Americans don't like to talk about it, but they should better learn how emulate Europe rather than the opposite. The USA is nowadays more similar to Europe than to new developing economies. While Europe hasn't the high growth it once had, they know how to maintain an economy that retains prosperity for most of its people.
When I visit family and friends in the old country, I always find people's attitude depressing. There is a universal sense of dependence on the state, stemming largely from the fact that over 20% of the population is employed directly by the government, but also from a widespread sense of entitlement to welfare and other support.
The state is the source of and solution to all of their problems, and this interferes with their willingness to depend on each-other for support. People will much more readily look to the state for the answers to their problems than to themselves or their peers.
I can only take such an attitude in small doses before I have to leave and breathe some fresh air of freedom and self-determination back stateside. I appreciate the sense of community and interdependence that comes from the state taking a back seat in people's lives. If we have a problem, then the answer is often to address it ourselves rather than petition the state for a solution. Chances are we're not the only ones to feel that way, and help from our peers will materialize from the bottom up.
I don't have numbers on full/part-time work of government employees so I'm using the basis that $53K average salary[1] implies that nearly most are full-time, given that the average income overall is about that amount (edit: wow, it's totally not[4]).
Some more information. The average hourly wage for full-time employees is $24.72 across the entire population [2]. The same data shows that the average hourly wage for both part-time (25 and older) and full time is $24.89. This is not apples to apples, just giving you some expectation on what you can expect for a professional workforce that works both part-time and full-time.
Assuming, then, that full time is 2000 hours (40hrs/week*50weeks), the average hourly wage for part-time and full-time government employees works out to $26.55 [3].
So based on that information, I am comfortable saying that an insignificant number of government employees are part-time or they are excessively overpaid.
Further, I am then comfortable saying that 27% of the Canadian full-time workforce works directly for the government.
I'm not anti/pro america/europe. I'm also not very good at geography, but are you talking about the same Europe as I think you are? Are you suggesting that Europe, as a whole, is an economic model to follow right now? Or when you say Europe do you really just mean Germany ?
In the global race to have the worst economy, Europe (as a whole) currently has a significant edge over the US, although the US is certainly running the race with gusto. There's serious talk of having to break the EU up over the economic crisis it is having. The traditional "US should be more like Europe" rhetoric should be packed away in storage for a while, conditions are not ripe for it.
Most of the European problems right now are problems that the US just plain cannot have -- Greece, Spain and Italy running up huge debts because they have the credibility of the eurozone without any of the responsibility.
America's different, we're one country.
Those problems aside, we could do a lot worse than modeling europe, way less gas usage, higher health insurance coverage, 2 months of vacation a year. Sounds a lot more stable to me.
> Those problems aside, we could do a lot worse than modeling europe, way less gas usage, higher health insurance coverage, 2 months of vacation a year. Sounds a lot more stable to me.
And roughly half the gdp/person of the US.
The US govt already collects about as much (per person) in taxes as European govts. (It collects significantly more than Canada and, iirc, slightly less than France.) Yet, no one would seriously argue that we get anywhere near the same level of benefit for that spending.
As long as the US govt is that inefficient, it's absurd to suggest giving it more money.
We should copy some stuff from their tax code, too. As you said, they're not collecting significantly more than us, they just have a way simpler rate. Netherlands was explained to me as "25% up to 100k, 50% on income over that". That's fair, simple and actually a lower rate for the vast majority of people. Our system is a bloated mess in comparison.
Not saying that automatically everything done by Europe is better than everything done in the US.. but mindless rah rah just leads to myopia. Let's steal good ideas where we can.
> We should copy some stuff from their tax code, too. As you said, they're not collecting significantly more than us, they just have a way simpler rate.
Actually, I didn't say anything about how taxes are collected.
However, I will point out that even when the US had significantly higher rates, the feds never managed to collect more than 22% of GDP in taxes and even those two years were "unstable", in that folks adjusted their behavior.
The sustainable maximum appears to be around 21%, and even that isn't possible during a recession.
> Netherlands was explained to me as "25% up to 100k, 50% on income over that". That's fair, simple and actually a lower rate for the vast majority of people.
No, it's not a lower rate for "the vast majority". It's actually a significantly higher rate for the vast majority.
Most employed folks in the US don't pay income taxes. They pay SS, which has very progressive payback, so it's actually a good "investment" for folks who don't pay income taxes. They also pay medicare, but again, their benefits outweigh their costs.
So, 25% (up to 100k) would be a huge increase for most Americans. 50% is higher than the current highest marginal rate, so anyone paying it would also see an increase.
I don't remember where the 30% bracket kicks in, but if it's less than 100k, maybe there are some folks who'd pay less under your scheme, but they're not anywhere near a majority.
> Let's steal good ideas where we can.
I agree, but until we "steal" the good ideas related to efficient govt spending, better taxation is a disaster.
Yeah, you played the old familiar canard of "I'm going to advocate for the government to do things less efficiently and then bitch about how inefficient they are". Par for the course for republicans.
Personally, I'd be in favor of a simplified tax rate with a flat/progressive system that doesn't have an encyclopedia built into it. You might be in favor of a slightly different version of that non-encyclopedia but we're basically on the same side. Rush Limbaugh is trying to divide us -- who's side is he on?
EDIT: btw, most people with under 100k of income in the US pay significantly more than 25%, closer to 40%. Do you think they should pay more? Or less?
> Yeah, you played the old familiar canard of "I'm going to advocate for the government to do things less efficiently and then bitch about how inefficient they are".
No, I didn't. I wrote that the US govt should be more efficient.
> btw, most people with under 100k of income in the US pay significantly more than 25%, closer to 40%.
That's not true. See http://www.taxbrackets2011.com/ . Singles with AGIs between $83-173k pay 28% marginal. The 25% bracket (for singles) starts at $34k.
No, you don't get to count SS. As I explained, SS is a forced savings plan with a rather good return for folks who don't max out, which happens over $100k. (They're subsidized by folks who do max out.) You can argue medicare, but it's <4%.
What? Of course SS and Medicare count. They're taxes. Europeans get pension plans too, and they have universal healthcare, and those services are included in the taxes that europeans pay.
You just argued "If I take the tax rate, and subtract 15%, I get 28%". That's ridiculous.
And, nobody in SS is subsidized by anyone -- those who max out don't pay any more beyond the max.
> What? Of course SS and Medicare count. They're taxes.
I pay the City of San Jose for garbage services - is that a tax? Of course not.
SS isn't a tax because the benefits are (roughly) in proportion to what you pay?
> And, nobody in SS is subsidized by anyone -- those who max out don't pay any more beyond the max.
Do you really misunderstand this or are you just being annoying?
For low-income/low-contribution folks, the ROI for their SS "contributions" is positive. The ROI for high-income/high-contribution folks is negative. The positive return for the low-income folks is the money that the high-income folks lose.
On the off-chance that you think that SS problems can be solved by removing the cap, I'll explain why SS advocates introduced it. They wanted a system that had popular support and didn't encourage organized opposition. For popular support, they wanted to cap payouts. To avoid organized opposition, they wanted roughly proportional payouts.
If you want uncapped contributions, do you want uncapped payouts? If so, you get to explain why Ross Perot gets $300k/year. If not, you get to defend a program that is a significant tax on folks who are very good at fighting taxes.
Ok, well go do some accounting on the dutch government, figure what % of their tax take goes to pensions and medical stuff, deduct that from their tax take and you can get back to me with an apples-to-apples comparison. Since those aren't really taxes.
I didn't say anything about uncapping SS. And I know my history, thanks.
You should be comparing government revenue as percentage of GDP. The US collects 30% less than Canada using this measure (about 24% of GDP vs 31% of GDP for Canada). European nations come in at even higher.
Most of the European problems right now are problems that the US just plain cannot have -- Greece, Spain and Italy running up huge debts because they have the credibility of the eurozone without any of the responsibility.
Right, and America hasn't been running up huge debts with the credibility of being the US and having the world's reserve currency?
I don't understand how higher health insurance coverage, 2 months of vacation, and less gas usage equates to a healthy economy, or maybe I'm missing something?
Higher/cheaper/universal healthcare and less gas usage definitely lead to a healthier economy.
Ever seen the numbers on how much of your car's sticker price paid for health insurance? If we spent less on the health insurance, we'd be more efficient, right?
How much money we shipping straight to Saudi Arabia in gas usage? If we could get the same stuff done on less gas, that'd be more efficient, right?
There is talk of breaking up the EU because the bad countries are bankrupting the ones that are doing really well. When everyone notices that the producers and the problem countries are the usual suspects, of course the conclusion is that maybe this agreement wasn't such a good idea after all.
