Janiece Saves the World, Part I - The Tax Code

Since I’ve not been writing for some time, I have a lot of things bouncing about in my brain. Some of these things make me want to take out an eye with a spork, some make me apoplectic with rage, and some make me happy. 

Unfortunately, in today’s world, the first two are far more common than the third. 

So I’m going to write them all down, and explain why I think I have some wonderful ideas. Many of these are not new ideas by any means, but they’re ideas I like, and I don’t see why I can’t add my opinions to those of the great unwashed. At least my ideas are back by research and facts. 

Yes, SUSAN, I am looking at you.

So today we’ll start with Part I, the tax code. 

(NOTE: Before someone starts bleating about socialism, you should know that I am a small “s” democratic socialist. That doesn’t mean I want the feds to control all aspects of production, or even most aspects of production. It does mean I believe in a welfare state. And by “welfare” I mean the actual meaning of the word:

“Welfare means the health, happiness, security, and general prosperity of a person, group, or community.”

What I don’t mean is so-called “welfare queens,” “freeloaders,” “moochers” or “welfare mothers.” Give people some dignity, why don’t you. 

So, balancing the budget. 

Even if the richy-rich-rich paid their full share of taxes, which they won’t, because ALL THE MONEY is still not enough, it would not close our existing $2 trillion budget shortfall, although it would certainly help. When you add in wealth taxes (typically cited as 2% annually for those whose net worth is over $50M and 3% annually for those whose net worth is over $1B), taxing unrecognized capital gains, and forcing the oligarchy to actually pay their fair share, we would still have a shortfall of ~$1T. 

So what’s the answer? I think it’s obvious (at least to a tax and spend liberal like myself) that we need to increase taxes. Let’s use Norway as an example, since they have a balanced budget and a surplus in some years. 

Here is their simplified plan:

• A 22% general income tax on net income (which includes capital gains)
• A 0-17.8% graduated bracket tax, with the poorest paying nothing, and the highest earners paying 17.8%. 
• Employees must also pay a mandatory 7.6% social security contribution from their gross earnings. 
• For corporate entities, a flat 22% tax on net corporate profits.
• In the Petroleum Sector, companies pay a 51% additional special tax. Note I did not say Energy Sector - only polluters have to pay. 
• Consumers also pay a standard rate of 25% on most commercial goods and services, with a reduced rate of 15% on food and groceries, 12% on public transport, cinema tickets and hotel accommodations.
• In addition, a net wealth tax on global assets exceeding NOK 1.9 million. The total rate is 1.0% (0.35% municipal + 0.65% state), rising to 1.1% on wealth exceeding NOK 21.5 million.
• Capital gains on securities and dividends are taxed at an effective rate of 37.84%.

That’s a lot of taxes, even up to 64.8%¹, not counting the sales tax! But what do they get for their taxes?

• Universal Healthcare & Medical Security with an annual out of pocket cap of ~$280. 
• Free universal healthcare for children including healthcare and dental
• 100% paid sick leave for all citizens funding by the welfare agency for a full year. No FMLA, no counted sick days.
• Parental leave policy which includes 49 weeks at 100% pay or 59 weeks at 80% pay, including a 15 week daddy quota. 
• Daycare costs are heavily subsidized by the government, with a legally mandated maximum cap (roughly $100 to $300 USD per month depending on the municipality).
• The state pays a monthly cash allowance (barnetrygd) to parents for every child from birth until they turn 18 to help offset the costs of raising them.
• Public primary schools, high schools, and universities are entirely tuition-free for citizens.
• Through the state fund Lånekassen, students receive low-interest loans and grants to cover their cost of living while attending college, a portion of which is entirely forgiven if they graduate on time.
• If a citizen loses their job, they receive a daily allowance equal to roughly 62.4% of their previous income for up to two years while they retrain or job hunt. Two years. Not 26 weeks.
• The National Insurance Scheme funds a universal basic retirement pension for all citizens, which is scaled upward based on lifetime income.
• Tax revenue funds highly complex civil engineering projects, including keeping remote Arctic roads clear, building extensive tunnel systems, and heavily subsidizing eco-friendly public transit networks. As opposed to, you know, collapsing bridges and potholes that would swallow my Mini. 
• The government aggressively reinvests taxes into environmental initiatives, which historically included massive tax breaks and structural perks for electric vehicle (EV) drivers. 

That’s a LOT of benefits. Without having to pay for many of these things, the tax rate doesn’t seem so awful, especially for the Norwegian equivalent of the middle class. 

Would such a plan work in the United States? I don’t know, I’m not an economist and I don’t have Paul Krugman, Robert Hall, or Michael Woodford on speed dial. But it has to be better than watching people die for lack of adequate medical care, seniors having to choose between their groceries and their medication, and people having to work until they literally drop dead in order to pay off student loans. 

¹Let’s all remember that the United States’ maximum tax bracket was between 90% and 94% between 1944 and 1963, and the wealthy still had plenty of money for yachts, homes on Martha’s Vineyard, and Deluxe Apartments in the Sky.