International Precedents: Learning from Success Stories

The reforms outlined in Project 2029 are bold, but they are not unprecedented. Many of these policies have been successfully implemented in other advanced democracies, providing valuable lessons and demonstrating feasibility. This section examines international evidence for key proposals.

Tax Policy: Progressive Taxation Works

High Marginal Tax Rates (70%+ on Top Earners)

International Examples:

United States (1950s-1970s): Top marginal rate was 70-91% for decades during America’s greatest period of shared prosperity and economic growth
Sweden: Top marginal rate of 57% (national + local taxes) with additional wealth taxes
Denmark: Top marginal rate of 56% combined with extensive public services
France: Implemented 75% rate on income over €1 million (2013-2014); faced implementation challenges but demonstrated political will

Key Lessons:

High rates did not prevent U.S. economic growth in 1950s-1970s; correlation between high top rates and strong middle-class growth
Nordic countries demonstrate that high taxes can coexist with thriving economies (Denmark: 2nd highest GDP per capita in EU)
Implementation challenges: Need robust enforcement to prevent avoidance; France’s experience shows importance of coordination with other tax policies
Revenue generated funds extensive public services that improve quality of life and economic mobility

Wealth Taxes

International Examples:

Switzerland: Wealth taxes in all 26 cantons; rates 0.3-1% annually; generates ~4% of total tax revenue
Norway: 1.1% wealth tax on net wealth over ~$170K; includes worldwide assets for residents
Spain: Wealth tax 0.2-3.5% (reintroduced 2011 after temporary suspension)

Lessons from Countries That Eliminated Wealth Taxes:

France: Eliminated wealth tax 2018 (replaced with real estate wealth tax); cited capital flight concerns
Sweden: Eliminated 2007 after 1% annual outflow of billionaires
Germany: Eliminated 1997 due to valuation difficulties

Critical Success Factors (Learning from Both Successes and Failures):

Exit taxes essential: Switzerland and Norway have mechanisms to prevent wealth flight
Comprehensive asset reporting: Norway requires detailed annual wealth declarations with third-party verification
International coordination: Unilateral wealth taxes face capital flight; U.S. size and FATCA enforcement provide advantages
Valuation standards: Need clear rules for non-liquid assets (real estate, private equity, art)
Lower exemption thresholds: European wealth taxes often start at lower levels (~$1M); Project 2029’s $50M threshold targets only ultra-wealthy, reducing administration challenges

Financial Transaction Taxes (FTT)

International Examples:

United Kingdom: 0.5% stamp duty on stock purchases since 1694; raises ~£3.5 billion annually (~$4.5B)
France: 0.3% FTT on stock purchases introduced 2012; raises €1.6 billion annually
Italy: FTT on equities (0.1-0.2%) and derivatives (0.02%) introduced 2013
Taiwan, South Korea, Hong Kong: Various forms of securities transaction taxes

Key Lessons:

UK evidence: Despite 0.5% rate (5x Project 2029 proposal), London remains global financial center; trading volume reduction minimal
Sweden cautionary tale (1980s): 0.5% FTT on equities led to trading migration to London; rate was too high without international coordination; eliminated after 7 years
Modern evidence: France and Italy FTTs at lower rates (0.1-0.3%) have not caused significant trading migration
Optimal design: Low rates (0.1% as proposed) on broad base (stocks, bonds, derivatives); exemptions for market-making to maintain liquidity

Capital Gains Taxation at Ordinary Income Rates

International Examples:

Most OECD countries: Tax capital gains at or near ordinary income rates
Australia, Canada, UK: Partial integration (50-80% of gains taxed at ordinary rates)
Germany: Capital gains taxed at 25% flat rate (lower than top income rate of 45%, but higher than U.S. 20% top rate)

Key Lessons:

U.S. is an outlier with 20% top capital gains rate vs. 37% top ordinary income rate
Countries with capital gains parity do not experience investment collapse
Lock-in effect exists but is overstated; most realizations occur at death or for large purchases (homes, business investments)
Revenue potential substantial: U.S. capital gains realizations ~$1 trillion annually

Healthcare: Universal Coverage is Achievable and Affordable

Public Health Insurance Options / Single Payer Systems

International Examples:

Germany (Public-Private Hybrid):

Statutory health insurance (public) covers 88% of population
Private insurance option for high earners (>€66K annually)
Public option administered by ~100 competing non-profit sickness funds
Results: Universal coverage, 11% of GDP (vs. U.S. 17%), excellent health outcomes
Lessons: Public option can coexist with private insurance; competition within public sector drives efficiency

Australia (Medicare + Private):

Universal public Medicare for all citizens (free hospital care, subsidized GP visits)
Private insurance available for faster elective procedures, choice of doctor
~55% hold private insurance despite public coverage availability
Results: Universal coverage, 9.3% of GDP, life expectancy 2 years higher than U.S.
Lessons: Robust public option doesn’t eliminate private insurance market; provides baseline security with choice

Netherlands (Regulated Private Market with Public Option Elements):

Mandatory health insurance through competing private insurers
Government regulates prices, mandates coverage, provides subsidies
Insurers must accept all applicants (guaranteed issue)
Results: Universal coverage, 10.3% of GDP, high satisfaction (>80%)
Lessons: Heavy regulation of private market can achieve universal coverage but requires strong government oversight

Canada (Single Payer):

Provincial single-payer systems covering hospital and physician care
Private insurance for dental, vision, prescription drugs
Results: Universal coverage, 10.8% of GDP, life expectancy 3 years higher than U.S.
Challenges: Wait times for elective procedures; limited prescription drug coverage
Lessons: Single-payer achieves universal coverage and cost control but Project 2029’s public option preserves more choice

Drug Price Negotiation

International Evidence:

Every other developed nation negotiates drug prices: U.S. is only advanced economy that doesn’t
Price differentials: Same drugs cost 40-80% less in Canada, UK, Australia, France
Example: Humira costs $2,100/month in U.S. vs. $1,000 in UK, $700 in Switzerland
No innovation collapse: Europe and other countries with price controls still have thriving pharmaceutical industries
Lessons: Government purchasing power enables negotiation without eliminating profits; U.S. overpays to subsidize global drug development

Labor Policy: Worker Protections Strengthen Economies

Minimum Wage ($25/hour = ~$52K annually)

International Examples (Adjusted to 2024 USD):

Australia: Minimum wage ~$15.50/hour (but effective minimum with universal healthcare, paid leave, pension ~$25/hour equivalent total compensation)
Luxembourg: ~$14.50/hour + extensive social benefits
France: ~$13/hour + healthcare, childcare, education essentially free
Germany: €12.41/hour (~$13.50) introduced 2015; unemployment declined from 5% to 3% post-implementation

Regional Variation Precedent:

Switzerland: No federal minimum wage; canton-level minimums reach $25/hour in Geneva (adjusted for cost of living)
Australia: Different rates by age and industry with lowest at ~$11/hour for youth, standard adult minimum ~$15.50

Key Lessons:

High minimum wages do not cause unemployment collapse; Germany, Australia, Luxembourg have low unemployment
Productivity increases absorb some costs; businesses invest in efficiency and training
Consumer spending increases offset some labor cost increases
Regional/age variation can address concerns about small businesses and youth unemployment
Project 2029’s $25/hour is ambitious but precedented when including social benefits value

Union Rights and Card-Check Recognition

International Examples:

Canada: Card-check (automatic union recognition with majority sign-up) in several provinces
Quebec: Card-check + anti-scab laws; ~40% unionization rate (vs. 10% in U.S.)
Germany: Sectoral bargaining covers 56% of workers even though only 17% are union members; works councils provide employee voice in companies
Nordic Countries: 60-80% union coverage; sectoral bargaining ensures high wages even for non-members

Key Lessons:

Card-check increases unionization rates significantly (Quebec vs. Ontario comparison)
Sectoral bargaining (extending union contracts to entire industries) raises wage floor for all workers
Strong unions correlate with lower inequality (Gini coefficient 0.28 in Nordic countries vs. 0.49 in U.S.)
German works councils model shows worker voice in corporate governance increases productivity

Paid Family and Medical Leave

International Examples:

Every developed nation except U.S. has paid family leave
OECD average: 18 weeks paid maternity leave, 10 weeks paid paternity leave
Estonia: 85 weeks paid parental leave (world’s most generous)
Japan: 52 weeks at 67% pay
Germany: 14 weeks maternity + up to 14 months parental leave (67% pay)

Economic Impact Evidence:

Female labor force participation higher in countries with paid leave (Nordic countries: 75%+ vs. U.S. 57%)
Infant and maternal health outcomes better in countries with paid leave
Business impact: California and other U.S. states with paid leave laws show minimal negative impact on business; small businesses often report benefits (loyalty, retention)

Electoral Reform: Multi-Party Democracy Succeeds

Ranked-Choice Voting (RCV)

International Examples:

Australia: RCV (called “preferential voting”) for 100+ years in federal elections
Ireland: RCV (called “proportional representation with single transferable vote”) since 1921
U.S. Examples: Maine (2018), Alaska (2020), NYC (2021), and dozens of other municipalities

Results:

Australia: Stable governance with multi-party system; centrist candidates win; extremism reduced
Maine: First federal RCV election (2018) saw civil campaigns and majority winner
Academic research: RCV reduces negative campaigning (candidates seek 2nd-choice support)

Public Financing of Elections

International Examples:

Germany: Parties receive public funding based on vote share + small donations; ~45% of party funding is public
France: Presidential candidates receive public reimbursement if they get >5% of vote
U.S. Examples: NYC (6:1 matching for small donations), Seattle (democracy vouchers)

Results:

NYC system since 1980s: Small donors more important; candidates spend more time with constituents vs. big fundraisers
Germany: Diverse party landscape; less plutocratic influence
Concern: Incumbency advantage; need to balance public funding to support challengers

Independent Redistricting Commissions

International Examples:

Canada: Independent electoral boundaries commissions in all provinces since 1960s
Australia: Australian Electoral Commission (independent since 1984) draws federal districts
U.K.: Boundary Commission (independent) reviews constituencies
U.S. States: Arizona, California, Colorado, Michigan (voter-approved commissions)

Results:

More competitive elections: California saw shift from 5% competitive districts to 25% after independent commission
Reduced partisan advantage: Arizona’s independent commission created balanced map
Increased public trust: Polling shows higher confidence in fair elections with independent commissions

Government Efficiency and Transparency

Digital Government Services

International Leaders:

Estonia: 99% of government services online; digital ID for all citizens; e-residency program; “Digital Front Door” in practice
Singapore: Whole-of-government approach to digital services; ranked #1 in UN E-Government Development Index
Denmark: Mandatory digital communications with government since 2014; 90%+ adoption; cost savings ~$100M annually
UK: Gov.UK unified portal (2012) consolidated 2,000+ government websites into one; user satisfaction 80%+

Key Lessons:

Unified platform (single login, single portal) essential for user adoption
Estonia’s success: Early investment in infrastructure (2000s); strong cybersecurity
Cost-benefit: Denmark’s mandatory approach initially controversial but achieved critical mass and savings
UK’s design principles: Start with user needs, build iteratively, default to open (open source)
U.S. already moving this direction: Login.gov (single sign-on), USA.gov improvements, but fragmented vs. international leaders

Transparency and Open Data

International Examples:

Norway: Presumption of public access to government documents (since 1814)
Sweden: Public access to official records (since 1766); any citizen can request any document
UK: FOI Act (2000) with proactive disclosure requirements; government spending data published monthly
Open Government Partnership: 76 countries committed to transparency, civic participation, technology

Results:

Correlation between transparency and trust: Nordic countries rank highest on both government transparency and public trust in government
Anti-corruption: Open data reduces corruption (Transparency International rankings correlate with government openness)
Economic benefits: Open government data enables private sector innovation (apps, services using public data)

Defense Spending Reductions

Post-Cold War Drawdown Precedent (U.S. Historical)

1990s: U.S. reduced defense spending from 5.5% of GDP (1989) to 3% (2000)
Savings: ~$100-150 billion annually (1990s dollars)
Outcome: No loss of military readiness; U.S. remained dominant military power; “peace dividend” invested in civilian economy

International Comparisons (2023):

U.S.: 3.5% of GDP (~$900 billion)
China: 1.7% of GDP (~$292 billion)
NATO Average (excluding U.S.): 1.8% of GDP
Japan: 1.1% of GDP
Germany: 1.6% of GDP (increasing to 2% under NATO commitment)

Key Lessons:

U.S. outspends next 10 countries combined (7 of which are allies)
Much of U.S. spending goes to procurement inefficiency, contractor profits (not readiness)
Historical precedent: 1990s drawdown showed military modernization can coexist with budget reduction
Project 2029’s 25% reduction would bring U.S. spending to ~2.6% of GDP, still far above any adversary