Taxes Here & Over There

The Left thinks that the rich in America pay a pittance, but is that true? 

On 01.01.13, the top marginal tax rate in the United States will automatically rise to 43.4%.

If you are wealthy and live in a state like New York, your combined, marginal tax rate is about 58%.

To put that into context, the top combined, marginal tax rate in COMMUNIST China is 45%.

In PROGRESSIVE Canada, the top marginal tax rate is 29%, the capital gains rate is 10%, and the dividend rate is 19%.

The Left thinks the corporations in the United States have it easy (Some do.  I'm looking at you, General Electric and Mr Obama's Chairperson of the Council on Jobs and Competitiveness), but do they?

The United States has the highest combined corporate income tax rate in the world at 39.21%, which will rise to 46.2% in 2013 before any Obamacare taxes or new taxes under Obama.

To put that into perspective, COMMUNIST China's combined corporate income tax rate is 25%.

The average corporate tax rate in the "SOCIALIST" EU is 23.2% and the highest combined corporate income tax rate in the EU is 33.9% in Belgium, which hasn't even had a government in over a year.

In "PROGRESSIVE" Canada, the corporate tax rate is 16.5%.

Furthermore, ONLY the United States taxes the profits of its corporations when made overseas and on which the entities have already paid taxes in the situs of earnings.

According to the OECD, the United States has the most progressive individual tax system in the world.  While it is true that tax rates on the uber-wealthy are certainly higher in some countries, the tax base is much wider.  There isn’t a country in Europe where 47-52% of the working population avoids paying national income tax.

Eventually, Obama must levy his tax increases at lower income levels because that's where the money is and there just aren’t enough millionaires and billionaires to pay for the Federal government that he wants.  Truth be told, there aren’t enough middle class taxpayers to pay for it either. 

I showed above how the US has the most Progressive individual and the highest income tax rates in the developed world, according to the OECD.

Now, we can look at how the "Unequal, Inequitable, Unfair, Oppressive, Mean-Mean-Meany" United States stacks up against the American Progs' vision of the perfect egalitarian, "fair share," "fair shot" nirvana known by them as the Socialist Utopia of Sweden.

Let's play a game:  It's called "Compare the tax rates of Olav, Inga, Sven, Ilse and Viktoria, who live in the Sollefteå Kommun in Sweden, to the average, middle class American, who American Progressives claim pays 40.3% (25% Federal income tax

plus 15.3% payroll tax) -- which is incorrect anyway, because the middle class doesn't pay a 15.3% payroll tax -- that is, unless Progs want to finally admit that taxes on businesses are passed onto employees (through lower wages/benefits) and/or pensioners (retired school teachers) and/or shareholders (union pension fund, individuals with401ks) and/or consumers)."

Olav earns $55,000, Inga earns $100,000, Sven earns $150,000, Ilse earns $250,000, and Viktoria earns $1,000,000,000.  For ease, we will not consider any deductions or marginality and all income comes from employment.

Olav lives in Sollefteå and earns $55,000: 56%

Olav lives in America and earns $55,000:  30.3%  (ONLY FEDERAL AND FICA TAXES)

Inga lives Sollefteå and earns $100,000: 61%

Inga lives in America and earns $100,000:  40.3%  (ONLY FEDERAL AND FICA TAXES)

Sven lives Sollefteå and earns $150,000: 61%

Sven lives in America and earns $150,000:  43.3%  (ONLY FEDERAL AND FICA TAXES)

Ilse lives Sollefteå and earns $250,000: 61%.

Ilse lives in America and earns $250,000:  48.3%  (ONLY FEDERAL AND FICA TAXES)

Viktoria lives Sollefteå and earns $1,000,000,000: 61%

Viktoria lives in America and earns $1,000,000,000:  50.3%  (ONLY FEDERAL AND FICA TAXES)

As you can see, the progressivity is much, much greater under the American tax system than under the Swedish model.

Now, let's assume that all income save that of Viktoria's comes from employment.  Her income is derived from capital - capital gains and/or dividends - which is exempt from the national income tax, which was 20/25%, and the maximum municipal tax rate, including contribution to the Swedish Church and funeral fee, which was 36%.

Olav lives in Sollefteå and earns $55,000:  His tax rate is 56%.

Inga lives Sollefteå and earns $100,000: Her tax rate is 61%.

Sven lives Sollefteå and earns $150,000:  His tax rate is 61%.

Ilse lives Sollefteå and earns $250,000:  Her tax rate is 61%.

Viktoria lives Sollefteå and earns $1,000,000,000: Her tax rate is 30%.

In 2010 in Sweden:

Person A, who earned $75,000 from employment, had a 20% national income tax rate.

Person B, who earned $100,000 from employment, had a 25% national income tax rate.

Person C, who earned $1,000,000,000 from dividends and capital gains, paid a 30% tax rate...

BUT:

Person A and Person B also paid an average municipal tax rate of 31.56%.

Person C paid NO municipal tax.

Person A and Person B also paid an average contribution to the Swedish Church of 0.99%.

Person C paid NO contribution to the Swedish Church.

Person A and Person B also paid an average funeral fee of 0.22%

Person C paid NO funeral fee.

When A, B, and C die, no taxes whatsoever will be paid on their estates whether they are worth $1 or $1,000,000,000.

Got that, Progs?

There are only two income tax brackets on a national level:  20% and 25%.  In the United States, there are six:  10%, 15%, 25%, 28%, 33%, and 35%.

In Sweden, the middle class is only separated by 5% points from the billionaire.

In Sweden, Warren Buffett may pay 30% on his income derived from capital

gains and dividends, but his secretary -- let's say that she lives in Ragundasjön in the Ragunda Kommun -- faces up to a 59.75% income tax rate when municipality taxes are added BUT BEFORE OTHER REAL PROPERTY, FEES, OR 25%VAT TAXES. 

And, if Mr Buffett and Mr Buffett's Secretary both died in a plane crash, the following would be the tax on their estates:

Billionaire Mr Buffett's Estate:  0%

Middle Class Mr Buffett's Secretary's Estate:  0%

While it is certainly true that many European countries tax their "evil rich" citizens, who are millionaires and billionaires, at a higher rate than does the US...

BUT:

THERE IS NOT A COUNTRY IN EUROPE WHERE 47% OF THE WORKFORCE PAYS NO NATIONAL INCOME TAX.

THERE IS NOT A COUNTRY IN EUROPE -- OR ANYWHERE ELSE ON EARTH, FOR THAT MATTER -- WHERE THE "EVIL RICH" PAY A GREATER SHARE OF THE TAXES AS A PERCENTAGE OF REVENUES AND GDP.

The middle class gets off easy in the United States...and Obama would make it harder.

Got that, Progs?

There are only two income tax brackets on a national level:  20% and 25%.  In the United States, there are six:  10%, 15%, 25%, 28%, 33%, and 35%.

In Sweden, the middle class is only separated by 5% points from the billionaire.

In Sweden, Warren Buffett may pay 30% on his income derived from capital gains and dividends, but his secretary -- let's say that she lives in Ragundasjön in the Ragunda Kommun -- faces up to a 59.75% income tax rate when municipality taxes are added BUT BEFORE OTHER REAL PROPERTY, FEES, OR 25%VAT TAXES. 

And, if Mr Buffett and Mr Buffett's Secretary both died in a plane crash, the following would be the tax on their estates:

Billionaire Mr Buffett's Estate:  0%

Middle Class Mr Buffett's Secretary's Estate:   0%

While it is certainly true that many European countries tax their "evil rich" citizens, who are millionaires and billionaires, at a higher rate than does the US...

BUT:

THERE IS NOT A COUNTRY IN EUROPE WHERE 47% OF THE WORKFORCE PAYS NO NATIONAL INCOME TAX.

THERE IS NOT A COUNTRY IN EUROPE -- OR ANYWHERE ELSE ON EARTH, FOR THAT MATTER -- WHERE THE "EVIL RICH" PAY A GREATER SHARE OF THE TAXES AS A PERCENTAGE OF REVENUES AND GDP.

The middle class gets off easy in the United States...and Obama would make it harder. 

In one of the articles that I wrote on OWS, I quoted a protester that said no one should be able to get to keep more than $200,000 per year.   She's a Ceiling Proponent.

Well, the first thing that anyone with a brain recognises will happen is that most people will stop working when they hit $200,000; thus, overall productivity goes down.

Capping income on top earners does nothing for low income earners.  Prohibiting a brain surgeon or LeBron James from earning more than $200,000 is not going to turn a high school dropout into a brain surgeon or a 5'4" white dude into a star NBA player. 

So, in will come the Floor Proponents.  They will argue that a "fair & just" society would guarantee a minimum income for all its people; therefore, welfare recipients must receive $50,000, a "living wage" must be $75,000, and most jobs requiring a college degree or less should be guaranteed a $100,000 annual income.

Sooner rather than later -- because the brain surgeon is still making so much more than the "working man or woman" - the Ceiling and Floor Proponents will push towards each other.   The 21st century Levellers will settle on a $100,000 annual income for everyone regardless of work, effort, experience, and expertise.  At that point, the brain surgeon will look at the welfare recipient and say, "Why work when I can earn the same amount for doing nothing?"

Progressives/Socialists define the economy down.