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by bzbarsky 1873 days ago
If the suggestion were in fact to double "all federal income taxes", what do you think tax rates would end up looking like? Right now the top "all taxes" federal marginal rate is 39.35%. (2.35% Medicare, and 37% individual income tax). Doubling that gets you to 78.7%. And state taxes also exist; in California the top rate would be > 90% overall.

And of course doubling rates will not double revenue, because incentives really are a thing and a change this large would have large incentive-mediated effects, including people ending up with more compensation in non-taxable form (leisure, respect, non-taxable perqs, etc). The only way to double _revenue_ is for rates to rise even more, or more likely to start affecting more people (i.e. the top rate starting to apply at lower income levels).

Now those are marginal, not average, rates. But just to be clear, right now US government (federal, state, local) spending is ~46% of GDP. Federal spending on its own is ~30% of GDP. If we are talking about doubling that second number, overall government spending would be 76% of GDP. Which generally means the _average_ tax burden across all people would be 76% of income (though some of that can get hidden via corporate income taxes and whatnot). There will absolutely have to be people with average tax burdens > 80% to suport that. That's assuming that we don't finance things by borrowing, of course; 1/3 of US government spending right now is not even coming from tax revenue.

It might also be instructive to compare 76% government spending to the table at https://en.wikipedia.org/wiki/List_of_countries_by_governmen... to see how that measures up against other countries.

1 comments

Be real man, no country on earth is taxing their people at 80-100%. I'd happily trade scandi taxes for scandi safety nets and worker protections. I think those max out at ~ 50%?

Regardless, I don't know why I get pulled into debates with people who view taxes as theft instead of the price of a civilized society. Neither of us are ever going to change our world views based on the arguments of another.

> Be real man, no country on earth is taxing their people at 80-100%

Sure. Neither is any country providing a $750/month UBI, much less $1500/month, from taxes. (Some countries do provide that sort of thing for citizens from oil revenues or whatnot.)

> I'd happily trade scandi taxes for scandi safety nets and worker protections. I think those max out at ~ 50%?

~50 govt revenue as a fraction of GDP, yes. A lot of that is VAT, not income taxes, of course.

But also, that's not the same as the discussion above about UBI. Yes, a Scandinavian-style safety net can be done at much lower taxation levels than "doubling the US federal revenues", especially people by and large don't abuse the safety net. Spending 1% of GDP on the military, not 3%, also helps a bit.

> people who view taxes as theft instead of the price of a civilized society

I have no idea where you got that from anything I said, and that is most certainly not how I view taxes.

> Neither of us are ever going to change our world views based on the arguments of another.

Honestly, it sounds like you have no idea what my world view even is...

>Sure. Neither is any country providing a $750/month UBI, much less $1500/month, from taxes. (Some countries do provide that sort of thing for citizens from oil revenues or whatnot.)

Kuwait pays ~$10k per citizen, last I checked. A few countries pay citizens for having children too.

Thanks for bringing this up. I just happen to have lived there. You should go check it out and try to find just one Kuwaiti citizen working a non-government or non-executive job. Talk to the people that are working and ask them where they are from, how much they get paid, how they are treated, and what happens if they try to switch jobs or leave the country before their ‘visa debt’ is paid. Also walk around and check out how well they take care of the place, or their own health for that matter. And, yeah, oil money.

So, to recap... the formula for utopia is to destroy the environment by burning all of your natural resources, and enslave foreigners to do all your work. So progressive.

> Kuwait pays ~$10k per citizen, last I checked

That's one of the "from oil revenues" cases I mentioned, indeed. Though are you claiming $10k/month? I'd love a source for that number; the last number I saw was ~$3k/month subsidy if you work in the private sector. Obviously if you work for the government directly you get whatever that salary is, which in Kuwait is pretty nice, but that's ostensibly a job, not a UBI.

> I’d happily trade

But that’s not your choice. It’s interesting that you indicate disagreement with how the money is spent, but not how it is taken. This seems like the same concern for those they are taking it from. Can you imagine how a society would function if it were based on consent?