America won’t ever have a European-style welfare state with out a VAT

Oct 2, 2021

AGOVERNMENTS SPEND more, it is increasingly important that they manage their taxes carefully. Large European welfare states like Sweden or Germany rely on growth-friendly value added taxes (VAT) to raise the huge amounts of money they spend. America gets away with a grossly inefficient and unnecessarily complex tax system only because its total revenues are relatively low.

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Small but growing. House Democrats are working on how to pay for President Joe Biden’s proposed Social Expenditure Bill that would see America take a step towards Europe with spending money on parents, childcare grants, green investments, and more money on health care. The bill is likely to be watered down in the Senate, but its current size is $ 3.5 trillion (1.2% of forecast GDP) over the next decade. To pay for that, lawmakers are proposing the largest tax hike since 1993.

The plan adds little to the efficient taxation that would be necessary if America ever had the European welfare state that many Democrats aspire to. This is because the proposals were made with the aim of raising taxes only for households with incomes greater than $ 400,000. The left thinks the rich are not paying their fair share. They want to raise the top federal income tax rate from 37% to 39.6% and introduce a new 3% tax on income over $ 5 million. They also want to raise the federal tax rate on corporate profits over $ 5 million from 21% to 26.5% (while overlooking the fact that doing so will at least reduce wages a little). The plan Increase the rate of capital gains tax and introduce various new taxes.

The federal government has some leeway to raise more money from high earners. But the notion that the main problem with the existing system is that tax rates are too flat is wrong. In 2018, the bottom fifth of the workforce paid no net federal taxes at all on average. According to the Congressional Budget Office, the top 1% paid a total rate (ie after all deductions) of 30%. Take state and local taxes into account, and high earners must pay a marginal tax rate – the rate important for work incentives – on every extra dollar they take home, which is mediocre for rich countries. Tax refunds for poor families are exceptionally generous. In 2019, a single parent of two children earning two thirds of the average wage had to pay a net wage tax of just 10%, according to an analysis by the OECD, a club of the most rich countries. In egalitarian Sweden, the rate was almost 33%.

Inefficiency is a bigger problem in America than interest rates failing to be sufficiently progressive. Countless deductions enable the very rich to disguise labor income as easily taxed capital income. And reluctance to collect a sales tax that is an excise tax means America relies on taxes that discourage labor and investment. America is one of only three rich countries that derives more than 70% of its tax revenue from labor and corporate profits. Sales taxes levied by states and municipalities are the only excise taxes of any interest.

The plan does far too little to improve efficiency. On the flip side, it would limit the carried interest loophole that allows investment managers to classify their fees as capital gains rather than income. It would reduce tax evasion through increased enforcement, such as auditing the tax returns of high earners, which more than pays off. And it would try to get more money from “pass-through” companies, shells that allow many professionals to treat their income as business profits, resulting in a lower tax rate.

But much is wrong with the Democrats’ plans. You seem to have passed up on closing one of the most expensive loopholes that depreciates capital gains when assets are inherited. The corporation tax increase would raise the total rate, including the average state and local taxes, to 31%, the third highest among rich countries. In the house, they seem disinterested in a CO2 tax to combat climate change. And while it’s not yet on schedule, they are talking about lifting the cap on an exemption from federal taxable income from funds used to pay state and local taxes. The cap was introduced in 2017 under Donald Trump. Abolition would continue to subsidize high-tax countries and benefit almost exclusively the rich. The Democrats would raise the top tax rates and at the same time narrow the tax base – the opposite of good taxation policy.

America’s economy would survive these proposals. But its creaky and cumbersome tax bill shouldn’t be asked to support the size of government that many Democrats want long-term, which includes state-funded universal health care, for example. Republicans know this is implausible. They usually reject VAT because they see it as too convenient a source of money. Democrats don’t like the tax because it’s easily regressive. But there is a reason VAT underpins the European welfare state: there is no desirable alternative.

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This article appeared in the Leaders section of the print edition under the heading “Ways and Means”

European-style flower present LEAF blooms all through Meatpacking District, NYC

MEATPACKING DISTRICT, Manhattan (WABC) – The Meatpacking District is hosting a one-of-a-kind flower festival this weekend.

More than 100 florists have exhibited in shop windows and squares across the neighborhood to create a European-style flower market.

“In a city with so many great talented florists and flower designers, I am very excited to present LEAF, our first annual flower festival,” said Moira Breslin, founder of LEAF – especially the Meatpacking District, TF Cornerstone and all florists – that we are making this happen could. We are excited to provide a platform for a new generation of florists to showcase their talents and turn the Meatpacking District into a riot Color – a gift for all New Yorkers during LEAF weekend “

Mayor Bill de Blasio even took part in the kickoff of the event on Saturday.

Organizers hope the festival will bring people back to the area as NYC continues to open.

“It enabled us to activate the whole neighborhood – restaurants, retailers got involved – and then just showcase the amazing creative class in town,” said Jeffrey LeFrancois of the Meatpacking Improvement District.

The festival lasts until 6 p.m. on Sunday.

Click here for more.

ALSO READ: “Oh my god, I’m in the mouth of a whale”: the lobster diver describes how he was swallowed by humpback whales

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A European-Type United Nations by Sandra Breka & Brian Finlay

For decades, multilateralism, based on a common overarching vision, has anchored the longest period of peace and stability in Europe. This alone should qualify the European Union as a model for the renewal of the United Nations.

BERLIN / WASHINGTON, DC – Last September, the General Assembly passed a to mark the 75th anniversary of the United Nations groundbreaking declaration Reaffirm the commitment to “mobilize resources” and “show unparalleled political will and leadership” to “secure the future we want”. The so-called UN75 declaration was an inspiring statement. But will it lead to significant changes?

  1. Getty / Bettman

History suggests it could be easy. After all, past anniversaries of the founding of the United Nations have brought about significant structural reforms. For example, on the 60th anniversary of the United Nations, the heads of state and government of the world established A peacebuilding commission to help countries make the transition from war to peace has expanded the human rights commission into a stronger human rights council and adopted the “Responsibility to Protect” doctrine to protect civilians in conflict areas.

The prospects of the UN75 declaration are further enhanced by the fact that it reflects the will of civil society. Before last year’s General Assembly, the United Nations launched a global survey to see what ordinary people care about. Of more than 1.3 million respondents, 87% said that international cooperation is critical to addressing today’s challenges.

The UN also supported more than 3,000 dialogues in 120 countries on “the future we want, the UN we need”. The results of these dialogues, which took place in “classrooms, meeting rooms, parliaments and community groups”, helped shape the declaration.

At the same time, national governments have worked to revive multilateral cooperation. Federal Foreign Minister Heiko Maas and French Foreign Minister Jean-Yves Le Drian announced the Alliance for Multilateralism Promote global cooperation in a time of resurgent nationalism. The alliance is now supported by more than 50 countries.

Similarly, last February, G7 leaders, including US President Joe Biden, proclaimed that they would work together to “make 2021 a turning point for multilateralism”. Working together to recover from the pandemic and “better rebuilding” were seen as a top priority.

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In particular, the countries also support the UN75 declaration. Two months after its unanimous approval, ten heads of state or government convened by Spain and Sweden published one Joint announcement Reaffirms its commitment to the Declaration and the ambition it embodies, and calls for reforms to the three main organs of the United Nations to create a “more agile, effective and accountable organization” capable of delivering “better” results.

All of these bode well for the future of multilateralism. However, turning words into actions is seldom easy, especially when it comes to so many actors with competing visions and interests. Given the nationalist and populist forces that are powerful in many parts of the world, the challenge ahead is all the greater. To do this, we should look to Europe.

The European Union has been a staunch advocate of multilateralism. In February, for example, the European Commission and the EU High Representative for Foreign Affairs and Security Policy Josep Borrell, issued a common communication to strengthen the EU’s contribution to rules-based multilateralism.

Likewise the Federal Chancellor Angela Merkel, French President Emmanuel Macron, President of the European Council Charles Micheland President of the European Commission Ursula von der Leyen joined the Secretary General of the United Nations Antonio Guterres and Senegalese President Macky sal in demand for one more inclusive multilateralism.

Europe’s leadership in this area makes sense. Although the EU is often classified as slow, risk averse and inflexible, it is characterized by its success in forging effective supranational policies and pooling resources to meet common challenges. The Europeans also particularly support international cooperation. In the UN survey, more than 90% of Europeans – a few percentage points above the global average – described international cooperation as “very important” or “essential”.

Building on Europe’s example of active multilateralism, our organizations, Robert Bosch Stiftung GmbH and the Stimson Center, along with other partners, recently brought together leading policy makers and experts from Europe and around the world to discuss how the UN75 Declaration will become a reality can. We identified several Key requirements.

For example, to ease pressure on the UN Security Council and the global humanitarian system, world leaders must take action to address the root causes of conflict. This means, for example, ensuring that basic social needs are met; Improving representation in politics; and strengthening national and regional government institutions.

Additionally, we need to address the “knowledge crisis” – including growing skepticism about science – that is undermining COVID-19 vaccination programs and climate mitigation efforts. This can be achieved through international and national campaigns that promote trust and combat disinformation.

A third need is to change the architecture and approach of global and regional financial institutions to fill gaps in digital participation, strengthen education, and make progress towards gender equality. Reforms of the legal and normative framework conditions are just as critical – in order to meet the challenges of today’s online and offline world.

Multilateral solutions can be difficult to develop, agree on and implement. This can make them appear inefficient and inefficient, with actors assuming they are better off doing it on their own. And yet, as Europe has shown time and again, the solutions forged from multilateral processes tend to be more inclusive, more effective and more lasting. Europe owes its longest period of peace and stability to these processes.

That alone should enable the EU to draw some valuable lessons for the renewal of the United Nations. An inclusive, adaptable and empowered UN, taking into account the EU’s experience, can provide a solid foundation for a rules-based international order that promotes global peace and stability while facilitating action to address common challenges. Such an institution could not be more worthy of our unwavering commitment and care.