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Politics : A US National Health Care System? -- Ignore unavailable to you. Want to Upgrade?

To: TimF who wrote (14590)	3/16/2010 2:55:14 PM
From: TimF	Respond to of 42652

Another way of expressing point 4 ---- "For the US a "lower" level of current taxation is a huge advantage. If, in order to support SS & medicare with a shrinking workforce, we need a 18% VAT and a 44% top marginal rate - we can do that. If France, Germany, Denmark, etc. need to raise revenue it's not like they can go to 75% tax rates and a 45% VAT." theatlantic.com Not that I think we can go to a combination of 18% VAT and a 44% top income tax rate without causing harm to the country, but the commenter was right that it is possible to do so. 75% tax rates (and having that top tax rate actually apply to a significant number of people, rather than having almost everyone be below the income to hit the top rate, and most of those who are above it having all sorts of deduction, credits, and exceptions to get around it), esp. when combined with a high VAT, would be far more harmful, and also likely to actually reduce government income, so while technically possible, they aren't realistic. Or to put it another way taxes can only go so high without negative consequences, and they also can only go so high without getting less and less additional revenue (eventually zero or negative additional revenue), so there is an effective limit to tax rates even if you don't think low taxes are generally good for the economy, or desirable for libertarian reasons, or otherwise a good idea. Any new spending program, that "pays for itself" with new taxes, encroaches on the limits of the room we have in the future to increase taxes should it become really necessary. Thus it makes our long term fiscal situation worse (at least if the new program is not easily canceled, and I submit a new healthcare entitlement will not be easily canceled).