Do Americans really want to "Go Dutch"?

by Xin Lu on 6 May 2009 41 comments

I just read a very interesting article by an American expat named Russell Shorto in the Netherlands titled "Going Dutch - How I Learned to Love the European Welfare State". The author describes his shock at a 52% top income tax bracket and his eventual acceptance of the social benefits of living amongst the Dutch. Here are some highlights of his experience and my thoughts on the subject.

Some of the benefits that stuck out in the article include a chunk of vacation money that is worth 8% of one's annual salary, reimbursements of as much as 70 percent of the cost of day care, and deposits of money for children's books. Even if a person does not work he or she receives a set amount of vacation money from the government. Another big benefit of the Dutch system is universal health care. Practically everyone is covered in a system that is a mixture of private and public partnership. It is also illegal for insurers to deny coverage to anyone based on their health status. The government essentially subsidizes the insurance companies to cover chronically ill patients. As to housing, a third of the dwellings in the country are below market housing and renters do not have to move out even when they earn more income. These houses are not managed by the government, but by private nonprofit cooperatives.

When I think about it, a 52% top income tax bracket is not really that far fetched. In California I am paying 9.55% for the top state income tax bracket, 25 to 28% for Federal, and 7.65% for Medicare and Social Security. If you add those up my top bracket is already 45.2%. If you consider that my employer pays another 7.65% of my salary for Medicare and Social Security then my top tax rate is essentially above 50%. So why do my taxes buy much less benefits than the taxes of the Dutch?

Shorto's suggests that the Dutch's culture of working towards the collective good is what makes them accept so much welfare. The Dutch also has good mix of private enterprise and government that works to elevate the living standards of everyone. In contrast, there is a polarizing divide between privatization and government welfare in America. The American culture of every man for himself makes Americans more disdainful towards social welfare.

ARTICLE CONTINUES BELOW

Personally, I found Shorto's view of the Dutch welfare system a bit too romantic. There is no discussion in how much these social programs actually cost the economy of the Netherlands and there is no mention of abuse of these entitlement programs. A more critical piece about the Dutch welfare system tells us that the Dutch disability insurance program nearly bankrupted the country in the 1980s and now the Netherlands has pared back its social programs significantly. The universal healthcare program that relied mostly on the central government has been reformed in 2006 to become a system that allows consumers to choose between insurance companies and promotes personal responsibility.

Perhaps growing up in America has brainwashed me to think more individually, but I think that when citizens depend too much on their government they are essentially giving up a lot of free will. America is not perfect, and many people struggle in the absence of universal healthcare and generous child care subsidies. However, at least we do not live in a country where paying for faster medical treatment privately is technically illegal. What attracted my family and many other immigrants to America is its promise of freedom, and having the power to choose the products and services we use everyday is a big part of that freedom.

In closing, I lived in China in a period when the government took care of nearly everything including healthcare, education, jobs, and housing. Everyone was equally poor, but the basic necessities were provided. It seemed idyllic, but anyone could lose everything just for saying the wrong thing about the government or having a second child. The government basically owned everyone, and everyone knew it. After a couple decades of this the central government understood that it was not economically sustainable and now China is radically different. Although many people in China now fondly reminisce the old days where they ate from the "big pot of rice" (Da Guo Fan), almost everyone agrees that their standards of living has improved greatly under a more capitalistic society where people are able to achieve upward mobility with their own skills and wills. I do not think there is a perfect government anywhere, but I firmly believe that more dependence on the government is not what Americans need.

What do you think? Have you lived in a "welfare state"?

Best of Wise Bread

How to Avoid (and Treat) Cold Sores	Homemade Lotion Recipes
How to Keep Bread Fresh	10 Travel "Must-Haves" That You Can Live Without
How to Buy and Sell Airline Miles	What if the Mortgage Interest Deduction Went Away?

6 May. 2009 | 3:43 PM Andrea Karim

I doubt that Americans will ever live in a fully socialist society like the Dutch. This country is just too independent and every-man-for-himself-yto allow it. It IS kind of ironic that it might not be that big a difference in terms of our taxes, though, isn't it?

I don't have a romantic view of any of the early socialist countries like China or the USSR. My grandmother's family had their home and land confiscated, and my great-grandfather was sent to Siberia and the kids and mother handed over to the Nazis by the Bolshevik government.

The Netherlands doesn't seem to have quite the same problem with totalitarianist rule - you don't hear about Dutch people losing their homes for criticizing the government, so I don't think that it's a fair comparison. It is possible, these days, to have a truly democratic socialist society, unlike the USSR and Socialist China.

And I have experienced firsthand just how strange and uncreative an effect that kind of "Resistance is Futile, We Are All THE SAME" mentality can have on a population while living in China. I witnessed, time and time again, people having a really hard time navigating around something on the road, like a large piece of garbage, that everyone steadfastly refused to move because it was the government's job to pick up the garbage.

The author of the article posits that the Dutch are able to accept a socialist system because they've always had to be so collective - there's also the implication that they're all sort of the same (all white, not a lot of religious differences). China is much more diverse, and I think the lack of creativity and initiative that held the country in its grip for so long was the result of the totalitarian practices that were used to FORCE everyone to believe that they were all the same. China was NOT a collective group of people before the Communist unification - the country is HUGE, and there are such giant differences from province to province in language, culture, ethnicity...

I'm less concerned about abuses of the socialist system (there will always be welfare cheats, and I don't think that their presence is enough to derail a good thing if it's a good fit). I was interested in the fact that the author didn't mention anything about the living situation of immigrants to the country, as The Netherlands have a big immigrant population from Turkey and North Africa and lots of strife resulting from so much of that cultural clashing. I'm assuming that many of the immigrants live in public housing?

I do think, however, that Americans are probably going to have to brace for a socialized medical system. The Canadians and the Dtuch have been working together to try to perfect such a system. We can howl all we want about higher taxes (I know I will), but everyone is pretty united in the understanding that the system, as it is, is pretty untenable.

6 May. 2009 | 3:54 PM FB @ FabulouslyBroke.com

I don't like the idea because I live in a sort-of similar system here in Canada

I personally am not keen on it because I don't see or experience any benefits except seeing money fly out of my wallet just because I happen to make too much.

I don't mind paying taxes, it's what keeps our roads nice, and people employed, etc etc... but over 50% is the reason why I am leaving to go to the U.S.

FB @ FabulouslyBroke.com

6 May. 2009 | 4:05 PM funkright

feel free to move south, into the good 'ol US of A, then get sick or have some type of catastrophic illness.. you've gotta pay for it, one way or another, nothing is free.. the marginal rate my be less upfront, but you pay for it in the end.. good luck on that move..

the only reason I would move south would be for the weather (living on the Wet Coast does get a bit water logged)..

6 May. 2009 | 4:10 PM Andrea Karim

Interesting - I've never heard a Canadian complain about their health care system, mostly because my family keeps up a unified front with their "Canada is so much better than the US, eh?" speeches.

I didn't realize until recently that Canadians still had to pay insurance on top of the tax rate; I just assumed it was all taken care of through the taxes. I do think that that was a major flaw with the NY Times article as well; the author discusses the monthly cost of his family's health insurance in the Netherlands (under $400, as opposed to over $1,000 in the US), but that's ON TOP OF the 52% tax rate.

6 May. 2009 | 4:10 PM Lloyd

I live in Canada and I guess I don't earn enough money to get up there in the 50% bracket, that is why it is called a Progressive income tax. I also work with a lot of Americans who are trapped in their jobs because of their health insurance. In fact, I don't believe that Fabulously broke is telling the truth, I just checked and the highest rate appears to be about 41% when your income is over $123,000.

You guys have been sold a bill of goods, I have more freedom because I can leave a job and not worry about my health care, it has nothing to do with my workplace. And I can tell you, the health care is pretty good.

Subtract from my taxes your health care costs to you and your employer, the price for decent schools and the cost of transportation because you have lousy transit and I really doubt I am paying a dime more in tax. To write "I think that when citizens depend too much on their government they are essentially giving up a lot of free will" is silly. I pay them taxes and they provide me with health care and decent schools and transit. I put two kids through the best universities in the country for $4,000 tuition per year each. You get what you pay for.

6 May. 2009 | 4:15 PM funkright

They are socialist dictatorships, to align them with Holland is a fallacy. Holland, at best, could be coloured partially as a country based on social democracy ideals..

The thing you need to ask yourself.. Since you can't take it with you when you 'go'.. why not share some if it along the way with others you are not as fortunate?

Needless to say, but I will, I am a social capitalist, let me create my own success, but I do believe we have a collective responsibility to one another that can't be abrogated in any easy way..

6 May. 2009 | 4:42 PM Pessimist

I'm going to go glass-half-empty here and say that, yes, government-run healthcare bureaucracy would be an absolute mess. But I think it's pretty clear that the current corporate-run healthcare bureaucracy is just as bad. Many of the arguments I've heard against increased government involvement in the healthcare system depend on the idea that we don't want our personal healthcare decisions being made in a back room somewhere by technocrats; thing is, that's already happening--it's just some corporate drone telling us what to do rather than a G-man.

It looks to me like the choice is between the waste, inefficiency, and possible abuse of a government-run system, and the impersonal, bewildering, and profit-driven private model. Is there a better way?

6 May. 2009 | 5:39 PM Guest, AGA

Yes, you have been brainwashed. I have lived in a number of western welfare states and then in USA for the last 15 years. The quality of life here is that of a 3rd world country. Nothing compares to the ability NOT to worry about health care or education ( GOOD, public education) for yourself and your children. I am so sorry to hear that even in times of such grave economic crisis, when the American model of capitalism is clearly not working, so many Americans are still weary of trying a European type of capitalism. You deserve everything you get!

6 May. 2009 | 6:42 PM Xin Lu

Well, I don't think you've actually lived in a 3rd world country. The quality of life in America is really above that of a lot of countries in terms of living space per person and available resources per person. As to the American model of capitalism, I'm not sure if it's clearly not working considering that America is still undeniably the number one economy in the world despite all the recent trials. You could argue that multiple European countries put together would beat America, but there is no single country that has exceeded America's economy, yet. I am personally wary of the European type of social capitalism because the United States government is already in so much debt, and it doesn't seem like throwing more money at an inefficient system would improve it. If the government can be as efficient in administrating social programs as it collects income taxes, then maybe there is hope.

6 May. 2009 | 6:45 PM Sarah

Until you've experienced hearing your mother on the phone, who's just been in a serious car accident and is in the ER, crying because she's not sure if can afford the visit to the hospital, even with health insurance and a job, then you know that this "freedom" we have in U.S. healthcare is bullcrap. When you're still paying for a three-day hospital stay that saved your life, years later (even though you had insurance!), then you know this systems doesn't have "freedom."
Again and again, I've known people who have had life-threatening symptoms and health issues, who were hard workers all their lives but either didn't have health insurance with their job benefits or had health insurance that didn't cover squat, have to choose between providing for their families or medical treatment. And personally, I don't think I've ever had an insurance claim that was correct -- it seems like after every dr.'s visit, I'm fighting on the phone with the health insurance company to get things covered that SAID would be covered in their policy -- I believe they automatically deny the majority of claims w/o even looking at them. It's stressful, especially if you're sick or hurt.

Our system is broken.

14 Aug. 2009 | 3:30 AM Guest

My girlfriend works in a doctors office and she tells me people do dumb stuff to get hurt bad and owe thousands and thousands, then turn around and can legally pay 5 dollars That a month and nobody legally can do anything about it.

6 May. 2009 | 6:50 PM Guest

Your taxes are high and benefits are low because of America's military spending, pure and simple.

I used to live in Germany (not in the military) and can report first-hand that the Germans have a system very similar to that of the Dutch.

The bis thing I recognized is that the Germans don't have to walk around shouldering the risk burden that Americans do. Nor do they need to be stock market experts as we do; their pensions are just there when they need them, as expected, as are vacations, child care, education, etc.

Did I mention that German universities are publicly funded? They are, as are our primary schools in this country. So, if you want to go to medical school and have the grades to get in, society will pick-up the tab. Why? Because society needs doctors! I have a German friend whose name is prefaced by Dr. Dr. because he has two doctorates, one in medicine and the other in dentistry. The government paid for both educations.

Wow, after Katrina I could never explain a) our lack of infrastructure investment and b) our governments lousy response. Germans always wanted to know why we were in Iraq when we hadn't taken care of business at home. In a country that doesn't hav telephone poles because all utilities are buried I really couldn't explain it to them.

When it came to our lack of healthcare and the need for "boxtops for education," forget it. The truth is, our politicians run our country not for us, the citizens, but for the corporations who fund their campaigns. That's why they got the bailouts while the newly-marginalized citizens were allowed to live in one of the tent cities that has popped-up around the country.

Americans are being fleeced and for some reason defend those who are fleecing them - go figure.

6 May. 2009 | 7:03 PM Guest

Please note that for a Dutch citizen making up to €17,579 ($23,384) the tax rate, including everying, is 2.45%.

In the USA the rate for the same income is 15%, plus 6.2% for Social Security, plus state income tax. Who says that the USA has lower taxes? It's just not true.

Here is a link to the official Dutch government page, in English, listing income tax rates.

http://www.belastingdienst.nl/variabel/buitenland/en/private_taxpayers/p...

6 May. 2009 | 7:15 PM J.

I'm shocked by your assessment of Chinese capitalism.

Yes, things are much better for the urban middle class. They are getting worse for everyone else. The rural poor have no health care and no public education. (No public education and rising illiteracy in one of the oldest literate civilizations in the world!) Modern-day China has the worst of both worlds: an authoritarian government, but none of the social security of a welfare state. It's hard to see that that equates with increased freedom.

6 May. 2009 | 10:15 PM Looby

I'm going to disagree with FB @2 as well- I've lived in both Canada and the UK and I'm happy to pay the tax rates I have because I've gotten so much back.
Healthcare (which I've been unlucky enough to use a fair bit in both countries and has been excellent), education- my four year degree and masters combined cost less than $15k and only cost that much because my parents were high income earners, good public transit etc.
I have a relative who has been in a care home for 18 months now and the only concern is making sure there is a rota of visitors, not the costs of keeping her there.

6 May. 2009 | 11:05 PM Guest

It is true that the gap between the rich and poor is getting wide in China, but people are definitely enjoying more economic freedom. In the past it was tough for people to even move to a neighboring city to work, but now the Chinese people are mostly free to work in all parts of the country. People from rural areas also have the opportunity of moving up in society by working in the cities simply because there are a lot more jobs available due to capitalism. Additionally, most Chinese people are free to start their own businesses now. Good public education and decent healthcare was only available in the urban areas to begin with, and rural people with more economic means are able to afford these services.

7 May. 2009 | 12:22 AM Dana

As someone who has lived in Canada, and now reside in the Netherlands, the arguments here are really interesting. In Canada, health care is a provincial matter, so every province sets their own payment rates. In Alberta, for example, it tops out (per person) around 400 bucks a year. In Ontario, I believe it's something around 300. This is income tested, so if you are a student or a low-income earner, you pay nothing.

In the Netherlands, the cost of health care is actually high (compared to Canada). A fairly good coverage costs around 1,000-1,600 euros a year person (approx). There are also co-payments for visit to specialists, etc, which may or may not be covered depending on your package. But I believe for seniors, the government does pick up a good portion of the tab. And having had some experience with the system, doctors here for some reasons are reluctant to write prescriptions or do very detailed check-ups, so I'm less than thrilled with the quality of care (it could also be a cultural matter, I'm not sure). The system was recently revised, as the system used to be completely free.

Since moving here for school over a year ago, I've become really amazed at how much money the system wastes on education, by allowing their students to literally loiter for a decade in the post-secondary system. Germany, I believe, battles with the same problem. So yes, there are a lot of inefficiencies in the system, definitely. This place makes Canada look like the wild wild west.

But it is undeniable that people on average are much happier and more content than the average Canadian, or American that I meet. I think it has as much to do with the lack of burdens, good weather, and good lifestyle choices overall that the government and the system actively promote. The country is not set-up to groom the next Bill Gates or Larry Page, but it is there to ensure the average Joe has a good life. To that end, it does the job.

7 May. 2009 | 1:56 AM Guest

I am currently living in Denmark, and I reflect on these issues a lot. There are a lot of benefits with these high taxes: retirement is taken care of, kids go to university for free, and you don't have to worry about not being able to afford medical bills. That takes away a lot of psychic anxiety we have about a major illness making us homeless. Public transportation is fantastic also. People in Denmark are much more relaxed than people in the States, and seem to enjoy life much more. Denmark is well known as the happiest country in the world, I wonder if there is a correlation between and social democracies.

I think a lot about these two philosophical questions:

Is it better in a society for everyone to have mediocre healthcare, or for some people to have great healthcare and some to have no access to healthcare?

Can a national healthcare system scale for a country the size of the US? Netherlands, Denmark, and even Germany are considerably smaller than the US. Also, the government works in Denmark; I don't think many of us trust the US government to be efficient or effective.

I do believe that the Danish healthcare is not as good as what I received in the US - for example, I have a family history of breast cancer, yet I will not be getting an annual mammogram while I am here, they believe in once every three years after 50, not once a year after 40. Many people here have private healthcare over the state system.

That being said, the system is much easier to administer than having to deal with insurers and health care providers. We just get a health card when we get our equivalent of a social security number, we bring it to our assigned doctor or to the pharmacy. No co-pays, no crazy claims or claims systems or provider cards with strange IDs.

Despite the economic crisis, unemployment is at 2.5% here in Denmark, and there's a great talent shortage for skilled and technical jobs. It rarely gets below freezing in the winter, though it is very dark.

7 May. 2009 | 3:38 AM Nicki

It's all very well and good to say that they don't like this system or that system but people are really suffering so the US better come up with something soon.

I live in Belgium - universal health care, guaranteed at least 20 days vacation, extra vacation money in May, 13th month bonus at the end of the year, money back for child care, complete reimbursement for vaccinations (and we got every vaccination available), long maternity leaves (plus the hospital insisted that I stay for a full 5 days after the birth to make sure that everything would be fine and the hospital near us is first rate). Had I not had the socialized health care, I still would have paid for all this because it wasn't expensive - the average doctor visit is only €22. Beyond that, if I lose my job tomorrow, I would be guaranteed a significant compensation package - none of this "thanks for 20 years service, don't let the doorknob hit you in the butt on the way out" crap - depending on how long you have worked with the company, compensation starts at 3 months pay and goes up from there. And do I need to mention that I would still have health care insurance even if I lost my job?

I think that Americans are going to have to reach rock bottom before they finally decide to change things instead of just complaining about them.

7 May. 2009 | 6:33 AM Brenda

I don't! I have lived in socialist countries in South America and I think it takes all the motivation out of a society. If we all get an equal share no matter how hard we work, why should I work harder than my neighbor? If my neighbor is a sloth, do I become one too?

BTW, I love your articles, always read them.

7 May. 2009 | 8:59 AM young mum

When I read on a frugal blog : "before having a baby, be sure to have enough in the bank to cover the delivery and beware! you may need a loan to pay for a C-section " I am shocked and just thank God I am living in France. We love bashing our system, sometimes with good reason, but I must say this : when I had my baby, I did not pay a cent to the hospital and if I had a C-section or neonatal care etc... it would have been the same for less than 600 euros a year!
And I am happy to pay the taxes I pay (18% for 25000 euros ayear) to be sure my poor elderly neighbour can receive all the medicines necessary, my colleagues who raises alone three children on 1000 euros a month can hope to pay for university.... Nothing is perfect of course there are abuses of the system, some people are not receiving what they should...
But, very selfishly, I feel I can't be happy if my parents and my baby can receive the care and the minimal comfort they need if my neighbour's are too poor to hope the same so I am happy and proud to pay my taxes!

7 May. 2009 | 9:33 AM Andrea Karim

I'm really happy for the citizens of Germany. Half of the reason that Germany doesn't have to spend so much on their military is because the US military pretty much takes care of their defense for them. Sure, it benefits us to have bases in Western Europe, but if we left, I imagine Germany might have to shell out a bit more of their own money on defense.

I'm not saying that I don't envy the German model, but it's only fair to point out that Germany (and Canada, for that matter) benefit a great deal from the presence of the US military. Most of Western Europe can rest assured that no one will be able to invade their borders because they have the US military ready to defend them (not so much for former Caucus states, like Georgia, obviously, but that's central/eastern Europe).

It is important, I think, Xin, to recognize that having the best and biggest economy in the world doesn't ALWAYS translate into being the happiest or the healthiest. I wonder what good it does to be the biggest economy when citizens can literally lose everything after a stay in the hospital for a stroke or heart attack.

7 May. 2009 | 10:07 AM Xin Lu

Andrea, Germany and Japan are not technically allowed to maintain a large standing army of their own after WWII because as we know, they were the invaders. That's why they spent all their time developing cool technological gadgets, which has been good for the world I think. As a result, the US has a much larger military presence all over the world because it committed to defend the "demilitarized" states.

Yes, the biggest economy doesn't mean that the people are the happiest or healthiest, but for a country that contains only 5% of the world's population it is a pretty amazing accomplishment. Perhaps it says that Americans are just too productive.

7 May. 2009 | 3:12 PM Andrea Karim

Yes, I know why Germany and Japan don't have standing armies. And that allows them to spend their spare money on making good cars and improving technology. Bully for them at this point. I'm just pointing out that if this military spending were freed up for us, we could pour it into things like health care, making universities affordable, and updating crumbling infrastructure. Whenever I hear Germans saying ,"Well, just look at us - our health care is so fabulous!", I have to say "Yes, because spend our money on your defense." This is not to say that Germany had any say in that arrangement early on, but I don't think it's a factor that should be overlooked when discussing fabulous benefits that Western European countries have. The same goes for Canada. I'm certainly not asking for gratitude on this issue, but c'mon, these countries would be spending a lot more of that money on defense if the US wasn't providing it.

I don't think Americans are much more productive than anyone else in the world, except maybe Andorrans, who are incredbily lazy (go ahead, find an Andorran to argue against this point). Mind you, America had a pretty good jumping off point - a huge country just bursting with natural resources (and no one that we considered "person" enough to qualify as legitimate owners of said resources), and cheap labor in the form of imported slaves that allowed unprecendented growth for centuries.

This isn't to say that Americans aren't hard workers, but I refuse to believe that there are many Americans today who work themselves as hard as, say, someone who lives in Vietnam or India. It's naive to think that America's success is based solely on a good work ethic, a democratic government, and upward mobility. It's much more complex, and insidious, than that.

7 May. 2009 | 12:54 PM J.

To guest #15:

Yes, now they have the "freedom" to move to Guangzhou and work
in a sweatshop for 50 cents an hour (or less), in order to pay the school fees or medical bills of a younger family member.

7 May. 2009 | 1:13 PM Xin Lu

This is off topic, but I really think it's kind of ignorant for Americans/westerners to criticize wages of 50 cent or 1 dollar per hour in other countries. In China a lot of rural workers are happy to get a job that pays that much because if they stayed in their villages some would make less than $1 a day. The purchasing power is very different in China. 50 cents here may be nothing to you, but it's enough for a couple days of fairly good food in China if you are frugal enough. There is nothing wrong with paying for the schooling of a younger family member. In the past most people died where they were born and stayed the same as what their parents were, but at least now they have more opportunities.

7 May. 2009 | 2:45 PM sd

Trouble is, we've been *willfully* ignorant for too long. We fail to recognize how much going "a la carte" is costing us:

- We're bailing out GM and Chrysler to the tune of billions of tax dollars. Yet one reason why Detroit cannot be competitive is ... the cost of health care. Granted, the UAW worked itself a pretty sweet deal over the years. But when GM estimates that there's about $1500 in health costs (for workers and retirees) on the hood of each car they make, you have a very clear cost of employer-provided health insurance. (And even if that figure is off by *half*, that's still money every buyer of a UAW-built vehicle shells out, even if they don't have their own health coverage.) (BTW, I'm not slamming the UAW. They did their job in getting the best benefits they could for their workers. I'm also aware there are lots of other good reasons people don't buy UAW-built models.)
- Because being without a job in the U.S. typically means being without health coverage, lots of work rules and even state and federal laws impede needed change. I think workers would be far more willing to transfer to another job, another company, or even another field if they knew they weren't kissing their health coverage and pensions goodbye.
- The last 20 to 30 years of American politics have fostered an "I've got mine" attitude that's quite unlike the America of our grandparents' generation. We like to think we're buying the best health care around. But the U.S. is the *only* large developed country that does not provide routine health coverage to all of its citizens. And this is starting to show in statistics like infant mortality (the U.S. ranks 29th (!) in the world) and expected lifespan (the U.S. is 14th, according to the OECD). We *like* to claim that Americans have the highest standard of living in the world. How can we, with statistics like that?

If we realized just what all this was really costing us, changing it wouldn't be hard. At least not for the general public. But there's an entrenched framework in place which will have to be dismantled. And it will not go quietly.

7 May. 2009 | 4:20 PM Edgar A.

Interesting post. Income taxes are complicated, especially in the U.S. Because the government does so little for the citizens directly, legislators are constantly trying to help out their special interests indirectly through provisions in the tax code. Thus, exemptions for children, deductions for interest on home loans, tax sheltering for retirement funds, etc.

But one thing about the nation's income tax is clear. The period of America's greatest progress in science, growth in technology, educational attainment, and probably its period of greatest optimism and satisfaction was during the period from about 1945 to the early 1960s. This was when our top marginal tax rates were at their highest--around 90% or even a little higher through the whole period.

Current top marginal tax rates are very low. But what is the state of the nation?

7 May. 2009 | 5:13 PM Guest

probably would love the Dutch system, as more of their health care costs would be subsidized by others.

Still, someone has to pay for those generous benefits.

Here in the U.S., a family with a household income in the low six figures could pay an effective federal tax rate of as little as 10%.

When one has the resources to fund the deductible, high-deductible policies are an inexpensive way to cover health care needs here in the U.S.

8 May. 2009 | 9:53 AM Meg

You say your tax rate is nearly 50% and wonder why we get so much less? Because over half of all Americans do not pay ANY taxes. If we ALL paid a 52% tax rate we would have a lot more money to throw around, but only the top 1-3% of Americans are paying that much in taxes.

(Also, employers pay a lot more in that system than simply 7.65% for medicare for each employee - all the paid time off they are required to provide is just one example).

Essentially instead of taxing Americans 52% and giving them back chunks of money all year long for vacations and childcare, we simply don't tax the "poor" in the first place.

And no one bothers to mention the biggest problem with trying to compare America to a system like that. The Netherlands is an extraordinarily small country!!!!! Both geographically and in population. Besides which they are extremelly homogenous with regard to religion and values and ethnicity and background, making it much easier for everybody to accept and agree on things for the "common good."

8 May. 2009 | 10:34 AM Debora

I was most surprised by the following:
"However, at least we do not live in a country where paying for faster medical treatment privately is technically illegal."

Here in the Netherlands we are very firmly against this. How can it be a good thing that someone with more money get's better / faster medical treatment. How can it even be justified that you kids gets immediate treatment, while someone elses has to wait for weeks?

@Brenda, #19
It's not about everyone getting an equal share. It's about everyone getting at least a minimum standard of good healthcare and education and such.
And if money is one's only insentive to go out there and work, I would say there life must be quite sad.

8 May. 2009 | 2:37 PM Slinky

Why is it the government's job to take care of things that people are perfectly capable of doing themselves? I agree that people should help others less fortunate and in need of help, but why should the government tell me how to do that, who to help? Why should the government force me to support things I don't believe in? Why can't I choose my own ways to give back to society? Why can't I simply help those I love and the causes that I'm passionate about? Why can't I choose?

10 May. 2009 | 9:03 AM asrai

slinky asked a bunch of questions. And that's why the US is taxed and run the way it is. Becuase of those assumptions. That it's every person for themselves.

In more socialist countries, such as the Netherlands, their idealism is supporting all the peoples. Thus, the rich are willing to pay high taxes for the good of all.

Most of the commenters here sure that ONE WAY IS right and the other way has to be wrong. Both are good and flawed in many many ways.

Lots of the people commenting are looking at the issue from the view of privalige. They have a computer and internet, which means a stable housing situation. Little fear of that situation changing even if they get the flu for a few days.

If you are lucky enough to choose where you live then you get to ask questions like "why should i subsidize other people's lives?" For a moment put yourself in their somewhat unlucky shoes.

I may not make much, but I have a house and a car and a computer and my daughter has everything she needs. Be happy you are so lucky.

14 May. 2009 | 12:11 AM Katrina

Sure healthcare for everyone would be wonderful! As a physician I would love to be able to treat everyone! But the truth is that there are limited resources. The system works for you if you only have minor problems. But if you happen to get a brain tumor or breast cancer you are screwed! Try waiting 6 months to get an MRI of your head when you have a brain tumor that will kill you in 2 months! You know what the Canadians do? They come to the US to pay to have the study done.

Bottomline- if universal healthcare happens, it will be good for minor things. If you have something really bad you had better have the money to get things done for yourself!

21 May. 2009 | 9:56 AM Jaap

@Kartina

On what do you base you statement that with universal health care you have to wait 6 months to get an MRI. I had pain in my leg. The hospital made a x-ray. They weren't sure what it was so I had a MRI the same day. I had cancer, got treated (still all for free). I am now cured, when I am afraid the cancer is back I have an other MRI within 3 weeks.

@all readers I am Dutch.

To all readers you don't pay 50% tax in The Netherlands. The Dutch tax system is in 4 brackets. Only all your income above 53.860 euro (now 72.000 dollar) is taxed 53%. Below that you pay an average of 33% tax.
For more info: http://belastingdienst.nl/variabel/buitenland/en/private_taxpayers/priva...

22 May. 2009 | 11:08 AM J.

Thank you, Jaap, for correcting such misinformation.

Americans are in love with the myth that we have the best health care system in the world. But the stats don't bear that out. For instance, our perinatal mortality rate is *much* worse than the Dutch rate. The fact that we have so many women dying in childbirth, and so many babies dying around the time of birth, in a country as rich as ours is a %&^*$%^ crime. We can do much, much better. Prenatal care is cheap and effective. We can offer it to all women.

I can only tell you the anguish of talking to the oncologist and having him tell you that before treatment for your loved one can begin, you will need to talk to the finance department, because 2 chemotherapy treatments costs $50,000 (not including hospitalization and supportive care) and they're not sure your insurance will cover it. I'm glad you were spared such stress, Jaap, and could concentrate on your health instead of your finances at such a critical time.

14 Aug. 2009 | 12:08 PM Alexandra

A bit off topic, but if you are out of work, health care is often free or reduced through your localities. Check with your local social services office. ER visits are free for the indigent. I used to refer people to health centers with sliding scale(some free) fee schedules. Many people are not aware of these services.

Check here are well:

http://findahealthcenter.hrsa.gov/

Also many, many hospitals have charity coverage, but you have to ASK.

26 Aug. 2009 | 9:34 PM Guest

The problems in our American health care are fixable w/o switching to a single-payer option.

problem 1. 3rd party payment.

Imagine you only had a $10 co-pay for every time you gassed your car up... you think people would act differently? I would! I wouldn't shop for the cheapest gas... I wouldn't even settle for 87 octane. Its 91 octane or racing fuel, baby! This waste on my part would force either an insurance co. or gov't to charge more or offer less for everyone. Yet this is the model we have for medical coverage. People don't just have insurance for emergencies(like your car accident, ladies) but are going to the doc for all kinds of crazy stuff, like low grade fevers. Now i believe its someone's choice to go to the doc for what they want, but they should be accountable to pay for it. If everyone shopped around for the cheapest prices for greatest value, the market would adjust, and so would doctor's prices.

To sum it up, socialized medicine in America would make this problem worse...not better.

Problem 2. Lawsuits.

Doctors have much higher administration costs because they're weary(and rightfully so) that they're going to get sued. So they overcompensate, prescribing drugs and tests that probably aren't needed... but it keeps their backside covered. this translates to bigger cost to the insurance co. which translates to bigger premiums and deductibles for us. You'd think if we just changed some of the laws, doing away with frivolous suits, we'd could fix this in one ballot term. But...the trial lawyers are big contributors to our elected officials...so people would have to be responsible and check who is contributing to which candidates.

That probably is too much to ask of our average, willfully ignorant, American voters, but still the problem is fixable w/o turning to "big daddy" government.

3. Freeloaders!

I have a wife and kid. What would you think of me if my wife was living out of our car and my child was going hungry because I was paying someone's rent and feeding their children. I'd be a lousy father and husband! The point is take care of your own family first and then if there is leftover cash you can chose to help your friend with rent.

Yet my state has chosen to bankrupt itself by offering free health care to those who aren't citizens. Oh, and don't try to find out if someone is a citizen or not because you'll get sued, removed from your position, or have your reputation destroyed by being labeled a racist. These people aren't paying into our system in taxes, but sure are reaping the benefits... at my families and your families(if you live in CA, NM, AZ, or TX)expense! All I'm saying is lets take care of our people... and that doesn't mean leave a Mexican dying in an emergency room because he has a bogus Social #. People show up to the emergency room for things that aren't emergencies because they know its free...well, to them it is.

Before i get accused of being a racist i would like everyone to know that I'm Mexican. But I'm a Mexican-AMERICAN! And I'm proud of it.

What bothers me the most about the current debate over health care is, people think Socialized medicine is the only alternative... and that is not the case.

18 May. 2010 | 2:39 AM hoa_kute

your essay is good, i like it. can you share with me mor about your ideal. thanks

11 Aug. 2010 | 12:20 PM Jade

I have to say I find to feel very much the same as the writer. I am an American living in The Netherlands because I married a Dutch national.
The grass is not greener over here in NL. So many people in the states ask me is it free over there as does cost ya nothing? I say nope
Medical care cost my family of 4 over 300 per month. I only get one system to use despite some choice with insurance products. The truth is all the private companies offer health insurance are almost the same. The only thing I think the USA should adopt is that you can not deny people coverage. The people who are not legal residents or citizens in the NL go uncovered just as they do in the USA but in the USA you can't be denied ER care, in NL you can.
The motivation to excel and get excellence is little if none in The Netherlands vs, the USA and I feel that is due to the socialization of everything here. If people are not motivated to work, excel you get nothing, you get people who do not make money or little money this means less taxes. The NL and most of Western Europe are trying to figure out how they are going to keep going with out tax payers at this very moment.
The fact is some of the most influential people come from the USA and few from Western Europe. The best of many things have come from the USA. Why well hunger and freedom is a heck of a motivator. (in my opinion)
However what I found to be a lesson learned from The Netherlands is that never ever ever should we confuse Capitalism as a form of government. This is where I find is a fault in American society. We need to draw a line between capitalism and the over all good for society. For example we do not need the government to control health care, but need the governments to make laws that govern the insurance companies so that they can make money but not at the expense of peoples health. Why don't we take out pre exsisting conditions such as pregnancy or a baby born with a heart defect? Why because I feel they big lobby folks from the insurance companies the politicians who are bank rolled by these folks...capitalism, greed.

23 Jul. 2011 | 5:41 PM newportbob

Starting with the usual trojan horse: Your piece was interesting, intelligent, and well written. However, I have the advantage of time -- in that the last 2 or 3 three years since you wrote, we see that, in the wake of our second Great Depression, the EGC Republicans (Extreme-Greed Capitalists) are espousing a government of the 1%, by the 1%, and for the 1%; are doing their best to decapitate government at all levels; and are intent turning the USA into a BRO (Banana Republic Oligarchy). Statistics say the top 1% now own roughly 40% of the wealth in our dear USofA. Whereas in China the government may "own the people", the idea (or at least mythology, if imperfectly implemented) here in the USA was that we the PEOPLE (not the Koch Brothers) own the government, the government is run by the people (not the super-rich), and run for the people (not the wealthiest 1%). Since you originally wrote your piece/blog, Thomas Geogheghan published his book "Were You Born on the Wrong Continent ?: How the European Model Can Help You Get a Life" -- where he analyzes why Europe (Germany) is in many ways better for the middle class than our over-the-cliff-extreme capitalism that serves the top 1% here. Provides a recent supplement to the writings of, say, Howard Zinn (Peoples History of the US), or the classic Jack London (Why I'm not a Republican -- paraphrasing that title ;-). Will look forward to your comments after you check out all three ...

Do Americans really want to "Go Dutch"?

Best of Wise Bread

comments

Add New Comment

Today's Hot Deals