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Re:The K-shaped recovery by mindslight on Friday September 25, 2020 @03:36PM (#24593348)
Many people have done the argument more justice than I can do, especially off the cuff, but US services are strikingly low for US federal taxes. This creates a general anti-tax sentiment, fueled by a focus on individual states' taxes rather than the bulk tax of the federal government.

Talking about EU/ECB is a red herring as the system hasn't been in existence long enough to collapse under its own incentives.

But sure, another answer to your question is "nothing". As in, various states might be raising taxes after this is all said and done. The Covid crisis and this orchestrated destruction of the federal government could usher in a return to more localism. It's hard to say what's around the corner from this point.

Re:The K-shaped recovery by bhupy on Friday September 25, 2020 @03:50PM (#24593456)
> but US services are strikingly low for US federal taxes

That's because US federal tax-base is extremely narrow. Ironically the US has the most progressive tax system in the developed world; the top 1% pay ~45% of the Fed budget, but there's only so much we can raise by targeting the rich, since by definition the base is so small. In contrast, in EU countries the tax bases is broad, it's a large number of middle-class taxpayers that pay high income taxes and high consumption taxes (VAT). While the funding is more regressive, it raises more revenue which enables more progressive spending. The net result is that, after taxes and transfers, the higher middle-class tax nations are more progressive.

> This creates a general anti-tax sentiment, fueled by a focus on individual states' taxes rather than the bulk tax of the federal government.

That's a feature, and not a bug — States competing with each other on tax rates creates a downward pressure on taxes in the same way that enterprise competition creates a downward pressure on prices. I already mentioned the EU, but Switzerland works exactly like this too. The top marginal Federal tax rate in Switzerland is ~10%, while the Cantonal tax rates vary wildly between 16-30%. The net result is that the Swiss enjoy some of the lowest taxes in the developed world while enjoying one of the highest standards of living and superior services. Much like the rest of the OECD, Swiss taxes are broad-based middle class taxes as opposed to top-heavy progressive taxes like the US.

Re:The K-shaped recovery by srtjstjsj on Friday September 25, 2020 @10:09PM (#24595888)
If the US had a stronger labor movement like Europe, then the 1% would have less money and would pay a smaller share of taxes, while the middle class would have more income and pay more tax.
Re:The K-shaped recovery by bhupy on Friday September 25, 2020 @10:21PM (#24595938)
Except the median disposable income (aka middle class income) in the US is higher than most of Europe:

https://en.wikipedia.org/wiki/Disposable_household_and_per_c...