OT: Ranking US Tax Oppression
by Locoweed 1.1 on Jun 30, 2009 1:14 PM PDT
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I found this study interesting, especially because we will be moving up in the "rankings" next year. Will the USA be #1 someday?!
Tax Oppression Index: U.S. Is #12
A new study, Tax Burden and Individual Rights in the OECD: An International Comparison, ranks the U.S. 12th among 30 OECD countries in its "tax oppression index":
The tax oppression index is based on 18 representative criteria measuring fiscal attractiveness, public governance and financial privacy in the 30 member states of the OECD.
- Italy
- Turkey
- Poland
- Mexico
- Germany
- Netherlands
- Belgium
- Hungary
- France
- Greece
- United Kingdon
- United States
- Norway
- Portugal
- Czech Republic
Of note: Our tax burden is higher than the Scandinavian countries, and Canada is #27.
LINK:
http://www.concurrencefiscale.ch/papers/IC-Bessard-Tax-Index.pdf
This is a FanPost and does not necessarily reflect the views of Conquest Chronicles' writers or editors. It does reflect the views of this particular fan though, which is as important as the views of Conquest Chronicles' writers or editors.
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Wow and I thought Canada was bad.
Everyday I am waiting for are State and Government to say: You Got Any Dreams, Because we want them TOO.
Paul D. Kelley
by so.cal.native1952 on Jun 30, 2009 2:47 PM PDT reply actions
Demar Derozan
said he was fine with Canadian tax rates. I think we know why.
by Locoweed 1.1 on Jun 30, 2009 3:19 PM PDT up reply actions
And Coach BO...
has us on a path to move higher in the rankings. Brutal. Begin preparing your ex-patriation plan.
That won't be necessary amigo,
I’m just gonna mosey down to Texas! I’ll buy me a Texas size crib in North Dallas, send the kids to SMU and wait for Texas Independence Day. Free again!!! Viva TEXAS!!! Yee Haaa!!!
by Locoweed 1.1 on Jun 30, 2009 4:26 PM PDT up reply actions
Funny!
I do have a “Secede” bumper sticker of the TX flag on my car. TX would welcome you with open arms, Loco.
Tex, That's mighty neighborly of ya!
Is Texas big enough to take in a gaggle of them silly Bruins? We can post Pablo’s regiment up near the Oklahoma border to keep out them Yankee illegals!
by Locoweed 1.1 on Jul 1, 2009 12:09 AM PDT up reply actions
I hasn't been an infantryman since... ever
unless you count the 5 days I spent in Marine Corps boot camp before they sent me to college…
Not buying it
I have a series of problems with this article.
Firstly, any study that claims to be able to quantify “tax oppression” using indices is effectively assigning a number to either a qualitative assessment or a normative preference. It’s the sort of thing that social scientists do to provide an appearance of rigor that doesn’t actually exist. So, from the start, this is methologically suspect. The author doesn’t even use the indices consistently where there’s no data or he doesn’t know how to apply it (e.g. US variation on VAT equivalent taxes).
Secondly, the author is conflating mobility of capital with mobility of economic activity, and the two are not the same. The author outright states that capital that moves to tax-competitive environments brings with it economic activity to the benefit of the host state. If that were the case, then Switzerland, Lichtenstein, Andorra, and the Grand Caymans would be among the heavy hitters of the world economy, and they are not. This implies that the capital is not being moved for productive purposes, merely tax avoidance purposes.
Thirdly, the author justifies moving capital on the grounds that only an economic actor can add worth to something, and the government of the territory in which that something is produced is trying to extract value based on their monopoly on coercive force. True as far as it goes, but it’s only the first half of the classical liberal argument put forward by Locke, who conceded that for genuine economic development individuals needed the force of law to ensure property rights and the validity of contracts. The counter to the author’s position is that when an economic actor – say, Accenture – moves capital outside of the state but not economic activity, then they are maximizing their benefit from state apparatus while trying to free-ride on taxation. I doubt the author would deem that tolerable in private contracts.
Fourthly, the radical anti-statist historical argument against large states, in the form of the collapse of the Roman empire, is deeply ahistorical. The coercive behavior of nations and city states didn’t change, there were just more of them, and they were more of a barrier to trade and economic activity outside their boundaries / sphere of influence, not less. The castles along the Danube aren’t there because aristocrats liked the view, they are there because of the rent value of stopping trade along the river. Similarly, Venice didn’y flourish because it was small, it flourished because they were able to extend coercive power to protect their trading fleet, rather than reducing the barriers to entry into the market.
All of which suggest that this business about “oppressiveness” is just a way to provide a veneer of scholarship to a pretty standard and I think non-empirical critique of modern state taxation regimes.
As for the US ranking relative to others… well, you could argue that by using indices he’s missed a couple of features. One is that even with increasing public debt, the dollar as reserve and oil currency has different standards applied than other currencies. Another is that the true level of taxation in the US can’t be captured at a national level because of variations in state and local taxes on income, consumption, and property.
About the only thing I agree with in this article is that public spending on social welfare requires significant revision.
Thanks for explaining it DC
More and heavier taxes within the OECD plus heavier restrictions on the movement of capital is a good thing, the World will forever accept the Dollar as a fiat currency, and those friendly Asian economies will never stop financing our debt. Well let’s put the pedal to the metal, wind up those printing presses, full speed ahead!
by Locoweed 1.1 on Jul 1, 2009 12:20 AM PDT up reply actions
My argument was that the article is deeply flawed – and you don’t seem to have anything to say on the assessment, just counter assertions. If you want to put this in terms of politician’s talking points:
This article isn’t about capital movement in the sense of currency speculation / international finance, it’s about justifying tax shelters for corporations. Don’t be melodramatic. The genie is out of the bottle in terms of currency movement / speculation and capital mobility for investment, and in the case of investment, that’s a very good thing. It’s sometimes a good thing for currency speculation – if you’re the US, it’s good, if you’re Iceland nearly being wiped out by hedge funds, it’s less good.
As for the question of the US dollar not being accepted as a reserve currency because it’s a fiat currency, please. If the dollar gets replaced as a reserve currency it’s going to be on the basis of it being worthless as a result of inflation from printing more of it or because debt is an unmanageable percentage of GDP. Until that day comes, the interim question is what would other countries replace the dollar with? Some mythical major currency that is based on some so-called precious metal?
In the meantime, the danger is that third world economies get big enough that China doesn’t need to finance US consumption any longer, but until that time, it’s a Mexican standoff.
None of this is an argument for being sanguine. You’ll note that I finished by agreeing with the author that state spending has to be rationalized in order to stave off taxation at absurd rates, and that’s true. If all the current administration does is continue with the spending policies from former President Bush’s administration, combined with new initiatives, no spending cuts, and adding money to the supply without increasing taxes, then only bad things can come of it. But frankly, when you start talking about fiat currency, which is usually a precursor to calling for a return to the gold standard, it raises an eyebrow, because the only way to kill the US economy faster than the path we’re on would be a return to the gold standard – you’d decimate the supply of money.
So we can kill ourselves with too much money or too little. Neither sounds very appealing.
If you’re proposing something else, by all means let me know. I don’t want to make false assumptions about your opinions.
DC, I appreciate the attention you're paying to this
The Tenth Amendment, what does it mean amigo?
“The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people.”
Was it our Founders’ intention to create a Federal Government that would provide health care and education, regulate food and fuel prices, insure us from job loss, provide for our retirement, and even protect us from economic recession? The current interpretation of the 10th amendment appears to be that the Federal Government can and should do whatever it believes is good for Americans. This used to be called “central planning.”
The reality is that all those government services will consume a growing percentage of GDP and there is no way you can “tax the rich” enough to cover the cost. In addition, the government is creating a dependent society that will find it in its best interest to support the system until it groans to a halt under its own weight.
With all its potential flaws, I find the article interesting in the sense that wherever we are on the taxation scale now, our position is going to “rise” very soon. Call me naive, but given our multi-trillion dollar national debt, it is an odd time to reward ourselves with more government handouts and entitlements.
I agree with your statement, “we can kill ourselves with too much money or too little. Neither sounds very appealing.” Going on the gold standard is certainly not an option, but what we are doing now is another form of suicide.
Instead the government should have allowed moderate growth in the money supply and public debt, prevent inflation and give capitalism a chance to purge out excess production and inefficient or obsolete industries. With all its flaws American Capitalism has worked well since the Great Depression, we will regret abandoning it, now we just have Change.
OOHHHH!!!!
Great post! Now was it our Founder’s intention to count certain people as 3/5s of a person, and completely disenfranchise 50% of the population? Yes. Does it make it right? No. Now this is where the question evolves into is the Constituion a living document or is it rigid & unbending?
Also, the Constitution does say in the preamble:
“We the People of the United States, in Order to form a more perfect Union, establish Justice, insure domestic Tranquility, provide for the common defence, promote the general Welfare, and secure the Blessings of Liberty to ourselves and our Posterity, do ordain and establish this Constitution for the United States of America”.
Some would argue that providing “health care and education, regulate food and fuel prices, insure us from job loss, provide for our retirement, and even protect us from economic recession” is promoting the ‘general Welfare’ for ‘ourselves and our Posterity’. Not sure I’d stretch it that far, but some might :-)
PS- It was FDR psuedo-socialism that got the country back to “work”, followed by the massive economic boon known as WWII
Myth Debunked, FDR Extended the Depression
Not true, Paul, although that is the commonly held misperception. Bruin research dubunks this myth. Yeah, the Bruins actually did something worthwhile!
http://newsroom.ucla.edu/portal/FDR-s-Policies-Prolonged-Depression-5409.aspx
And, some more debunking:
http://www.mises.org/story/100
Loco is right. Our government is in violation of our very own constitution. Support Ron Paul!
IIRC, most of those studies claiming that FDR didn’t reduce unemployment during the Great Depression tend to exclude public works employment… which is curious, because those folks were in fact employed.
There’s also a school of thought that the Depression was extended because of too rapid a retrenchment on public spending…
And even if you take the view that the Depression didn’t really end until WWII, was that because of conscription or a truly stunning industrial effort the likes of which no other country could probably have generated?
Those are great articles Tex
The North Campus Bruins are alright; it’s all those red ones in the middle that are kinda loopy and prone to issuing fatwas. I wonder where Pablo hails from ;-)
by Locoweed 1.1 on Jul 1, 2009 10:39 PM PDT up reply actions
Need you even ask that question?
I has a sense of humor and spoke semi-gut engrish (all sic) and I suck at math
Your first statement is partially true Pablo
There was huge disagreement over slavery, so the Founders simply left the problem to a future generation. Because the Constitution was silent on the issue, the 10th amendment was used by the South to continue the odious practice of slavery until the 13th amendment in 1865.
I wish I had the time to really engage on this, but I have a ton of stuff to do and yet also be up in a few hours, so…
- I always thought the 10th Amendment was what the party not in control of Congress resorted to when they were trying to stop the opposition. Dim memories of Con law make me think that there’s a constant conflict between that and the 14th Amendment.
- I doubt that the Founding Fathers envisioned anything like what we have today. IIRC, Jefferson’s hopes for the US extended to an agrarian representative democracy populated by small land holders, sort of a modern yeomanry.
- Original intent is hard to divine and frankly not always pertinent. It’s more important that we have the mechanisms to manage change and the weight of precedent. It allows and constrains change, which is a pretty ideal combination for a written constitution / divided government.
- Central planning is nothing of the sort. Central planning is when you have a command economy where production in its entirety is dictated from the top down, as per the Soviet model. Total debacle, guaranteed to fail and it did.
- Agree that government services cannot possibly be funded solely on taxes on the rich. For instance, a government health insurance plan is almost certainly going to have to get funding from other sources such as treating employee subsidized health plans as income rather than exempting them, and some form of VAT.
- The short term handouts are what they are – essentially Keynesian counter-cyclical spending – but entitlements absolutely are an issue, as is military spending. Both of those are going to have to be constrained. Our entitlement programs are much less than in say EU countries but we more than make up the difference in military spending… generally to the benefit of our allies.
- I take your point about letting the market do its thing but I think the pervasiveness of the liquidity crisis, as well as the lack of transparency in the credit default market, meant that rather more vigorous action was required. I’m relieved that both the Bush and Obama administrations balked at nationalizing entire sectors as that would have been a total over-reaction.
- I just don’t agree that we’ve abandoned US market capitalism. We’re nowhere near levels of nationalization that you would have seen in post-war Europe or 1960s Latin America. We don’t even have national industrial policies like a South Korea or Taiwan… just a little more direct government influence in exchange for pots of public money. I doubt it will last.
The Federal Government already represents 28% of GDP
Healthcare spending amounts to 17.5% of GDP (~$2.5 Trillion/yr), meaning the Government potentially is about to grow to 45% of GDP. This does not include its controlling interest in AIG, huge stakes in banking and the auto industry. If that isn’t Central Planning (new age variant) then what is it? Not including all the new obligations the CBO estimated that the Federal Govenment would represent >40% of GDP by 2075. That doesn’t sound much like your daddy’s US market capitalism.
by Locoweed 1.1 on Jul 1, 2009 10:33 PM PDT up reply actions
Lets face it unless you are directly involved with old money and old government
YOU ARE SCREWED LIKE ME
Paul D. Kelley
by so.cal.native1952 on Jul 1, 2009 11:19 PM PDT reply actions
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