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To: Torie

Good call. There are additional taxes in many EU countries outside of federal taxes. For example, I met a man from Ireland who calculated that he paid 55% of his earnings in taxes. The ratio in Ireland is 49.5%. This takes into account corporate taxes as well, so the federal tax rate will be lower for an individual (probably around 35%). The rest of his taxes were for political subdivisions. I currently pay about 20% of my earnings to federal taxes with and additional 10% (roughly) to state and county. This leaves me with 70% of my earnings (which is lower than many because I have no deductions) compared to the man from Ireland who keeps 45%. Pretty disturbing if you ask me.


24 posted on 05/27/2005 8:35:00 PM PDT by burzum
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To: burzum

Let me put these numbers in a different light, so that our picture is more realistic.

French government operations cost 54.2% of the GDP of France in 2003, which means that 45.8% of the GDP is left in private hands.
Recall that in France there is only one level of government to speak of. The national government is centralized. There is one megalopolis and a couple of smallish cities.

US government, at federal, state and local levels consumed 30.6% of GDP every year. Which means that 69.7% of the GDP was left in private hands.
However, this number is deceptive.

Remember that in France, there is universal health insurance, and universal free public education from age 2 (child care) through university.

In the US, 15.3% of GDP is spent on health care, but only 4.6% of that comes from the government. Which means that 10.7% of the GDP in the US that is part of the "private" economy is actually consumed on health care. In both France and the United States, health care expenditures end up in the hands of doctors, who are private in both places (France's national health insurance is not like Canada's, but is really US Medicare from birth to death. US Medicare is free choice of doctors, with the government paying the rates.)

So, that 10.7% of the US private economy spent in health care costs has to be added into the government figure, because the recipients of that money are the same in either place (and doctors are well off elites in both places). This is a mandatory expenditure, and it is consumption, not savings. I will return to this point in a moment.

In France day care and pre-school are provided for in that 54.2%. It is universal, and part of the public education system. In the US, the same need is paid for out of the private economy, it is not universally available, and it consumes 3% of GDP.

In France, education for everyone, from pre-school through university, is funded as part of that 54.2% of GDP.
In the US, 10% of GDP is spent on education, but only 5% of that comes from the government at all levels. 5% comes out of the private economy. All Americans with children know the burden of saving for college.

So, let us add together those pieces of the American "private" economy that are consumed on necessary services: 10.7% for health care, 3% for child care, 5% for education. That adds up to 18.7% of GDP expended by Americans out of their private dollars for these service, which are of the same genre as is spent out of the public coffers in France. Please note that in both France and the US, all of these expenditures end up in private hands: doctors, teachers, and child care workers. The only difference is in who writes the check.

Add that 18.7% of the GDP for these services to the US governmental outlays of 30.9% of GDP, and you get a realistic comparison of the cost of government plus social services in France and America.

In France, it is 54.2% of GDP.
In America, it works out to 49.3% of GDP.
So, France is really spending 4.9% more of its GDP on government and social services than the United States is, when you get right down to it.

Now please remember that there are 44 million Americans without health insurance, and 0 French people without comprehensive health care coverage. And please remember that the 4.9% difference in France provides universal day care coverage and universal free educations through college.

The French are indeed spending more than the Americans for the social cohesion that France particularly values. But when you compare the 30.9% US government expenditures to the 54.2% French government expenditures, France looks bloated and ridiculous. However, you must remember that what the French are GETTING out of that 23.3% difference in their GDP expenditure is universal health insurance, universal child care and univeral free education. The Americans don't have universal any of those things, but they still spend 18.7% of their GDP right out of their own pockets to get some of the same services. The money ends up in the private pockets of the service providers in both places.

So, the French government "premium" for its socialism is really 4.9% of GDP, not 20%, and for that 4.9% of GDP the French get universal coverage, and there are no French people with the anxiety of losing their health care, or wondering how they are going to pay for a nanny or save for their child's college.

One can still prefer the American system if one chooses, but the simplistic mashing of numbers comparing government to government expenditures paints a very false impression. The realistic comparison of services to services paints a very different picture.

The French pay 4.9% more of their GDP to have universal security. That Americans spend 4.9% less, and have universal anxiety. It is a judgment call. Simply put, France will never choose the American model. The difference in cost is marginal, but the difference in stress level is enormous.


39 posted on 05/27/2005 9:37:43 PM PDT by Vicomte13 (Et alors?)
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To: burzum; Happygal
My cousins, their friends and everyone I met in Ireland, both Ulster and Republic prided themselves on avoiding VAT and working off the books. I wonder what the numbers would be if the 'black' economy's numbers were brought into play?
62 posted on 05/27/2005 11:40:20 PM PDT by investigateworld ( God bless Poland for giving the world JP II & a Protestant bump for his Sainthood!)
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