One for you nineteen for me
Sometimes I think I’m a masochist. As I mentioned in my last politically inclined post, I listen to a lot of podcasts from all over the political spectrums. One of these is Bill O’Reilly’s radio program (The Bill-O The Clown Show, if you listen to Keith Olbermann). Now, I should point out that I generally listen to O’Reilly for the entertainment value - I like it when he yells at people and calls them pinheads. O’Reilly is long on vitriol and short on facts.
As long as you recognize this, you can enjoy O’Reilly’s show for the humor of it and it is an indication of what’s going on in the mind of the Far Right. The problem is that a lot of people don’t seem to reognize that O’Reilly is one of the great comics of his generation. They take him seriously. They go to him for news and analysis of the news. That’s some kind of scary. It’s not the narcissism, you get used to that, it’s the repetitiveness. O’Reilly seems to subscribe to that idea that the Right has taken on recently that if you repeat something often enough it becomes true. No spin indeed.
O’Reilly’s ranting this week has been based a lot on the current economic woes. He likes to repeat the same accusations against his bogeymen - “the liberal media”, the “Far Left loons” and “socialist Europe” who offer “cradle-to-grave entitlements, big federal apparatus, high taxation, all the things that the Democratic Party wants to introduce here in the United States”. One of his shows this week was about taxes. How the Dems want to raise everyones taxes to pay for their social entitlement programs - standard Right Wing chatter from the “independent” O’Reilly. He cites the crippling tax rates in Europe and other “socialist” countries with enititlements like single-payer health care that prevents their citizens from dying.
A lot of what O’Reilly had to say this week didn’t ring true. I’m now paying taxes in my third different country and I’ve never really felt that there was that much of a difference in the amount that I pay in taxes in any of the three. So, I decided to do a bit of research into tax rates in various countries. I used my income as a gauge and compared the individual income tax rates in a “low” tax country like the U.S. with a “socialist” country like France and a couple in between - Britain and Australia - where the tax rate is higher, but government services are more plentiful. Things like single payer health insurance, government subsidized maternity leave and generous unemployment benefits. I’m not going to tell you exactly what I make, but let’s just say it would put me solidly in the middle class. When did that happen? When did I become a member of the bourgeoisie?
- In the USA someone earning what I do would pay 28% of their salary as federal income tax. Depending on the state in which I lived, I may owe up to another 10% in state income tax. Again, depending on the state, I would pay between 0 - 10% on all goods as a sales tax. For example, if I lived in Utah (god forbid) I would pay about 33% of my income in taxes before sales tax. If I lived in California, that pre-sales tax rate would be 38%.
- In Britain, I would be paying a whopping 40% of my income in tax as well as 17.5% on top of goods that I purchase (except necessities like food).
- In that bogeyman of the right, France, I would also be paying 40% income tax rate and 19.6% of goods and services, so similar to the rate in Britain. But as in the UK, health care would cost me virtually nothing.
- In Australia, I’ll be paying 26% of my income back to the government and a surcharge of 10% on top of goods. At my income rate, I add another 1.5 % of my income that goes toward the national health service - so a grand total of 27.5% before sales tax.
So, Bill-O’s got it half right - people in “socialist” France or “capitalist” Britain do pay more to the government - but depending on what part of the U.S. you live in, not much more. And if you tack on the amount you pay for health insurance in the U.S., the amount of money you lose when you take time off for maternity leave or are unwillingly out of work and the like, I’d be willing to bet that you’re paying more.
That’s the thing, I really resented paying taxes in the U.S. because it wasn’t clear to me what they were paying for - sure, I want to support the NIH, NSF, NEA - but in 2007 nearly 20% of the federal budget went to pay for defense and an equal amount went to pay down the national debt. In the same year in Britain the top two budget items were health and education. This is why, even though my tax burden in Britain was higher, I didn’t mind paying it.
Australia was a surprise. Before you consider any government “entitlements”, I’m going to pay less in taxes in Oz than I would be in the U.S. Now, the Australian health care system is not as good as Britain’s or France’s. We may in fact, once Dr. O’C starts working, be required to buy private health insurance or pay an additional 1% of my salary in taxes. A Free Man, who is a big advocate of nationalized health services, was not impressed by this. Nonethess, the biggest budget item in Australia is social welfare programs. Unfortunately, number two is “general government services”, in other words the massive Aussie bureaucracy. So, Down Under, I’m paying less but maybe getting less as well. 
The take home message? “You get what you pay for?” “In this world nothing can be said to be certain, except death and taxes?” I guess so. More importantly, be careful about what you hear, especially in this election season. The other day, Bill-O was shouting about buying land in Ireland if Obama raised his tax rate to 60%. Now, I know you’re probably calculating whether or not it would be worth it, but let’s take a look at reality.
I looked at Obama’s website for information about his tax plan. Unfortunately, it is notably lacking in specifics, facts or hard numbers. So, Bill-O could be right as far as I know. But, the highest tax rate in the world is in Denmark at 63% and even though the Danes are the happiest people in the world, I doubt that Obama will be looking to Copenhagen for his tax policy. For comparison, I looked at McCain’s website and the Republican nominee is more specific. He says that he will lower the corporate tax rate from 35% to 25% and will “keep the [individual] tax rate low”. These were the only numbers on either candidate’s fiscal pages. Unfortunately, McCain fails to point out that only the largest corporations pay a 35% tax rate.
The fact of the matter is that no matter who gets elected, most people will pay about what they paid in taxes last year. This is about what people in most of the rest of the Western world pay - plus or minus a few percentage points. What may be worth looking at is just what you’re getting for your money.
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A friend of mine just emailed me one of your articles from a while back. I read that one a few more. Really enjoy your blog. Thanks
25 Jul 2008 at 4:30 pm
Some real life numbers. In the US, if you owned your house (mortgage interest is exempt from taxes, in the UK it isn’t), you’d reach the exemption limit, and then you could exempt other stuff and further lower your effective tax. So while at some point we were nominally in the 28% tax bracket, the actual amount of tax we paid was 10%. As for health care, in the US only one person need pay for insurance, whereas in the UK *both* are paying a huge tax for health care which is very very bad, and anyone who can afford it buys private insurance. BTW, in Belgium, where income tax is 50%, everyone buys additional private health insurance. (Don’t shoot me: I am aware of health care problems on all sides; I grew up daughter of two doctors in a socialist country.)
25 Jul 2008 at 5:05 pm
Excellent comparative analysis. I wish there were more actual number-crunching examples involved in such political discussions. It drives me crazy that the Right continues to use the bogeyman of “the Democrats will raise your taxes and make you poor” and that the American public still believes it. Who do they think is paying for this Republican war? And that’s better than health care for everyone?
You must have a better sense of humor than I do, because I can’t stand to watch O’Reily, not even for entertainment value.
Juls last blog post..Obamania sweeps through Germany
25 Jul 2008 at 5:15 pm
a lot of people in the UK get annoyed with others who DONT pay their taxes but still get free health care, social security etc. But, I know I was billed almost £2000 dollars in the US for some antibiotics when I had a viral infection and some blood tests… whereas in the UK I don’t have to. And I get free contraception and cheap drugs and if I couldnt afford it I would get free glasses and free meds. Hell, you can even get free boob-jobs in the UK. Interested on the opinion on Canada- you cant get private health care even if you wanted it and I dont think that has made their health care better… it’s better to have the choice. I think it’s best to have free social services for those in need and if you dont like it, buy your own. However, there are people that abuse the system and that can be where a lot of anger comes from, but if something happens in your life leaving you homeless and penniless, I know where I’d rather be…
25 Jul 2008 at 5:36 pm
The difference between the US and all other countries described in this post is the idea of a public healthcare system where everyone has some level of care. During my 4 years in the US I encountered too many people who weren’t willing to contribute through taxes to other peoples healthcare. Morally I think that is appalling. I would rather pay more taxes knowing that no matter where you stood on the socioeconomic scale you knew if you got sick or your kids got sick you wouldn’t be afraid to take them to see a doctor because you couldn’t afford it.
And to disagree with our fine blogger AFM, I have been to the doctor 5 times since I got here and have not had to pay a single time. The only thing I have paid for are prescriptions, which granted would be free for Z in the UK. In the US although I had private health insurance I paid something every time I saw the doctor. So stop slagging off the Aussie Healthcare system!
25 Jul 2008 at 6:40 pm
Vera, you’ve exposed a weakness in this post- there’s no way that I could possibly address all the variations in tax rates in different countries. That’s why I focused on the base rate for individuals and not the rate for married couples, capital gains, social security, payroll taxes, etc. But I stand by my original premise - you get more for your money in countries that have more social welfare programs.
SSG, did you buy those “antibiotics” on the street?
Dr OC, you find those kind of people everywhere. I was shocked when we first moved to Oz that a survey found that something like 80% of Aussies opposed expanding maternity benefits. Selfishness, unfortunately, is a universal phenomena.
25 Jul 2008 at 7:11 pm
Hey thanks for the comparison. If politicians aren’t doing their homework, I guess we have to do it for them.
25 Jul 2008 at 8:10 pm
“But I stand by my original premise - you get more for your money in countries that have more social welfare programs.”
Chris, I almost wrote “we can agree to disagree”, and realized I am not sure that I do disagree with you ‘in general’. I am a socialist by birth after all, LOL, and am convinced that health for profit is wrong. Btw, there was a pretty good PBS Frontline recently on health care around the world): http://www.pbs.org/wgbh/pages/frontline/sickaroundtheworld/
But I also believe the God is in the details, i.e. one’s individual situation makes as a big difference, and would therefore argue that one needs to include other possible benefits of different systems as well (no taxes on mortgage interest is a biggie, which is why I wrote about it).
25 Jul 2008 at 9:45 pm
Obama intends to repeal the Bush tax cuts on the wealthiest 2% of Americans, of which O’Reilly is undoubtedly one. So his taxes will go back to being what they were at the end of the Clinton administration. There will be some capital gains tax adjustments. But there will be nothing like 60% tax rates. That’s nonsense, and Bill O knows it.
You and I will pay nothing more, and probably not anything less, under an Obama administration. Although we’ll get a tax credit for some of our daughter’s tuition, which can’t come soon enough.
I intend to buy a Mini with any money the gov’t gives me back, which I think is a great social program.
25 Jul 2008 at 11:19 pm
I guess, according to you guys, I’m selfish. I have a real problem with welfare as it stands right now. Before kids I worked at a bank, and on certain days of the month all we did was cash checks for people with multiple kids who did absolutely nothing to earn that money. Jeff and I pay over a third of our income in taxes (as you said, this does not include sales tax or real estate tax), AND we pay $400 a month for health insurance. We also happen to be paying for healthcare, food, clothing, housing for a bunch of people who do not work or even appreciate the fact that someone is out there paying for their government check every month. Add to this the fact that we now have so many illegal immigrants in our town that our county hospital is bankrupt from treating them and is raising prices for those who can pay, and yes, I have a serious problem with being taxed further to pay for their crap. I’m sorry to rant, and from across the ocean I’m sure I sound like a jerk. I don’t have a problem with the government helping truly helpless people, or people who are earnestly trying to improve their situation. I do have a problem helping people who feel they are entitled to a check just because they are alive, and who do not intend to do anything to support themselves. So there ya have it.
And for the record, I also think O’Reilly is fear-mongering jerk.
26 Jul 2008 at 1:26 am
Quite interesting. Although I can’t stand O’Reilly or any other pundits (a blight on society, I say!), I do appreciate a good insight into the “facts” he rants about.
I would love to pay more taxes in exchange for national health care (especially since I have no insurance right now at all), but I’m not sure I trust the U.S. government to get it right. I find it difficult to think of one thing that runs smoothly in this country, so I’m not so sure I want these particular government bureaucrats in charge of my health care. Still, it would be nice.
Out of curiosity, what do you think of the so-called fair tax? We kind of have a mini-fair tax here in Tennessee, as we have no state income tax but pay 9.25% sales tax. It seems to work fine, but I’m always interested in other viewpoints.
26 Jul 2008 at 2:35 am
I hate to say it, but I agree with Jessica k in some respects. I’m an Obama-loving Democrat and I hate pundits like Bill O, but it seems that there’s a lot of take and no give in the welfare system here. I am a teacher (on leave at the moment, not getting paid, of course), and I noticed that in our local public school system, 90 percent (or more, not sure) of the funds were allocated to needy children and families, while there was virtually nothing in place for enrichment. So if you are a middle class kid and your school isn’t providing you with enough materials, tough. But if your dad’s in jail and your mom’s sitting at home poppin out babies like a gumball machine, step right up to the goody bag…
Something needs to give, and hopefully our next president can work on a solution to this ever-growing problem.
Toastys last blog post..Raise Your Hand if You’re From Duluth!
26 Jul 2008 at 4:18 am
Vera - I’m with you on the details - everyone’s individual situation is different and a dollar (pound, euro) one way or the other can change your tax burden massively.
Thanks for the clarification on Obama’s tax policy, Kathy.
I don’t know enough about the fair tax, Courtney. But I’ve always understood things like sales taxes as being regressive. In other words, if you make less money you still have to buy necessities. So you’re still spending and getting taxed at the same rate as a billionaire. Doesn’t sound fair to me.
Toasty and Jess- my main point is that what your taxes are going to pay for in the States is largely defense and debt (brought on by defense). Selfish may have been a poor choice of words. Nobody likes to pay taxes. I know that there are people that exploit the “welfare” system. There are people that cheat on their taxes, their are corporate cheaters that rip off their stockholders. Cheaters are a universal phenomenon as well.
BUT, I would rather my tax money go to help other people. With health care, unemployment, maternity benefits, etc. than be sent over to some desert in the Middle East. If I’m going to have to pay taxes, and we all do, it would be better to help folks - all I’m saying.
26 Jul 2008 at 8:54 am
Wait a minute….Bill O is talking about taxes? Jeeeeezus. I’ve been too busy in the trenches of his earlier “War On Christmas” to notice that another issue had come up.
C’mon, Bill, I can’t keep all this misinformation straight.
Rays last blog post..Where do they come up with this crap?
26 Jul 2008 at 9:56 am
Oh, and as for government inefficiency/incompetence. A lot of that has to do with the Bush Administration and G.O.P. as a whole, gutting the government of competent bureaucrats. The best way to convince people that government is incompetent to handle things like health care is to insure that the government is incompetent in general.
Mission fuckin’ accomplished.
Ray, just give Bill O time, it’s only July. The War on Christmas doesn’t really start until late August.
26 Jul 2008 at 10:05 am
Cool site!!! Interesting article…some good debate in the comment’s section too.
FYI I am an American who used to live in Australia. I was in Sydney. Where are you guys?
26 Jul 2008 at 2:05 pm
I’m a Republican. That’s right, I said it. But guess what… even a Republican can think the Bush administration is evil. The only thing I don’t get, though, is why aren’t all the Democrats in the country pissed off at their state representatives? Where were all these loud voices when they were voting to back all his really stupid decisions?
I honestly hope Obama wins. I think I’ll vote for him. I want someone to blame for everything for the next four years. Wrong nail polish? It’s that evil Obama’s fault!
Toasty and Jessica, I agree with you. We’re considered an upper middle class family, and we take it up the butt in every aspect. Higher tax bracket, no earned income credit, not even that nice little incentive refund, and no consideration for anything. The school system? We have to pay for EVERYTHING while everyone around us gets it all for free. Our daughter wanted to take part in a program for future medical professionals over the summer. The cost for us was $5k. Below our income level? Yep, free. The truth is, we couldn’t afford that anymore than the next family in this current financial climate. But we didn’t get a choice. I’m sorry, but what makes it any more fair for someone else’s kid to have the opportunity even if they can’t afford it, but not mine because the government “thinks” I can? I don’t know of anyone who could hand over $5,000 right now for their kid to do something like that.
Yes, the Bush administration has been horrible. I agree with that every step of the way. But the truth is, we had better not just focus on cleaning out the top, guys. We’d better start there and work our way down. We need a whole new government, and we need it fast.
26 Jul 2008 at 10:15 pm
I don’t really have any objection to paying for other people’s healthcare, unemployment benefits and education. Thank God I am in a position to do so and not in the disempowered position of collecting those cheques (although I have been there and done that too). I don’t know the situation of those people who queue up weekly and seem to think the world owes them a living but I am guessing they are not incredibly fulfilled or happy people. I guess the drugs, alcohol and multi fathered families attest to that. But at the end of the day I don’t feel I can judge them for their situation and I feel privileged to be in a position to pay my taxes and in some small way ensure that opportunities exist for all people. The one that really did get up my nose though was the ‘Baby Bonus’. I personally know several people who used theirs to purchase plasma TVs and I guess there are a lot of babies who have been brought into a less than ideal world as a direct result of the financial ‘carrot’!! Like AFM I believe that you get what you pay for and I do feel proud to live in a country where we take care of our own (with the exception of our indigenous population and there is not a lot of pride to be had on THAT point.)
But maybe I would feel differently if I were handing out the cheques week in and week out!
arizaphales last blog post..Give It Me Baby…ah huh huh…
27 Jul 2008 at 12:51 am
We lived in Sweden, which has one of the highest tax rates in Europe. Comparing the percentage of our income that we paid in Swedish taxes versus the percentage of our income we now pay in the US for those same services–we pay the same, if not more, in the US.
If that is not bad enough, it is for an inferior level of service, I might add. Because if I have to go to the doctor for something that isn’t “covered,” I have to pay even more out of pocket on top of the percentage of our salary we already give the insurance company. I am not stating that Sweden has the answer, but surely the US can do better than it is now.
NATUIs last blog post..Supplementing the Family Income
27 Jul 2008 at 12:29 pm
“Now, the Australian health care system is not as good as Britain’s or France’s.”
Health care system? What health care system?!
Agness last blog post..Coverage - The Bird And The Bee
27 Jul 2008 at 2:26 pm
Oh, don’t get me started.
A few random points.
I recently lived in New York, where I also had to pay a CITY income tax. That put me up to 37% gross tax. Plus 9% of my gross on health insurance–yes, for us old blokes, it’s that expensive. Not hard to get up to British/Swedish/Australian levels, soon.
If I owned property there, I would need also to pay a small fortune each month in property tax, simply to fund schools and (one level of) police.
A friend of mine owned a house in Dobb’s Ferry, NY. Nice house, but hardly a McMansion. It set him back forty-five thousand bucks a year in property tax. He wanted to sell the house to a local policeman, but the property tax alone would take up two thirds of his pre-tax salary. My friend moved to Melbourne.
When the AFMO’Cs buy a house in Australia, AFM will be pleasantly surprised that Oz property tax actually reflects the modest amount it takes to keep their neighbourhood plumbed, parks mown, garbage collected, and a road delivered to their front door.
As NATUI said, even if the cost of maintaining yourself as a resident in the US is comparable with elsewhere in the civilised world, the level of civilization is not. I agree that the British NHS is crappy, but have you tried a US emergency room lately? I would take Flinders Medical Centre any day over almost any hospital in NYC.
A major problem with US government is that there’s simply too much of it. For example, how many police forces do you have in an average American jurisdiction? FBI, state, county, local (which really does all the work, and enjoys no economies of scale) and special authorities?
How many police forces do you have in South Australia, AFM? Lemme tellya. One. It enforces state, federal and local laws. Efficient, fair and accountable.
Australia in the 90’s succumbed to a wave of US-led ideological thinking. Electricity and gas authorities, railways and public transport were put in private hands. The undisputed result? Costs went up and services went down. The only real success in privatisation was the Australia Post, I believe, who have pioneered the Post Office as business-service approach adopted around the world.
The only way universal social benefits programmes really work is if the middle class participates. They will demand a level of service and fairness that makes the whole system work.
By the way, I wish I were a girl. Then I could become a single mother and rort the system, popping out babies and spending my welfare checks on caviar and Krug. That’s what they do, right?
28 Jul 2008 at 6:34 pm
All I know is, my Republican father scolds that I shouldn’t vote for Obama if I want to see an inheritance. And I’m still going to vote for Obama.
29 Jul 2008 at 2:30 am
Mike - we’re in Dad-elaide, as it’s known. Thanks for your visit.
Angel - Crikey, where did all you Republicans come from. I want to disagree with you about a full flushing of the bureaucracy. Most civil servants are just decent hard working folks that are as frustrated with the system as you are. The problem is at the top and I firmly believe that your party’s obsession with small government is the problem.
Ariza - based on then number of teenage mothers that I see at the malls when Dr. O’C drags me there, I think the baby bonus has been, to use the technical term, a clusterfuck.
NATUI - I think Sweden does have the answer, but I’m a socialist. Sweden works pretty good, despite what Bill Orally might try to tell you.
Agnes - ‘xactly.
Headbang - you said it better than I did. Don’t even get me started on privatization. What a stupid damn idea that was. All you have to do to convince yourself that privatization doesn’t work is get on a train in Britain. Rather, try to get on a train in Britain.
Gypsy - that’s some dedication! Brings new meaning to the term “yellow dog Democrat”.
29 Jul 2008 at 4:04 pm
[…] croup and wrote us up a script for Prednisone. What did we pay for this, you ask? Zero dollars and a lower income tax rate than what we would be paying in the States. Just […]
25 Sep 2008 at 9:17 pm