government and taxes

[HighLordDave]

Over on the Education, free or not? thread our friend Lazarus brings up some interesting questions on the role of government and the amount that governments should tax their citizens.

With that in mind, what is the role of government? Is it simply to provide collective security and move mail or should government play a larger part in our everyday life?

What is a fair proportion of a citizen's income to go to paying for their government's services?

This may actually be two topics, but since we can't fund a government without taxes, I've thrown them together.

[C Elegans]

Oh, I see a flame potential in this topic - policial opinions are often, like religion, highly personal and differ greatly!

My personal view on this: I think the goverment should play the role of organising a society in the best interest of most of it's citizens. That includes regulating functions such as laws, finacial

About taxes: as is obvious in the Education free or not-thread, I think education, infrastructure, care of children, eldery, challenged, health social security bla bla should be tax funded. This is because I don't think commercial interests and a free market provides enough social security for people who for various reasons have low or no income from employment.

As for what is a fair and reasonable proportion of tax, it's a very difficult question to answer. Personally, I think it should be depending on how much a person has left to spend. Also, the tax must not be so high so people with low incomes actually get more money left by living off social security, as was the case in Sweden during the 1980's. A job should always pay off better than tax funded unemployment insurance, otherwise the system will certainly get abused as it did in Sweden during this period.

So I think progressive tax is best, but not the kind of progressive tax we have in Sweden. Here, the lowest tax rate is 27% IIRC, which IMO is far too much for low income takers. Also the progression is far too steep here. The roof is 57% tax, and you reach that roof already in the higher region of the normal/average spectrum. This means that Bill Gates (well, he is retired now, isn't he?) and an ordinary IT-consultant, physician or engineer would pay the same percentage of their income.

[size=small]As for me personally, I really don't care a lot how much I pay in tax as long as I have money left to live an OK life and I believe the tax is mostly going to things I think should be tax funded. But I'm talking from the perspecitve of a person who has chosen the profession of an underpaid university researcher for personal reasons (after 7.5 years at uni, I earn about the same as an underground ticket seller, less than a taxi-driver), rather than taking one of all the numerous offers I constantly get from the industry to work for them for 4 or 5 times higher salary. [/size]

[Dottie]

I feel very ambivalent about this one. One side of it is that the governments of today have achived many good things, and can be used to organize society and to some extent provide a sort of security for its citizens.

On the other hand Governments imo have never existed for the purpose of providing for the people, but rather for the purpose of further its own power at any costs. Without doubt the list of unethical behaviour commited by gouvernments does far exced all acts of terrorists, revolutinary movments and criminals together.

Currently im leaning towards society should be managed by a federal system of trade unions. Money for healt care, education etc would then be taken directly from company profit.

[GandalfgalTTV]

Over her the lowest rate is 37% and that's quite high, but I consider it to be fair. The goverment is responsible for a lot of things over here and IMO it works well. Nobody has to go homeless, hungry, everybody get's the same quality of health care, education. etc. etc.

Everybody nages about the high taxes, but that's just being Dutch, most would not want it any other way.

[Lazarus]

Oh, no! Now I'll be getting into another huge debate - I have homework to do, here, people! Please try to be less interesting!!

Anyway: my view on government/taxes in under five minutes. Government has become ridiculously large, and needs to remember it's roots - talking here of the US govt, and the concept that the Founding Fathers had of it. I disagree, in principle, with taxes of any sort.

Let the arguments commence! (I may not be able to get back to this until next weekend, though.)

[GandalfgalTTV]

It took you five whole minutes, to think that up. Disagreeing with taxes of any sort. So if you become unable to work, you want to starve. If you can't pay for school, you want to remain stupid. etc. etc. etc.

This is about as ridiculous as it gets.

*Yes flaming when someone is not here for a week isn't fair or nice. But IMO it's deserved.*

[HighLordDave]

Taxes are necessary because government is necessary. The questions I guess I am asking are things like: What level of service do we expect of our governments? What is government's role in society?

Answering those questions will determine how much the government needs to raise, which will in turn determine which taxes are needed. Remember that until the Civil War the US government was funded primarily through import tarriffs. However, it provided few services. Even in the later 19th century, government played a small role in society to such an extent that the federal income tax wasn't instituted until 1913.

Americans have a unique perspective on taxation; our founding fathers mounted and won an armed insurrection based on their dislike of paying taxes. So it should come as no surprise that Americans in general don't like to pay taxes. What we do like, though, is all of the services that the government provides. We also like government to be our advocate, but we don't like it to advocate things that don't affect us directly, especially if it "interferes" with our lives.

So how big should government be?

[McBane]

The biggest problem here in the US, IMO, is the size and scope of the government. While I agree that taxes are a necessary component for our government to function, it is the responsibility of the government to wisely use its resources.

I dont like to see money that I worked hard to earn, go to the government and watch it wasted away. For example, Ken Starr and his $50+ million investigation into the Clinton administration.


Although, 57% tax rate in Sweden???
@ CE - is health care funded by the Swedish government?


I read somewhere that the average US taxpayer works about 4 months (free) ie. the government gets the first 4 months of salary.
That is a rather sobering thought. Hmm, I guess we are all working for free right now.

[Gwalchmai]

What are the alternatives to taxes?

I suppose the US government, being the bastion of Capitalism, could develop a product and sell it to make money. What could we sell? Cars? Computers? Pet Rocks?

[C Elegans]

Originally posted by McBane
Although, 57% tax rate in Sweden???
@ CE - is health care funded by the Swedish government?

Yes, it's not entirely free as it is in Norway, but the patients pays only a small sum, the rest is governmentally subsided. (is this the correct word? - it's so difficult to discuss economics and politics in English, I don't know the terms You pay per visit, not depending on the time or actual price of the treatment, so a 5 min consultation and a 10 hour open heart surgery will both cost the patient about $12. You can go to a private clinic or to a public health care clinic - the cost is the same. You never pay more than about $100 in a year even if you consume lots of health care. Same thing with medicines. This is to protect chronically ill people from having high costs for the treatment they need.

Physiotherapy is included in the above system, if you have got a prescription from a physician.

Psychotherapy is also included in the above system if you A. go to a therapist who is a psychiatrist, ie a doctor or B. go to a psychologist who works in the public health care system. Both these groups of therapist are totally overcrowded, waiting lists can be 1-2 years. If you want to go to a private therapist, you get assessed by specialists from the public health care and they decide if you should get your therapy paid or not. Usually young people and people with disorders that are believed to have good prognosis with therapy (like anxiety disorders) are paid for.

Dental care works differently, it used to be the same but it changed to a progressive system where the patient paying the whole cost up to about $60-80, after that the government pays an increasing percentage depending on the cost.

For children under age 18, everything is free except for visits to the ER, which I believe is like $20.

[McBane]

Originally posted by C Elegans


Yes, it's not entirely free as it is in Norway, but the patients pays only a small sum, the rest is governmentally subsided. (is this the correct word? - it's so difficult to discuss economics and politics in English, I don't know the terms You pay per visit, not depending on the time or actual price of the treatment, so a 5 min consultation and a 10 hour open heart surgery will both cost the patient about $12. You can go to a private clinic or to a public health care clinic - the cost is the same. You never pay more than about $100 in a year even if you consume lots of health care. Same thing with medicines. This is to protect chronically ill people from having high costs for the treatment they need.

Physiotherapy is included in the above system, if you have got a prescription from a physician.

Psychotherapy is also included in the above system if you A. go to a therapist who is a psychiatrist, ie a doctor or B. go to a psychologist who works in the public health care system. Both these groups of therapist are totally overcrowded, waiting lists can be 1-2 years. If you want to go to a private therapist, you get assessed by specialists from the public health care and they decide if you should get your therapy paid or not. Usually young people and people with disorders that are believed to have good prognosis with therapy (like anxiety disorders) are paid for.

Dental care works differently, it used to be the same but it changed to a progressive system where the patient paying the whole cost up to about $60-80, after that the government pays an increasing percentage depending on the cost.

For children under age 18, everything is free except for visits to the ER, which I believe is like $20.

Thanks for the information. At least you (as a taxpayer) see a tangible benefit to paying taxes. I like the concept of government subsidized health care. From the outside, it appears to be a very good system for most people. However, as I work for an insurance company I would not like to see myself unemployed.

[HighLordDave]

@McBane: You wouldn't be unemployed, you'd get federalised.

@Gwalchmai:
The most reviled tax is the income tax because it makes people feel like the government is "taking" money away that someone has rightfully earned. Along with import tariffs, the income tax is the primary method of taxation for the federal government. Most state governments are financed through state income taxes and the sales tax. Local municipalities fund their budgets through property taxes and municipal services fees. All levels of government also sell bonds as a fund-raising mechanism, although they are obligated to repay those bonds with interest.

To a small extent, the federal government does sell services in a capitalist setting, the most notable examples being the US Postal Service (one of the four original cabinet-level posts) and the National Parks Service. I do not believe that either entity is a profit-making venture, although they certainly subsidise their budgets with "sales" revenues. Some states also "sell" a product: the lottery.

Americans in general don't mind paying import taxes because it's a largely hidden fee; the cost borne by the manufacturer/distributor and built into the retail price of the goods we buy. So in this way, since we never see the tax, we don't think about paying it.

@C Elegans:
Have you noticed that the federalised health care system is being abused (ie-people going to the doctor for a cold or being overmedicated)? One of the arguments over here against a federal health care system is that it will stiffle innovation and research. Do you feel that is the case in Europe or other countries with universal health care? Do people who generally do not get sick feel that they are being burdened by the smaller proportion of the population who does? Can a doctor open a private practise and charge whatever rates he/she wants or are all doctors employed by the health care ministry (or you call the oversight entity)? Do you think that Swedes (or Europeans in general) are more willing to pay taxes than Americans?

(Personal note to C Elegans: I don't mean to put you on the spot or make you feel like I want you to speak for all Swedes and Europeans, but I am curious).

[McBane]

@McBane: You wouldn't be unemployed, you'd get federalised.

Great! That way I won't be paid on merit, but how many years of experience I have. At least budgeting future income will be easy....hmmm 2% increase this year, 2% increase next year.....

But, benefits should be good, plus mandatory breaks for every hour of work

[C Elegans]

Originally posted by McBane
However, as I work for an insurance company I would not like to see myself unemployed.

You wouldn't be out of work here either, Sweden is a "mixed econonomy" and insurance companies play an important role too. If you get struck by long term illness, you will get like 80-90% of your income for a period, then after 3 months you will get about 70%. Most people take private insurances to assure they get more compensation in case of long term disease or permanent disability. The you have the retirement programs. In the old days, it was all tax funded (income tax and employee's fees), nowadays it's mixed with private insurances and personal savings.

posted by HLD:
Have you noticed that the federalised health care system is being abused (ie-people going to the doctor for a cold or being overmedicated)? One of the arguments over here against a federal health care system is that it will stiffle innovation and research. Do you feel that is the case in Europe or other countries with universal health care? Do people who generally do not get sick feel that they are being burdened by the smaller proportion of the population who does? Can a doctor open a private practise and charge whatever rates he/she wants or are all doctors employed by the health care ministry (or you call the oversight entity)? Do you think that Swedes (or Europeans in general) are more willing to pay taxes than Americans?

Abuse of the health care system is not a problem here, the target for abuse used to be the unemployment-system back in the 1980's, but this has largely changed. Sweden is one of the least overmedicated nations is the world, probably because of the much stricter regulations we have from the Swedish FDA. The Swedish FDA is split in several control instances, and rules for introducing a medicine on the market and rules for prescribing to a patient are very strict in all Scandinavia compared to most of Europe, UK, US and South America.
Whether a health care system is private or govermental, is IMO irrelevant to the degree of innovation and research. Tiny little Sweden with a population of 9 million is actually 2nd after the US in production of research in several large medical research areas like neuroscience and cardiology. I see no conflict here, rather I think there are other factors who are decisive in whether research is flourishing or not. Those who argue that a federal system will hamper development and research, what are their arguments, how do they reason?
People in general I think don't feel burdened paying for the long term ill, challenged or other expensive groups. On the contrary, I think most people think it's right to pay tax for these groups, whereas most people are very upset to pay for what they (and I) view as an unnecessary large administration apparatus.
A doc, psychologist or dentist can open a private practise and charge whatever they like, but then the governmental subsidiaries(?) only cover a set fee, so the patient will have to pay the rest. This of course means the establishment will have very few custumers if they charge more than public health care.
I certainly think that Scandinavians as a group are more willing to pay taxes than Americans as a group, mainly because we are use to it, it's like brushing your teeth. For the rest of Europe, I think some countries like Switzerland, has always had extremely low taxes, and thus will probably be less inclined than Americans to pay like 30% income tax. Countries like Germany, France or the Netherlands seems to have populations with a high acceptance of tax too, but others might fill me in here.

Note to HLD: No problem at all, I understand you are curious about the system in general, just as I'm often curios to know more about the system in other parts of the world. I know you know I can only speak for what I believe is common opinions in Europe/Sweden.

[HighLordDave]

Originally posted by C Elegans
Those who argue that a federal system will hamper development and research, what are their arguments, how do they reason?

Some folks say that private practise encourages competition and that competition stimulates innovation. In the field of medicine, I am a little skeptical that competition encourages discovery because most doctors devote most of their work to their practise, not research. It's doctors associated with universities and teaching hospitals who perform the bulk of medical research into new techniques and technology.

I think competition is more important to drug and technology companies, but even they don't work in a competition-driven lassiez faire environment; much of their work is funded through research grants and other federal programs. Still, that arugment carries a lot of weight over here as does stigimatising universal health care with the word "socialism".