The government has no reason, in the medium to long term, to have such high taxes. Since, by keeping high taxation the state retrieves less money in absolute terms than they would if they let wages increase and steer away from the minimum wage.
I don't think you could say that about most EU countries. Portugal really is in a bad place.
(Edit: just clarifying that the situation is different, yes taxation is high as most others but in the case of Portugal its much worse)
It does - Debt.
Portugal's debt as percent of GDP skyrocketed during the GFC and Eurozone crisis from 75.8% in 2008 to 129% by 2012.
Unlike economies with a similar debt-to-GDP ratio like Italy, Portugal's economy is a relative minnow, and doesn't have a significant domestic capital market which can at least help stem some of the issues, nor can Portugal attract FDI at the same level as much more business friendly Spain, which made income taxes their only lever.
That said, the Portuguese debt-to-GDP ratio has gotten much better (99.10% in 2023), but that was because of how much of the Portuguese budget was spent on servicing debt.
This does seem low in comparison to the US, where ~17% of the national budget is spent servicing debt interest. For context, this is approximate 1.5X what we spend on national defense. [1]
https://www.investopedia.com/why-interest-payments-are-blowi...
Looks like the US’s cost of servicing works out to about 3.4%, which definitely seems rather high (though, probably still not high enough that you’d necessarily want to aggressively pay it down; 3.4% isn’t a _great_ return). Actually, I’d wonder how much of this is related to the debt ceiling stuff; I would assume that makes refinancing when debt is cheap more difficult.
I don't know how or if the debt ceiling has any impact on refinancing.
My concern is that the US GDP is also fluffed up, and the situation is more dire.
I just think we would've gotten through this sooner by making use of the invisible hand and lead businesses to be able to prosper more and as a result, higher wages. This would lead to more modest taxes having a higher wield to the state.
As it stands, they are taxing people for a very low absolute amount in the end. Not to mention that taxes go way lower the closer you are to minimum wage (a good thing, but it also shows how little they gain from this strategy). In the meantime they strangle any small to medium sized company, which are the ones driving the wages for most.
However, the issue lies in the absolute amounts. In France, the median (monthy) is 2340€, but in Portugal it is 1039€.
When you are taxed in relative terms this amounts to quite a big difference when comparing what both government get from their citizens.
I concur that France's cost of living is higher and that I'm wayyyy oversimplifying it.
[1] https://www.statista.com/statistics/205960/median-household-... [2] https://www.euronews.com/business/2024/07/08/european-averag...
And given too left-leaning and fanatical green-deal-at-all-costs push from Brussels economical situation won't get better, in contrary. They could be pouring money into defense, its not like in 20 years russia will stop wanting to subjugate/murder us all. Or they could try not killing their own automobile industry so quickly. Or...
EU started a slow but steady decline given changes in global economies, it will take probably a long time due to various factors but trend is clear.
Investing heavily in renewable technology and R&D doesn't mean spending less on military or industrial capacity - in fact it's fairly dual use.
Furthermore, US, China, SK, JP, and others manage to balance both.
The issue is most EU members stopped funding their militaries following the fall of the Berlin Wall and redeployed that capital elsewhere - especially during the European Recession+Currency Crisis (1990-95), GFC (2008-11), and Eurozone Crisis (2008-2014).
It has private healthcare mandated by the government, and an economy favorable to capital. It has a federal system where most of the power and spending resides with the cantons(states), and much closer to the voters.
The Swiss constitution was actually modeled after that of the US.
“The Amercian national constitution, the Articles of Confederation, was constructed on the Swiss model of a confederacy of some over sovereign states. Then, Americans repudiated confederal government in 1787 as impotent and unworkable and adapted a new federal constitution. The opponents of the new charter, the Anti Federalists argued that a Swiss style government was still a viable model which offered the best hope for the preservation of American liberty. The Swiss themselves repudiated confederate government in 1848 using many of the same arguments Americans had marshalled against it in 1787 and adapted a Federal constitution modelled after the American constitution of 1787. After the Civil War many American state and local governments adapted constitutional reforms borrowed from the Swiss. The initiative and referendum – which continues to this hour to give the politics of California and other influential states their distinctive tone.”
https://www.legalanthology.ch/hutson_swiss-and-american-stat...
Another fun fact about the Swiss government that I think is superior to the US is that the effectively have seven presidents which form an executive council. The executive council debates behind closed doors and presents a unified public front. Internal debates of the executive counsel are sealed for 20 years before release to the public.
That said, my favorite thing about Switzerland is still that the vast majority of tax collection and public spending occurs at the local level. Federal spending revenue is approximately 30% with the rest being the local cantons. Swiss Cantons are smaller by population then a typical California county.
I think this emphasis on local government results in Civic engagement, oversight, and empowerment while reducing political strife.
This resembles the Athenian executive. It works in peacetime but less so in war. It’s also bad if you polarise because it blamelessly deadlocks.
https://www.healthcare.gov/health-coverage-exemptions/forms-...
> I think only the wealthiest Americans have much more money in their bank accounts than they would in Europe
Well, you thunk wrong.
Median household income in the US is $80,000 [0] and taxes like VAT are nonexistent.
Throw on top of that access to subsidized plans like Medicaid or ACA plans for households that earn below the median, and most Americans come out ahead.
The big issue with the US is the de facto inability to commit mental health patients to involuntary mental health holds unlike much of Europe due to the current interpretation of the 14th amendment, which has caused the mental health crisis to become a homelessness and drug crisis.
That said, as a whole, most Americans live fairly comparable lives to most Western countries, as HDI shows. In fact, much of Europe has a much lower HDI than the US once you exclude Scandinavia, Germany, the British Isles, and Switzerland.
When you look at a subnational level, it is the Deep South (Alabama, Mississippi, Louisiana, Arkansas) and Appalachia (West Virginia, Kentucky) that continues to lag, but they represent less than 5% of the entire population of the US.
… Eh? Large-scale involuntary committal largely ended in Western Europe decades ago. What figures are you basing this on?
You can better see the reality by looking at actual examples of families with massively different incomes living in the US vs elsewhere. It takes WAY higher salary (5x?) in the US to enjoy the same lifestyle as someone in the UK, for example.
I don't know exact salary figure, but my sisters family in UK have medium income (1.5 jobs) new BMW, two kids in college, foreign vacations every year, kids got latest Apple phones/watch/laptop growing up ... A bit like 1950's America living the dream on a single income with foreign holidays and iPhones added.
It's seriously not difficult.
Where do you live?
Here's a handy table: https://en.wikipedia.org/wiki/Tax_rates_in_Europe