Revenue

Revenue: noun, the income of a government from taxation, excise duties, customs, or other sources, appropriated to the payment of the public expenses.

In the U.S. we have the I.R.S. (Internal Revenue Service).  The I.R.S. is the federal entity responsible for the collection of taxes. The taxes are then treated as revenue and used to pay for government and all the programs that we are privileged to have. Half of us pay all the taxes for the whole country in the form of income taxes. The other half for whatever reasons doesn’t pay anything. Perhaps that includes the unemployed, retired, disabled and of course we can’t leave this group out; the swindlers who play the system to have all their taxes refunded. That’s a huge problem and it will only get worse. The retired and the disabled are another problem that has to be addressed. The retired persons sector will only increase in numbers as time goes by. As everyone knows, the average lifespan of Americans has been growing for decades now. To wit, the longer the retirees live the longer they burden our government programs that are there to help them. For some time now it seems that the trend in illnesses that warrant disability has been on the increase. Maybe we are becoming a less healthy nation or is it that people have found ways to work the system to take advantage. This will lead to a smaller section of Americans paying a larger portion of the taxes. And in the current economic climate with 9.2 % unemployment the actual number might be about 40%. It doesn’t take a financial wizard or a mathematician to see that the bottom line isn’t a healthy one. It’s also easy to see that the development of new social programs or the extension and enlargement of existing programs by the federal government is a horrible idea. The federal government must learn to live within its means. That’s economics 101. 

Hugo

European Model

No no no, not that kind of model. That will have to be left for a future post. I am talking about the financial and healthcare model, the one that everyone seems to bring up when they talk about changing the American free market model. When the question about healthcare comes up somebody always lauds the European Model. They say that medical care is free. They say that prescriptions are free. They say that it should be that way here, and that no one should ever be denied medical care because they can’t afford it. I usually (and somehow I am always alone in my view) reply that it is in no way free. It is being paid for by a higher tax rate. They counter my point by saying that they are willing to pay a little more so that it may happen here. They start to name countries to try to make their point. They inevitably end up mentioning Canada. By this time they have lost their calm and are shouting. As if saying it louder will make it true or sway me to their side. I ask them if they know how much they are being taxed here in the U.S. Most of them lowball it to around twenty percent. I ask them if they would be willing to double that tax to get “free” healthcare most of them say no way. Then I tell them that the tax rate in the U.S. is at 35% and their jaw drops to the floor. And yet they keep saying that healthcare should be provided by the government. When I tell them that they would have to pay about 50% in taxes, well they begin to lose their steam. I press my points and they seem incredulous. They start to tell me how Britain’s system works. Then how the healthcare in the Netherlands is so wonderful and on and on until the come back to Canada. Just so you don’t think I am full of crap; here are some of the income tax rates for those countries.

United Kingdom 50%

Netherlands 52%

Canada 50%

Sweden 57.77%

Spain 43%

Portugal 45.88%

Greece 40%

WWW.taxrate.cc

Okay, just to be a little clearer, their system doesn’t work. It works maybe in the short term, but eventually it collapses. Here are a couple of videos that illustrate quite well what I am talking about.

High taxes + high unemployment = riots 

No thanks Obama, we don’t need higher taxes or high unemployment.  I will pay for my own health care.

Hugo