Hacker News Reader

Comment by ljf | Hacker News Reader

As a Brit and a left leaning type, it baffles me to see America. From talking to friends who live there (I won't pretend I know fully) but it seems between income, state and property taxes you guys pay a lot. Add in health care and it seems you pay in line with or above many European countries. Yet with your society's wealth there seems a resistance to supporting your own people, and almost actively seeking to add to the poverty through the prison and court system. It seems crazy, when getting these people up and productive, would not only be the moral (Christian?) thing to do, but would ultimately also add to the wealth of the nation.

Is it because in America who are 'your own people'?

View on HN

Americans complain about taxes more than perhaps any other people from a rich nation, but we frankly don't pay that much. The OECD average is about 35% of GDP. The UK pays right about that. The US pays ~27% of GDP. And of course even with that relatively small amount of revenue, a lot of it goes to uniquely American spending schemes like defense or NASA, both of which are vastly better funded than their European equivalents. So it's really not all that surprising that lots of other stuff doesn't get funded much.

That being said, the homeless rate in England and the United States is the same ( https://en.wikipedia.org/wiki/List_of_countries_by_homeless_... ). Do you see a similar resistance to supporting people there?

Does that include state taxes?

And city property tax where the majority of all homeless housing initiatives are funded from, even though homelessness is really a national problem as they migrate to the cities with the best weather and benefits, further straining individual city resources like San Jose.

Yes.

Percentage of GDP sounds like an insane way to measure tax rate for individuals.

If you look at individual tax rates the United States is an even bigger outlier. No VAT, and income tax is extremely progressive.

We pay almost 50% in taxes which I think is close to what you guys pay in Europe. The lions share goes to Washington where as far as I can tell it either evaporates or gets spent on very expensive jobs programs like the F-35. Our states do a better job generally and provide the bulk of the services. However in many cities and states the budgets are consumed by pensions leaving less for services each year. A person who works in government can retire with 80% pay at 55 after 20 years with their pension based on last 2 years. As people live longer, many people are collecting pensions for more years than they worked.

The problem is that we already pay a lot in taxes and we get poor returns on this money as it is. I think there would be more people willing to pay more if they thought money was the answer and it would help people. Most people think the money would just be wasted.

At the same time we also have large numbers of people who pay no taxes, 51%. So as our population grows, the demand for services increases but the percentage of tax paying citizens is not increasing.

We have a real mess here.

I think you hit the nail on the head.

Mandatory spending was 65% of our budget last year the majority of which goes to healthcare, pensions, and social security. Defense was over half of our discretionary spending. I'm hopeful that the US could make changes in defense spending but healthcare and pensions will screw us and it will be our own fault.

The second you open a conversation with "We are going to reform pensions" or "We are going to guide health access in medicare" politicians have stepped on too many voters' toes and the system falls apart.

If the US adopted a policy for medicare similar to the UK's NICE it would be derided as "death panels".

I think we all want an easy ride and regrettably the people who will end up paying for it are going to be the people with little to no say.

I'm not disagreeing with everything you said, BUT, most pension plans I have seen only pay about 1 to 2 percent of your (ending) salary per year of service, which means something in the range of 20 to 40 percent of your ending salary when you retire, rather than 80 percent. I'd really like to know about this "4% per year of service" job, so I could apply :-)

However, the part about "pay spiking" by taking on a more difficult or higher cost of living locaiton, but higher paying, job in the last 2 or 3 years, is very true. It would probably make more sense to average your entire career.

It's a shame private companies don't offer pensions anymore, but I guess that was just a thing for my grandparent's generation.

> We pay almost 50% in taxes which I think is close to what you guys pay in Europe.

Total tax burden in the US is about 30%, slightly higher for the top half of the income scale. http://ctj.org/ctjreports/2015/04/who_pays_taxes_in_america_...

> The lions share goes to Washington where as far as I can tell it either evaporates or gets spent on very expensive jobs programs like the F-35.

About 2/3 of taxes go to the federal government. Half of federal spending is on Social Security and medical spending (Medicare, Medicaid, etc.). About 16% is defense and international security assistance.

http://www.cbpp.org/research/federal-budget/policy-basics-wh...

> At the same time we also have large numbers of people who pay no taxes, 51%.

About 45% of households pay no federal income tax, but most of them still pay federal payroll taxes, sales taxes, property taxes, and so on. The estimated tax burden for the lowest income 20% of the population is 19.2%, less that the overall 30%, but still significant.

Regarding federal payroll taxes, i.e. Social Security and Medicare, it's not accurate to lump these in with other taxes as they are basically forced-savings. And due to their progressive nature, low-income individuals will get more out then they ever put in.

I looked through and it seems to me they excluded the 7.65% for social security and Medicare. I don't see it explicitly mentioned, at least, and some of those numbers seem too low to be including it.

"At the same time we also have large numbers of people who pay no taxes, 51%. So as our population grows, the demand for services increases but the percentage of tax paying citizens is not increasing."

By large number of people who pay no taxes, I assume you are referring to working age adults? In other words you exclude those under 18 years age, most college students, retirees, people with major disabilities, those who choose to stay at home to take care of their kids because child care is unaffordable? Also most of those who pay no income taxes still pay sales tax, social security tax, medicare tax and (sometimes) property taxes.

I'd say that as well. A lot of people criticize our tax structure (probably with good reason) but a common criticism is that we don't pay enough in taxes and that we end up starving useful resources because of it. That criticism is pretty much false. When you count federal, state, county, and local taxes, and then throw in things that don't typically get counted like mandatory expensive-as-fuck health care, we easily pay just as much or more than many well functioning first world countries.

What we're really good at is throwing our money either in a dumpster or into corrupt people's pockets. Weve got farm subsidies, corporate health care, bombs in the Middle East, transit infrastructure that is 5-10x more expensive than anywhere else in the world, heavily subsidized roads, and pork barrel spending as the only way to break up congressional gridlock. We've fucked everything up, and it's probably too late to do anything about it.

As a fellow left leaning Brit the pull yourself up by the bootstraps thing always seemed strange, sometimes people just don't have the bootstraps to start with!

And, just as the literal interpretation of the phrase, the figurative interpretation is impossible (even if you have bootstraps). That's why it's not happening. It's enough though, for the masses of people to be stupid enough as they are in America to believe that this is possible to create such a messed up society.

Sales tax (VAT) in the UK is double what it is in America.

Well, most important is how inefficient the country is. All governments are corrupt: thats true in Europe, its true in Canada, but its 10x true in the US. It's no China or Russia, but its pretty bad.

Second, you said "resistance to supporting your own people". Well, even if you don't resist, thats very difficult because figuring out who "your own people" is, is nearly impossible here because of the immigration situation.

Regardless of stance on immigration, the fact is that the way to most efficiently reduce poverty will differ based on if someone has been here all along and got screwed, based on if they are refugees, or if they came by other means. You have to analyze the pipeline and allocate resources, people, and programs for both prevention, and for safety nets.

People make it so damn hard to differentiate and allocate logically, its impossible to be efficient there.

(Note that I'm a green card holder, I wasn't born in the US, so this is just what I'm seeing in polar contrast to my home country). When data is collected and surveys/analysis presented, most of the time everything will be mixed in without separating root causes (someone who fell into poverty because of medical bills, is a very different problem to solve than someone who came here being poor in the first place). And then there's the racism situation...

So authorities are left with 1 size fit all programs that get abused left and right, with corruption sprinkled in to make it harder. Yeah, its impossible to fix things this way.

Reply on news.ycombinator.com