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Brent

I think this comparison is useful for conversational calculations, but it's hard to do an apples-to-apples comparison without more inputs, including VAT and other taxes. I ran across one posting (on a web bulletin board) in which a Canadian living in California tried to compare his tax situation at home with his new one. Ultimately, he said direct comparisons were very difficult, but on balance he felt the move provided him a net benefit. The wage was higher, the prices of consumer items were significantly cheaper, and these two offset fully any extra cost of health insurance. Still, it's hard to draw a conclusion from anecdotes...

You might also look at the OECD's tax stats for more:

1) Entry page

http://www.oecd.org/document/60/0,3343,en_2649_34533_1942460_1_1_1_1,00.html

2) Spreadsheet including the "total tax wedge" for various countries (France, up to 63.2%; the U.S., up to 43.7%)

http://www.oecd.org/dataoecd/44/2/1942506.xls

Dan Dx

@Brent
What do you get in return of your 43.7% taxes?

Brent

@Dan:

I'm not defending the U.S. system, nor saying that the return on my taxes are particularly rewarding. A good part of my tax dollar goes towards programs -- like defense and some welfare programs -- that I think should be scaled back dramatically. Defense is among the largest parts of our budget, and the money that goes towards it takes away from domestic spending that could make my life quite a bit more comfortable. For example, I'd like a decent high speed train network; the money we've spent in Iraq probably could have built out a good part of one nationwide.

In any case, the point I'm trying to make is much smaller, that income tax rates do not completely explain the total tax burden. If the OECD numbers are correct, the French pay 20 percent more in total taxes than Americans. If I paid 20 percent more, I would expect to have a fantastic health system, along with free higher education and the like.

I tend to support health care reform efforts. Still, it is perhaps ironic that the current proposals could cost me a good deal more than what I have now. Too, it's not clear to me that I stand to benefit from reform overall, other than changes to contractual issues such as removing the ability of insurers to rescind a policy.

Tim Jones

The other item left out of the cost calculations is that you are shifting the cost of insurance from a payroll deduction that goes to insurance to a tax that goes to the government. So, for example, I will pay $280 per month next year in health insurance premiums. The percentage of income would vary, if I made $25,000, that would add 13.4% to my "tax bill"; if I made $90K, it would add only 3.7%.

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