I’m not sure what the next decade holds for the US, but it’s either gonna be some major-scale reinvestment and redistribution or it’s gonna get pretty damn unstable.
Stability is directly proportional to the strength of economy. When people struggle, they take up on the streets. Not to take away anything from the BLM movement (I support it obviously), but my guess for its stronghold and how it became mainstream is because of the pandemic. 2 months into the pandemic in May 2020, a lot of anger was pent up. It was all released in the unrests we saw in pretty much all major cities. Same goes for far-right extremists, Boogaloo boys, QAnon, etc.
There hasn't been as many protests in the world in pretty much every country as much as we had in 2020.
Too bad people are more focused on social identities than poverty. If the unrest was more about poverty there would be a lot more people involved, and people would have a harder time painting it as thing for restless black people. If the demonstrations were about poverty, and every group could see “people who look just like me” I bet there would be more success.
The issues this article highlights are not systemic, they are because of the pandemic.
Unemployments statistics also differ heavily on what the specific statistic consider unemployment to be.
6.8% increase in median household income from 2018-2019. Look at the stats, most of that growth went into the lower quintiles.
And no, even if income inequality increases, higher incomes for low wage workers have real, immediate benefits.
Furthermore income isn’t everything. If wealth inequality wasn’t so great than even those unemployed would be able to weather C19 must more comfortably.
The middle and lower classes in Europe pay very high tax rates, but get a lot in return. The left in America is promising European-style safety nets without any tax raises - but the rich simply can’t afford this amount of safety net. Bernie was at least honest in that he plainly said new, broad-based taxes would be necessary to fund his proposals.
Edit: HN is hilarious because people downvote facts they don’t like. At least admit reality to yourself - or post a comment that refutes the statistics.
My understanding is that it's all the deductions that make the US system on the whole quite regressive.
In any case US taxpayers don't appear to be getting good value for their money.
They do have a pretty insane military though...
The Economist article is paywalled so I can't read beyond the intro. But the headline is intriguing: "gov't spending is not." That seems to be me to be the crux of it; Canada's tax system isn't terribly effective and we've been running deficits for seemingly forever, but at least all that debt is on the whole focused on things like health and education; while the US has an absolutely huge debt that seems to produce little of value for its population.
EDIT: I'll add that Canada is no worker's paradise. Inequality here is still very pronounced, and the gov't is also involved in all sorts of stupid subsidies on failing industries, and seems unable to effectively build new infrastructure. And our housing market just gets more and more irrational every year.
With the 2018 tax changes, a lot of the itemized deductions are capped and the standard deductions raised. I think I've read now that 90% of the filings are for standard deductions.
The most hilarious thing of all is that Trump passed a tax cut, and one of the very few tax increases as part of it was to eliminate the ability to deduct state taxes from federal above 10k. The only people this affects are rich people in high-tax blue states. And the democrats are bitching and moaning to remove this, because again, no one likes paying taxes, even those who pretend to love tax increases https://www.cnbc.com/2020/05/12/house-democrats-stimulus-bil...
I was astonished to discover earlier in my career, after a pay raise, that I got to stop paying FICA at a certain point. I didn't even realize there was an upper limit. It's a tax that only applies to "lower" income workers. Highly regressive.
Also, US income taxes are only nominally progressive. There are so many loopholes that very wealthy people (most infamously the POTUS) can end up paying no taxes whatsoever. Tax dodging is a science and an art. Didn't Warren Buffett say he paid a lower rate than his secretary?
If you did not limit the taxes and they explicitly became income taxes (in appearance), many upper-middle class Americans would find themselves paying upwards of 50-60% taxes on income for vanishingly few benefits. That has political ramifications that the government would rather avoid.
The challenge for the US is that the taxes on the middle class are very low relative to e.g. Europe. But they cannot squeeze enough taxes from the top 20% that pay most net taxes to make up the difference.
However to reform social security so it can actually be maintained, I agree we should increase the limits or remove them entirely. But keep in mind social security is not seen as a tax - it’s a retirement pension. If we are going to change it so that rich people pay more and get less, we should also reform Medicare so that rich people pay for their own healthcare in retirement. Tons of old age programs give handouts to the rich - that’s not what they are for.
This is a very important distinction, so I'll repeat it. Social security in the United States is not a pension, it's just a government program. We're told it will continue, but that's only because the current government says it will. A future government could just decide to stop payments, and there would be no recourse because it's not a pension. If you live in the United States, please plan accordingly.
> A future government could just decide to stop payments
A future government could just decide to go to war with Canada and the recourse for citizens would be the same.
This is a common misunderstanding of how taxes work, or specifically what refunds mean. Getting a refund does not mean you paid zero or negative tax. Getting a refund simply means that you had more tax withheld than you should have. The tax withheld from your regular paycheck is not authoritative, it's just a prepayment of your estimated tax bill for the year, and it is almost always slightly inaccurate.
You can see this for yourself assuming you earn above the poverty line. Your tax return has three fields related to this: total tax withheld, total taxable income, and the tax owed given your taxable income. Getting a refund just means the tax withheld is greater than the tax owed. The total tax owed on your tax return is the tax you actually paid for the year, and for the vast majority of people it is >$0 even if they get a refund. In fact, the approximate tax paid on the median US household income (~$68k) would be ~$13k (assuming the household files a joint married return) which is decidedly non-zero.
What income range do you define as middle class? And What's lower class in the US income wise?
Also for a bit of context what government services do people receive welfare for in the US? What are the big sercices that are driving those net negative tax payments?
It's only going to be done with all tax payers increasing their contribution (or maybe all but the lowest).
The HN guidelines [1] mention:
> Please don't comment about the voting on comments. It never does any good, and it makes boring reading.