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Originally Posted by Nodrog
Its impossible to calculate how much of your income is taxed indirectly, but 60% doesnt sound that unreasonable. Taxation as a %ge of GDP is 46%, but that doesnt include the myriad of subtle forms of taxation we have including things like inflation, the minimum wage, and expensive state trains/tube systems. Then you have the indirect role that government policy plays in driving up prices in areas it subsidises. 60% may be slightly too high, but probably not by much.
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Unless I remember completely wrong, Belgium peaked the tables with 65% total tax, and most European Union countries float fairly above 50%. In addition to "subtle" taxes, some income are taxed twice (ie. first you earn the wage, pay taxes, use it to buy goods, pay value added taxes), depending on the tax regime used. I'm not sure how political suicide opposing progressional taxation in the UK would be, but at least in Finland (taking to account we're "notorious" for our very progressive income tax; VATs and such are then partially defined by the union) it'd definately be so. The tax regime we use is already almost regressional at large, and the main progressive bit of it is the income tax. Now that they're about to remove some taxes related to private ownership, and heritages, the regressive scheme will excarberate even futher.
Remember, next time you go grocery shopping, that the VAT you pay for your food is very regressive at large. (And in a VAT system in general, the store will push the taxes on you, making you pay double tax for the same "income" whereas you're basically paying large transaction costs for first exchanging your work to money and then exchanging your money to consumerables).
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Originally Posted by Nodrog
It really depends how you want to slice things up though, and theres probably no objective way of doing it or calculating the monetary effects that policies have.
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I'm not quite sure how the ECB standards are defined, but I'd guess they're using some fairly global system. SNA or whatever they use will probably include some form of total tax calculations per GDP. A direct way of calculating it is just adding up the taxes a government receives. Rather simple and gives solid results. Defining externalities as taxes (the effect of criminalization of marihuana on the demand of alcohol thus relating to alcohol taxation perhaps) are impossible to calculate at any reasonable level, also it's worth to notice that a lot of worthy "work" (the infamous grey sector, including the black market employees, household work, and so on) goes unnoticed for applicable reasons. Nevertheless, for a Western country, 60% isn't exaggerating (according to commonly accepted schemes of calculating the taxes).
Being an ignorant moron I'm struggling to avoid a moan on the median voter system, so I'll first ask someone to briefly explain or link me to something that describes how this election of yours works.