About taxes

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So, I was looking through my papers for last yeah and I noticed that I ended up paying 36% income tax last year, I also paid an average of 18% value added tax on all my purchases from my remaining income. In addition to that, 60% of the gas price is made up of indirect taxes, I need gasoline to get to my job.

So, if we just do VAT and income taxes, with a salary of let's say $50000
That means :
Adjusted for income tax.
50000 x 0,64 = 32000

Adjusted for VAT.
32000 x 0.82 = 26240.

Adjusted for gas indirect tax, assuming required gas usage of 50L per week (100 km driven, 0.5l per km) gas price equivalent to $2.50
23640

Subtract for state required car costs:
524

Total
23116

Actual tax rate: 53,8%

I could still add:
- Annual toll road fees (since new roads should be financed by the various taxes paid on cars)
- Taxes on alcohol and tobacco.
- Taxes on collective transport.
- Property taxes.
- Taxes on purchases of a car.

Which would bump this to in excess of 60%. The taxes paid, do not include dental care by the way, and there is also a fee that has to be paid every time you visit a doctor in addition to having to pay for the medicines he prescribes. So, how does Scandinavian social democracy look to you right about now?

Last edited by TM on 04 Nov 2012, 4:24 pm, edited 1 time in total.

Welkom to America, Komrad, where "The Lord giveth, and the taxman taketh away"!

If I made a similar calculation for the tax rate in Denmark, that would probably result in heart attacks . Not all world records are worth bragging about.

You get off easy. In America, if they confiscate too much money from your paycheck and give it back to you, it's taxed too.

To the two Americans in here, I didn't add capital tax, municipal taxes, wealth tax, electricity tax, TV tax etc. Just the most obvious ones, because I didn't feel like having a heart attack.

The avoidance of taxes is the only intellectual pursuit that carries any reward.
John Maynard Keynes

I wish more people did that calculation. The effect is to raise the price of everything we do. This means that some decisions become unprofitable: "I can't do X because, even though it would create $10 of benefit, tax makes it cost $20."

In other words, taxing stuff means LESS WORK GETS DONE. Massively less work, as tax roughly doubles the price of work. Tax does not merely skim off money, it destroys the economy.

Burt this only applies to work. Some things, like the amount of land, are fixed. Taxing land hurts land owners, but does not hurt the economy. (It actually benefits the economy by forcing idle land into productive use.) If you tax land instead of work then even land owners benefit, even after paying tax, due to the miracle of compound growth.

Yeah, I'm a Georgist. Taxing work is not just immoral but economically illiterate. Just ask Adam Smith. http://answersanswers.com/test/economics.html

[img][800:500]http://answersanswers.com/test/about/adam-smith.jpg[/img]

So what's the point?

i think quite a lot of people would agree that taxes in scandinavia are messed up,

in denmark the media license is enforced for users, but any internet capable device makes you a user, so in essence it is as mandatory as it gets no matter how much one actually uses.

this is made worse by the fact that education in denmark today requires an internet conection, meaning that the students that dont have the extra disposable income will be hit the hardest.

good intentions are one thing but reality often demands something else entirely.

scrap the media license and the whole beurocracy that supports it and use the revenue instead of the media license, if anything extra is needed then charge for use much like today, except for internet users, they should create a user system tied directly to ones social security number and use nemID for administration.
80% of students under 25 that live by themselves or with a partner doesnt own a tv to begin with.

they are already distributing the nemID codebooks for almost every public access site so the administration would be miniscule compared to today.

well i digress, that is only a single place where improvements could be made.
i think one has to think of a novel way to collect and administrate taxes, preferably a dynamic system with as ittle human decision making as possible.

You don't see a problem with more than half of your earnings going to the government?

Of course I see a problem with that but how are you going to make it better?

Well that's a start I suppose that you see it as a problem. What can one person do? Vote, refine your beliefs so that they are consistent with each other, advocate those views to other people, give time and money to advance that cause. It's hard to gauge the inflection of what one says on the internet but I'm guessing you find this pointless to talk about for whatever reason?

It's pointless if there isn't a direction to make it better and an idea of what the golden ratio of taxation is. Are you talking about the percentage rate of taxation being too high or do you have a problem with taxation as taxation?

i think what was meant is, how do you maintain the service level and make it cheaper,

you can always cut, doesnt mean it works.

Yay....taxes!

I'd rather have a root canal.

I agree.