The Ur-Quan Masters Discussion Forum

(http://archania.org/taxes.png)

I kinda think 90% taxes for the richest isn't so bad. If you earn more than 100 million USD a year, you still get more than 10 million USD...

I think 60% or 65% is the most any person should pay. But this also goes for companies. I'm sorry for my country (the netherlands) that helps american evilcorps evade paying any taxes in the USA.
Also, your system regardless of the percentages makes it really weird to pay taxes and I don't think it's in place anywhere. Because people going from any group to the next one will have to pay double the taxes. If you calculate it through a lot of people will forego wage increases at all.

For example you earn $60000 each year and pay 30% taxes because you're upper middle class.Leaving you with $42000 each year.

The $70000 mark makes you proceed to the rich class so when you get a wage increase to $70000 you pay 55% taxes,  That leaves you $31500 each year.
Meaning that because your boss payed you more you have to sell your house ;).

That's why most systems in place pay no tax over the first 'part' of your wage, and increasingly more over each next 'part'.

Why? I think it is ridiculous that many progressive tax systems stop to increase at about 40%.

For example:

Person A earns 200 000 a year and pays 30% income taxes.
Person B earn 400 000 a year and pays 40% income taxes.
But since 40% is the maximum, person C also pays 40% income taxes, even though he earns 4 000 000.

Person A is then left with 140 000 after taxes.
Person B is then left with 280 000 after taxes.
While person C is left with 2 800 000.....

You really think it is fair that person B has to pay the same percentage as person C, even though he earns 10 times less?????

Sure. It is just a model. I don't even specify what constitutes the different groups. In reality, of course there should be a continuous graph. Maybe I should make it like that not to confuse people. But I think it is easier for people to understand a graph divided into groups like that. A continuous graph won't have any groups... Just a calculated percentage according to your income.

Maybe this graph is better:
(http://archania.org/continoustax.png)

If it's just a model then what do you want our opinion on? If we think rich people should pay more taxes? Yeah sure :).

Yeah, that.

To clarify the problem Scalare originally raised - it isn't that it wasn't curved. It's that the percent is calculated on the total rather than the marginal dollar. The marginal dollar is each dollar asit comes in. You tax each one as if it was the last.

So, for instance the rich people would earn their 'poorest' income at no taxes, then their 'poor' income at low taxes, their 'lower middle class' income at higher taxes, 'upper middle class' income at higher taxes, and the rest of the income that puts them in the rich range would be taxed at the 'rich' level.

You can fix it by just changing 'percentage of income paid in taxes' to 'marginal tax rates'

Ok. Thank you for clarifying (I am a moron when it comes to taxes). I will change it, but do you like more the first or the last graph?

I can even have it combined like this if you think it is easier to understand then:
(http://archania.org/combinedtax.png)

That's a different model altogether, not what he meant by having 90% at the richest level and the 100 / 10 million example he posed.

The model you propose is the one we have right now  where I live.

This is what it's like for 2017.

1: until € 19.981 - 36,55%
2: from € 19.982 until € 33.790 - 40,8%
3: from € 33.791 until € 67.071 - 40,8%
4: from € 67.072 - 52%
(that's french notation of numbers by the way. the reason why 2 and 3 are the same is because they use almost the same scale for people who are over legal retirement age (65 and 9 months), but they are taxed less in the 2nd bracket)

I earn around € 42.000 a year, so from income tax I have to pay € 16.276.  Which is around 39% income tax.
I believe the US system is the same, but with more brackets and less tax overall.

I think the graph confuses it too much, don't use a graph at all because you don't explain what the 'classes' are and how they are established.

... yes, and that's the problem you had with it. Adjusting marginal taxes is much better than replacing it with a clunkier, less fair system. The current system's basic formula is OK. I took him to mean adjusting the values. 90% is a far, far cry from any current rate, so it's still worth talking about.

Is 90% even possible to achieve with marginal taxes?

I have made a new graph with more specified categories.

(http://archania.org/taxesmorespecified.png)

You can have a marginal tax bracket of 90%, obviously. If you put a marginal tax above 90%, then someone with sufficient income beyond that would face a 90% total tax rate; if they earned more, it would go higher, asymptotically approaching whatever the top bracket was.

I don't think going that high is a particularly good idea.

Why not? What do you think would be a good maximum percentage, that still would be able to decrease economic inequality in the world?

(http://archania.org/wealthdistribution.png)

I see that Bernie Sanders only goes to 52%. (http://www.bernietax.com/#0;0 (http://www.bernietax.com/#0;0)).. but his proposal is much better than the one you have now. I don't know if it is going high enough though... maybe something between my proposal and Bernie's.

I think I will settle for a marginal tax of 75% for those earning more than 5 million USD / year.

With my system you would pay something like:

from 0 to 15000 -> 0 USD
from 15000 to 35000-> 1000 USD
from 35000 to 42000-> 1050 USD

Total=2050 USD

That is actually much less than you pay now....It is a bit inaccurate since my system is based on USD, not euro

I think your country starts at a too high percentage, which is not very good for poor people.

You can't really say anything about it if because income tax alone is not the full picture. :)
Poorer people get subsidized more for housing for example etc.

I think your system is bad because the 90% is way more than is paid in the rest of the world. Rich people will just leave to countries with less tax.

I have reduced the maximum to 75% now, and obviously you haven't even read the abstract....

"Global wealth inequality is currently enormous, with 0.7% of the richest people in the world owning 45.6% of the world’s wealth,  while 73.2% of the poorest people in the world own only 2.4% of the world’s wealth [4].  In the current multinational world, billionaires often place their money in ”tax havens”, and/or move their businesses to other countries to avoid paying taxes. Because of these loopholes, global wealth inequality continues to grow. With a new world Government, billionaires will not have any ”tax havens”, or any countries they can move to if they are unhappy with paying taxes. The tax laws will be the same everywhere."

http://archania.org/manuscript_for_a_new_world_government.pdf (http://archania.org/manuscript_for_a_new_world_government.pdf)

so this is related to your other topics then? ;). I should've known!
Sorry for not entirely reading your abstract. So with my wage I'm likely to be among the richest 5% of the world and have to pay a lot more tax then?

I'm not a huge fan of globalisation by the way. I am a fan of it when it makes people not hate eachother just because they are in a different country, but it is really easily abused by the powers that be and leaves little power in the hands of people like you and me to change local things. Your tax might go towards paying billions of african kids to be able to go to school but because of their beliefs they don't use birth control making them very dependant on us to keep them going to school and fed etc.

Maybe you should, but you ended up paying around 2050 USD in taxes, which is much lower than you pay now....so maybe I should change it a bit, so that only people that earn less than 10 000 USD / Year shouldn't pay any taxes, and maybe increase the lowest from 5% to 10% or something....

It is somewhat difficult to make a tax system for the entire planet, because prices are different in different countries. So maybe in Netherlands and USA people are poor if they earn less than 15 000 USD / Year, but not necessarily in China, India and Africa, where living and prices are cheaper.

But one think I am certain of, is that the 1% richest should pay a lot more taxes. Not necessarily you.

Edit: I have tweaked it now, so that  I was able to increase your tax to 6500 in my system...

A marginal rate above 90% just seems awfully high - earning more basically gets you nothing at all. 90% even is pushing it. 75% is pushing it a lot less. Like, to the tune of 2 and a half times less, while still being 3 parts going to the government for every 1 part kept.

Remember that I also want to have it so that rich people can decide which public sector most of their taxes goes to, and I might not feel like all my tax money is wasted if I can decide which public sector it goes to. My impression is that many rich people are unhappy because their taxes are used on things they care little about. Innovators might for example care a lot about research and education, and might be very happy if their taxes are used for that, rather than for the military.

The general idea is that we must get people more involved with the government., so that they regard it as an extension of themselves, rather than as an enemy that steals taxes from them.

That can't work. The rich would only support initiatives that benefit them and their acquaintances. As in, nothing that's beneficial only to the poor. They probably don't even know what programs the poor need, even if they do care.

Or for social security, or health care, or public schools... all of these things are completely unnecessary for the rich, even if they're beneficial for all of society.

Rich people are quite involved in the government. Some would even argue that we currently live in a plutocracy because they have such an incredible influence on elections.

Of course, the rich shouldn't be allowed to invest their taxes in whatever they want. It has to be public sectors, and I do think all public sectors are good for society... (with the possible exception of military/police in a world without crime and violence).

(http://www.archania.org/sectors.png)

Also, I was thinking to only allow them to decide what 75% of their taxes should be used for, which leaves some money for public sectors that aren't getting enough funding. It is quite unlikely that all rich people are going to invest in the same sector. Rich people are a diverse group, just like people in general are a diverse group.

And the poor people will also benefit from not needing to pay any taxes in my system. Since you need to earn more than 10 000 USD / year to pay taxes according to my proposal.

That may be, but their interests are not diverse in one particular way: they all have lots of money, so they don't benefit from any program that aims to reduce the cost of something except to the extent that this enables them to sell products at a cheaper price. Welfare, in particular, is completely useless to all of them, but education and health care are not all that useful to them either because they can easily afford the expenses of private insurance and private schooling. For these kinds of things, you're basically depending on charity from them.

So then, in other words, programs that the rich benefit from would get massively overfunded while programs that don't benefit the rich would get massively underfunded because the only people benefiting from them are paying little to nothing in tax. That they have some funding doesn't change the fact that this change would not benefit these programs at all.

That is irrelevant to the question of whether giving taxpayers a say in how their taxes are spent makes sense.

This simply isn't true... in São Paulo (Brazil), rich people pay tons of money to have armed guards around their houses, because of all the poverty there. In Scandinavian countries, rich people don't need armed guards around their houses, because there isn't so much poverty there. Poverty makes a society more dangerous for rich people, and many rich people would prefer to have less poverty because of that.


Of the public sectors I showed you in my last post, which do you think will get massively overfunded? I think they benefit equally much from investing in all of them.

Then they have an incentive to support police.


That doesn't mean it's in their interest to put their money into solving poverty. If they put their money into reducing poverty and it isn't enough, it's entirely wasted from their perspective. So what's in their best interest is to have stronger police forces, or (as you mentioned) private armed guards, which I suspect they would be more likely to opt for given the choice.


Subsidies, mainly. To a lesser extent, military.

But the main point is that letting tax payers choose where their taxes go would be a disaster for a country's budgeting. You can't just have the budget get thrown around chaotically like that. The government needs to have the power to decide how to use those taxes or they may as well just be voluntary donations instead.

What's the subsidies thing? Isn't everything a subsidy? healthcare, welfare, education are subsidies over here..

Well, some people might think it is in their self-interest to decrease poverty, while others might think it is their self-interest to increase the police. Both things might work, but I think the best solution is to decrease poverty. No matter how much police you have, you can never be completely safe if there is a lot of poverty and lots of people eager to rob you. It is also more good-hearted to invest in decreasing poverty, and not all people lack a heart...
 

So you think it is better that Donald Trump decides what your taxes should be invested in? I think similar concerns were raised when women's right to vote was introduced. People probably generalized women (like you generalize rich people) into something ill-intentioned. But women are in fact a diverse group of people, and diversity was actually increased when women were allowed to vote. And as we know from the diversity prediction theorem, a more diverse group is better at predicting.

Not all tax payers are complete retards. If the roads and infrastructure in a society is very bad, lots of people will probably realize that their taxes should be invested in roads and infrastructure. Similarly, if the education is very bad in a society, lots of people probably realize that their taxes should be used on education.

The things I have mentioned should be subsidized are: healthy food, investigative journalism, and environmental-friendly technologies.

why not education and welfare?

Because they are so central to a welfare-state that they have their own sections?

So they DO get subsidized?

Surely you must be joking. The President has basically zero authority on how money is spent. That's up to Congress to decide.


You're comparing apples to oranges (genders are not classes, levels of wealth are), and voting is not the same as restricting what your share of tax can be used for at all.


Yes, but the wealthy have an option that is much better for them: just spend the money directly on private improvements, e.g. private roads and private schools. From their own perspective, the money is much better spent this way because it's necessarily going toward the improvements they need.

I think this is the biggest point you're missing. No, rich people are not idiots. That's why if they have a choice for where their taxes go, they will direct their taxes to whatever benefits them the most, and use private spending for anything else. Or, as they do today, they would simply use loopholes to avoid paying taxes altogether.


That's not at all what I thought you meant. When I see "subsidies", I think of things like the corn subsidy that currently exists, basically paying farmers to grow corn so that corn can be cheaper. This is a trick to boost certain sectors of the economy.

Subsidy means a different thing to each and every one of us. Since we do have different subsidies in each country :P.

But how much power the president has over the congress, doesn't that depend on the majority party affiliation in the congress? Now that you have a republican president and a republican majority in the congress, isn't it likely that the president will have much more power over the congress?

I am also somewhat confused why you think this congress is better suited to decide which sectors should get funding, than the tax payers themselves. Many of these congress-members are surely just as despicable as the rich guys you dislike so much. The group of tax payers is also much larger than the group of congress-members, so it is probably much easier to lobby the group of congress-members than to lobby the group of all tax payers. I do however agree that the tax payers shouldn't be allowed to decide what 100% of their taxes should be used for. Maybe the president/congress should be allowed to decide 50%, while the tax payers should be allowed to decide 50%...


I think you misunderstand a bit. I don't want the tax payers to be allowed to use their taxes on private roads for themselves and guards for themselves. The tax money has to be spent on public sectors...


Edit: Based on your comments I have rewritten parts of this section, and included a better description of what the subsidies include.

(http://archania.org/taxpayersinvolvement.png)

No, the President just doesn't have any power over them. Only influence by way of having a voice that lots of people pay attention to. If the President had actual power over Congress, that would completely destroy the separation of powers in the government.


No. The only thing it means is that since the President is a Republican, bills the Republicans want that get passed through Congress are basically guaranteed to get signed into law.


If you think that Congress is unfit for this task, then you should be advocating for no taxes at all so that individuals can donate or invest their money where they want. The whole point of taxes is to fund the activities of the government, and the activities of the government are controlled by Congress. It makes no sense to give the government money, but then require it to use that money for a particular purpose.


But members of Congress are accountable, because allocating the budget is actually their job. By the way, I never said that I dislike rich people. I've only been describing how they can be expected to act.


So what? The whole problem with having tax payers decide where their taxes go is that it completely defeats the purpose of taxes.


Then here's a novel idea: just cut taxes by 50%. Or rather, don't raise them to 90% in the first place. If you're paying 10% of your income in tax, that remaining 90% is what you can use to allocate to causes you want to support.


No, I don't misunderstand. If the rich can choose where to spend their taxes, it's in their interest to choose to have their taxes spent wherever it will benefit them most. So they will not choose to have it spent on infrastructure if there is an option that benefits them personally more, because they have the capability to make private improvements where they need it. Actually, given how you define subsidies, I think that "infrastructure" would be the most likely thing that the rich would choose out of your categories, so it's police, health care, education, and welfare that would be neglected.

That sounds like a horrible idea, because that would continue to increase the wealth gap between the rich and the poor. It is a big difference, because if you invest your money in buying something, you own that then. Like for example if I invest my money in a private health care company, I earn money from them in the future. On the other hand, if I use my tax money to invest in public health care, I do not own anything in the public health care sector, and I don't earn anything from that in the future, except for the benefit of having a better health care system in my society.


You seem to think that people are like simple computer algorithms that always do the same under the same conditions. But people are huge neuronal networks that often behave differently under the same conditions, and are  largely controlled by emotions, not logic. If the infrastructure in a country is bad, lots of people will invest their taxes in it, for sure. But if the infrastructure is very good, I would be much more scared that it will get underfunded. And that is one of the reasons why I don't want people to be allowed to decide what 100% of their taxes are used for.

It's not an idea, it's the status quo of literally everywhere. No one in the history of the world has had a 90% tax for anyone.

You're making a very simple issue (how much people should be taxed) into something needlessly complex, in what seems to be an effort to convince people who want lower taxes to support higher taxes. You are also contradicting yourself. If rich people would gladly support public schooling or welfare or health care or whatever when it doesn't benefit them, then they can donate the money directly.

I don't think most rich people gladly would donate lots of their income to public health care, public educations, and welfare. I think that if they had to donate lots of their income to one of those sectors and got to choose which one, they would be more happy with donating to  some sectors than to others. I would for example be much more happy if I could donate to education rather than to the military.

It is extremely important for a government to be well synchronized with the population. That is why we have democracies, and that is the main reason why I want tax payers to be involved in what their taxes are used on.

If a rich person has a say over what his $2,000,000 go toward, and a poor person has a say over what his $0 go toward, then the rich person has more say. That's not democracy. The way we are supposed to influence the government is by voting, not by telling the representatives we voted for what they are allowed to do with the tax dollars we sent them.

Ok. But if I am paying a ginormous amount of taxes, and I know that a lot of it is going to something I am against (for example the military, and a war in Vietnam, Iraq or Afghanistan), then I won't be very happy either.

The richest in the world gain huge profits from these wars.

Well, the people owning weapon-manufacturing companies might profit from war, but if they choose to invest their taxes in the military they are basically just funding themselves.

The problem is for all the people that don't have money in weapon-manufacturing companies, but are forced to donate to them through taxes. If I could choose not to donate to the military, then I wouldn't need to sponsor their immoral weapon-manufacturing companies.

not just weapon manufacturers, oil companies too. and banks financing it all. the rabbit hole is much deeper than you think.

People in general don't want to pay taxes period. It has little to do with being against what the government is spending it for and no one is going to be happy to pay higher taxes based on the fact that they can dictate where they get spent.

It is true that people in general dislike paying taxes, but the reason why rich people dislike taxes is very different from the reason why poor people dislike taxes. Poor people dislike taxes because it has a direct impact on their lifestyles. If they payed less taxes, they might afford a better vacation, a better computer, and so on.

Rich people don't dislike taxes because it has a direct impact on their lifestyles. They are not economically restricted to go anywhere on vacation just because of taxes.  To rich people taxes are much more like involuntary donations, and if you are ever going to give a large sum of money in donation, I believe you will care a great deal about what that donation is used for.

What? Poor people don't even have a computer let alone can go on a 'better' vacation.

No, the reason everyone dislikes paying taxes is exactly the same: you're forced to part with some of your money. It affects poor people worse when it does (that effect being not having adequate food, housing, etc and/or having to work even longer hours), but that doesn't change the core reason that everyone wants to choose how to spend their own money.

Their own money? I don't know if everybody even regard taxes as "their own money". I think many Europeans think of it as their civic duty to pay taxes, and have a very good understanding of all the communal benefits they get from paying taxes. In the Netherlands (where Scalare comes from), I think they have free dental care, and most European countries have more or less free public health care. Lots of Europeans attend to free public schools, and tuition free universities.

Why don't you Americans worry a bit more about what you are spending money on instead? Like here for example, is a price comparison of some pharmaceutical drugs in different countries:

(http://www.archania.org/priceofdrugs.png)

We don't have free healthcare or free dental care, we pay like E120 each month for obligatory health care insurance.
I think the only country with free healthcare is the UK.
I don't see taxes as debilitatingly harsh, just as a 'neccesary evil'.

You don't see stuff like in detroit in the Netherlands.
https://www.youtube.com/watch?v=jijRIFpSbRY

But we're moving more and more to a neo-liberal society. Which sucks.

I think also Europe is moving more and more towards nationalism, and is starting to blame foreigners (particularly Muslims), for everything. Much like nazi-Germany blamed the Jews for everything.

It's not unique to Americans. The cause of high healthcare costs is too remote for most people to notice (we're not all economists), and even if it wasn't, any tax increase you face is going to be a short-term detriment to you. In Michigan, that was most recently demonstrated by a proposal to raise the sales tax, which is a flat tax; a sales tax increase would have affected the middle class and poor the most, so most of these people voted against it. The fact that there's a sort of distrust in the government's ability to get anything done just reinforced that decision.

The 'computer' and 'vacation' examples weren't exactly great, but Zanthius' idea does remain - everyone can be concerned about their tax burden, but this tax burden is more pressing on the poor.

That said, I think that a large part of the question of what is done with it applies regardless of how much is being paid. It's a purity thing. People don't want to be involved with things they disapprove of. If I pay $1 in taxes, $100, or $100 000, that massively changes the amount of my contribution but it doesn't necessarily change the feeling that I contributed to everything the government did.

~~

Anyway, I'm very happy with how cool things have stayed here despite the political nature. Keep it up!

what do you mean by 'this' tax burden?

Any tax burden, basically, so long as marginal taxes don't go up above 100%, nor increase rapidly from very low to very high. Peoples' need for money is marginally greatest at none, and falls off from there. This is why we don't tax the poorest at all - we'd barely get anything out of it and it would hurt them a lot.

Since I cannot publish the manuscript in any journal about politics (since it is too broad and doesn't go sufficiently into detail), I am thinking about writing much more narrow and detailed essays for some of the points. I think the first essay is going to be about why we need international tax regulations to prevent increasing global wealth inequality. Because the main right-wing argument in almost every country for less taxes for the rich is that less taxes for the rich will attract more businesses, and give a competitive advantage against other countries. Yeah, all of that is true, but that is also why wealth inequality continues to increase....

(http://archania.org/taxesfortherich.png)

Of course the red-minded only seems to care about the red argument, while the blue-minded only seems to care about the blue argument. But both arguments are equally valid, and that is why we need international tax regulations.

I'd swap the colors to make them line up with the usual colors assigned to the parties.

Usual in the United States yes, but red is most commonly assigned to left-wing parties in other countries (https://en.wikipedia.org/wiki/Political_colour (https://en.wikipedia.org/wiki/Political_colour)).  However, red doesn't really capture the essence of that argument, which is empathy generated by mirror neurons in the brain. These mirror neurons seem to be most responsive to the color magenta, so I have made it magenta now.

(http://archania.org/taxesfortherich2.png)

Anyhow, I found an OECD report from 1998 about harmful tax competition (https://www.oecd.org/tax/transparency/44430243.pdf (https://www.oecd.org/tax/transparency/44430243.pdf)), and this webpage which argues against tax competition (http://www.taxjustice.net/faq/tax-competition/ (http://www.taxjustice.net/faq/tax-competition/)), so apparently you are right in that there already are organizations working for the same agendas as me. And maybe I don't need to publish anything about this.

You can certainly ask them if they need any help, though, or find something else that fewer people are working on.

I have added a new subsection about local involvement:

(http://www.archania.org/localinvolvment.png)

I think a common theme in my manuscript, is that people need to be involved to make a society functional/healthy. When cells in a human body become alienated from the body, they turn carcinogenic. When people feel alienated from the government, they tend to vote for people like Donald Trump.

Anyhow. So tomorrow is the big day. I guess you are all going to celebrate his inauguration?

Only with deep breathing exercises

I found out that there are people working on very similar ideas to mine.

https://www.project-syndicate.org/commentary/globalized-world-order-sovereign-obligations-by-richard-n--haass-2017-01 (https://www.project-syndicate.org/commentary/globalized-world-order-sovereign-obligations-by-richard-n--haass-2017-01)

https://www.fastcoexist.com/3067153/change-generation/the-case-for-eliminating-countries-and-instituting-a-global-democracy (https://www.fastcoexist.com/3067153/change-generation/the-case-for-eliminating-countries-and-instituting-a-global-democracy)

https://oneglobaldemocracy.files.wordpress.com/2016/12/one-global-democracy-deck-dec-2016.pdf (https://oneglobaldemocracy.files.wordpress.com/2016/12/one-global-democracy-deck-dec-2016.pdf)

I even tried to contact the website of this guy (Peter Schurman), to ask if they want to cooperate.

This graph illustrates an important fact that most socialistic governments ignore: America underwrites your lifestyle. Your healthcare runs on American money and innovation, and you don't know it. The US provides the funding for all of it. Because European governments create artificial price ceilings, there is no money to develop new medicine and medical techniques. The US has a free market, and so the drug companies raise our costs to pay for research and innovations. Our insurance costs increase yearly because we are the only ones pulling our weight. You need to know this, and stop looking down your noses at the ones who find your lifestyle.

This graph will change in the next few years, because this is one of the major issues Trump has taken on for correction. I don't agree with everything he says and does, but this one I do. I pay insane insurance premiums so Europeans can have government subsidized health care. And why do I care? Because if I live simply and don't waste money, my wife can stay home with the kids. If my tax burden is high, then she has to neglect our children to pay taxes to give benefits to others. That's wrong. We eat well, we exercise, we work at it and we are healthy; why should we get another job to pay for others' bad lifestyle choices?

Globalism is good?

 We Americans have corruption in our government, like everyone else in the world.  The big worry for larger governments, like the EU or a global government, is that there is no check on their power.  People falsely compare Donald Trump to Adolf Hitler, as if you were some sort of madman intent on killing off political dissenters and racial subgroups.  If he really were, then you would be glad that there is no global government for him to rule. Having multiple countries keeps human avarice in check. The day we have a global, unified government is the day that someone can exert their power unchecked.

Moving on, we have a heavily divided society here. Our elections are split along a nonsensical two-party line: factions within each group bitterly disagree, but are always lumped together. Our news reporting is comprised almost entirely of people who sympathize with one of those groups, and the world gets a distorted view of American opinion.  Our politics aren't black and white just because we have two parties. Think about your own politics, and you'll realize that the reporting on American politics is silly.

Actually, 2 of the 3 biggest pharmaceutical companies in the world are Swiss (Novartis and Roche). Pfizer (the second biggest) is American. In the United States (in particular), the pharmaceutical companies use a lot of money on commercials. In some European countries there are much stricter rules for pharmaceutical commercials, and pharmaceutical companies might therefore have a lower commercial expenditure in Europe.  It is also better if medical professionals use meta studies to determine which drugs to give to their patients, rather than being influenced by commercials from the pharmaceutical companies. Commercialization of pharmaceutical opioids is a very sad story in the US:

(https://image.slidesharecdn.com/rx15workshopmon200aleshiredowellnonotes-150406123644-conversion-gate01/95/rx15-workshop-mon200aleshiredowellnonotes-4-638.jpg?cb=1428342004)


Development of new pharmaceutical drugs is insanely expensive today, mostly because of requirements to clinical trials.

(http://cen.acs.org/content/dam/cen/92/web/20141120lnp3-LN-graph.jpg)

But since pharmaceutical companies often neglect to publish negative results, the public is nevertheless often mislead about the efficiency/safety of drugs.  You can read more about this in this book: https://www.amazon.com/Bad-Pharma-Companies-Mislead-Patients/dp/0865478066/ (https://www.amazon.com/Bad-Pharma-Companies-Mislead-Patients/dp/0865478066/).

It would be much better if the government tested the efficiency/safety of drugs from our tax money, because the pharmaceutical companies cannot be trusted to do that themselves. That would also make it much cheaper for new developers to produce drugs.


I think you actually pay much more to your doctors and people high up in  Pfizer and Swiss pharmaceutical companies that already are filthy rich.

As a linux user, I have a more general critique of your reasoning. Bill Gates is one of the richest individuals in the world today, but I still think linux is a superior operational system. Has Bill Gates and all the people paying for windows somehow also contributed to the formation of Linux? Not so much. I think they have payed lots of money for Windows mostly to increase the development of Microsoft products and to make Bill Gates filthy rich. I might still have Linux, even if Bill Gates and Windows never existed. In a similar way, Europe might be able to sustain much of itself, even if the United States never existed. Innovation doesn't necessarily need to be overly capitalistic.

The only thing I might agree to, is that the United States has payed much more for NATO than Europe. But what does that help now that you have voted a Putin supporter to your president? I doubt that Angela Merkel and other European leaders trust American military aid in a hypothetical confrontation with Russia right now, and Angela Merkel has agreed that Germany will increase its military. One of the reasons why Germany hasn't developed a large military, is because the US and other European countries didn't want it to develop a large military after the second world war. Not necessarily because it didn't want to spend money on its military.

This is so.... controversial, I'm not going to say much about it, besides:
-in the US, the cost for litigation is such, that any pharmacy company needs piles of cash set aside in case anyone dies although he only used the recommended dose of the medication.
This does not exist in Europe.
- due to private insurance only, many medications are only available for very few people in the US. Despite the US being such a big market, many expensive drugs do get sold in the US only sporadically, whereas in Europe they are sold on a very regular basis. This scaling also makes Europe much cheaper for the drug maker, while still earning comparatively the same profits. (so instead of reducing health care, you should increase the US health care to compensate for this).
There are far more reasons. But if you find that the US is subsidizing European health markets (besides the US companies making tons of profits on the European market), then introduce a health care act that prohibits companies from selling drugs in the US at a higher price than G7 or G20 countries average.
(Also, the graph you cite is slanted. It uses in Europe only the public health care act prices, whereas many patients (like myself) have to pay a higher price, as I am privately insured and my medication does not fall under limitations of the German public health care medication price ceiling act. Yet, the price of my medication is only about 10% higher than for the public health care insured patients.)

And if you were subsidizing, that would mean the companies would make a loss in Europe. Why do they not stop selling here, then?

There are far more reasons than just the health care acts limiting prices. Actually, what most price ceiling acts do, is limiting the doctors to prescribing the active ingredient, so that the pharmacy can give you cheaper generic instead of the full-priced brand-name. To be able to compete, the brand-name drugs keep their prices within ranges of the generic makers (except in the first exclusive years).
That way, doctors can not prescribe drug XY, but they actually prescribe the active ingredient, and the marketing of the big pharmaceutics on the docs is lost. So they do not spend billions on marketing (millions are still spent, though).

(In very rare circumstances, docs can still prescribe the specific drug, but they need to give reasons. E.g. generic drug user often use cheaper filling stuff Z, where patient has shown allergic symptoms - but there needs to be a medical reason - the doc can loose his approbation if he provides no or a false reason.)

The pharmaceutical companies are definitely not losing money on the European market, but they might earn a little bit more from the American market. One might further argue that since somewhat more of the profit comes from the American market, it stimulates innovation in these pharmaceutical companies somewhat more than the European market.

But does more profit necessarily cause more innovation? If so, then why do I perceive linux to be a much better operational system than windows? I am sure there are countless of other examples of that more profit doesn't necessarily imply more innovation. Too much profit might actually make companies lazy.  If the pharmaceutical companies earned less from the American market, maybe they would strive harder to increase their profits there, for example by more innovation.