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Businesses Government The Almighty Buck Politics

Sorry America, Your Taxes Aren't High (bloomberg.com) 903

Americans generally feel they're being over-taxed, especially around this time of the year. But is that really true? An article on Bloomberg investigates: The Organization for Economic Cooperation and Development analyzed how 35 countries tax wage-earners, making it possible to compare tax burdens across the world's biggest economies. Each year, the OECD measures what it calls the "tax wedge," the gap between what a worker gets paid and what they actually spend or save. Included are income taxes, payroll taxes, and any tax credits or rebates that supplement worker income. Excluded are the countless other ways that governments levy taxes, such as sales and value-added taxes, property taxes, and taxes on investment income and gains. Guess who came out at the top of the list? No. Not the U.S. At the top are Belgium and France, while workers in Chile and New Zealand are taxed the least. America is in the bottom third.
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Sorry America, Your Taxes Aren't High

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  • by Anonymous Coward on Tuesday April 11, 2017 @11:42AM (#54214437)

    Smart people like Trump never pay them.

    • Re: (Score:3, Insightful)

      by Kierthos ( 225954 )

      It's not even that the rich have to be that smart to pay much less (if anything) in taxes. It's that they can afford to hire people to find/exploit every tax loophole they can. I feel relatively safe in assuming that Trump doesn't pour over his own tax returns every year making sure that everything is set up for him to pay as little as possible. He has people to do that for him.

    • Re: (Score:2, Insightful)

      by jonsmirl ( 114798 )

      The US income tax system is highly progressive. Currently the bottom 45% of US households pay no federal income tax [marketwatch.com]. So when you look at the tax burden of the average American family (ie at the 50th percentile) that family is only paying a little federal income tax. To get to the number in the article it is other taxes like property tax, social security, state tax, etc.

      • by Pfhorrest ( 545131 ) on Tuesday April 11, 2017 @12:43PM (#54215247) Homepage Journal

        Of relevance to that matter is the fact that the median income is about HALF of the mean income. So that person at the 50th percentile, that "average American" by one measure, is only making half of the "average American" by the measure most people probably think of (add up how much we all make and divide by number of people, i.e. mean income). It's not surprising that people making not even half of average are paying a very low tax rate. What SHOULD be surprising is that most Americans are making less than half of the "average American".

        Rich people want more people to share their tax burden? See to it that more people get more income to be taxed, then. But if you want to hoard all the money, be prepared to pay for everything, because nobody else can.

  • by clifwlkr ( 614327 ) on Tuesday April 11, 2017 @11:44AM (#54214459)
    I don't think anyone thinks that America's income taxes straight out are that high. But now add in property taxes, which are very significant, social security, etc. That really starts to cover the effective tax rate that you really pay. Then also all the government 'fees' and requirements you pay (required backflow valve inspections at your cost, etc.). Finally, consider what you actually get for it, as we don't get government pensions or healthcare or any kinds of real social service for this money.

    So basically they really aren't counting the total real taxes paid, and aren't considering the value of those taxes. Not sure how really useful this comparison is at the end of the day.....
    • Re: (Score:3, Insightful)

      I don't think anyone thinks that America's income taxes straight out are that high.

      You need to spend more time on conservative websites.
      • The argument that we should be happy because our taxes are lower than other countries is a bit like telling Mary that she should be happy that her husband only beats her twice a week, because Jane's husband beats her three times a week.

        And what do we get for those taxes? Soaring education & medical costs with reduced quality, dilapidated bridges & roads, wars against countries that pose no threat to our national security, agricorps that get subsidies to not grow food, etc.

        Now I'm just waiting for

    • by beelsebob ( 529313 ) on Tuesday April 11, 2017 @11:56AM (#54214611)

      By the time you take all that stuff into account the US is likely to be *way* further down the list. Property tax isn't high in the US (typically around 1.5% of the value of the property, which is similar to, or lower than council tax rates in the UK). Sales tax is typically extremely low (typically less than 6%), compared to the UK's 20% VAT. Taxes on fuel are typically extremely low 18.4/gal, compared to the UK's £2.19/gal (273/gal).

      • And... slashdot ate my cent symbols. Assume that 18.4 and 273 are followed by cent signs)

      • by Ded Bob ( 67043 ) on Tuesday April 11, 2017 @12:03PM (#54214719) Homepage

        If they did not take into account state taxes, they also skipped city, township and county taxes. Sales tax can come from state, city and county, I think.

        Gas taxis 18.4/gallon at the federal level, so it should be already in there, right? I am not sure. Anyway, state and city can add their own gas taxes.

        Does the UK's VAT replace the income tax there or do both exist?

        A more thorough report would be nice regardless of whether the U.S. is higher or lower on the chart.

        A report for value obtained by those taxes would also be nice. However, that can be highly subjective.

      • Sales tax is often above 6%, even here in Utah. There are state, county and city components to it. The federal gas tax is the low part. State more than doubles that. We pay an additional 29 cents a gallon on that. Given the cost of gas that is an effective 25%ish tax rate. Social security tax is very significant amount, varying by income.

        Then again remember the second half of the equation. We are required to by health insurance and nothing is covered. We have to pay out of pocket on top of that to
        • by Freischutz ( 4776131 ) on Tuesday April 11, 2017 @12:38PM (#54215195)

          Sales tax is often above 6%, even here in Utah. There are state, county and city components to it. The federal gas tax is the low part. State more than doubles that. We pay an additional 29 cents a gallon on that. Given the cost of gas that is an effective 25%ish tax rate. Social security tax is very significant amount, varying by income. Then again remember the second half of the equation. We are required to by health insurance and nothing is covered. We have to pay out of pocket on top of that to use the health insurance. We have to save for our own retirement as we do not get government pensions back out of our money, and in fact can't even really start collecting social security (our own money) until later and later years. Now approaching the average age that a male dies. We basically get very little for our tax money, and have to make up that difference ourselves, costing us more. This means that the real effective tax rate is higher, and actual cost of living can be quite high do to the lack of services provided for your taxes. The corporations get cheap tax rates, the extremely rich pay very little, and the middle class carries a significant portion of the tax burden. Look at the effective rate the middle class pays and what they get.

          I live in a European country. I pay 25% sales tax, a 40% income tax and a monthly charge for my pension plan but that's not a tax to my mind, it's an investment. Additionally I pay tons of all kinds of fees every time I want to use a public service, my car is subject to fuel taxes and road taxes but I expect this 'taxing by a thousand tiny cuts' phenomenon also exists in the states so let's stick with the big taxes. If I was an American I'd be paying 25% income tax and 0-10% sales tax depending on where I lived. On the face of it I'd say the American has it significantly better than I do especially because the average pay in my industry is about 30% higher in the US. However, I do get universal healthcare and free university education for my 40% income tax and 25% sales tax and the crime rate is ridiculously low here compared to the US so it's not all bad.

          • I live in a European country. I pay 25% sales tax, a 40% income tax and a monthly charge for my pension plan but that's not a tax to my mind, it's an investment. Additionally I pay tons of all kinds of fees every time I want to use a public service, my car is subject to fuel taxes and road taxes but I expect this 'taxing by a thousand tiny cuts' phenomenon also exists in the states so let's stick with the big taxes.

            If you think about it, you'll realize how stupid this whole thing is. Regardless of the for

            • by LunaticTippy ( 872397 ) on Tuesday April 11, 2017 @07:01PM (#54218519)
              For every problem there is a solution that is clear, simple, and wrong. Taxes are complicated for a lot of good reasons. There are some bad reasons, too, but not all the reasons are bad.

              You already opened the door to many of the reasons with behavior modifying taxes. Many annoying details in the tax codes are there because of this.

              Another big problem is locality. There are countless tiny library districts, transit districts, school districts, etc. that all have wildly varying needs and draw on different groups of people. If you attempt to simplify things and then flow cash back to these districts things can get ugly fast.

              Maybe try to attend a few local town hall meetings and see how complicated it gets when some bright fucker tries to nix a bag fee or something.
            • by beelsebob ( 529313 ) on Tuesday April 11, 2017 @08:44PM (#54219015)

              If you think about it, you'll realize how stupid this whole thing is. Regardless of the form of taxation, the net result is the same - money diverted from the productivity generator (employee, company) to the government. So why do we need so many taxes?

              This makes a base assumption that services provided by the government are not productivity generators.

              According to you:

              *Roads are not productivity generators

              * People who are not sick don't generate productivity

              * Educated people don't generate productivity

              * People who don't live in fear of crime don't generate productivity ...

    • by Ded Bob ( 67043 )

      Exactly my thoughts. Ignoring a lot of different tax avenues that governments utilize is one deficiency in the report. The other is the value provided. Ignoring whether the country should or should not provide services (i.e., healthcare), what the country does provide as part of taxation(s) should also be accounted. Well, I guess that could go into a separate report.

      Also, what about evaluating the individual states of the United States? The European Union countries were rated individually while the Uni

    • by ctilsie242 ( 4841247 ) on Tuesday April 11, 2017 @12:06PM (#54214777)

      I will assert that the taxes to the -government- are not high in the US. However, there are "taxes", that one has fork over to businesses or else:

      1: Health insurance.
      2: Toll roads/commuting. There is no government interest in public transportation, so one has to have a vehicle and drive. This means forking over cash for car insurance, vehicle upkeep, parking, traffic costs, etc.
      3: Pollution.
      4: Potential losses due to sickness/injury. Those costs going to inscos don't mean that they might bother paying a hospital bill bursting with zeros. It is pretty common for someone to lose their entire fortune with one serious illness.
      5: Unemployment. Not everyone has a 2 year "fuck you" fund. Benefits can be quite limited, if one can get them at all, since ex-employers fight unemployment claims tooth-and-nail as a matter of routine.
      6: Training and education. When I was in college, my German classmate had his tuition paid for by the state. Same with my Russian, Chinese, French, English, and Indian classmates. I was the only one there forking out fees out of my pocket or getting student loans for it.

      I would be more than happy to pay more in taxes, provided it gave single-payer health coverage, a usable public transportation system, some type of income if jobless for the short and long term, and education so I can keep relevant when job skills shift. In fact, if those things were covered by taxes, I'd be far better off financially, and I'm sure most people would be as well.

    • Ahem
      It ain't what you got, it's what you do with it that counts.
      I was surprised to find that Canada pays less than the US overall.
      And for that Canada has a rudimentary universal health care system, and the US has what?
      Crumbling infrastructure and an overpriced military that funnels money into the military's suppliers and from there to the executives of those suppliers.

      It's no wonder the US citizenry are so angry.

      Peace
      • Canada vs US (Score:5, Interesting)

        by sjbe ( 173966 ) on Tuesday April 11, 2017 @12:52PM (#54215337)

        I was surprised to find that Canada pays less than the US overall.

        You shouldn't be. Canada is rather more sanely managed than much of the US.

        And for that Canada has a rudimentary universal health care system, and the US has what?

        The US has a schizophrenic public/private system where nobody is in a position to control costs. We have universal health care but only for retired and some (but not all) poor people. We have great hospitals but nobody to keep costs in check. We refuse to insure millions of people thereby costing ourselves far more money when they inevitably show up in the emergency department of a hospital to get treated at far higher cost. We allow drug companies to charge whatever they want because... reasons. If you wanted to design a financially irresponsible health care system you'd have a hard time developing one more irresponsible than the one the US has.

        Crumbling infrastructure and an overpriced military that funnels money into the military's suppliers and from there to the executives of those suppliers.

        Our military isn't so much over priced as over funded. We have WAY more military than we could possibly justify or need. We spend more on our military than then next 8 largest military budgets combined, most of whom are allies. We have an annual federal deficit of $600 billion and guess how much we spent on our military last year? Yep, $600 billion. We basically borrow every penny we spend on the military, thereby screwing future generations because baby boomers are paranoid idiots.

    • Sit down and shut up (Score:3, Interesting)

      by DogDude ( 805747 )
      You get the largest military in the history of the planet. That's what stupid Americans want, so that's what stupid Americans get.
    • Re: (Score:2, Insightful)

      by Anonymous Coward

      we are grossly overtaxed... for what we get in return

      for what we pay, with all taxes combined (income, property, sales, registration fees for cars and what not, etc).. we *should* have single payer non-discriminatory universal health care, free 4 year public university, and a lot of other things.

    • by fiannaFailMan ( 702447 ) on Tuesday April 11, 2017 @12:16PM (#54214927) Journal

      I was filling my return in yesterday. I was owing the feds $200 until I put in my mortgage interest deduction. Suddenly Uncle Sam owed me $2000. Property taxes are negligible given the system that's skewed in favor of home owners who take a massive benefit from the general population's tax contributions. It's a huge driver of income inequality.

  • Relativity (Score:2, Funny)

    by Anonymous Coward

    Sorry, but you've only been stabbed in an artery, so it's not actually bad compared to this guy was was shot in the face.

  • It's relative (Score:2, Interesting)

    by Haxzaw ( 1502841 )
    Just because others are taxed higher doesn't mean we aren't over taxed. I'm not saying we are overtaxed, but I think taxes could be lower, or spent more wisely.
  • by meta-monkey ( 321000 ) on Tuesday April 11, 2017 @11:47AM (#54214517) Journal

    "Yes, you're getting forcibly fucked in the ass, but the dick's on the small side, so it's okay."

  • Yes they are too (Score:4, Insightful)

    by Bobb Sledd ( 307434 ) on Tuesday April 11, 2017 @11:49AM (#54214527) Homepage

    Yes they are, for a non-socialized country they sure are. I pay over 50% in combined taxes, regulatory fees and permits, and still have to shell out more for things like healthcare and get no government benefit because I "make too much." So bite me.

  • Health Care (Score:5, Insightful)

    by SuperKendall ( 25149 ) on Tuesday April 11, 2017 @11:49AM (#54214529)

    Since health insurance is required by the government it is a tax, even if you don't want to call it that.

    Why is that figure omitted from the comparison?

    • by chill ( 34294 )

      Because the vast majority of people get healthcare through their employer or provided by the government and don't have to explicitly purchase it?

      http://kff.org/other/state-indicator/total-population/?currentTimeframe=0&sortModel=%7B%22colId%22:%22Location%22,%22sort%22:%22asc%22%7D [kff.org]

      • Re:Health Care (Score:4, Insightful)

        by johannesg ( 664142 ) on Tuesday April 11, 2017 @12:20PM (#54214967)

        What does it matter if it's your employer paying it directly, or paying the money to you and you paying it? The route the money takes shouldn't make a difference.

        I live in the Netherlands. The lowest tax bracket here is 36%, which seems surprisingly close to the 37% we ended up with in the table. The highest bracket is 52%, and it kicks in at around 67000 euro (i.e. it's not just for the extremely rich).

        But then there is another sum which must be payed by the employer. This is income-dependent, but it's not counted as income tax. Why? This money is directly related to my income, so what could it be, other than an income tax?

        "Ah, but this second sum is paid by the employer, so it isn't income tax!" Well, I've got news for you: the first sum is also directly paid by my employer to the government. I never get to see or touch that money. I just hear about it in reports, stating that I sponsored the government for an appallingly large figure.

        So yeah, all in all I'm going to go with "we pay a lot more than 37%", and that makes me suspect the other figures in the report as well.

      • by Pascoea ( 968200 )

        Because the vast majority of people get healthcare through their employer or provided by the government and don't have to explicitly purchase it?

        I don't see how that's relevant, unless I'm misunderstanding your point. I'm included in the vast majority and have employer provided health coverage. It cost me $500/month, and my company is chipping in at least that much per month. My employer certainly doesn't require me to participate, but if I don't I pay the "no-insurance-tax". How is that not the same thing as a tax? Just because I'm able to purchase it through my employer instead of an exchange doesn't diminish the requirement of having health

    • In fact a lot more is missing. In some countries, education, health care, day care, unemployment ensurance is fully or partly covered. You need a complete picture to compare socialized countries with non socialized. It is interesting as well to compare different levels of incomes in different countries. What are good countries to be rich and poor, and how much is needed to "feel" secure.
  • Our taxes may not be high, relatively speaking, but what we get in return for them in this country is still a complete fucking joke.
    • Re:Yeah, well... (Score:5, Insightful)

      by Baron_Yam ( 643147 ) on Tuesday April 11, 2017 @12:05PM (#54214753)

      You get the biggest, best-equipped military in the world. One (admittedly large by area and population) nation, effectively dominating a large portion of the planet and strongly influencing the rest. If you take off the gloves, you could take on the entire world and win.

      You've done that at the expense of healthcare, education, and social programs. It's a choice you make every election cycle.

  • by Blue23 ( 197186 ) on Tuesday April 11, 2017 @11:54AM (#54214587) Homepage

    For example, if a country's taxes include universal health care, then the equivalent cost to Americans would be taxes + healthcare costs, not just taxes. Same in regards to things like universal access to education (including college), or a better social support net for elders past working age.

    Comparing buckets that are supposed to cover differing things and noticing they are differing sizes really doesn't show anything at all. It's a false equivalency that's misleading at best.

    • by Altus ( 1034 )

      You are right, but thats not really the way most americans think of their taxes. Raising taxes is a hard line for a ton of americans and it doesn't matter what we get in return for it, so we will never have universal healthcare if the idea of raising taxes is so vilified. Even if the tax increase was far less than what we pay now for insurance (which it likely would)

  • by Lumpy ( 12016 ) on Tuesday April 11, 2017 @11:57AM (#54214629) Homepage

    Forgot to ad the forced insurance payments that are in fact taxes. $900 a month for both my wife and I. I pay more in taxes+the forced insurance payment than the canadians do and they dont have to pay co-pays and their pharmaceuticals are not allowed to be price gouged.

    So add that in and now you have the REAL number to compare, because those countries all have universal healthcare for their citizens.

  • Payment vs Service (Score:5, Interesting)

    by EndlessNameless ( 673105 ) on Tuesday April 11, 2017 @11:57AM (#54214637)

    Americans may pay less taxes, but we also get far fewer services.

    The closest we have to retirement pensions is Social Security, which is a laughable amount of money. In other countries, you can retire without dedicating a chunk of salary to a gambling scheme---the ubiquitous 401K.

    We have no public health care, so we pay higher costs out of our own salaries.

    Our public education system is woefully underfunded, and higher education is very costly. It would be nice if everyone smart enough to be a doctor or an engineer could just decide to go to school. Who knows?---it might even help with the health care costs and H1B issues if students didn't have to mortgage their futures just for a chance at those professions.

    Let's not forget the embarrassing state of our infrastructure. If a bridge collapses, maybe the media frenzy will force the politicians to do something. Until then, they can rust, rot, or erode away.

    • Americans may pay less taxes, but we also get far fewer services.

      We get plenty of services. We have more aircraft carriers at our disposal than the rest of the world combined. A fleet of nuclear weapons waiting to be launched. Probably more tanks and aircraft than any two other nations. We have a wealth of services we pay for.

  • When income tax was created the peoples voice was disconnected and so today a great deal of taxes are used in a manner the taxpayers would not approve of. And there is a problem with Americans have viable and heard voice in their government business. Soooo http://3seas.org/pmwiki-gov/ [3seas.org] read, share and with your representatives so they may actually know how to represent you. And know, they don't just work in their respective states but on teams in congress.

    Personally I do not approve of my taxes beiung used f

  • by pecosdave ( 536896 ) on Tuesday April 11, 2017 @12:05PM (#54214763) Homepage Journal

    The problem isn't that just one tax - the payroll/income tax being high.

    It's that after you pay that you still have to pay social-security (which isn't operating in the way it commissioned to operate), the medicare, state income tax (in most states), health insurance - which in now a tax per the supreme court [washingtonpost.com], car inspection, vehicle registration, property tax, sales tax at the register, "universal service fee", among other things that creep in we are much more highly taxed than we get credit for when you're only looking at payroll/income.

    For a couple of years I was at 53% removed from my paycheck before I got paid, THEN the sales tax etc.... happened.

    • The problem isn't that just one tax - the payroll/income tax being high.

      TFA doesn't just cover cover federal income tax. It tries to quantify every tax that is based on an individual's income. Therefore social security, medicare, and state income tax are counted.

      Included are income taxes, payroll taxes, and any tax credits or rebates that supplement worker income. Excluded are the countless other ways that governments levy taxes, such as sales and value-added taxes, property taxes, and taxes on investment income and gains.

      Keep in mind, you are supposed to get your social security and medicare payments back when you are retired.

  • by geekmux ( 1040042 ) on Tuesday April 11, 2017 @12:10PM (#54214821)

    "...Excluded are the countless other ways that governments levy taxes, such as sales and value-added taxes, property taxes, and taxes on investment income and gains. Guess who came out at the top of the list? No. Not the U.S.

    Guess who made an accurate tax survey? No. Not the OECD.

    What the fuck is the point of a survey on tax burden when you're going to exclude a lot of it? My property taxes aren't some meaningless number, paid for by scrounging loose change from underneath my car seat.

    This survey is as pointless as asking what megacorps pay in taxes every year...you know, excluding tax loopholes of course...

  • Not relative (Score:5, Insightful)

    by OrangeTide ( 124937 ) on Tuesday April 11, 2017 @12:12PM (#54214847) Homepage Journal

    Having taxes that are too high is not a relative observation. It's a benefit vs cost issue. Are the taxes we pay being used effectively? Do we pay more into the system than we need to? Is there a lot of graft in the system? Are taxes creating new government organizations that reduce individual freedom without providing something of equivalent value to society in exchange? Are the services we're paying for something that we democratically agree is necessary and useful or are the services the remnants of failed policy? Do our taxes get funneled into bailing out rich banks instead of helping the middle class or helping the poor move up into the middle class?

    Just because the US pays less taxes than Sweden does not mean we are denied the right to point out that taxes are too high. It's relative to what we as a society want and what we actually get from those taxes, and not relative to what a person in another countries pays.

    Also remember your intro to macroeconomics course. Saving money versus spending money has serious economic repercussions. And it is going to be difficult to compare different cultures and economies based on those metrics. Americans are not savers, and we tend to run our economy with the heat turned up higher than some other countries would find comfortable. (for better or for worse)

    If the entire Earth had the same tax rate, we wouldn't say that taxes were average. What if the tax was 95% of your income above $10k? That would be high, but it wouldn't be higher relative to any other country if they were all the same. The argument is ridiculous.

  • Americans hate paying taxes because the US government is dysfunctional and doesn't use the tax money wisely. Here in Canada, we pay a lot more taxes than in the US, but there are far fewer people angry at the tax level than in the US because we get things for our money, most notably universal single-payer health care.

    In counties like Sweden and Denmark that have really high tax rates, most people are OK with that because the government provides many services.

    I really don't see a way out for the USA giv

  • Mark 2030 on your calendar. That's when the majority of baby boomers are retired, retirees will outnumber workers, and two-thirds of the federal budget will go to Social Security/Medicare. Taxes will have to go way up to pay for everything else.
  • Did anybody actually think that US taxes were high? They're pretty low, I pay way more income tax and sales tax than an American would, so I always assumed that Americans knew that their taxes were really low.

  • Comment removed based on user account deletion
  • by King_TJ ( 85913 ) on Tuesday April 11, 2017 @12:58PM (#54215403) Journal

    That really ignores a few basic points.

    First, the U.S. is a Democratic Republic, NOT a nation with a monarchy, a dictatorship, Communist rule, or Socialism. That puts it in a rather unique position as far as having a government structure that encourages less taxation and more self-reliance. (Not interested in trying to start the whole "which is better?" debate here... but just stating facts. I'd expect these other types of governance to impose higher taxes because they focus on the people working for the greater good of the whole, with government at the center, orchestrating things. In America, government is, at least in theory, "by the people, for the people" and exists to only do the basic tasks outlined in the Constitution and Bill of Rights.)

    Second, taxation in America is all spread out. The list of taxes is huge, and comes at the local and state level as much as at the Federal level. I'm no expert on the subject,but I'm confident that in many nations on their survey, taxation is much more centralized. In America, I can't even pay a cellphone or land line phone bill without getting hit with a list of various "nickle and dime" taxes for my municipality, city and state, followed by the Federally imposed ones like the FUSF (money they force you to pay to subsidize cheaper telecommunications offerings for the poor).

  • by Chris Mattern ( 191822 ) on Tuesday April 11, 2017 @02:24PM (#54216403)

    You can't excuse something bad by pointing out it's worse elsewhere. Tell me, would you buy excusing Jim Crow by saying it was better than slavery? Not to say that taxation is as bad as those things, but it's the same argument.

  • by computational super ( 740265 ) on Tuesday April 11, 2017 @03:01PM (#54216801)
    Just because taxes could be higher, and just because they are even higher for somebody else, doesn't mean they aren't high.

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