Still bad. I grew up in Norway. I moved to the UK at 25. Employment rights and social welfare in the UK is a joke compared to in Norway - the UK is "US light" in those respects.
Yet I felt I had much more freedom of choice in Norway: Becoming truly destitute in Norway is pretty much only possible if you refuse to apply for government support.
This, to me, meant I was free to make a lot of decisions without considering consequences that would put me at substantial risk in the UK, and much more so in the US. It is hard to describe the feeling. I've mentioned before, how I started my first company (an ISP) pretty much on a whim because we were dissatisfied with the available ISPs; we threw together a business plan, found an angel investor, found offices and moved into them (literally; three of us lived there for a while) in the span of a few months. During this time, not once did the potential consequences of failing enter my mind, for the simple reason that there'd pretty much not be any consequences: I'd be able to get government support if I needed it, and I'd "just" go back to my studies or find another job.
Not really needing to worry about healthcare, or housing, or whether or not you might starve, are important forms of freedom to me. I'd take that over a few percent lower taxes any day, and I'd argue that I get more freedom of choice from those benefits than what few percent more disposable income could buy me in other ways.
> About a third of his wages (and 20% of everything he buys) is used for the different types of government support.
If Francois makes enough to pay 1/3 of his wages in income taxes, he's earning enough that he'd pay roughly 1/3 of his wages in taxes in many pats of the US too. Sure, if Francois went to live in Utah, he'd be better off, tax wise. If he were to go to California, on the other hand, the difference would be minimal.
VAT makes up very little of the typical tax burden. I'm in the UK, and 20% VAT translates to about 4% of my gross wage, because most of my income does not go to products that are taxed at the 20% bracket (for starters, I pay tax with some of them; then I pay my mortgage, and so on; and food is zero-rated).
Tax differences are not as great as people tend to think. My tax burden in Norway was about 1-2 percentage points higher than in the UK. A salary giving me the same purchasing power in Silicon Valley, would cut my tax bill by about the same as my added costs for healthcare insurance, and certainly wouldn't cover my increased transport costs... I did the maths for this to excruciating detail because we were considering moving to the US at one point. There may be specific income levels where the differences are more pronounced due to differences in tax policies, and certainly some countries / states are more or less expensive (as I learned the other day: stay clear of Belgium... )
Agreed that the tax burden argument is bunk unless you live in a US state with no income tax.
I was recently surprised to find that if I earned $80,000 in Australia, married to a partner who does not earn, and with two children, my effective tax rate would be ~ 15% (!), even if self-employed, once you factor in the Family Tax Assistance payment ($500/mo) and the government rebate for private health insurance purchase. That doesn't include other benefits I could receive such as child care rebate (50% of child-care costs up to $7,500 per child).
Compare to NYC, where as a self-employed person I pay 30-40% on $80k, with high property taxes on top! And I get no government assistance and certainly not healthcare.
This is astounding. And yet Americans think these countries are "socialist" and "high tax." Not true, US scores lower on economic freedom and higher on government size and tax as %GDP.
There are so many cool things about living in the US, but raising a family here just sounds absurdly stressful and expensive.
That is completely irrelevant to the argument. Replace Norway with Sweden or Denmark. Or for that matter France or Germany or any number of other European countries. The argument would be exactly the same:
That strong welfare systems can provide more freedom of choice by removing a lot of concerns that you have to consider when those systems are not available.
The 2013 budget had a deficit of 3.3%, which it used capital from the oil fund to fill. The biggest deficit that they are allowed to have - and to cover with that kind of money - is 4.0%.
In addition to the direct 3.3% - Norway's petrochemical economy provide 36% of government funding through taxes.
In addition, 445 Billion dollars from the oil fund is in reserve for pensions.
Simply put, the Norway model is not repeatable unless you're have a natural resource reserve. One could argue that the US shale reserves should be used in similar fashion.
> In addition to the direct 3.3% - Norway's petrochemical economy provide 36% of government funding through taxes.
That is a pretty big industry. Crude petroleum and crude gas consists of over 50% of exports. A lot of economical activity leads to a lot of tax revenue. Imagine if this industry did not exist, that the petroleum simply did not exist to begin with - the people that work in this industry now would be working in other sectors and industries. (The real problem is to replace this industry with something else once the well dries up. But that is a problem brought by such a big oil industry, not a problem that exists in spite of it).
> In addition, 445 Billion dollars from the oil fund is in reserve for pensions.
I think the whole point of the fund(s) is for them to be pension funds. But it may vary how strictly they are ear marked.
Now you're undermining your original point of the oil sector subsidizing the budget. The whole point of the Pension Fund is so that the incumbent government can't go on a spending spree and leave the future generations in the mud.
Correct me if I'm wrong, but isn't Norway's welfare system funded by oil revenues (including returns on an enormous sovereign wealth fund created through said revenues)?
It's easy to have a rich developed country with a high quality of life when you have a small population and lots of natural resources.
This argument is entirely orthogonal to the argument I was making: That welfare systems can provide more freedom of choice than increased taxes takes away: The incremental "freedom" that a slight difference in taxation provides in the form of disposable income does not do much; the incremental freedom from having a lot of concerns pretty much taken away because the welfare system reduces the worst case impact substantially, on the other hand, is a big deal.
As I said in a response to someone else: Replace Norway with Denmark, or Sweden, or Germany, or France or any number of other European countries in my comment above, and the argument still stands.
No it doesn't. It would stand if Microsoft, Google, IBM, transistor, Apple, etc, etc were all from socialist (regulated economies) Europe and not capitalistic (economic freedom) US. If the system in Europe is so full of freedoms why people are not so creative there? Because they aren't. Whatever it is from IT to movies, from cinema to healthcare, most of the innovation always comes from the US. You tell me why.
It probably has to do more with being open to immigration and innovation than being ruthlessly capitalistic that the US has been able to maintain its competitive edge.
Immigrating to the US has become harder over the years and "regulators" are against potentially disruptive technologies like Bitcoin while countries like Denmark are trying to embrace those kinds of technologies.
It remains to be seen if the USA can maintain its position going forward. In any case it's tough times ahead for many highly privileged economies. I'm from Austria and the disconnect between what used to be and the current realities is often huge. I guess the most important thing is to not get blinded by your own success, then you survive and possibly even thrive.
Yet I felt I had much more freedom of choice in Norway: Becoming truly destitute in Norway is pretty much only possible if you refuse to apply for government support.
This, to me, meant I was free to make a lot of decisions without considering consequences that would put me at substantial risk in the UK, and much more so in the US. It is hard to describe the feeling. I've mentioned before, how I started my first company (an ISP) pretty much on a whim because we were dissatisfied with the available ISPs; we threw together a business plan, found an angel investor, found offices and moved into them (literally; three of us lived there for a while) in the span of a few months. During this time, not once did the potential consequences of failing enter my mind, for the simple reason that there'd pretty much not be any consequences: I'd be able to get government support if I needed it, and I'd "just" go back to my studies or find another job.
Not really needing to worry about healthcare, or housing, or whether or not you might starve, are important forms of freedom to me. I'd take that over a few percent lower taxes any day, and I'd argue that I get more freedom of choice from those benefits than what few percent more disposable income could buy me in other ways.
> About a third of his wages (and 20% of everything he buys) is used for the different types of government support.
If Francois makes enough to pay 1/3 of his wages in income taxes, he's earning enough that he'd pay roughly 1/3 of his wages in taxes in many pats of the US too. Sure, if Francois went to live in Utah, he'd be better off, tax wise. If he were to go to California, on the other hand, the difference would be minimal.
VAT makes up very little of the typical tax burden. I'm in the UK, and 20% VAT translates to about 4% of my gross wage, because most of my income does not go to products that are taxed at the 20% bracket (for starters, I pay tax with some of them; then I pay my mortgage, and so on; and food is zero-rated).
Tax differences are not as great as people tend to think. My tax burden in Norway was about 1-2 percentage points higher than in the UK. A salary giving me the same purchasing power in Silicon Valley, would cut my tax bill by about the same as my added costs for healthcare insurance, and certainly wouldn't cover my increased transport costs... I did the maths for this to excruciating detail because we were considering moving to the US at one point. There may be specific income levels where the differences are more pronounced due to differences in tax policies, and certainly some countries / states are more or less expensive (as I learned the other day: stay clear of Belgium... )