Then how does this thinking fit with the reality of taxes increasing everywhere, year after year? Does that mean that services are getting better? Because you know, it's actually the opposite. It's getting worse: more and more illiteracy in schools, inflation of degrees that don't get you any job, more unemployment (or stagnant at best), healthcare with less and less services... etc.
Can you show data to back this up? To my knowledge, income taxes in all Western countries are lower today than they were in the '50s or '70s.
Let me do the calculation for Belgium for you:
$1 -> First, because yearly the employer has to pay you for 13.92 months, not 12 (end of year bonus thing), we take that out. That's 14% (but you get 20 days 1.5 times paid holidays, and an end of year bonus, which is taxed at a higher rate, but you do get that)
$0.86 -> "patronale bijdragen" (30%) -> $0.6 (even this ignores a few taxes that stem from having employees at all, and assumes there is no union at your workplace. Unions are extra).
$0.6 -> brutto <> netto (depends on total pay because this is a progressive tax, but let's assume you have a normal pay (which gets you into the higest tax bracket and taxed at roughly 40%, let's say 50k euros/year before tax, which is not a particularly large amount) -> $0.36 [1]
$0.36 -> VAT 21% is charged on this -> $0.285
So total tax in .be, for normal workers, is 71.5% (a bit less if you make very little, more if you make more).
This is a strict underestimate, as it assumes you're renting, not owning any real estate, producing zero garbage, not using public transport, harbours or airports, or a car or any kind of motorized vehicle, don't use fuel for anything, not using electricity, gas or water, not ...
Also: you might think this is fair. Everybody pays this, right ? Well, there's one tiny little detail that allows anyone sufficiently rich to evade almost all taxes : capital gains is not taxed in Belgium. Needless to say, this is a hole in the tax code big enough to drive the "bagger 288" through, but only open to the rich (more extreme examples have their own company own things like their house, and they "charge" their own company rent to pay almost entirely with pre-tax money, and you charge their own company rent which is not taxed according to the above calculation). [2]
Aside from cementing the position of the rich, and attracting French comedians, I'm not sure what this accomplishes. [3]
And in case you're wondering about the people who decide all these taxes. Surely they pay those taxes themselves, right ? No [4]. They feel they don't owe the state 71.5%, they feel they owe 12% + VAT, or about 30%, less than half of what their subjects pay)
So no, it's just the normal workers that pay this amount. If you are rich and can get your money paid out to you however you want, then you are taxed at less than 30%, or nothing if you "invest" it all (for instance in that house you live in and rent to yourself). If a politician likes you enough, or needs you, you can get a job that doesn't owe these taxes in government.
Still think it was higher in the 50s ? VAT was 0%, pre-pre-tax taxes (patronale bijdragen) were 0%, and income tax was nominally higher, with the highest bracket at 60% starting pretty high (but again no taxes on income that was packaged in companies). So let's say a well paid consultant in the 50s would have been taxed at something like 45%-50% total.
The argument socialist make to further increase the taxes is, of course, not to tax the rich more. That cannot be discussed in public (and of course has nothing to do with the fact that nearly all leftist politicians are rich landlords that have never once in their life paid tax like this).
The worst of it is, this is correct, but if you tell this to a friend ... they don't believe you ... hell some I have gone through this with them in detail, and they still don't believe me.
They don't believe it to the point that they truly don't understand why construction companies pull crap like having their employees "resident" in Poland. Yes those labourers get less money, but the vast majority of the savings is from not having them subject to the Belgian tax system.
What this pays for ? Social security and pensions. Oh, and total amount the government managed to save for future pension payouts with these taxes ? Zero. 0 comma 0. The amount of elderly is rapidly going up, and taxes will need to rise, at minimum, 100% (from their current level, ie. taxes on wages will need to rise to 140% of pay) if the current level of benefits for the elderly is to be maintained.
[1] https://home.kpmg.com/xx/en/home/insights/2011/12/belgium-in...
[2] http://www.taxbites.be/taxation/content/view/64/42/
[3] https://www.theguardian.com/film/2012/dec/22/gerard-depardie...
[4] http://www.brusselstimes.com/magazine2/5828/myths-and-truths...
> $1 -> First, because yearly the employer has to pay you for 13.92 months, not 12 (end of year bonus thing), we take that out. That's 14% (but you get 20 days 1.5 times paid holidays, and an end of year bonus, which is taxed at a higher rate, but you do get that)
Why are you subtracting 14% from the employee here? That 1.92 month bonus is money that ends up in the employee's pocket. From the employee's point of view, you should be adding 16% here -- for every $1, the employee actually gets $1.16 when the full year is considered.
If you count bonuses as losses to the employee, that would make for some very unhappy Wall Street bankers (where bonuses can easily exceed yearly pay).
>but again no taxes on income that was packaged in companies
Glad that you noted that. I feel that packaging your own income in shell companies is very common across the Western world
One part of it is that there's more of it: more elderly people that require and receive care.
Of course, it's yet to be seen how well b) will play out in practice.
