Sunday, November 1, 2015

Who Will Feel The Bern?

The Democrat Presidential Debate also took place while BeeLine was on hiatus. Since I have written about the GOP debates it only seems fair to provide some perspectives on the Democrats.

I must admit that watching the Democrat Debate seemed at times to be akin to watching a Venezuelan United Socialist Party debate between Hugo Chavez and Nicolas Maduro. It seemed that the entire affair revolved around how much free stuff could be handed out in the next four years.

Bernie Sanders pledged he was for about $1 trillion in new spending per year ranging from paid family leave, universal health care funded by taxpayers and free tuition at state colleges and universities for every student. It worked out to about $41.7 billion of promised spending for every one of the 28 minutes he spoke at the debate.

Of course, Hillary was not going to be outdone by Bernie. She is also for paid family leave, free public college tuition for all as well as making Obamacare fully available to all illegal immigrants.

The Democrats' model for all of this taxpayer-funded social spending largesse are European countries such as Denmark, Norway and Sweden.

This is what Bernie Sanders said in defense of his "Democratic Socialist" views.
"...I think we should look to countries like Denmark, like Sweden and Norway, and learn from what they have accomplished for their working people."
Having just been in Denmark and Norway recently let me provide a little context and perspective on those two countries.

This is a photograph I took during the morning rush hour in Copenhagen.

Morning Rush Hour in Copenhagen

Do you notice the bicycles? Where are the cars? There are well over a million bikes in Copenhagen. It works out to a little more than the population of the entire city.

Finding A Place To Park Your Bike In Copenhagen Can Be Difficult

They are everywhere. Why?

Our driver from the airport driving into Copenhagen explained that there are a lot of bikes in Denmark because the taxes on automobiles are so high.

The tax on top of the purchase price of a car is 180%. He explained that a Volvo costs about $100,000 in Denmark with the taxes included. The tax on gasoline means that putting gas in your car costs about $6/gallon as the tax per gallon is currently $2.95/gallon.

By the way, our driver spoke extraordinarily good English and was clearly well educated. I asked him about his background. He said he was a trained architect but could not find a job in his field since the Great Recession began in 2008. It seems that all of that free education does not necessarily guarantee a job you were educated for in Denmark.

Liberals like to talk about entitlements or government benefits but they don't like to talk about who is going to pay the bills. If they are forced to, the explanation is that the money is always going to come out of the pocket of the "rich" or "Wall Street". That is the familiar refrain of Bernie Sanders or Hillary.

However, how do they pay for all of those government benefits in Denmark and Norway?  The fact is that when the government pays for almost everything, everyone has to pay. You simply cannot tax the rich and get the money you need. Everyone has to pay. And everyone pays a lot!

Most all personal income in Denmark is subject to a flat 8% social security tax that everyone pays. On top of that, everyone is subject to a minimum income tax rate of at least 36% (after a 43,400 DKK ($6,400) personal allowance. On top of that there is a 25% VAT (value-added tax) that is applied to almost every purchase in the country.

It all works out to 49 cents of every dollar of GDP in Denmark goes to taxes in Denmark. That is the highest rate in the world. Sweden's rate is 45.8% and Norway is 43.6%. (Note: The United States tax burden is 26.9%).

This is the model that Bernie Sanders wants us to aspire to?

Bergen, Norway

When Mrs. BeeLine and I were in Norway, a friendly Norwegian overheard us chatting while we were taking a walk. He asked if we were Americans and told us how much he loves the United States.

As we talked he spoke about the nice social services they had in Norway but he also spoke of the high taxes to pay for it all. He mentioned that the taxes were high but most thought they were fair because everyone generally pays the same rate. He stated that they did not use a progressive tax system in Norway. Everyone paid the same percentage with the rich paying more because they earned more not because of a higher tax rate.

I was a little surprised when he told me this and I checked out the facts on Norway's tax system when I got home. Of course, he knew what he was talking about. Most people understand what is coming out of their own pockets.

For example, a flat tax of 28% is applied to all personal ordinary income in Norway after a modest personal allowance deduction. There is also a 25% VAT on almost everything one would purchase (15% on foodstuffs).

However, he also mentioned that he was concerned with the direction he had seen the United States had taken under President Obama. He spoke with some knowledge about the subject as he said he owned a condo in Fort Lauderdale, Florida and visited the U.S. often.

The system works in Norway because people were used to the high level of services and it was generally understood that everyone was paying a fair share of taxes since they used a flat tax system. The system also worked because Norway was a small country with small cities. (Note: Bergen is the 2nd largest city in Norway and has a population of less than 280,000).

People are expected to be accountable and responsible. For the most part there is nowhere for people to hide in Norway who might try to game the system or take advantage of the social services in illicit ways. You received benefits from the government but everyone was also expected to contribute to society.

He stated that the United States is not Norway. You can't have Norway's system without a lot of accountability and responsibility. And you can't pay for all the things that were paid for in Norway without everyone paying. You just can't pile more and more taxes on your rich. It will not work.

This was a Norwegian speaking, not me.

Bernie Sanders spent his honeymoon in the Soviet Union.

Perhaps he should take a second honeymoon to Denmark or Norway.

And when he gets back he might want to start talking straight to the American people on exactly who is going to pay for all of the "government benefits" that he and Hillary are promising.

Only then will people hopefully understand that they are the ones who are going to get "berned" by the progressive, liberal, socialist ideas that are being promoted by the Democrats.

There are no free lunches... even in Denmark and Norway.

I know.

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