Letter to the Editor: The misguided seduction of socialism

Over 100 million deaths are attributable to communist/socialist rule. Far from delivering utopia this form of government has delivered abject misery, now a new generation wants to give it a try. They no doubt consider the worst of these regimes to be communist, not the socialist regimes they would like to have in power. However, most of them saw themselves as socialist. In fact, two of the worst offenders, the USSR and the Nazis, had the word socialist in their name.

Bernie Sanders and Elizabeth Warren say it’s the Scandinavian model of socialism they value, but the Scandinavian model is not very socialist at all. There are no minimum wage laws and there is school choice. In the 2019 Economic Freedom of the World Index, Sweden scored only slightly behind the United States and above countries like Japan and South Korea.

The Scandinavians do offer a lot of “free” stuff like education, medical care, and parental leave, perhaps that is the attraction? Although these benefits appear to be free, they are paid for through taxes, and not only by the “rich”. Denmark’s top marginal tax rate is 60.4%, Sweden’s is 56.4%, and Norway’s is 39%. The top marginal tax rate in the U.S. is 37%, but who it applies to is far more important.

The top marginal tax rate of 60% in Denmark applies to all income over 1.2 times the average income. In the US that would mean that all income over $60,000 would be taxed at 60%. In Sweden the 59% tax rate kicks in at $75,000 and in Norway their 39% tax rate kicks in at $80,000. In the U.S. the top marginal tax rate of 37% kicks in at $600,000.

All three countries have a national sales tax (VAT) of 25%. State sales taxes in the U.S. average 7% and some states charge none at all. Buying a car in Denmark, expect more taxes. A registration fee of 85% for cars valued under $29,000 and 150% for cars worth more. This is on top of the 25% VAT and gas prices more than double those in the US. No wonder so many Danes ride bicycles.

In Denmark, the poster child for “good socialism”, a couple earning $60,000 would have $24,000 left after paying their taxes, and then would be taxed a further 25% on anything they spend. So, the $24,000 is only worth $18,000 after paying the VAT. In the US the $60,000 would be taxed at 12%, leaving $52,800. Assuming an average sales taxes rate of 7%, this amount would be worth $49,104. The US taxpayer earning $60,000 therefore has $31,104 more disposable income than the Danish tax payer ($49,104 – $18,000). So, in this case the “free stuff” is costing you $31,104.

The primary difference between the U.S. and Scandinavian model is that U.S. taxpayers have more control over their money. They can choose what health care plan to buy or how expensive a college to go to. If they choose a less expensive option, the difference is theirs to spend as they please. The Scandinavians are not given that choice. It should be apparent at this point that the socialist paradise is not all it’s made out to be.

Hylton Phillips-Page
Rehoboth Beach

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