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The European Evidence Shows Why the Left’s Real Goal Is Higher Taxes on the Middle Class
Townhall.com ^ | April 14, 2012 | Daniel J. Mitchell

Posted on 04/14/2012 8:40:51 AM PDT by Kaslin

Why are taxes so much higher in Europe, consuming 46 percent of economic output compared to 32 percent of GDP in America? Is it because nations such as France, Greece, and Sweden have adopted the kind of class-warfare policies that Obama wants for the United States?

Surprisingly, the answer is no.

As explained by Veronique de Rugy, the United States actually has a more “progressive” tax code than European nations. The corporate tax rate is higher in the United States than in any European country, and the double taxation of dividends and capital gains also is far above the European average. Western European nations tend to impose higher tax rates on personal income, so the overall tax burden on the “rich” is roughly comparable on both sides of the Atlantic.

Since the United States and European nations impose somewhat similar tax burdens on upper-income taxpayers, what accounts for higher tax collections in Europe? Simply stated, the Europeans collect a lot more from the middle class.

The Europeans squeeze the middle class because that’s the only way to finance big government. That’s the point I made in this interview on Fox News.

To elaborate, European politicians have learned that there’s a limit to the amount of revenue that can be obtained by taxing the rich. In part, this is because there aren’t enough rich people to finance a bloated public sector.

But it’s also because Laffer Curve effects are very powerful at higher income levels. Simply stated, rich taxpayers usually have much more control over the timing, level, and composition of their income.

It’s quite likely that European nations maxed out on the amount of revenue they can collect from the rich, which is why they started going after the middle class.

The same is true in the United States. The New York Times already has admitted they want higher taxes on the middle class. And as you saw in the clip above, Senator Schumer views higher taxes on the rich as a “start.”

People probably get tired of me warning against the value-added tax, but that’s going to the key fight at some point in the future. If the left (with the help of foolish Republicans) succeeds in imposing this hidden tax, I fear that the fight will be over and that America is doomed to become another Greece.

After all, why would politicians reform entitlements if they have the option of slowly but surely pushing up the VAT rate?


TOPICS: Business/Economy; Culture/Society; Editorial; Foreign Affairs; Germany; Russia; United Kingdom
KEYWORDS: classwarfare; europeanunion; france; germany; greece; liberals; obama; russia; sweden; unitedkingdom; vat

1 posted on 04/14/2012 8:41:01 AM PDT by Kaslin
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To: Kaslin

The lefts goal is to achieve a “government takes all and divvies out wealth to the population as they see fit”.


2 posted on 04/14/2012 8:50:50 AM PDT by EGPWS (Trust in God, question everyone else)
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To: EGPWS; Kaslin

The lefts goal is to achieve a “government takes all and divvies out wealth to the population as they see fit”.


A very good point, personally I think that what the “Elites” want more than anything else is a return to feudalism. With themselves as the new Nobility.

That may seem way out there but Communism, Socialism and nearly all of the other “isms” seem to have that as their end goals. A very small group controlling the rest of the populace and doing as they want when they want to, without any consequences for their actions.


3 posted on 04/14/2012 8:59:37 AM PDT by The Working Man
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To: Kaslin

As I’ve said before 90+% of the older people in this country will not lift a finger to bring down the cost of Social Security or Medicare (and that includes at least half of the older people on this site). The fact that those programs are about to bankrupt this country doesn’t matter to these people, as they only WANT THEIR MONEY back.

Since I have kids, I worry about what kind of country we’re going to leave them and I see it going one of three ways.

(1) We reform entitlements, with means-testing being a starting point...essentially turning those programs (Medicare and Social Security) into welfare programs. Beyond that, before the government steps in to give these people a ride on the backs of my kids and (future) grand kids, we institute a “parental support” law, requiring kids, that have the means, to pay into the support of their parents (similar to child support). If that isn’t enough, then the government steps in to provide some level of subsidence for them.

or

2) We raise taxes to pay for these programs...and raise them big time. We institute a European-style VAT, a European-level gas tax, an Income tax that reaches everyone, without loopholes (like the mortgage interest tax deduction), and maybe some other taxes for good measure. It will take all of this just to pay Social Security and Medicare.

or

(3) We do nothing and let the country collapse in debt (like Argentina and Russia) - which must and will happen, given our mismatch between spending and revenues.

Obviously, I favor the first option (reforming entitlements) since it leaves us with a low tax rate and doesn’t punish my kids, but I’ll take the second option over the third option (which punishes everyone). I realize that many on this site don’t have kids, so they may see it differently.


4 posted on 04/14/2012 9:11:44 AM PDT by BobL
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To: Kaslin; ding_dong_daddy_from_dumas; stephenjohnbanker; DoughtyOne; calcowgirl; Gilbo_3; NFHale; ...
RE :”The Europeans squeeze the middle class because that’s the only way to finance big government. That’s the point I made in this interview on Fox News.
To elaborate, European politicians have learned that there’s a limit to the amount of revenue that can be obtained by taxing the rich. In part, this is because there aren’t enough rich people to finance a bloated public sector.
But it’s also because Laffer Curve effects are very powerful at higher income levels. Simply stated, rich taxpayers usually have much more control over the timing, level, and composition of their income...
It’s quite likely that European nations maxed out on the amount of revenue they can collect from the rich, which is why they started going after the middle class.
The same is true in the United States. The New York Times already has admitted they want higher taxes on the middle class. And as you saw in the clip above, Senator Schumer views higher taxes on the rich as a “start.

This is their ultimate goal of raising taxes on the rich first, to tax the rest of us more; You can see that here in Maryland where Dems raise taxes on the rich as a chaser for all the taxes they raised on the middle class.

Ironically Obama to get re-elected has consistently ran on lower taxes for most people, but wait till after the election. I expect he will (would) veto tax cut extensions.

5 posted on 04/14/2012 9:16:48 AM PDT by sickoflibs (Obama : "I will just make insurance companies give you health care for 'free, What Mandates??' ")
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To: Kaslin

Of course, it’s clear that even taxing the so called
wealthy will not be enough to cover the “entitlement”
so the middle class is the only ones left with any
money.


6 posted on 04/14/2012 9:17:24 AM PDT by tet68 ( " We would not die in that man's company, that fears his fellowship to die with us...." Henry V.)
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To: BobL

I am on Social Security and for three years I did not get any cost of living increases. As a matter of fact I got a reduction from what I got paid prior. Instead my cost of Medicare, which is deducted from Social Security went up and you have the nerve to say we should give up more. Wait until you have to depend on SS and medicare


7 posted on 04/14/2012 9:34:17 AM PDT by Kaslin (Acronym for OBAMA: One Big Ass Mistake America)
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To: EGPWS

Obama already believes that everything belongs to the government. What he has to do now is convince everyone else.

“We cannot continue to spend money giving tax breaks to the wealthiest Americans, who didn’t ask for them and don’t even want them.” Obama this morning in his weekly address.

How much clearer could his attitude be?

We and everything we have and earn should be controlled by the government.


8 posted on 04/14/2012 9:36:31 AM PDT by Jvette
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To: Kaslin
Personally, I have no problem with a highly regressive tax system -- even if it means taxation that seems onerous for middle-class and lower-class citizens.

The simple truth is that this kind of taxation is the only way to ensure that a person or family pays taxes that are roughly commensurate with their use of taxpayer-funded services and amenities. This is why the AMT should be amended to include a flat minimum tax (say, $5,000) that each and every adult person in the U.S. must pay, no matter how little "income" they report.

9 posted on 04/14/2012 9:46:53 AM PDT by Alberta's Child ("If you touch my junk, I'm gonna have you arrested.")
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To: Kaslin

“I am on Social Security and for three years I did not get any cost of living increases. As a matter of fact I got a reduction from what I got paid prior. Instead my cost of Medicare, which is deducted from Social Security went up and you have the nerve to say we should give up more. Wait until you have to depend on SS and medicare”

Actually, if we only paid out money to people that DEPEND on SS and Medicare, there would probably be more money for them. it’s the ones driving the Winnebegos or have 3 kids that are doctors that bug me.

Yes, I know that sounds like class warfare, but those people are living their lives on the backs of our kids and kids that have not even been born yet. They already spent every dime collected by the government in their working years, plus another $18T or so. This really has to stop, in some way.


10 posted on 04/14/2012 9:56:33 AM PDT by BobL
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To: sickoflibs
27 Statistics About The European Economic Crisis That Are Almost Too Crazy To Believe
11 posted on 04/14/2012 10:59:19 AM PDT by blam
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To: BobL
"This really has to stop, in some way. "

It will but, no-one will like the consequences.

12 posted on 04/14/2012 11:02:52 AM PDT by blam
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To: BobL
Wake up there BobL.

Anyone who has paid into the system for 30 to 40 years has GIVEN that MONEY to the Government and in all likelihood would like SOMETHING in return.

Why would they lift a finger to cut themselves off from what they were forced to pay into for a lifetime?

If they gave every young person today a choice to opt out of having to have SS taxes deducted from their pay check and allow them to put it into a private account that THEY, the individual, controlled, in 30 to 40 years they would have 5 to 10 times the money to draw upon than SS could ever provide and deliver.

The PROBLEM if you haven't noticed is GOVERNMENT wants CONTROL.

Government will NEVER be able to SOLVE the problem. They're akin to putting a band-aid on a gunshot wound.

Ronald Reagan said it best:

"Government is NOT the solution, Government IS the problem".

13 posted on 04/14/2012 12:03:56 PM PDT by VideoDoctor
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To: Kaslin

To statists looking for taxes to “balance the budget” anyone not on welfare and receiving benefits becomes “the rich.” In the meantime, it seems noone you really know in life qualifies for the benefits.

The Left did this in the US before they were canned by Reagan and Newt. The Buffet tax is the camel’s head in the tent.


14 posted on 04/14/2012 1:32:16 PM PDT by SaraJohnson
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To: Kaslin
you have the nerve to say we should give up more.

Easy, Kaslin. Almost everyone agrees that Social Security costs must be reined in. I've not heard anyone, though, who advocates cutting the floor out from beneath those who already have it.

On our side, anyway.

15 posted on 04/14/2012 3:55:13 PM PDT by BfloGuy (The final outcome of the credit expansion is general impoverishment.)
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To: VideoDoctor

“Anyone who has paid into the system for 30 to 40 years has GIVEN that MONEY to the Government and in all likelihood would like SOMETHING in return.”

Well, if they hadn’t voted, collectively, to spend every penny in that “savings account” and then run up a debt of $18T, I’d say you have a point.

As it is, those people will get my kids’ money - don’t worry about it - it’s theirs and my kids don’t need it anyway - nothing wrong with living in Third World lean-to’s. My kids have no choice, there aren’t enough in their generation to out vote today’s older people, because the older people (again, collectively) saw to that also.

My only hope now is that all the tax increases that are scheduled to hit Jan 1, 2013, actually do hit, as that will, at least, give them some hope of not actually having to live in a bankrupt, destitute country - just a very highly taxed country, where half of their income goes to older people demanding tribute.

But yes, they will get THEIR MONEY BACK, as they see it - regardless of the hell my kids have to live in.


16 posted on 04/14/2012 4:05:28 PM PDT by BobL
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To: blam

“It will but, no-one will like the consequences.”

Agree, it will stop, one way or another.


17 posted on 04/14/2012 4:07:00 PM PDT by BobL
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To: BfloGuy
"I've not heard anyone, though, who advocates cutting the floor out from beneath those who already have it. "

It'll be inflated away, I'm afraid.
There aren't many alternatives.

18 posted on 04/14/2012 4:17:28 PM PDT by blam
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To: BobL
I didn't authorize the Government to KEEP SPENDING. I'm against it.

When I was a kid the income tax rate was 90%. That's right. If you made a million dollars you paid 90% to the Government... and Social Security was NOT in trouble and Medicare didn't exist.

The reason your kids are gonna OWE is because the GOVERNMENT will NOT CUT SPENDING... and those Entitlements you BLAME are a small part of where the money is going.

Solyndra stole 500 million in the blink of an eye with Obama's help. And there are 100's of more such schemes systematically stealing the tax payer's money.

If you haven't noticed, it appears to be intentional to intentionally "break the bank" and the U.S. will be lucky to have a 100 lean-to’s.

If we don't change course and cutoff what's unfolding, America, as we knew it, will be a fond memory.

19 posted on 04/15/2012 11:31:53 AM PDT by VideoDoctor
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To: VideoDoctor

“If we don’t change course and cutoff what’s unfolding, America, as we knew it, will be a fond memory.”

No argument from me. It’s one of my options, and I’d be more than happy to have live off my savings (and/or kids) when I’m older, if it keeps our country the way it is for them and their kids.

I will also tolerate taxing the crap out of the lower and middle classes, if we have no interest in cutting entitlements, but I don’t prefer it, and we won’t be the same country.

What I don’t want to see is our country heading into the gutter of bankruptcy because it will be VERY UGLY and there will be no one to bail us out. Unfortunately, that is clearly the direction we’re heading.


20 posted on 04/15/2012 12:07:37 PM PDT by BobL
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To: VideoDoctor
... and Social Security was NOT in trouble ...

That's because the Ponzi scheme hadn't gotten to the "collapse" point yet, where there aren't enough new suckers to cover the payouts to the early participants.

21 posted on 04/15/2012 1:12:07 PM PDT by DuncanWaring (The Lord uses the good ones; the bad ones use the Lord.)
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To: sickoflibs; Cincinna; AdmSmith; AnonymousConservative; Berosus; bigheadfred; Bockscar; ColdOne; ...

Thanks sickoflibs.


22 posted on 04/15/2012 7:28:20 PM PDT by SunkenCiv (FReepathon 2Q time -- https://secure.freerepublic.com/donate/)
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