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Another thing to take in consideration is: how much does it benefits me the taxes I'm paying. Let's take an example of an employer. The taxes he pays will have a direct impact on the health care he may need, the education of his children, infrastructure he may need. But it will also have an impact on his employees. And healthy employees with better education will be more productive, hence, the employer will also benefit indirectly from the taxes he's paying.
A) Shouldn't the employer decide himself, if he wants to help to help pay for his employees' high insurance?
B) Education is best left to state and local governments because they are better intuned to their own children.
C) The federal government neglects infrastucture spending because most of the money goes towards entitlement programs and defense.
A) No. I would tend to agree a bit more if the employer together with the employees chose the benefits. However, in my example I was thinking of a larger time window. The children's education that we're paying for now will be the future workforce. And, perhaps, there will be some jobs in 20 years time that nowadays don't exist. I doubt that most employers and employees would care to pay for that education today.
B) I don't have enough information on how the tax money (and I'm speaking about all taxes) is distributed between the central and the local government in the USA. I suspect that it might be like in my country: most of it stays in the central government. Nevertheless, it seems that we agree that public education is important.
C) Again, my country is different from the USA because we spend less in defence, but both the central and the local government are known for wasting money. The thing is: we don't really have an option regarding who will build infrastructure.
So, in my opinion, all individual income should be taxed the same way. Evidently, all changes to taxation should be smooth to give time to the market to adapt.
So you believe in a flat tax?
Sort of. I would prefer simple function like this linear function:
Tax = t * (Income - I0)The
Tax (in $) would be computed as the fraction
t (a fixed number between 0% and 100%, say 35%) of the
Income (in $) above a minimum value
I0 (in $). Evidently, incomes lower than
I0 wouldn't pay taxes.
Regarding the Scandinavian countries, I would prefer that my country would be more like those (except in the climate) than most European countries and the USA.
Again, it doomed to fail like the Soviet Union and Greece and welfare states only function for small populations.
I don't really think that any country is perfect in that sense. And I find that extremes usually are not the best choices. In many things, the USA and the former USSR were opposites. One of the reasons for the collapse of the USSR was that there is no real incentive to be more productive if you get the same. Other reasons were also important like being an oppressive dictatorship where corruption existed and a little fraction of the population lived significantly better than the rest (not exactly the Greek scenario). However, in terms of welfare, the USA are far from being perfect in my view. There is poverty, the access to good health care is difficult (expensive), the public education isn't of the highest quality. Take the
PISA 2009 profiles by country/economy. Go to mean and distribution of students -> reading (USA=500), mathematics (USA=487) or science (USA=502) -> histogram. The USA are generally in the middle of the other OECD countries.
Scandinavian countries do better with their welfare states than other countries because, in my opinion, their education level is higher and people are better informed when they choose their government. Furthermore, they work more for the community than in other countries because they see the revenue of doing so. Therefore, I don't really think that they're doomed.