Doesn't seem so: Croatia's tax to GDP ratio is 26.6 %. Compare that to 46.8 % in Belgium, 43.4 % in Austria, 40.6 % in Germany, 45.8 % in Sweden. 26.9 % in U.S. which is internationally known as a low-tax regime.
Surely some taxes are high, and taxation is not necessarily fair, but I'd say that Croatia's taxes overall are not high. I would also expect that the "black market" GDP is higher there than in "old" EU countries, say Germany or even France, or the U.S. Though I admit this is mostly based on just prejudice.
The US is not regarded internationally as a low tax economy, it's regarded as a medium tax economy. There are about 110 countries with lower tax takes per GDP than the US.
Singapore (14% of GDP) and Hong Kong (13% of GDP) are low tax economies.
Japan and Australia are similar to the US, and are not considered low tax countries. The US and Japan also share the distinction of having among the highest corporate tax rates on earth.
You are right, but in comparison to European countries, U.S. taxes are low. There's only one European country (Lithuania) where tax per GDP is clearly lower than U.S.
E.g. in Scandinavia, the horrors of U.S. are attributed to its "extremy low" tax status. Horrors like that rich people only live in compounds surrounded by walls and armed guards, and the poor are dying because of no health care and no food, and the middle class does not exist. Yes, I know it sounds rather extreme but this is common rhetoric in countries where the tax rates are >40%.
"Horrors like that rich people only live in compounds surrounded by walls and armed guards, and the poor are dying because of no health care and no food, and the middle class does not exist."
The poor have essentially universal free healthcare in the US and have for a long time. I should know, I've used it before, and it's very easy to use. The poor also have the benefit of the one of the largest welfare states on earth, including the largest food and subsidized housing programs.
The US has the world's largest true middle class, with a median income among the highest of any country. A mere 1% of US labor earns the minimum wage, and the majority of those people are below the age of 25. The US also has a higher labor force participation rate than nearly all of Europe - while simultaneously having a high median income.
The US has a lower unemployment rate than: Sweden, Finland, Denmark, the Netherlands, Belgium, France, United Kingdom, Spain, Portugal, Greece.
And while Europe rolls around in a near depression, with Europe's GDP still at 2007 levels (since 2007 the US has added $3.5 trillion to its GDP) and high unemployment, US wages are expanding at the fastest pace in a decade, while unemployment keeps falling, which will drive even faster wage growth in the next few years.
I'm talking about rhetoric that's used, particularly in the countries you mentioned in the unemployment list. I didn't say I believe the rhetoric. I just say that elections are never far away, and that kind of talk - how bad the U.S. is - gets votes.
>A mere 1% of US labor earns the minimum wage
Would you mind citing your source for this? It seems to me you could claim anyone making ≥$7.26 per hour - even part time workers - as "not earning minimum wage," a metric that is not particularly encouraging given the cost of living exceeds even the earnings of a person making that for 40 hours a week in most places - nevermind that people making around this wage are often kept below the number of hours that triggers mandated benefits.
My b.s. meter is tingling at a lot of what you said (enough that on reddit I'd accuse you of being a shill), but you're being blatantly disingenuous about healthcare. It's true that emergency rooms won't turn anyone away (and maybe you bailed on the resultant bill as a "poor" college student), but Medicaid does nothing for most and even for those who qualify it gives nothing in the way of preventative care.
Medicaid does nothing for most and even for those who qualify it gives nothing in the way of preventative care
What? That's patently false. Medicaid provides access to a wide range of providers and requires almost no financial contribution (you get a prescription filled and it's $3-5; if you can't pay it's free).
As for preventative care, it's actually a focus of Medicaid! There are numerous programs offered that provide preventative care for pregnant women and children. [1]
The ACA just increased Medicaid eligibility to 133% of the Federal Poverty Level (~$40K for a family of 4). I would argue that's a pretty reasonable cutoff for those in need.
I don't think you know what the word "political" means. You can't just use it as a term for people who uncritically spew whatever bullshit they were fed out their mouth hole.
>The US and Japan also share the distinction of having among the highest corporate tax rates on earth.
This is an often-repeated myth that doesn't hold up when you consider the tax breaks afforded to corporations in the U.S.
The corporate tax rate is high in number, but when you factor in exemptions, the U.S. is quite competitive in this regard. Reuters reported in 2013 that corporations utilized $180B in tax breaks. [0]
The U.S. is known as a low tax regime? They have among the highest corporate taxes in the world. Taxation as a percentage of GDP is not a good measure because that doesn't address the tax burden as a percentage of income, but as a percentage of GDP. That also doesn't measure the value received for the tax burden endured. As an extreme example, if you are receiving value from those taxes (perhaps education or public transport,) then you would pay less out of pocket for those services. However if you had a low tax rate but we're required to pay for everything directly (such as paying for education,) then the real value of those taxes to the citizen is much less. So at the end of the day, you may pay lower tax, but you spend more because those taxes aren't delivering value. The raw ratio is meaningless; the value derived per dollar is much more meaningful.
And yes, the Baltics do have a bad ratio of taxes collected, versus value received.
Yes, value derived per dollar is meaningful, but it is rather difficult to measure reliably. A lot depends on how much corruption there is.
However, I'd claim taxes in proportion to GDP are a fairly good indicator of taxes in proportion to income, because income and GDP are strongly related. In fact, one way to define GDP is "the sum of primary incomes distributed by resident producer units" and the same number may be called GDI, "gross domestic income".
> The U.S. is known as a low tax regime? They have among the highest corporate taxes in the world.
Nominally, yes, but the effective corporate tax rate is much lower [1]. US income tax is at the low end for the developed world, too (both nominal and effective).
VAT hurts, but not as much as taxing income. People do not like consumption taxes, but even with high VAT, they still consume, while taxing employment or corporate incomes hurts economies more because they have a stronger impact on economic activity.
Land value tax would be even better, because the land does not run away or stop working. How's that in Greece?
VAT is easier to "cheat" than income tax. Just don't buy stuff in your own country.
Land Value tax makes the rich pay a lot but hits the poorest really hard since the threshold to owning land (and creating wealth) is substantially raised.
> Land Value tax makes the rich pay a lot but hits the poorest really hard since the threshold to owning land (and creating wealth) is substantially raised.
That seems a bizarre statement. Firstly I don't see any connection between owning land and creating wealth. Secondly taxing land value is a deterrent to land ownership and should reduce the desirability of owning land and reduce the price of land. This will make it more cheaply available to productive use and reduce the incentive to hoard land unproductively. Finally the poorest cannot afford to own land anyway so are not affected by the land taxes.
Have I missed something?
BTW I largely agree about cheating VAT especially in a small country with neighbouring countries that can be cheaply visited.
What I'm trying to say is that social mobility will be severely stunted.
We can agree that the reason for owning land is to make money, yes? Planting crops would take a couple of months to return the initial investment. If I planted a forest it could take years.
If this investment possibility is removed from everyone without (massive amounts of, if the tax is high enough) capital it's going to create a further wealth gap for no apparent reason.
> Finally the poorest cannot afford to own land anyway so are not affected by the land taxes.
Yes, this is true for the poorest, bad phrasing on my part, but it is going to make the barrier of entry higher.
Also: land produces goods that everyone need the same amount of (food, wood, wool), this would increase prices in a way that wouldn't really bother the capital heavy but would seriously hurt the already poor.
Land can make money purely by rising value over time so people can speculate by owning land. There may be little incentive to actually use the land.
The ROI on a forest takes years whether or not the land value is taxed. You also said earlier that it was a tax on land value so presumably much lower for forestry land than urban land.
The primary impact of a land value tax is likely to be on the price of land itself because land will be less profitable. Introduction or increase will hurt those who own land (and its abolition would benefit land owners).
If we assume that the cost of access to land (rent) is set by the free market then we can assume that demand is essentially unchanged and the supply of land would if anything be increased (if some speculators sell or start to rent out their land) so access to land for the less wealthy should be cheaper.
I think your assumption that ownership is the way that less wealthy access land is fundamentally wrong. I think that this will also apply to the effect on prices of things made on the land on which I expect little impact (although there may be side effects on the rental market that make this more complicated).
Taxes really are quite high - not sure how good of an indicator for this is tax to GDP ratio though.
A lot of the people frequenting HN are (usually) well off IT workers - so I find the following list quite telling - it shows an effective income tax and social security rates on USD $100,000 of gross income (based on KPMG 2012 global tax rate survey): http://imgur.com/MUZlz
This is informative, even though we should remember that comparisons can be very difficult across different systems (for instance, does our IT worker have a spouse and children, and is there a child deduction in taxation, and what else there is in childrens' services and benefits).
Usually different comparisons concentrate on "average" workers, i.e. lower income.
> taxes are very high
Doesn't seem so: Croatia's tax to GDP ratio is 26.6 %. Compare that to 46.8 % in Belgium, 43.4 % in Austria, 40.6 % in Germany, 45.8 % in Sweden. 26.9 % in U.S. which is internationally known as a low-tax regime.
Surely some taxes are high, and taxation is not necessarily fair, but I'd say that Croatia's taxes overall are not high. I would also expect that the "black market" GDP is higher there than in "old" EU countries, say Germany or even France, or the U.S. Though I admit this is mostly based on just prejudice.
(Using Heritage Foundation figures in http://en.wikipedia.org/wiki/List_of_countries_by_tax_revenu... - OECD numbers are slightly different but not that much)