I am pro common good and building a thriving society for all. I believe it’s both morally (i.e., “there but for the grace of God go I” kind of thing) and economically smart to, say, have a safety net. I believe we thrive when we all thrive.

Yes, let’s not digress on this one (because it’s big) but you’re expressing the core disagreement between the two political ideologies in the USA. One believes that a common redistribution of wealth as determined by the politicians leads to collectively the best society, whilst the other distrusts the politicians to successfully do so, so best to leave the wealth with the people that earned it, and let market forces distribute the wealth through employment.

I lean latter, but again, let’s not digress.

That said, I live in CT, so I’m more than aware of sending more dollars to the shared kitty than I get back.

Sure. And smallish states like CT would have to collectivize with other small states or one big one to get decent economies of scale, for sure. I’m in Texas, so we’re able to operate alone. I don’t see this as a major obstacle to fa modern version of federalism, but it would indeed require some thought and planning.

On the country graph, i posted this in another comment, but if you go to the site it came from, i think you’ll see this is income and payroll only (at all levels), so doesn’t have consumption/sales. It’s not all the taxes.

Hm. That’s not my understanding of what a “tax wedge” is, but I’ll have a look.

I’d like to see data on your statement about middle class taxes would have to double, etc. That may or may not be true, but my meta/macro point here is that we should be asking what we want and whether that’s delivered at a reasonable price, not just ask what our tax rate is. So if all taxes were higher, but everyone got health insurance (for example), like in those other countries you mention, that could be worth it.

I can run some numbers if I have some time, but the general issue here is that there aren’t enough “rich” that we can tax them enough to attain a European-style social welfare system AND fund the military at a trillion a year (which is what Pentagon plus all other military spending in other budgets comes to.) And if you look at countries like Denmark, they have a top marginal rate approaching 60%, but that top rate covers the entire upper middle class. Canada, another example with which I am familiar, IIRC, taxes their middle class at an effective rate of 22%, which is roughly double what they pay in the US (income only, not payroll).

Megan McArdle summed it up well in an article about a year ago. To paraphrase, she basically said that both parties in the US are lying to the people. The Democrats tell their voters that they can have european-style social services paid for only by the rich (not nearly enough money there), whilst the GOP tells their voters that they can have american-style social services paid for by nobody at all. :-)

We are well overdue for a come-to-Jesus meeting where the public is actually told the TRUTH about what various bells and whistles cost, and the extent to which the government is engaging in financial engineering to so the right hand doesn’t know what the left hand is doing.

Written by

Data Driven Econophile. Muslim, USA born. Been “woke” 2x: 1st, when I realized the world isn’t fair; 2nd, when I realized the “woke” people are full of shit.

Get the Medium app

A button that says 'Download on the App Store', and if clicked it will lead you to the iOS App store
A button that says 'Get it on, Google Play', and if clicked it will lead you to the Google Play store