Finnish-born journalist: Americans make crucial mistake in how they look at life | Hacker News Reader

Finnish-born journalist: Americans make crucial mistake in how they look at life

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47 pointssmn123465 comments

"Foreigners tend to view Nordic countries as "these socialist nanny states where everybody has a collectivist mindset," Partanen said. But "in fact a lot of these services really support everybody's independence.""

I pay a ton of taxes in the U.S. I don't get how Finland warrants an accusation of a collectivist mindset, while America takes and redistributes just as much money. Is it because spending on defense, instead of social services, doesn't qualify as a collectivist mindset?

Effective tax rate in finland is around 50%

https://tradingeconomics.com/finland/personal-income-tax-rat... and seems to come from a income tax rate that is similar to the US 25-31% but also includes retierment / social monies around 18+3%, so ends up effectively being 50-51. Also capitol gains is taxed at 30% for anything over 30k euros.

I found this info with one google request, first 2 answers.

So the tax rate is OOM 2x the US.

So it's not anywhere near as much money % wise.

But yes we allocate it differently.

I think you are forgetting that in the US we also pay state and local income tax, state and local property tax, and State and local sales tax. Even if you rent you are paying property tax indirectly. There is also Social Security and Medicare taxes so pile on 12.6% for that as well.

Once you figure in all those things the effective US tax rate is a lot higher than the federal income tax rates.

I live in Seattle, I pay no state tax. My property tax is $5k/year which is and additional 5% at 100k income, but I elected into that and we don't have property tax in the discussion, lets just assuming rental in both locations. Social security caps out iirc. There's still a 20% difference between the effective tax rates.

Washington State and local government has a sales tax of close to 10%. So say you make 100k per year, your effective tax rate is 25% add 5% property tax and ten percent sales tax that's 40%.

As sibling said, the 10% is just on what you buy, which hopefully isn't 100% of your salary. Also 40% is still a lot less than 50% but is also not a OOM like I said above.

You aren’t paying sales tax on your full salary unless taking on tremendous debt.

it's obviously higher but it's nowhere near an effective rate of 50% for a lot of US citizens

I figured it out as being pretty close between San Francisco and the UK, especially once you include healthcare costs on the US side.

numbers plz

Sure, for San Francisco according to https://www.quora.com/What-is-the-income-tax-rate-on-a-100k-... it's 34K USD of state and federal income tax on 100K, so you pay ~34%, plus healthcare costs.

In the UK, 100K USD is ~75K GBP, and according to the excellent tax calculator here https://listentotaxman.com/76467? you pay ~32% if you don't count Employers NI (which no-one would ordinarily in discussion, and really if I am to make that adjustment I should really ensure the grossed up amount was 76K, but it will make at most a few percentage point of difference), and if you do it's ~39%.

It's quite possible I'm missing some taxation or complexity on the US side (FICA?); I'm UK resident not US resident. The UK side is correct.

Other notable tax differences that come to mind include:

* No worldwide income tax in the UK

* Capital gains is a single rate in the UK

* No property tax (we have Council Tax instead, and the average for a Band D property in England is £1,484/year)

From the same source, US effective tax rate is ~40%

https://tradingeconomics.com/united-states/personal-income-t...

Don’t forget VAT and much higher import taxes which make some consumer goods prices constitute of effectively 70-80% tax.

When you have goods with import tax of 50% or higher and on top of that you pay 20-25% VAT you have much higher effective tax rates.

In many European countries 80% of your income or in some cases even more will go into taxes.

I was recently in Denmark where I learned first hand from numerous locals about the social services working together whereby most (if not all?) medical care is completely covered, children's education is covered (if they go abroad as well), subsidies for having kids and for studying / continued education... this largely results in two major considerations: a "no-stress" lifestyle without cause for concern of saving up for unforeseen and significant medical illness, and no cause for concern of saving up for your child's schooling and higher education. So, despite a _slightly_ higher tax, does all the take home money not then become completely disposable income with nothing needing to be allocated for savings, unless desire for new car or housing, or luxuries?

> America takes and redistributes just as much money

The statistics refute this claim.[1]

All values in USD/capita. Stats are from 2015

USA - 14,794

Finland - 18,580

Iceland - 18,783

Sweden - 21,800

Denmark - 24,527

Norway - 30,138

The other Scandinavian countries are included for comparison.

[1] https://data.oecd.org/tax/tax-revenue.htm

It would be interesting to see income distribution as opposed to per capita. I think, it will throw up even more contrasts between USA and Nordics.

Yes. Arguing for a Nordic system is effectively proposing massive middle class tax increases. Citizens in those countries typically are paying for their own services, not having them provided by the rich.

Let's not forget that childcare and healthcare costs would be removed from the equation. Would these costs be lower in a country with higher taxes? Well pretty much any progressive tax system will ensure that unless you majorly screw up the planning.

That's a good angle.

We deify the military and then question whether the government can be trusted to build roads.

Whatever stupid military decisions the US has made, you are being quite flippant and ignoring one very important difference between the US and Finland and that is that the US is a superpower that maintains the geopolitical order with the help of its military. This includes the securing of maritime trade routes. Don't take that for granted. The US is heir to the British Empire and as such it is not a small Scandinavian country of less than 6 million people that, by the way, benefits, along with the rest of Europe, from the security provided by the American empire.

Including the destabilization of Middle East for at least the last 20 years, to secure/favor US interest?

The US is a superpower that maintains its geopolitical order with the help of its military. Like any dominating nation before it, no argument there. But please stop justifying all this with good intents or universal values. The US does what it does to improve the life of its citizens, period (or at least a subset of its citizens).

Sure I'm being flippant, but not about the military, about the bizarre attitude that a government can effectively police the world but can't be trusted to do much of anything else.

Keep the Navy on the oceans, but damn it, keep the government out of my Medicare!

This will sound like a backwards argument but you saw what happen when the navy wasn't paying attention to the exit to the gulf by somolia. One can look at it as moving the price for gas to other locations (aka the navy via taxes). I'm placing no positives or negatives on it just stating it. In reality the economy is a massive set of levers or to put it in CS terms it's optimizing in a very large number of dimensions. The solution space is massive and there are many local minima which are no where near the global minima. However people love to argue about specific levers and bike shed the discussion based on the small windows they have into it.

I disagree, the “stability” the US provides is more than offset by the instability it causes. Vietnam, Afganistan, Iraq, Iran has all been pushed in unstable directions by the US. US global order is a total hit and miss. And this excludes all the instability the US has caused in South America with overthrowing governments and war on drugs.

Btw kind of ironic to lecturing a finn about security provided by the US as they were left on their own to fight the enormous red army. They still managed to kick ass though.

It is what we have seen in Iraq, Vietnam and Afganistan as well superpowers are not nearly as effective militarily as people think.

In Norway, you pay an annual tax on basically everything you own (update: yes, everything you own, not everything you earn that year) past the first ~$180k. I don't really care what sort of "independence" this supports for somebody, I'm not going to live somewhere that makes you rent everything from the state, after paying exorbitant taxes to "buy" it.

update: corrected the cutoff figure with new exchange rates and policy updates, seems that two parties in NO are looking to eliminate the wealth tax.

added: keep in mind purchasing power differences in Norway, where basically everything is more expensive relative to the U.S. exchange value of the kroner. 1,480,000 NOK (source of the $180k figure) will buy you about 40 sqft of suburban apartment in Norway, on average.

If what happens to your income past the first $100k is a major concern for you, you are very much in the minority in the US, as the median family income in the US is about $60k[1], and most Americans have less than $1k in savings.[2]

Sure, rich people have little to gain by having a great social safety net, as they can just rely on their own money for all of that. But for the vast majority of Americans, it matters.

Also, for those who are complaining that the US has such high taxes, you should know that the US itself used to tax income of over 90%.

[1] - https://en.wikipedia.org/wiki/Household_income_in_the_United...

[2] - https://www.cnbc.com/2017/09/13/how-much-americans-at-have-i...

Not income, static assets. That is, if you own more than about 40 sqft (sic) of apartment space outside of a city centre, you must pay a wealth tax on it.

It's sad that this is the top response, because you have completely misunderstood what I said, and responded with something unrelated.

Probably not. It only counts for 1/4 its value, and you get to subtract your mortgage, so its pulling your average net worth _down_ until your mortgage gets paid down to less than 1/4 the value of your property.

The poster was talking about what "you own". It's really easy to have more than $100k in assets. That's basically anybody who owns a home.

The median net household worth in the US in 2013 was still below 100k USD as per https://www.yahoo.com/news/median-wealth-whites-us-nearly-16... (can’t find newer numbers atm, but I’d be surprised if the median did move significantly upwards) Keep in mind that wealth in the US is extremely unevenly distributed and you might be making observations in a bubble. The white median is for example about 50% higher than the combined.

The median net worth of Americans is $97k. [1]

As for owning homes, many Americans don't own their home but rent.

[1] - http://www.newstrategist.com/median-net-worth-97300-in-2016/

Land and housing is cheap in the U.S, relatively speaking. in Norway, wealth taxes start after about 40 sqft of out-of-town apartment.

If that was true, I'd be very wealthy: 40 square feet is 6.3 by 6.3 feet. Or 3.7 square meters. That would make for a price of 57 000 $ per square meter! In reality, the national average price in Norway is $ 5000 per square meter and 10 000 in the most expensive area (Frogner, Oslo January 2016)

So $ 180 000 buys you a studio apartment of 18 square meters in the most fancy area, or 36 sqm on the average. That is roughly 200 and 400 square feet.

The median net household worth in Norway is $ 300 000.

Taxes are not rent. Taxes are the share of expenses you pay for the services and security the state provides. In European countries, especially in the Scandinavian ones it’s commonly understood and agreed upon that the stronger ones carry more of that burden. That may sound like communism to people from a country with a stronger “each for his own good” mindset, but pretty much all statistics point in the direction that it makes for fewer extremely rich people but to an overall happier society. Not having to worry about health care is one of contributing factors. And when looking at the fact that a medical incident in the family nearly bankrupted the last Vice President of the US, you really have to be one of the few insanely rich to be certain that such an incident won’t hit you.

What the parent is talking about is most likely the yearly tax you have to pay over your (already taxed) savings. E.g. here in The Netherlands you have to pay 4% tax a year over any savings over 25k euro. This includes anything like investments as well.

The parent is considering that 4% the “rent” after you already paid 52% tax to “buy” it.

What you pay taxes on doesn’t matter. It’s the part of your income, assets, inheritance that the society decided you have to contribute to be part of it. Call it donation, rent, protection money or stick with a less loaded term and call it taxes.

A wealth tax is exactly equivalent to a rent. There is a genuine owner (the state) which has control of the property in a default, there is an unlimited recurring fee set by the owner (the state), and access to the property is predicated on paying that fee.

Only compared to a system with extremely strong renter rights. The state can only terminate your ownership on the basis of non-payment. Even San Francisco allows leases to be terminated for more reasons than that.

Of course not. You still own whatever you own, and can still sell it, destroy it, modify it, whatever.

You do pay tax on owning it, in a system that taxes wealth, but that does not mean someone else owns it.

Calling it rent and calling the state the true owner doesn't really make sense--you're conflating two separate ideas, I think, to play on people's emotions ("oh noes, the state owns everything!"). It's not true or accurate, though.

> You still own whatever you own

Not if you don't pay the rent.

> and can still sell it, destroy it, modify it, whatever

And when you sell it, you're basically selling a rental agreement.

> Calling it rent and calling the state the true owner doesn't really make sense--you're conflating two separate ideas, I think, to play on people's emotions ("oh noes, the state owns everything!"). It's not true or accurate, though.

Call it whatever you want, I want to actually own my property, instead of having to pay for it on an ongoing basis on threat of deprivation. At the end of the day, the state is the owner, because they are the only ones who don't have to pay to keep it. We can chase our tails all day and nitpick about definitions, but in the purest sense, the government owns almost everything in Norway, if people stop paying the rent/tax/fee.

If your definition of ownership is that the state can take things from you because it has the monopoly on power there’s a very sad message I have for you: It’s basically everywhere like that. Try not paying the taxes due on land and housing property in the US and see what happens.

That may be the case for most or all land in the U.S., but it at least doesn't apply to musical instruments, couches, computers, and cars (except in some jurisdictions).

If the best I can do is pay the wealth tax only on real property, then that's what I would prefer.

The IRS will happily impound your valueable instruments if you fail to pay taxes. Looks like the government still owns everything you call your own.

Sure, but owning a cello doesn't increase my real property taxes.

You do "actually" own your property, even if you have to pay a tax on it.

I think you're playing word games, because you're using an idiosyncratic definition of ownership and rent that no one else (except maybe in libertarian circles) uses.

I'm not going to play along with those sorts of word games, so I will leave you to your unique definitions.

"it makes for fewer extremely rich people but to an overall happier society."

The extremely rich are still going to be extremely rich after paying taxes.

True, the rich will still be rich, but the span contracts (lower Gini coefficient) By many statistics, this lower span correlates to a happier society.

Speaking as a Norwegian, the wealth tax is not really that much of an issue. It just not that burdensome. Its less than one per cent of your net worth above $ 180 k. Net worth, so you can subtract any debts such as your mortgage, student loans, etc first. And property only counts for 1/4 its actual value.

Its just not going to impact on people. Anyone with enough net assets to make it relevant is going to consider the amount neglible.

According to the Norwegian statistics authority, the average gross household worth is 3.4 million NKr ( 500 000 $ depending on exchange rate.) 2/3s are in property. Net after debts is 2.1 million, so you got 2.2 million in property and 1.3 million in debt.

That means your taxable worth for this tax is equal to (2.1 million + 2.2 million/4) - 1.3 million - 1.5 million. Which is a negative 200 000. Converted to dollars, that means Norways Joe Average household with a gross worth of $ 485 000, and a net worth of $ 300 000 can still add 28 000 $ to his assets before the tax starts to kick in. Provided he does not take on more debts there. Property is reeeeal good that way since you can subtract your full mortgage. While only counting 1/4 the value of the property and the interest is deductible on your income tax.

Joe Average also makes 70 k $ and pays 25 % tax.

PS Exchange rate 10 year average used.

Everything you own? Or everything you earn?

If the former, then this would an application of Piketty's idea, of taxing capital instead of revenue, which I thought had not been implemented anywhere yet.

https://en.wikipedia.org/wiki/Thomas_Piketty

http://www.skatteetaten.no/en/Tabeller-og-satser/Formuesskat...

Two examples of the holistic view:

- Finland is adopting a more holistic education system than compartmentalised subjects http://www.bbc.com/news/world-europe-39889523

- (Not Finland but really cool) retirement home with a co-located pre-school benefits both the elderly and the young kids https://www.theatlantic.com/education/archive/2016/01/the-pr... :

> Another resident with advanced Alzheimer’s whose speech was incomprehensible garble was able to speak in complete, fluid, and appropriate sentences the moment she was wheeled into the baby room. “You could immediately see that she had accessed some part of her brain that had raised several kids,” Hoover says.

That guy was born in Finland and it shows. He should know only people from the USA can criticize the anything American, due to the notion that America is "special", which is being spoon-fed since childhood to all citizens through movies, TV, politics, radio, etc.

> "The choices Nordic countries have made have little to do with altruism or kinship," Partanen wrote for The Atlantic in 2016. "This is what Americans fail to understand: My taxes in Finland were used to pay for top-notch services for me."

This is an odd statement to me. Any wealth redistribution system has both "givers" and "receivers". What do the "givers" in Nordic countries actually think? Do the the "givers" share this perspective that the system isn't altruistic? Or do they not consider this money theirs? Are they conditioned by a young age to see themselves as "receivers"? Or do they not think about which they are, and prefer the ambiguity? Or are they silenced? I'm very curious to hear a "giver's" perspective, because this sounds a bit brain-washy to me.

The point was that a lot of the redistribution is in principle just moving money from the the working age self to the young and older self.

I pay taxes which funds students today but I get that back later when other fund my kids to go to university.

The point is that the bulk of the money is paid by the middle class for services used by the middle class. You pay more in some stages of your life than you receive but you get more back in other stages.

That was the finnish point of looking at this hollistically.

That makes a lot of sense now, thanks. I think the point about people being givers and receivers at different periods in life is a good one. Americans who are fortunate do this at the family level, but obviously many cannot.

As a Nordic citizen, I'm torn between believing that everyone, citizen or not, should have the same rights to healthcare, an education, transport, telecommunication and so on and that by enforcing this system we have effectively cut off the possibility of private services within those fields that some may need or prefer, specifically healthcare to get appointments at their own leisure rather than being assigned one that you're practically force to abide by or the ability to privately tutor kids rather than sending them to a public school that doesn't necessarily fulfil their needs or potential. That said, I much prefer the system of everyone having the same basic rights at a very affordable rate than potentially having to struggle to live a decent life at the expense of getting a better service if you happen to be able to afford it.

Thank you. I can definitely understand that. It's nice that we live in a world with different systems, and can see the pros/cons and learn from each other.

Pretty sure I would count as a "Giver" and a fairly average one.

There are knock-on effects of living in a system with less desperation such as lower crime rates, better infrastructure, and more opportunity which is enjoyed by everyone. The "givers" in your example would in all likelihood not have been givers their entire life. They will have been educated at a university, gotten their first job when someone was off for a year on maternity leave, etc.

Thanks your sharing your experience. That's a great point, about people being givers and receivers at different points in their life. I hadn't heard that perspective.

Hmmmm. But yet she moved to America.

I wonder why?

Also americans love anti-adblockers.

Yeah yeah yeah I have heard it all. When nordic corporations stop spreading corruption outside of their countries they can talk shit about other countries. Besides not everyone would want social democracy. Believe me not everyone in Europe is happy about that either. Just because it can work in Finland it does not mean it can work anywhere else.

Except it is always people who have never even tried it who claims it wont work elsewhere. Why not try proven ideas than some wacky idea you feel good about but which has never proven itself anywhere?

The nordic model is not based on companies being angeles who do good by their own accord. You need government, press, unions etc holding them accountable.

You can’t have frer for all capitalism and wait for private enterprise to start being nice and take social responsibility.

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