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<< More on the "Mercenary" controversy | Main | Return of Inflation >> April 14, 2004Taxes on Wealthy Help EmploymentHere is an intriguing article from The Economist, an article that compares the US taxing and welfare systems to Europe. Some of the comparisons are expected: According to the OECD, Sweden, Denmark and Finland devote almost a third of their GDP to social transfers. Germany and France devote about a quarter. America redirects only 14% or so of its national income in this way.But here's the odd thing. Their tax systems are less progressive than the US, so since the rich don't pay as high a percentage of taxes, those European social transfers are less redistributive than you'd expect. The US actually taxes capital and corporate income more than in Europe: the American state took an average of 31% of capital income between 1991 and 1997. The corresponding figure was about 20% in Germany, Norway and Finland, and 24% in France. In 1998, rich Americans faced a marginal tax rate on dividends of over 46%.One result of the light taxation of capital and the heavier taxation of wages in Europe is higher unemployment there. Which brings up the counter-intuitive evaluation of the US economy. It's progressives pushing high taxes on capital and the wealthy that drive the better employment numbers historically in the US. Posted by Nathan at April 14, 2004 08:43 AM Related posts:
Trackback PingsTrackBack URL for this entry: CommentsThanks, Nathan, although this is something I'm trying to get my head around (having seen this in the Economist, too)... though we have higher rates, don't we actually effectively tax our corporations less because of all their deductions? Posted by: Issa at April 14, 2004 09:59 AM Thank you, thak you, thank you!!! As a pro-market leftist, I appreciate this analysis that illustrates that the right-wingers view of markets is upside down: Capital does not employ labor, labor employs capital. The right wingers are correct that taxes discourage that which they tax, but then they claim to help employment by shifting taxes from capital to employment. Further proof of this thesis: Bush's tax cuts and the current ecconomy. There were huge tax reductions on capital, little or no tax reductions on labor. Result: Profits are up, employment is stagnant or down. And no one can figgure out why. (Okay, this post hoc ergo proctor hoc analysis is not PROOF, but it is certainly consistant with a plausible hypothosis.) Posted by: Decnavda at April 14, 2004 06:33 PM Who gives a shit what corporations pay? I go to work every day, and make my sure. Stop pissing and moaning for those lazy-asses who look to the Government for all the answers. I have never gotten a job from a poor, government-dependent liberal. I always get them from those evil corporations. By the way, Decnavda: You sound like something I once read in Das Kapital. let me ask you this: What socialist Euro-waste country has any chance of passing us economically. You already know the answer: NONE Posted by: brian at April 16, 2004 09:10 PM Brian is a troll from Bangalore. Posted by: ish at April 16, 2004 09:24 PM Um, Brian, no one is saying that corporations are necessarily evil, only that there are larger economic gains for middle and working class people when we have a progressive taxation structure. Take your bullsh!t "commie liberal" straw man somewhere else. Posted by: Abhishiktananda at May 2, 2004 10:02 PM for to to because. Posted by: forced sex videos at September 1, 2004 09:25 AM Post a comment
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