Do Not Bother Comparing the US with any Other Country
In response to my article The Coming Economic Collapse, reader El Chino, a blogger from Norway, left this comment:
What's wrong with 28% tax on capital gains? We in Norway have had it for years and are doing just fine. According to the UN (3 years in a row), we have the best social security and standard of living. Playing the socialist scare-card is just so laughable. Don't you get it; to reduce the deficit and increase the taxes will be worthwhile in the long run. Give the Obama-man a break and start looking beyond your own personal economy.
A usual, I like to respond by blog post.
First off, as I'm sure El Chino knows, there is no separate capital gains tax in Norway - capital gains are included as in ordinary income, so to that extant, capital gains are indeed highly taxed. Regardless, Norway is not doing just fine because of high taxes on capital gains tax. Norway is doing fine because oil is 30% of GDP. In the US Oil is a mere 2.6% of our GDP.
The percent of your population that invests in anything is so measly, so tiny, it wouldn't matter what tax Norwegians paid, it would have little effect on the overall economy. But in the US where investment is the engine of our way of life, the creator of jobs, the thing that makes us the most powerful nation on earth, the tax on capital gains is quite crucial. If it were not for your country luckily finding oil, your welfare state and high taxes would eventually leave every Norwegian homeless, naked, poor and shivering in the cold.
When a country is as insignificantly tiny as Norway, certain statistics can skew the perspective and make comparisons to the US ridiculous. For example, in terms of Nobel Prizes, the US has garnered more Nobel Prizes (320) than the next four countries combined: United Kingdom (116), Germany (103), France (54), and Sweden (28) (1). We dominate like no one's business. We have 1.03 Nobel Laureates for every 1,000,000 in population. But let's make a ludicrous comparison to the US using a small, insignificant, flea-sized country: the Faroe Islands with a population of 49,006 has one Nobel prize winner (2), thus ranking it as the country with the highest number of Nobel Laureates (20.4) per million population (3).
I have previously written: We should make English the national language; even more, we should insist that Europeans teach all their children English as well. Certainly the world should require that all pilots speak English fluently. That many Europeans are bilingual is worthless unless one of the languages is English. Indeed, English is the language of science and unless the world learns to speak English they will not attain the greatness that America has in the sciences.
Now given what I have just written, could not a tiny insignificant flea from the Faroe Islands respond that what I write is nonsense; that people who speak Faroese have 19.6 times the number of Nobel Prize winners per million than Americans? Nyaa Nyaa!
Yes, it is true. Any tiny, teeny, weensy little pipsqueak country in the world can have some statistic that makes it look like it lords over the US in regard to standard of living, or median income, or whatever. I am sure there is some baseball player in Honduras that has hit more lifetime home runs than Babe Ruth and Hank Aaron put together; but so what? He has not hit those home runs with the big boys, in a real baseball league, with talented professional players.
In Norway the national and municipal income taxes combined total 24.5% to 28.0%. In addition there is an Income tax on gross personal income (including pensions) that ranges from 0% - 12%. In addition, there is a social security tax of 7.8% on gross salary income. It should also be noted that fringe benefits are taxed as well - up to 51%. [Source NORWAY tax rates]
There's even more: there is a annual tax of up to 1.1% on your net worth. And even more: there is a VAT tax of 25% on almost everything Norwegians buy except food (only 14%!!!) and transportation, movie tickets, and hotel rooms (8%).
By the time Norwegians finish paying taxes they have very little left for stuff. Prices in Norway are higher than in the rest of Europe and ridiculous when compared with the US. Alcohol is so expensive after heavy taxes that most Norwegians need to smuggle it from abroad. A pizza in Norway costs more than a dinner at an American restaurant.
Norwegian apartments are tiny and spare and egregiously expensive (Oslo is consistently the most expensive city in the world to live in) compared to what Americans, even poor Americans enjoy. Look at this photo of a typical Norwegian home.
Actually most living spaces in Europe are much smaller than typical US apartment sizes. Any American may well wonder where all the stereos, game-players, big-screen TVs, and real furniture are being kept. What Norwegians consider expensive furnishings we would call cheap patio furniture. Rich Norwegians have less in their closets than a typical American family.
I am not surprised that my Norwegian reader likes Obama, Norway's policies explicitly intend to spread the wealth among Norwegians. In this manner, all Norwegians are poor compared to Americans. On paper, Norwegians make about ten grand more GDP per person than Americans, but they do not live better than America's poor. Put any black ghetto youth in any Norwegian home and he'll immediately say, "Man, these people ain't got nuffin in their houses. I thought I was poor."
For my readers who do not know how tiny Norway's economy actually is: Despite all of Norway's oil earnings, California is 5 times bigger, Texas and New York are each 3 times bigger, Florida and Illinois are 2 times bigger, Pennsylvania, Ohio, New Jersey have bigger economies. Damn, even North Carolina and Georgia have higher GDPs than Norway.
Compare yourself to the US? Hell, Norway cannot even compare to a few southern states. In my article Mike Lupica is an idiot I presented a map of the US which matched the gross domestic product of practically every major country with some American state:
So dear non-American readers, please do not compare what happens in your country to the US. If your country has socialized medicine, it is made possible because you do business with America. If your country gives your workers 30 hour work weeks, it is made possible because your companies trade with America. If your country has the highest standard of living (GDP per person) such as Qatar, Norway, Kuwait, and others it is because you sell America a lot of oil. The reason you sell so much oil is because so many Americans own cars, so many Americans own factories, so many Americans run mega-farms. Hell, a poor person in the US is someone who only has one car.
America makes possible everything in the world. Everything.
So monkeying around with taxes and economic restrictions, tinkering with what makes America rich and powerful will affect your standard of living, your way of life in that tiny country of yours. Be careful what policies of Obama's you support. The last time the US had a depression, the world had a depression.
Be very careful.
ENDNOTES
(1):
Rasmussen College, Nobel Prize Winners by Country
(2):
Wiki, Niels Ryberg Finsen
Niels Ryberg Finsen (December 15, 1860 – September 24, 1904) was a Danish/Faroese/Icelandic physician and scientist. In 1903 he became the first Danish Nobel laureate. He was awarded the Nobel Prize in Medicine and Physiology "in recognition of his contribution to the treatment of diseases, especially lupus vulgaris, with concentrated light radiation, whereby he has opened a new avenue for medical science."
(3):




