich to the poor.
October 8th, 2009 at 2:30 pm
Just to clarify this statement: There is also a cap on unemployment benefits, so some low-wage workers may actually receive 80% of their salary, but most people don’t. It is possible to buy supplemental unemployment insurance from private insurers, but that never really took off.
In case anyone is interested, white collar workers and those who are paid on a monthly basis can be fired with between 2 weeks and 6 months’ notice, depending on length of employment. Other workers get between 3 days and 3 months notice.
October 8th, 2009 at 2:44 pm
Well, I guess one could say that children and the unemployed make up a “large minority,” but nevertheless, most everyone else pays all sorts of taxes, and even those in the lower tax brackets are squeezed to the point where I do not think that 17% VAT taxes are practical.
October 8th, 2009 at 2:44 pm
There is also a cap on unemployment benefits, so some low-wage workers may actually receive 80% of their salary
I find that highly discriminatory. I was fine when I was laid off back in 2001, as a single recent college grad the $525 a week I got from the state was plenty. However, if I had been 55yo worker who’d built up some seniority, I certainly could have benefited from a more generous program. Systems with salary restrictions seem to overly benefit the young at the expense of those older people who are in their peak earning years.
October 8th, 2009 at 4:06 pm
@62: The older people in their peak earning years have assets to ride on. Also, your seniority doubles as experience, the thing every employer is looking for and no young potential employee has, so you will probably get into a job faster and be paid more when you do.
As for your earlier posts, means are worthless in this kind of comparison. Both countries’ income distributions are non-normal but the US’s in particular has a tail you have to see to believe. Bill Gates walking into a bar does not make everyone in it richer. Using means to hide the poverty of the US’s poor is an old and infamous trick and many people are likely to assume bad faith when they see it, even if it was actually just a mistake.
Strictly speaking, Jason L. is right to demand a whole-distribution approach (specifically, for which X does the Xth percentile of US workers have the same income as the Xth percentile of Danish workers?), but I assumed that data probably wouldn’t be available which is why I was aiming for medians.
October 8th, 2009 at 4:23 pm
chris,
Also, your seniority doubles as experience,
What are you, 19?
It’s call age discrimination and it’s rampent all over the world. See Asian executives and politicians facination with dyed jet black hair.
http://www.huffingtonpost.com/virginia-moncrieff/the-asian-mans-penchant-f_b_205548.html
October 8th, 2009 at 4:56 pm
a large minority of our country doesn’t pay any tax.
Really? There’s a large minority which doesn’t pay Social Security taxes, or sales taxes on every piece of food, clothing, etc. they buy? Which minority would this be, exactly?
October 8th, 2009 at 5:08 pm
There is also a cap on unemployment benefits, so some low-wage workers may actually receive 80% of their salary
jmo: I find that highly discriminatory.
It *is* highly discriminatory. Recently high-earning employees make more for being unemployed than do recently low-earning employees for being unemployed. That said, since tiding people over so they don’t end up having to sell their car or move into a cheaper residence is very beneficial for society, and higher-earners generally have greater expenses, then unemployment benefits are rightly larger for higher-earners. That said, it really is unfair for someone to make more money being unemployed than someone else, which argues for unemployment benefits (perhaps above some floor) to take the form of a guaranteed loan rather than a grant, with a very generous repayment schedule.
October 8th, 2009 at 5:20 pm
chris: Also, your seniority doubles as experience.
jmo: It’s call age discrimination and it’s rampent all over the world. See Asian executives and politicians facination with dyed jet black hair.
Obviously, you’re both right. Age discrimination is rampant, and being 35 with ten years experience is better than being 30 with five years experience.
The justice issue (unequal pay for equal non-work) and the efficacy issue (unequal expenses for unequal pay) can be made to be less at odds if the tide-over pay is to some extent a loan.
Age discrimination is a problem in itself — it’s not clear to me that unemployment benefits should reverse-discriminate in response. Racial discrimination is also a problem in getting hired, but I don’t think that discriminated-against minorities should be given more generous or longer-lasting unemployment benefits.
October 8th, 2009 at 5:36 pm
36.4% of those in the lowest income quintile vote while 63.1% of those in the higest quintile vote. I don’t see how you’re ever going to get support for massive transfer payments from the rich to the poor.
If they take the form of taxing the rich to pay for services available to everyone, such as healthcare, transportation, and public works generally, then the non-rich would all support this, and most people are non-rich.
Also, there may be a way to piggyback support for helping out the lowest quintile as part of a transfer from the highest quintile or two highest quintiles to the three lowest quintiles, which form a majority of voters in the U.S. (though not by much).
For comparison, in France the highest-income quintile votes ten percentage points more than the lowest-income quintile.
October 8th, 2009 at 6:00 pm
(obviously, the above is naive, but the point is that the disparity in voting turnout does not automatically make attempts at remedying inequality non-starters)
October 9th, 2009 at 4:55 am
If we went for the big one, the marginal tax rate, plan for it to go up the super wealth scale in parallel increments 37%, 39%, 41%, 43% etc. -wouldn’t that fall as one of those budget thingies where we only need 50?
All the other little taxes, not only do they hit everybody, but even worse, each one is going to get haggled over, for 6-8-10 months, in Congress and in the MEDIA, eeeGGAADDS! TAXES!
But if we come at the RICH from OUT OF THE BLUE with a simple, non-haggle-able TAX ATTACK, you know? It just might work! Hey! I still have hope.
October 9th, 2009 at 9:41 am
[...] is the reason why statists admire Scandinavian nations. Matthew Yglesias, for instance, recently expressed his great admiration for Denmark. And I suppose I would agree with him if asked to pick the [...]
October 9th, 2009 at 10:15 am
In the election of 1994, when Republicans made huge gains in the house and senate, a significant number of Democrats who voted Republican – whose taxes had not been increased – did so because they believed their taxes had been increased.
I’m not saying you can never raises taxes. You just have to do it when you are electorally strong. You have to know going into the election that a small, but significant, segment of the population will believe their taxes have been raised even if they were not. You have to accept that you will lose a few representitives to this ignorance.