[redpoint5]

Originally Posted by Ecky

if you pay X taxes in the US and Y taxes somewhere else, the crossover point at which you're giving more than you're getting will be at A income (or position in the socioeconomic ladder) in the US and B income or point at the other location.

I was entirely confused before you clarified here. I still suspect that generally a wealthy person has an advantage in the US, and the average to low earner is advantaged in NZ.

In more specific terms, is the $75,000(US) income earner a net contributor or burden to the system? $40,000? $200,000? What is the crossoverpoint, above which you're better off providing things for yourself than relying on pooled and redistributed communal resources?

Good questions, and I don't know... my guess is a single earner making $75k is at just about break-even on paying vs taking from the system.

This is rather multifaceted, however. New Zealand has 3x as many business owners per capita, because it's easier to start a business, and there are more robust legal protections in place to prevent large businesses from drowning small businesses through means outside of pure competitive advantrage. The US however has far greater ability to scale up.

I have no insight into the differences in the systems. That said, nature has imposed an insidious rule that the big get ever bigger. A successful business growing to become the most successful by far isn't caused by system structure, but simply a manifestation of nature. Preventing nature from imposing her rules is the exception, and it doesn't end well. Reality always demands repayment.

100% of big businesses were once small businesses. Remember when Amazon was a business that sold used books? Remember when Facebook was for college students and "friends" could only be people that go to your college?

Being pedantic, but a quick search suggests the ratio is just under 40% of households which paid no federal individual income tax - which is still a disturbingly high number. I'd guess a portion of these are students, and a portion are welfare and/or disabled.

I got that fact from a couple years ago. Numbers shift, but apparently a large number still pay no net federal income tax.

Perhaps the question I ought to be asking is, why is the laborforce participation so much lower in the US (approximately 15% lower)? Why is the unemployment rate (of those seeking to join) higher? You and I both know it isn't because the bottom half of Americans are more lazy and/or stupid than their peers overseas.

Circumstance and cultural values answers most discrepancies. NZ has a population just a bit larger than Oregon, and is an island. The smaller the community and the more isolated they are, the more tightknit the tribe.

I flew to Nicaragua once, and it was the most corrupt and dog-eat-dog culture I had ever encountered. Then I traveled to Little Corn Island, a tiny dot in Nicaragua, and it was the highest trust, least corrupt society I've ever encountered. 4 of us are paying $12 a night for a hut, and our $1,000 cameras or laptops are safe in an unlocked shack. A local couldn't provide change for a large denomination of cash I used to pay for breakfast, and they said no worries, pay later when I have smaller cash (which I did later that day).

When there aren't unlimited people to abuse, trust becomes crucial (proved by my experience in prison).

I risk derailing the topic here, but you also have the incontrovertible fact that national spending is broken down quite differently. NZ and the US spend similar portions of their GDP, but where it goes is quite different. As a portion of spending, New Zealand puts around 4x as much into education, while healthcare spending is actually lower as a percent despite the system covering everyone.

"Education" is primarily a cultural value. If the culture doesn't value it, no amount of cash will fix the problem. 99.9% of knowledge is free to learn from the internet, but is meaningless if people don't value it.

US healthcare is the worst combination of socialism and capitalism. Profit motivates many decisions that are adverse to patient care or cost, and socialism removes the incentive to seek the best value for the dollar. Who cares what something costs when someone else is paying the bill, and who cares what something costs when one has no intention of ever paying the bill. As long as we're all splitting the bill, I'm having prime rib, the expensive bottle of wine, and desert.

All said, while I appreciate that the US is an engine of innovation and production, on an individual level, my life is considerably better here, and the system is both apparently more stable and sustainable.

NZ is entirely dependent on western superpowers for stability. It's "sustainable" because nobody has any interest in conquering an island with a population a bit larger than Oregon. The Oregon National Guard probably has the capability to conquer the NZ national defense... because it relies on western nations for protection.

No doubt island living is less stress than a melting pot of 330 million people. Bigger things make bigger mistakes. Bigger things make bigger discoveries. Bigger things have a harder time defining an identity.

Originally Posted by JSH

The vast majority of people are paying federal taxes because the USA collects 15.3% FICA taxes from dollar #1.

I feel that you're purposely misrepresenting the meaning of what I've said. A forced "savings" account is not really a tax. You pay in, and you get it back out. I'm specifically excluding entitlement taxes as they are regarded as deferred payment.

Who pays even $1 for the war department? The department of miseducation? IRS? FBI? TSA gropers? Billions for war in Ukraine? Failed Iran bribery? Massive inflation? Less than half of households is the answer.

Elon is a good example of why people get so upset with the tax system as it relates to the top 5% Yes, Musk's earnings are technically unrealized, but he still lives on them. Instead of cashing out shares to fund his day to day living he takes out loans against his Tesla stock.

Loans require an interest to be paid. When that interest is paid, it is counted as profit and taxed.

Then there is the fact that even if he had to cash out some stock the highest long term capital gains rate is only 20% - which is less than the 22% federal income tax rate for income between $44K and $95K.

Then there is the fact that capital gains, dividends and rental income are not subject to FICA taxes, so while the regular Joe is paying 15.3% on every dollar of his W2 income the investor class don't need to pay the same 15.3%.

You're making my point about the tax code being corrupt, and in need of massive simplification.

Federal taxes are progressive until you get to the top 5% - and then the effective tax rate plummets as the majority of income shifts from W2 wages to investments.

You're making my point that the US has prioritized innovation. Gambling is what we're good at. Big winners, and big losers. The majority of us somewhere between the extremes. Nobody dying of hunger, because we're a society that doesn't tolerate it.