Why Americans Work So Much !

quinta-feira, junho 25, 2015 David Barradas 0 Comments

In 2004, Edward Prescott, who was awarded the Nobel prize that year, showed that the higher the effective marginal tax rate on labor income -- that is, the share of each next dollar earned that the government chooses to redistribute -- the fewer hours people put in. Importantly, the tax rate in this equation includes the employer's part, and companies, too, are less interested in getting more work out of people if they have to give up more of the resulting income.

The finding was unexpected even to Prescott himself. "I am surprised," he wrote, "that virtually all the large differences between the U.S. labor supply and those of Germany and France are due to differences in tax systems. I expected institutional constraints on the operation of labor markets and the nature of the unemployment benefit system to be of major importance."

When Government takes 61% of what you make, you work only enough to survive!

When a Government increases the top income tax and the economy goes down it could be because people are not stupid!

People don't want to work for others and that is the reason why when Government increases tax rated sometimes the receipts go down! Surprise? of course not.

If you look at the table below from OECD, Portugal my country takes 61% of what i make each month. Of course things are not well in Portugal. This is like this since Troika arrived in Portugal in 2011 and asked for Budget consolidation. The Government didn't want to cut expenses so they raised taxes instead.


Source: OECD 
Top marginal tax rates
Personal income tax & employee social security contributions (All-in rate) first line is 50,3 highest Income tax in Portugal plus 11% social security = 61,3%


Country
Portugal 50.3 61.3
Slovenia 39.0 61.1
Belgium 45.3 59.4
Finland 49.1 57.2
Sweden 56.9 56.9
Denmark 56.2 56.2
France 54.0 55.0
Netherlands 50.1 53.4
Ireland 48.0 52.0
Spain 52.0 52.0
Japan 50.6 51.1
Israel 50.0 50.0
Canada 49.5 49.5
United States 46.3 48.6
Italy 47.8 47.8
Germany 47.5 47.5
Norway 39.0 47.2
United Kingdom 45.0 47.0
Australia 46.5 46.5
Greece 46.0 46.0
Luxembourg 43.6 45.0
Iceland 44.4 44.4
Austria 43.7 43.7
Korea 39.4 43.2
Switzerland 36.1 41.8
Chile 39.5 39.5
Poland 20.9 38.8
Turkey 35.8 35.8
Slovak Republic
21.7 35.1
Mexico 35.0 35.0
Hungary
16.0 34.5
New Zealand 33.0 33.0
Czech Republic
20.1 31.1
Estonia
20.6 22.6

0 comentários: