Why We Hate Taxes, and Why Some People Want Us To
behavioralscientist.org
behavioralscientist.org
It's probably because of how taxes and the government works is different in many ways to the US:
1. You feel it on your own wallet how your tax is spent and redistributed. Even though I pay a large amount in tax, being a high earner, I also get support from the government, paid monthly, for childcare and mortgage interests. Also, the government supports programs like no-downpayment mortgages, that are unheard of in many countries.
2. Public services are visible and efficient. This is true from healthcare to garbage collection and schools. Schools are actually a good example: while daycare in amsterdam would cost around $2,000/month for a child, schools are "free". Of course, once you paid for daycare, you know that it's not free, but paid for from tax, and have a good idea how much goes back into it.
3. Tax returns are ridiculously simple. They can also be done up to five years in the past, in case you forgot to claim refunds.
4. Thanks to how taxes are spent, there is less inequality across society. The government invests in social housing nationwide and has strong social net support, redistributing wealth via taxes from high earners to the low earners. For example, the $2,000/month childcare costs: for low earners the government pays up to 97% of this, dropping to 33% for people well off. Contrast this with places that don't have any of this and the inequality can be seen in all parts of life.
The US government actually spends more per capita on healthcare($4,197/person/year) than most countries with free excellent healthcare (Switzerland $4178/pp/y, Canada $3074/pp/y, UK $2802/pp/y). Netherlands govt spends barely more than the US govt at $4495/pp/y.
https://www.visualcapitalist.com/u-s-spends-public-money-hea...
Source: Trump's tax returns.
Actual source: https://www.nytimes.com/2011/08/15/opinion/stop-coddling-the...
One source (there are many others with like 20 seconds of google searching): https://www.wsj.com/articles/top-20-of-americans-will-pay-87...
555 of them took the standard deduction instead of itemizing!
https://www.irs.gov/statistics/soi-tax-stats-individual-stat...
The Netherlands income tax is also marginal but the 51.75% rate kicks in at €68,507, and the lowest rates are already over 30%.
When you get to this point I think it's ,more useful to look at what proportion of a countries GDP is taken in by the government.
Property tax rates are in the single digits (or very rarely, the low double digits). And only apply to property owners.
Payroll taxes are distinct from income taxes but reduce taxable income so shouldn't be split out separately...
So, TLDR: you'd still need to be making more than $300k+ each year for your annual total tax % (all inclusive) to exceed 50%. That puts you in the 0.1% of Americans.
> The US government actually spends more per capita on healthcare($4,197/person/year) than most countries with free excellent healthcare (Switzerland $4178/pp/y, Canada $3074/pp/y, UK $2802/pp/y). Netherlands govt spends barely more than the US govt at $4495/pp/y.
This is an unbelievably important thing to bring up. The US government already spends enough to have fully socialized, excellent health care. The only reason taxes have to go up for an M4A proposal is because enormous amounts of protectionist legislation and regulatory capture make the same services cost double in the US. If we had sane health care costs (which could be accomplished pretty quickly by opening the local market to foreign competition), taxes wouldn't have to go up at all.
edit: Dean Baker made a suggestion that stuck with me years ago; instead of a public option, just allow Americans to buy into other countries' health systems, for example, France's. They could provide services at a nice rate on US soil, and use US payments and addition to the risk pool to subsidize their own citizens' health care at home. Other countries would start competing with each other for US business, and would so radically undercut local providers that health care prices would be vaguely economically justifiable in no time.
All these things really need to happen to close a lot of the loopholes in the US system.
One problem is if this is opt in, only the elderly and sick will want to buy in and the foreign government would balk at the large number of high risk signups. Young and healthy individuals who are accustomed to the freedom of not buying insurance and just going to the emergency room will be reluctant to pay for something that they believe they don’t want. There’s also a mismatch between therapies permitted by the FDA, religious freedom laws, etc.
For example (as a German citizen) you can go to university in Germany for free and move to a low tax country afterwards for work. When you are old and fragile you come back and use the healthcare system since your foreign insurance becomes too expensive (I'm not entirely sure about that loophole, but I heard it existed).
Of course there is some friction involved (friends, family in the home country). But which percentage of the population has to act rationally for the system to become unsustainable in the long run?
Most countries haven't adapted their policies to the reality of globalization yet. I fear some might go the way of the former GDR and try to keep their citizens from leaving. I heard even the US is doing something like that, it's said to be quite hard to get rid of a US citizenship (and the IRS).
I like having education, roads, community services, a safety net for those less fortunate, a strong military, infrastructure and the myriad other things that governments (should) spend money on.
What I do hate is the obsessive hatred of taxes. No wonder governments get into massive debt - they don't have money.
I also hate large companies avoiding and shirking tax and leaving it to people to pay - I really hate that. Apple, Amazon etc etc all guilty of this - they want our money, they want profit from our community, they don't want to contribute back - at all, if they can possibly avoid it.
Further, the government is one of the few entities that can spend money to make the world worse. You can donate to charities to help people in countries you haven't heard of, you can buy a yacht and leave them alone, but if you pay that money in taxes then part of it will go to blowing them up for some inscrutable reason.
Again, it's not that companies are saints or that they couldn't do better, it's that hammering them for tax avoidance is probably not the best thing to pick from the long list of corporate ethical failures.
I agree with you, but I don't think we can blame "companies", but who should blame the politicians (or people who voted for them maybe, or the people who buy stuff from these companies). Politicians are the ones who set up the laws allowing companies to avoid taxes. I see corporations as complex autonomous entities whose behavior isn't dictated by any single person, but rather by a "system" that lets them operate.
The method by which most of these companies avoid paying taxes does more to help their local and state communities than is appreciated.
It's profits that are taxed and they reduce profits by reinvesting those profits. Reinvesting profits results in more jobs. More jobs allow those that are employed as a result to put food on the the table for their family and a roof over their heads. It also allows those people to pay local, state and federal taxes and participate in those communities.
As a member of the communities where these companies operate, I'm happy that they do what they do to reduce federal taxes because much of what would have been federal taxes ends up in state and local coffers and increases employment opportunities for my neighbors and friends.
It's a fair system if corporations are paying tax contributions proportional to their profit as reported to the stockmarkets.
Anything else is just rationalisations and excuses. Citizens pay the money - companies should too.
If corps have people-ish rights then they absolutely have people-like obligations. Instead they're getting to have their cake and eat it.
This would be true, if companies actually did this when confronted with lower tax bills. However, with rare exceptions (like Amazon), companies haven't done this in decades.
I'm happy that they do what they do to reduce federal taxes because much of what would have been federal taxes ends up in state and local coffers and increases employment opportunities for my neighbors and friends.
Corporations also skip out on state and local taxes. In fact they probably skip out on a larger % of their SALT taxes than they do their federal taxes.
That's why companies sometimes are in fact given money by the government in the U.S. rather than paying money to the government.
I work in (international) tax, and I don't know of any, especially not once you take effective income tax rates into account (i.e., meaning the actual taxes paid as a % of income).
I'm also unfamiliar with any socialist country having schools remotely as good as the University of California, VTech, UT, Ohio State, etc. I won't even try to list the many hundreds of amazing public K12 schools in this country.
I'm also not familiar with any socialist country that has roads better than the US with anywhere close to the same level of utilization. Sure, roads in the US may be relatively bad, but they're also 1000x more utilized.
Every openly socialist country in the world is the size of a small state or middle-sized US city. You're literally comparing apples to carrots.
If you were to name the country, I could pull the same type of statistics showing how bad the schools are in that country, how poor the roads are, how long the wait is for medical treatment.
And in the elementary schools I work with (and mind you I live in a district with a good reputation in the region in a relatively wealthy area), I'd say it's less than 10% of the kids are reading even close to their grade level.
Going to call bullshit on that one. My district wasn't all that great growing up and it was embarrassing when only 70% of my 5th grade class was reading at grade level. There are a few school district where less than half of students read at grade level, and they're almost all urban school district with large % of poor, ESL, immigrant student populations.
The U.S. govt from the top down, and even state and local governments will create a LOT of bureaucracy that provides no added value. Beyond that, they create purchasing systems that force higher spending. When states have tried to create different systems to stop corruption in those lines, the corruption just shifts and it winds up about the same.
There are usually solutions that can work at least as well as what we have with less government incursion and less bureaucracy. Personally, I'd rather see the gov't cut most programs, and allow taxpayers to take roughly half of their own tax burdens and direct them to charities directly. Let people fund what they actually care about directly and advocate themselves.
Also, corporation shouldn't be paying taxes (except as part of trade). They should be limited in terms of holdings and un/underused asset terms and forced to payout to owners/shareholders who would then be liable for taxes. Likewise, non-living entities should have severely restricted "rights" ... this would take a constitutional amendment at this point though.
There's a good episode of the West Wing about this. Everyone thinks that all of the government bureaucracy is useless until they confront the reason that it exists: to deal with specific issues within the government's scope of authority. Some bureaucracy is wasteful/far outlived it's purpose, but that is the exception not the norm.
I'd rather see the gov't cut most programs, and allow taxpayers to take roughly half of their own tax burdens and direct them to charities directly. Let people fund what they actually care about directly and advocate themselves.
If you think government is wasteful just wait until you see how much administrative overhead is wasted at charities and (for-profit) companies. You'd immediately demand for all of that spending to go back to the government.
Do you have any ideas around empowering small charities / non-profits to do more with less?
There are a ton of companies that offer services for free/cheap for a non-profit. Example: YouTube gives (gave?) $10k/month in donated/subsidized advertising to non-profits. Salesforce has a free service for non-profits.
Zapier/IFTTT could be used to stitch products together to automate tedious workflows. I suspect just a little bit of hand-holding for the technologically averse would go a log way.
The difference is people volunteer their money to private companies and charities... that's not the case with the government.
But I also hate when taxes are raised inefficiently. Don't make me pay taxes by sending me a fee in the mail and requiring me to send a check to some government office (sure, this is not a "tax" it is a "fee", whatever, get with the times). Use taxes to price in externalities. Use VAT instead of sales tax, if at all; use personal income tax in lieu of regressive sales taxes. Use land value tax rather than property tax. Redesign "well-intentioned" tax schemes which subsidize the rich like Prop. 13. Make inflation tax deductible on capital gains but also create higher capital gains brackets. Stop making people guess how much our taxes are and just tell us (specifically, the IRS already knows how much we owe so just charge us that!).
Close tax avoidance loopholes.
I also hate when my taxes are spent inefficiently. Stop with the pork barrel spending. Stop spending so much to subsidize the price of oil. Spend on transportation and renewable energy. Redirect military spending which theoretically could develop technology that could be useful for civilians, and instead fund the civilian-applicable technology directly. Fix the corrupt and broken government contracting system. Redesign welfare (for example, SSI) so that it's always in the recipient's benefit to work if they can.
We need to make our system more efficient. We in the US often pay effective tax rates on par with countries that seem to get so much more bang for their buck when it comes how those taxes are spent. I don't mind taxes in theory at all but I want to feel like I'm getting my money's worth
What is not valid is to use those objections to justify not paying tax.
Too many people use these objections to justify avoiding tax.
I really wish the legislation allowing the IRS to actually tell you how much you owe would have survived...
Has this been tested anywhere, even locally?
The funding source is not the United States Government. The funding source is US taxpayers.
The right wing likes to proclaim this in support of their dislike of taxes and of government generally (at least when government is telling them what they can and can't do; it seems quite different when they control government and get to tell others what they can't do).
But if we're going to work our way backwards through the chain of funding sources, why stop there? Seems to me that taxpayers' employers could make the same argument about being the funding source — and then the employers' customers — and so on, stretching all the way back to the Big Bang ....
To a lesser extent, the states also generate itemized budgets. Most but not all of the state-level budget information is available online.
B) You can, to a lesser degree of detail, since non-profit tax returns are made available for public viewing by law. You can use Charity Navigator (fee required) or visit your nearest IRS office to view them. Many states also require non-profits above a certain size to make their financials available upon request.