Two Economic Models For The Poor

Leftists like to portray the European economic model as more “poor” friendly than the United States  economic model. But that depends on what your preferences are: if you are poor and would prefer less disposable income with more government services, then yes, the European model would be preferable. However, if you are poor and would prefer more disposable income with less government services, then no, the European model would not be preferable. It all depends on your preferences.

Economist Tim Taylor, in contrasting government redistrubition trends around the world points this out:

On the tax side, the U.S. tax code is already highly progressive compared with these other countries. The OECD published at 2008 report called “Growing Unequal: Income Distribution and Poverty in OECD Countries, which states (pp. 104-106): “Taxation is most progressively distributed in the United States, probably reflecting the greater role played there by refundable tax credits, such as the Earned Income Tax Credit and the Child Tax Credit. … Based on the concentration coefficient of household taxes, the United States has the most progressive tax system and collects the largest share of taxes from the richest 10% of the population. However, the richest decile in the United States has one of the highest shares of market income of any OECD country.After standardising for this underlying inequality … Australia and the United States collect the most tax from people in the top decile relative to the share of market income that they earn.”

This finding is surprising to a lot of Americans, who have a sort of instinctive feeling that Europeans must be taxing the rich far more heavily. But remember that European countries rely much more on value-added taxes (a sort of national sales tax collected from producers) and on high energy taxes. They also often have very high payroll taxes to finance retirement programs. These kinds of taxes place a heavier burden on those with lower incomes.

25 Responses to “Two Economic Models For The Poor”

  • I suspect that the comparison is between US federal taxes and taxes in EU countries. Do you know? If so that’s a misleading measure, because while it’s true that federal taxes are progressive, state and local taxes in the US are regressive.

    Even worse often right wingers only consider one type of federal tax. The federal INCOME tax. That is certainly progressive. But other federal taxes, like payroll taxes and excise taxes, place a higher proportion of the burden on the poor. The net effect is still progressive taxation at the federal level. But then you add in state and local and it becomes much less progressive, as I’ve pointed out here and elsewhere. We have almost a flat tax when you consider the overall picture.

  • But that’s the point: compared to the USA, Europe has MORE OF the very regressive taxes you claim.

  • Do you know if the comparison is between federal taxes and EU taxes or ALL taxes in the US (state and local as well as federal). Or is it just a comparison between federal INCOME taxes and EU taxes?

  • The article is saying two things. First, that we have a more progressive income tax and second, that we have less regressive other taxes than Europe (VAT, payroll tax, gas taxes, etc).

  • So it’s not talking about state and local taxes, which are regressive.

    So for all we know overall taxes in the US may be more regressive than EU.

  • Nice answer back in return of this issue with firm arguments
    and explaining the whole thing about that.

  • Excellent post. I was checking continuously this blog and I am
    impressed! Very helpful info specifically the last part 🙂 I care for such info a lot.
    I was looking for this certain information for a very long time.
    Thank you and good luck.

  • Whats up this is somewhat of off topic but I was wondering if blogs
    use WYSIWYG editors or if you have to manually code with HTML.
    I’m starting a blog soon but have no coding knowledge so I wanted to get advice from someone with experience.
    Any help would be enormously appreciated!

  • Hi there, this weekend is good in support of me, as this point
    in time i am reading this wonderful educational paragraph here at my house.

  • I have read so many posts concerning the blogger lovers however this article is actually a fastidious article, keep it up.

  • I know this if off topic but I’m looking into starting
    my own weblog and was wondering what all is required to get
    set up? I’m assuming having a blog like yours would
    cost a pretty penny? I’m not very web smart so I’m not 100% sure.
    Any tips or advice would be greatly appreciated. Thanks

  • Excellent blog you have here.. It’s difficult to find excellent writing like yours these days.
    I really appreciate people like you! Take care!!

  • Hi there! I know this is kind of off topic but I was wondering which blog platform are you using for this website?
    I’m getting sick and tired of WordPress because I’ve had issues with hackers
    and I’m looking at options for another platform. I would be awesome if you could point me in the direction of a good

  • Hurrah, that’s what I was seeking for, what a information! present
    here at this weblog, thanks admin of this website.

  • Pretty section of content. I just stumbled upon your website and in accession capital to assert that I get actually enjoyed
    account your blog posts. Any way I’ll be subscribing to your feeds
    and even I achievement you access consistently quickly.

  • It’s awesome to pay a visit this web site and reading the views of all mates concerning this piece of writing,
    while I am also eager of getting familiarity.

  • aUOxFz qlfzwyckslea, [url=]qopdvwsuddgo[/url], [link=]yghyvirmtbpb[/link],

  • I’ll immediately snatch your rss feed as I can not find your e-mail subscription link
    or newsletter service. Do you’ve any? Kindly allow me recognise in order that I may just subscribe.

  • Thank you for any other fantastic article. Where else may
    just anybody get that kind of information in such a
    perfect approach of writing? I have a presentation next week, and I’m at the search for such info.

  • My brother recommended I would possibly like this website.
    He was once totally right. This post actually made my day.
    You can not imagine just how a lot time
    I had spent for this information! Thanks!

  • Hello! This is kind of off topic but I need some advice from an established blog.
    Is it very hard to set up your own blog? I’m not very techincal but
    I can figure things out pretty quick. I’m thinking about creating my own but I’m not sure where to start.
    Do you have any ideas or suggestions? With thanks

  • I’ve been browsing online more than 3 hours today, yet I never found any interesting
    article like yours. It is pretty worth enough for me.
    Personally, if all website owners and bloggers made good
    content as you did, the web will be a lot more useful than ever before.

  • Fine way of telling, and good piece of writing to get
    facts about my presentation subject, which i am going to
    present in institution of higher education.

  • If you are going for finest contents like I
    do, just go to see this site all the time because it presents
    feature contents, thanks

  • Sweet blog! I found it while searching on Yahoo
    News. Do you have any suggestions on how to get listed in Yahoo News?
    I’ve been trying for a while but I never seem to get there!
    Thank you

Leave a Reply