Fix The Txagline

Taxes, savings and the labour market.

From the other thread:

"(in X nordic country) if you work you will be taxed so heavily that you won't ever have any savings (although healthcare is free and food/shelter is guaranteed)"

Now, admittedly, taxes have so far only gone down in my country, but this sounds suspicious.

The thing is, taxes are invisible. I know that the government takes 60% of what I make (plus 18% of what I spend), but the way it's structured, I never see that money to begin with. The difference between the figure in my contract and the figure in my bank account is 23%, but once I sign the paper, I only think in terms of real earnings - the other figure is irrelevant.

Effectively any and all negotiations about salary are based on the actual pocketed earnings. A strong economy can support strong taxes because the end figure is high as well. So you don't have to spend any money on health insurance and college funds for the kids - most people still don't think about how much the government takes, they think about how much they get and how much they spend.

High taxes, if used wisely (and they have to be, otherwise the government won't hold), stimulate the economy. This increases pocketed earnings. Nobody is going to work for less money than they need to have a nice lifestyle, so nice that they will give up eight hours of their day for it.

The system balances out. In terms of what people get to take home, adjusted to purchasing power parity, there is no major difference between the US and Sweden. (You'd be surprised at the posh cars you see in Stockholm, for example, even though in absolute figures cars are ridiculously expensive compared to Montana.) Except in a high-tax country, you also have good healthcare, good education and good public transport.
Permalink Flasher T 
January 4th, 2006
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