--

Taxes, savings and the labour market.

From the other thread:

"(in X nordic country) if you work you will be taxed so heavily that you won't ever have any savings (although healthcare is free and food/shelter is guaranteed)"

Now, admittedly, taxes have so far only gone down in my country, but this sounds suspicious.

The thing is, taxes are invisible. I know that the government takes 60% of what I make (plus 18% of what I spend), but the way it's structured, I never see that money to begin with. The difference between the figure in my contract and the figure in my bank account is 23%, but once I sign the paper, I only think in terms of real earnings - the other figure is irrelevant.

Effectively any and all negotiations about salary are based on the actual pocketed earnings. A strong economy can support strong taxes because the end figure is high as well. So you don't have to spend any money on health insurance and college funds for the kids - most people still don't think about how much the government takes, they think about how much they get and how much they spend.

High taxes, if used wisely (and they have to be, otherwise the government won't hold), stimulate the economy. This increases pocketed earnings. Nobody is going to work for less money than they need to have a nice lifestyle, so nice that they will give up eight hours of their day for it.

The system balances out. In terms of what people get to take home, adjusted to purchasing power parity, there is no major difference between the US and Sweden. (You'd be surprised at the posh cars you see in Stockholm, for example, even though in absolute figures cars are ridiculously expensive compared to Montana.) Except in a high-tax country, you also have good healthcare, good education and good public transport.
Permalink Flasher T 
January 4th, 2006
This has essentially been my philosophy though I've never bothered to articulate it in any sort of article. :)

The problem comes when taxes are radically adjusted (can't think whether this has happened in my lifetime) and salaries lag behind for too long. People aren't likely to quit their jobs in droves for greener pastures, nor are they likely to successfully negotiate a higher salary to make up the difference.
Permalink Mark Warner 
January 4th, 2006
If they tax increasingly higher percentages as your income increases, and depending on how they tax capital gains (so your savings can't *grow*), it could be more true than in other countries.
Permalink MarkTAW 
January 4th, 2006
"High taxes, if used wisely "

This is the whole crux of the argument though. Americans, or at least ones like me, believe we can better manage our own money then the government will.
Permalink Phil 
January 4th, 2006
Right, you'll manage it right out of the needy's pockets.
Permalink Mark Warner 
January 4th, 2006
The needy can earn their own money Mark. I'm more then willing to help those who cannot help themselves.
Permalink Phil 
January 4th, 2006
Flasher T,

While you might have assuaged yourself to accept the net earnings, and you pay no heed to the government take, remember that it's not only the 60% (wow) off the top of your pay, but it's also the greatly increased cost of every other good and service throughout your economy. Outside of VAT, every manufacturer and service organization has to increase their costs X% to support not only their bloated corporate tax, but also the greatly increased salary requirements of their employees.
Permalink Dennis Forbes 
January 4th, 2006
"I'm more then willing to help those who cannot help themselves."

Great. What percentage of your non-government-managed-money will you be setting aside for that task?
Permalink MarkTAW 
January 4th, 2006
60%? Holy cow.

We American's keep arguing over how much below 30% our income tax should be. 50% is considered 'confiscatory'.

Just remember that next time Bush is trying to 'stimulate' the economy through 'tax cuts'.
Permalink AllanL5 
January 4th, 2006
"Great. What percentage of your non-government-managed-money will you be setting aside for that task?"

*shrug* i don't know why everyone has to do the "what are you doing?" nonsense every single time this debate comes up, but as i've mentioned before we voulenteer for habitat, give 3% of our annual income (which is matched by wifes company), sponsor children at christmas, and support our own family (not let them end up "on the street"). Communities need to be supported at the local level, not through federal government handouts.
Permalink Phil 
January 4th, 2006
(Note: I'm allowed to talk about aboriginals, as I'm purportedly 1/8th Cree - it's my blanket exemption from racism cries)

Native reserves here in Canada are a great example of a handout society in action (and they constantly get us censured by the UN). Quite contrary to the image of the wise, pipe-smoking chief, most reserves are awash with overwhelming alcoholism, coupled with a complete lack of any sense of personal responsibility - decades of government handouts have led to it somehow all being the government's problem.

There was a story in the paper a while back where one tribe was complaining about the negligent government, demonstrating this by showing off their filthy house full of garbage, with graffiti on their walls (yes, the interior walls) and holes punched all over the place. Most people would be ashamed to be seen in such a situation, because it is indicative of gross personal neglect, but here it was all somehow Uncle Beaver's fault. One native town, called Davis Inlet, was so over-the-top lost that the government spent $200 million dollars to move 535 people to a brand new town, with all new housing, a community centre, and so on. In no time the new community devolved into the same situation as the old, again with every misstep being the government's problem.
Permalink Dennis Forbes 
January 4th, 2006
Yeah! Fuck all this socalist bullshit! Ain't no terraists flyin' planes into MY house! Because I have my OWN guns... so fuck that socialized-army shit.
And I ain't breakin' no laws, and crooks don't fuck with me... so why should I pay for YOUR cops? Socialism! Communism!
Come to it, all you crazy assholes on the east coast, with your shitty blizzards that wreck the roads... I don't live there, why should I pay for your socialized roads? BULLSHIT.
Permalink Star Wars Kid 
January 4th, 2006
Who are you arguing against SWK? It seems that the discussion is consider different weights of taxation/services versus the free market. It isn't black or white, you know, and from what I've seen (in this thread) no one has cried either socialism or communism but you.
Permalink Dennis Forbes 
January 4th, 2006
Obviously there are SOME things that need to be taken care of on a federal level, but taking 60% of my income to hand to someone who has no skills or chooses not to work sounds like stealing to me. Why should we not have a say if we want to help our fellow man or not? I think spending should be much more heavily taxed instead of income. Spending is optional. Taking income though is telling me how I should spend my money, and often goes to government waste and corruption. (Awesome, I just bought part of a stealth bomber that was shot down by iraqi rebels!)
Permalink Phil 
January 4th, 2006
It is every American's right - no duty - to pay as little tax as possible. It's ingrained in our society. That said - most of us would pay more tax if we felt it went to something other than another government boondoggle.
Permalink Sassy 
January 4th, 2006
But don't you want to build a highway bridge to nowhere in Alaska?
Permalink Dennis Forbes 
January 4th, 2006
Nuttin' against you, Dennis... I took so long to post, yours got in first.
It's that I've been encountering this exagerrated rage against 'guvmint' spending lately. I live among people who (more-or-less) actually feel that way, only it's never about cops or roads, it's always welfare and food stamps.
Which is really odd when you think about it. Phil's comment that 'communities should be supported at the local level instead of with federal handouts' got me thinking about it. There are some things that best be accomplished by a large, centralized agency, such as building and maintaining an interstate system, or running a military. I'm just going to go ahead and assume that, because this is ?off after all.
But what about social services, like welfare, housing assistance, and medical care? Where is the evidence that decentralization of the services renders more efficient distribution than a centralized model? The only examples that I'm familiar with (i.e., norther Europe) are contrary to this notion.
Permalink Star Wars Kid 
January 4th, 2006
SWK, a good local community example would be the chinatowns and little italy's out there. Poor immigrants would come in, and the community would help them get on their feet. People look out for one another, and next thing you know they are buying up serious tracts of property in wealthy areas. The local thing matters because as Dennis said, we in dense Washington DC end up having to give a large share of our money for a bridge in alaska or homeland security in north dakota because of all the porkbarrelling. People should have a vested interest in their own community.
Permalink Phil 
January 4th, 2006
Agreed. Though it is really difficult to draw the line.

The Canadian healthcare system, for example, is far from perfect (especially to the perception of an American, spoon-fed a diet of HMO propaganda), yet it manages better metrics than the US system, at a greatly reduced price. Medical coverage seems like a good candidate for centralization, though on the flip side because it's "free", emergency rooms are overcrowded with people with the sniffles, and quite honestly a lot of seniors that have nothing better to do with their time.
Permalink Dennis Forbes 
January 4th, 2006
"Right, you'll manage it right out of the needy's pockets."

Actually, if the money isn't taxed in the first place, it will STAY in their pockets!!!

Oh wait, you meant MY money in THEIR pockets. My bad.


So Muppet.... if you're so concerned about the needy, can we assume that you're not going to take the tax deductions for your recent home purchase?
Permalink KC 
January 4th, 2006
Hmm, a Google search on "Davis Inlet" showed a different story, with this Native community having one of the highest suicide rates in the world. I think if some really foreign country had a post-genocide native population showing such problems, we wouldn't blame the natives.

The US-style libertarian solution of minimal state intervention is well-intentioned, but I get the impression that a) the history of capitalism shows this is disastrous (Polanyi, _The Great Transformation_) and b) the Bill Gateses and politicians know how vital federal subsidy is to the economy.

Seemingly mindless defense/tech/corporate subsidies has a goal -- it keeps the economy afloat. Now there are far better ways to spend it, even more effective economically, but simply cutting it would be disastrous to the US economy.
Permalink Tayssir John Gabbour 
January 4th, 2006
`Hmm, a Google search on "Davis Inlet" showed a different story, with this Native community having one of the highest suicide rates in the world.'

How is that a "different story"? That's exactly the same story that I just told.

`I think if some really foreign country had a post-genocide native population showing such problems, we wouldn't blame the natives.'

Post-genocide...give me a frickin' break.
Permalink Dennis Forbes 
January 4th, 2006
Phil,
I agree, or at least think I do... not had enough coffee this morning.
I don't know where the Chinatown or 'little Italy' examples are coming from, though. Here's what I see in California:
Some immigrant communities (such as the Japanese, Han Chinese, and Sikhs) came over in more-or-less already gelled packs, or extended clans. Then they got busy, and formed tight-knit communities (what the academics like to call 'co-prosperity spheres'). They packed themselves into small apartments, cut expenses to the bone, worked themselves to death, sacrificed their health, and in the end bought up every 7-11, carpet-cleaning service, etc. in town. Now they are owners and they are prospering.
And good for them.
Then there's other immigrant groups (like many Mexicans and the Hmong) who came here under rather different circumstances, usually alone or in very small groups. They have for a variety of reasons been unable to form these co-prosperity spheres and become an effective economic force, despite making the same sacrifices as the more fortunate groups above.
So what's the point? The point is that I believe that success requires not just hard work but also a distressing amount of luck. I come from a poor family and I know firsthand how hard work alone just doesn't cut it.
Permalink Star Wars Kid 
January 4th, 2006
The 60% figure is amazing. I think you would most likely find the 60% wholely unacceptable if you got all the $$$ in your paycheck and then had to pay it back. I think this is how it should work- If you are going to have to pay income taxes then imagine if companies pay you 100% of your earnings and then you give it to the government. That would hurt and that's why it is setup the way it is. Getting the money and paying the government would force you to honestly evaluate the *cost* of government and I bet alot more people would be actively involved. It would also bring some introspection on things like *free* medical care. It would also force the government to be more responsible with your money.
Mike
Permalink MikeG 
January 4th, 2006
"How is that a 'different story'? That's exactly the same story that I just told."

No, the suicide rate wasn't mentioned in your post, which is what I referred to. I would've frankly been impressed, as that would've seemed unusual... for aborigines so shockingly lazy that they just offed themselves for some reason.

Alcohol drinking is part of the welfare-glutton imagery that we frequently see -- but world-level suicide is not. That raises serious questions about how lazy they really are.

As for genocide... well, either that or Native Americans committed mass suicide. ;)

(If the native situation was different in Canada, then I'd be grateful for someone to point that out...)
Permalink Tayssir John Gabbour 
January 4th, 2006
Tayssir,

Interesting how you took a post that symbolized the problem of a "mother government" and easy handouts, and turned it into a "lazy aboriginals" slant. Yet I never said that aboriginals are lazy. Instead I said that a small community of individuals who happen to be aboriginals living in an artificial world of government handouts had so little personal responsibility that they devolved into a cycle of self-destruction.

And alcoholism, along with glue sniffing and gambling, has always had a tight correlation with suicide.
Permalink Dennis Forbes 
January 4th, 2006
> 50% is considered 'confiscatory'.

If I add up all the taxes I pay it's 50%. That's without health care. So what's another 10%?
Permalink son of parnas 
January 4th, 2006
To clarify the 60% number: the income tax in Estonia is not 60%. It's 23% (24% last year), and 33% is social tax, which goes to social services like pensions, healthcare etc. And there's also a 1% unemployment insurance.

The 33% is not "taken" from employees; the 33% is what the employer *must* pay the state. The number in the job contract is the full salary sans income tax, the social tax number is not paid by the employee. If you are a private entrepreneur, you do have to pay that yourself, of course.
Permalink Mr. Wumpus 
January 4th, 2006
Dennis, in your post, you mentioned the natives showed "gross personal neglect", with a "complete lack of any sense of personal responsibility." With people claiming "every misstep being the government's problem."

Now, you might think I'm painting you as a racist, which I'm not. You started out by claiming you're not racist, which I accept and have no reason to think otherwise. I'm not interested in playing some game where I make a wild claim and you respond and... you know, the Zen of ?off.

However, I do think that in the case where a race has been either enslaved, driven off their land, or exterminated; and when there are many such communities on the continent living in extreme squalor; it's not that they've been helped too much by the nanny state. I mean, if anything, Microsoft works hard, but Bill Gates's daddy certainly points out that federal subsidy was the cause of his son's individual wealth, and that of many other privileged US citizens.
Permalink Tayssir John Gabbour 
January 4th, 2006
Tayssir,

`Dennis, in your post, you mentioned the natives showed "gross personal neglect", with a "complete lack of any sense of personal responsibility." With people claiming "every misstep being the government's problem."'

Exactly, and it's a symptom of a handout society. Of course the ultimate of handout societies exists on reserves as a function of their mandate (as we make amends for past sins), though if there were the same setups with virtually any other society I'm sure the results would be the same. Listen Tayssir, I'm not trying to say that you're a Nazi, or that you salute to Hitler or hide swastika dishware in the old cupboard in your basement, so I don't want to go there, okay?
Permalink Dennis Forbes 
January 4th, 2006
"However, I do think that in the case where a race has been either enslaved, driven off their land, or exterminated; and when there are many such communities on the continent living in extreme squalor; it's not that they've been helped too much by the nanny state."

Interestingly, native nations were driving each other off their land endlessly, in brutal, terrifying campaigns. Are the tribes paying appropriate reparations to each other? Have we traced back to the origin of humanity to ensure that every piece of land that the Cree claim wasn't originally walked over by an Alognquin, and vice versa, or maybe even by a hominoid ancestor? Oh, right - 21st morality only applies to 19th and 18th century white man, as we imagine that the rest of the world was living in peaceful harmony while the evil white man was off stealing everyone's land. That sort of distortion is good fun for all.

Regarding the squalor - the problem with a nanny state is that it's an endless pit, and squalor has a way of rebirth no matter how much money you throw at it. For Davis Inlet the government paid $350,000+ for every man, woman, and child to move to a new community, and much of it was quickly trashed. In Ontario a native community was given millions upon millions to create a water treatment plant, and of course we heard of the "shame" when the purported mismanagement led to someone piping a raw sewage intake into the clean water intake, operating free of Ontario regulations and rules because it's the imaginary world of a nanny state mother country where you can just throw up one's hands and blame the government (which is exactly what happened, with everyone talking about "Canada's Shame").
Permalink Dennis Forbes 
January 4th, 2006
"The 33% is not "taken" from employees; the 33% is what the employer *must* pay the state. "

Sure it is. The 33% is taken from you- Do you actually think the employer doesnt view this as a cost of hiring you. If they have a $100 for your position, they are going to offer you $67- the other $33 is associated with the "social costs" of hiring you. You dont even consider that 33 bucks *your* money- well guess what- IT IS!
Permalink MikeG 
January 4th, 2006
>>Interestingly, native nations were driving each other off their land endlessly, in brutal, terrifying campaigns. Are the tribes paying appropriate reparations to each other?

Oh please. So what if they did? They could have boiled babies or whatever. That doesn't make what happened to them any less a crime.
Permalink Star Wars Kid 
January 4th, 2006
"That doesn't make what happened to them any less a crime."

SWK, the point is that people have been fighting and killing each other for thousands of years. Its not a crime, its war. Those same indians took other indians lands at one point, the white people had their land taken by the romans then turks, etc.. To the winner go the spoils has been the way the world has worked forever, normally a losing nation would be completely exterminated or enslaved. You can't apply todays morals to the past.
Permalink Phil 
January 4th, 2006
As long as the Federal Government is running a deficit, whatever services they are providing, if they do not raise taxes to cover that deficit they must borrow, or print the dollars.

If they print it, that's inflation, which has been quite rightly resisted since around 1980 by the Federal Reserve Board. So the current deficits must be borrowed.

Which borrowed money they have to pay back, with interest. Current debt service on the CURRENT national debt is in the range of $300 billion dollars -- somehow, that never figures in to the "entitlements" the conservatives are so keen to cut.

I agree taxes should be as low as possible, as long as the budget is balanced. And I'm willing to pay taxes for services for those less fortunate than myself, and willing to pay taxes for resources in this country that build up this country. Things like education, road maintenance, disaster relief for New Orleans and California.

Not being willing to be taxed, yet being willing to vote in people who deficit spend, is hypocritical. Boosting military spending to increase the deficit, then cutting 'entitlements' to balance the budget, is cynical and disasterous. Disasterous in that it ceases giving resources to those who need it most (retiress on fixed incomes, low-income people who need medicare/medicaid) in favor of giving it to those who need it least (people owning stock in the military-industrial complex).

This mantra of "It's YOUR money!" is cynical and hypocritical. The Federal Government does do some things well -- would you trust ENRON with your retirement insurance? It's NOT all "YOUR Money!" -- 30% of it are the dues you pay for the services that you enjoy every day of the year.

I wish all these dyed-in-the-wool Libertarians would just go live in some special compound set up in Colorado for their use. Don't want to pay taxes? Want a pay-as-you-go society? Want to remove all safety-nets, because of course nobody we care about needs them? Come to the Colorado free-tax zone.

Bring guns, books, and SUV's, because we can't afford police, schools or roads.
Permalink AllanL5 
January 4th, 2006
>This is the whole crux of the argument though. Americans,
>or at least ones like me, believe we can better manage our
>own money then the government will.

True only in certain cases.

Healthcare is something that it is most certainly *not* true. 10% of the American GDP is spent on healthcare, whereas in countries with socialized medicine, healthcare of the same quality costs roughly half that.
Permalink Colm O'Connor 
January 4th, 2006
>>To the winner go the spoils has been the way the world has worked forever, normally a losing nation would be completely exterminated or enslaved.
Yeah, so what?
Look, I'm not a bleeding heart. In fact, my soul is withered. But basically, what I'm reading out of this branch of the argument is that we don't own indigenous cultures any recompense for destroying their civilizations because (1) that's the way the world works and (2) they did it too. Both of which are bullshit excuses. If you don't wanna pay, fine. But don't feed me lame reasons.
Permalink Star Wars Kid 
January 4th, 2006
>>Bring guns, books, and SUV's, because we can't afford police, schools or roads.

High-five to AllanL5!
Permalink Star Wars Kid 
January 4th, 2006
SWK, I dont owe them anything, I nor any of my ancestors did anything to them, its the same as the slavery compensation argument. Its been hundreds of years, at what point are they sufficiently compensated?

And Allan...I think even the conservatives you bash agree with you. Both democrats and republicans deficit spend like a champ, because if you try to cut anything some group will shit about it. I would vote for anyone who seriously wanted to tackle the national debt.
Permalink Phil 
January 4th, 2006
Are not all Nordic countries high tax/high maintenance affairs?

And Western Europe on the continent is less so, but more than North Amerca?

And Canada lower yet, but more than the US?

And there is a whole spectrum of continuity in between?

So why are people obsessed with somehow insisting that the US increase its tax rates and provide higher social services?

If you don't like that system here, move elsewhere and enjoy the higher tax rate. You've got the entire world to chose from...
Permalink hoser 
January 4th, 2006
>>I dont owe them anything
Fine. It's the "well, they did it too" reasoning that irritates me to no end.
Permalink Star Wars Kid 
January 4th, 2006
You are aware, Phil, that before Bush got in, America did in fact have a balanced budget? And the sky didn't fall, in fact the stock market had some of its best performance in history.

That was a Democratic President, with a slightly Republican Congress. And that was done with "the largest tax increase in the history of America" in 1991, voted (of course) by Democrats. And the sky didn't fall then either. Of course, the Republicans used that to turn the House, and then the Senate, so they got Republican majorities.

So instead we vote in Bush and the Republicans, and they turn around and give us a $400 Billion deficit, or more.

I don't think I believe you, Phil.
Permalink AllanL5 
January 4th, 2006
>Both democrats and republicans deficit spend like a champ,
>because if you try to cut anything some group will shit
>about it. I would vote for anyone who seriously wanted to
>tackle the national debt.

You should DEFINITELY be voting Democrat:

http://www.cedarcomm.com/~stevelm1/usdebt_files/image006.gif
Permalink Colm O'Connor 
January 4th, 2006
"You are aware, Phil, that before Bush got in, America did in fact have a balanced budget?"

You are aware Allan that there was a dotcom bubble during that time too right? And that there wasnt a big hype about the war on terror? I'm not defending Bush or any deficit spending so I'm not sure why your taking that tack on me.
Permalink Phil 
January 4th, 2006
`Fine. It's the "well, they did it too" reasoning that irritates me to no end.'

Why does that irritate you? Because it's true?

It's entirely pertinent when people endlessly fictionalize a world where white man alone engaged in aggression against innocent victims.

Let me put it in a more modern way - what sounds worse: China brutally invading docile Tibet, or China invading North Korea just as North Korea launches an assault on South Korea?
Permalink Dennis Forbes 
January 4th, 2006
Dennis, feel free to call me a Nazi. That would be a slight entertainment ;)

If by the Nazi reference you're implying I'm essentially calling you a racist despite claiming not to... I'm not interested in playing this game with you. Political correctness is so 20th century. I'll do without the 5 debate points.

That is, if I'll remain unmolested by easy "stop hatin' the white man!" claims.

As for tribes paying reparations to each other, being guilty of their own crimes -- sure. Hold 'em to the same standard and line up the grievances -- the highly wealthy ones should help out the ones they wiped out and whose lands they're decadently enjoying. I've heard that by a libertarian standard, if I've been enjoying privileges illegally taken from others, warping the market, I owe them for some decent fresh start on the free market.

The only problem though is many natives currently don't seem to have many pennies to rub together in order to pay serious reparations (crack suicide squads don't pay well), but I think they should be held to serious moral standards.

Anyway, our positions seem to be elucidated, so I'll mosey on to other stuff... Gotta run, watch stuff with someone...
Permalink Tayssir John Gabbour 
January 4th, 2006
Clinton also "balanced the budget on the backs of the poor" by signing the welfare reform act.

Kind of a "only Nixon could go to China" act, only Cinton wouldn't be villified for Welfare Reform.

Don't get me wrong, I come to praise Clinton, not to bury him. Seriously, he opened trade, balanced the budget, did almost everything a good Republican would want. In fact, he stole any criticism away from repubs by enacting their agenda. And had that "I feel yer pain" aw shucks demeanor. I'm all there.

Bbut don't make it out like he gave all things to all people. He didn't. That's what made him so successful.
Permalink hoser 
January 4th, 2006
"it's also the greatly increased cost of every other good and service throughout your economy."

That's my point. Absolute price is irrelevant, as long as purchasing power is roughly the same.

"bloated corporate tax"

Actually in Estonia, reinvested profit is not taxed. ;) This is a perfect example of high taxes stimulating the economy: because the government gets its money from social, income and value-added tax, it can afford to not take a penny of reinvested profit. As a result the foreign companies grow their subsidiaries here (because a subsidiary doing development work produces no profit - it sells the product to the parent company at a price exactly equivalent to operating costs), and local companies invest all profit into growing the business; the owners just give themselves high salaries.

"60%? Holy cow."

60% (ish) is the difference between what the employee costs the employer and what the employee pockets. The way it's structured is that you have a 23% income tax taken off the figure in the contract, and the employer additionally pays 33% of the contract figure in social tax. Plus there are tiny percentages for unemployment insurance and pension funds. I can't be bothered doing the maths for the exact percentage.

"Native reserves here in Canada are a great example of a handout society in action"

I'm not talking about a handout society. I'm talking about a society that has found it more efficient to have community services centrally managed. I wonder what figures you'd get if you compare an average American's expenditures on things like transportation, healthcare, education etc. with those of an average Swede.

"Obviously there are SOME things that need to be taken care of on a federal level, but taking 60% of my income to hand to someone who has no skills or chooses not to work sounds like stealing to me."

Heh. Every single American with whom I'd discussed our system at length has marvelled at it (particularly the Republicans). Like I said, Estonia is very laissez-faire, you can't really live off welfare.

"I think spending should be much more heavily taxed instead of income. Spending is optional."

That's why it can't be done. If you tax spending but not income, people will earn, but not spend. And then there'll be nothing to earn, because nobody is spending anything. This is what happened in the Great Depression - none of the wealth really disappeared overnight except the virtual money in the stock market, but people were so freaked that they didn't spend anything.

"Where is the evidence that decentralization of the services renders more efficient distribution than a centralized model? The only examples that I'm familiar with (i.e., norther Europe) are contrary to this notion."

There has been proof posted on this board, with numbers, that the costs of healthcare for Americans are higher than they are for Europeans. (Not by me though.)
Permalink Flasher T 
January 4th, 2006
>>Why does that irritate you? Because it's true?
Hardly. Two reasons, really.
1) It's bad logic. Simply stated, whenever force or agression is used, it should be questioned. Some forms of coersion are justified, others are not. A past use of aggression by one society on yet another is not a justification for our own.
2) It's used by the powerful to far greater effect then by the powerless. It reminds me of Carter's claim that the USA did not owe Vietnam reparations *because*--and this is crucial--"the destruction was mutual". It takes a scary kind of illness to think that the US and Vietnam came from that conflict equally battered, but there you have it.
Permalink Star Wars Kid 
January 4th, 2006
FlasherT,
I, for one, am still waiting to welcome our new Estonian overlords.
Permalink Star Wars Kid 
January 4th, 2006
Fair enough, Phil, I over-reacted.
Permalink AllanL5 
January 4th, 2006
SWK,

White man did all of these evil deeds centuries ago - when it was the norm (which is the point of pointing out that it was already happening). I'm not saying that it validates invading a nation today, but rather that holding the actions of England, France and Spain of the 18th and 19th centure to the standards of the 21st century is pretty absurd. How can a conquered nation today say that a particular piece of land was "there's", when really they've crystalized where they could see when they were conquered - for all anyone knows, they could have been exterminated by another nation the next year.
Permalink Dennis Forbes 
January 4th, 2006
>You are aware Allan that there was a dotcom bubble during
>that time too right?

Even factoring that in Clinton still went further than any Republican Presidents did in balancing the budget.

So by your own argument, you should be voting for a Democrat.
Permalink Colm O'Connor 
January 4th, 2006
Fair enough Colm, but like I said if anyone from any party had a platform of cutting the debt I would vote for them.
Permalink Phil 
January 4th, 2006
Wow....I meant their's above...sorry about that.
Permalink Dennis Forbes 
January 4th, 2006
You mean that you'd believe what they'd say?

What was it Bush said he "wasn't in the business of"?

Hmm.

Nation building.
Permalink Colm O'Connor 
January 4th, 2006
"I think if some really foreign country had a post-genocide native population showing such problems, we wouldn't blame the natives."

...Australia?
Permalink Flasher T 
January 4th, 2006
Two words: Raise Taxes.

If you're saying you'll vote for somebody who had a platform of Raising Taxes, I'd gladly support you in that, Phil.

Somehow I doubt it.
Permalink AllanL5 
January 4th, 2006
Actually Allan I would be all for it, assuming thats actually what it would go to, and not funding a bridge in Alaska, making a monorail in west virginia or funding an art project in new york. If they laid out a budget that would raise my taxes 25% and pay off the debt in two years I would be all for that.
Permalink Phil 
January 4th, 2006
Dennis,
I suppose it centers around what you mean by "holding {foo} to the standards of {bar}". Now if by that you mean:
* Thinking that all persons involved in subjugation of indigenous peoples were purely, and only, morally reprehensible and deserving of punishment
...then I agree, that's going to far.
On the other hand, if you mean:
* That crimes against human dignity are crimes against human dignity, regardless of when perpetrated, by whom, or against whom; and moreover as we now recognize the nature of the crime it behooves us to redress what wrongs we can, particularly as the effects are still felt
... then that strikes me as a rather humane, and reasonable, position.
Somebody, somewhere, has to start paying up. China owes Tibet reparations, as Japan owes China. As the US owes Indians and (you bet) blacks. That slavery shit was ill.
Permalink Star Wars Kid 
January 4th, 2006
>> Like I said, Estonia is very laissez-faire, you can't really live off welfare. <<

That was the original intent of our system, too. It was supposed to be enough money so that people wouldn't starve.

But what ended up happening is they'd spend the money on luxury goods (satellite TV, name-brand clothes, new car, etc), and then go complain they had no money for food. Since no one likes to see someone starve, we increased the amount of money given to them. Repeat cycle until you reach the current system.
Permalink example 
January 4th, 2006
Example, this sounds like an argument for MORE oversight of those on welfare, not less.

Just saying. [g,d,r]
Permalink AllanL5 
January 4th, 2006
"I think you would most likely find the 60% wholely unacceptable if you got all the $$$ in your paycheck and then had to pay it back."

Let me think about it. Let's assume I earn 10,000EEK a month now (a nice round figure). If the company put 22,000EEK in my bank account every month and then I had to pay 12,000EEK to the government...

Honestly? I don't think it would be different. This is the point of my original post: how much the employer spends on you is irrelevant. The only figure that matters to me is how much I have left after I've paid rent, the ISP bill, the mobile bill, the utilities, my credit card payment, my student loan payment and bought food.
Permalink Flasher T 
January 4th, 2006
Circumstantial evidence about some people spending the money on luxury goods doesn't really mean anything, PARTICULARY when it is evidence presented by people who want to kill welfare.

Public perception is twisted by the circumstantial evidence - the public starts to eblieve that this stuff is far more common than it actually is.
Permalink Colm O'Connor 
January 4th, 2006
"The thing is, taxes are invisible. I know that the government takes 60% of what I make (plus 18% of what I spend), but the way it's structured, I never see that money to begin with"

Maybe thats the problem....if at the end of the year you had to write a large check for "your share" you'd probably think a little differently toward taxes.

I laugh in people faces on April 15th when i ask how much taxes they paid this year, and thier answer is "Nothing I got $1000 back" CLUELESS....
Permalink Yo! 
January 4th, 2006
"Maybe thats the problem....if at the end of the year you had to write a large check for "your share" you'd probably think a little differently toward taxes."

Like I said above - tax is just another expense. I'm not giving away my money, I'm spending it on doctors who treat me when I'm sick and professors who teach me and my kids so they can make money. The bank takes a bit of my money automatically as financing payments for my car and my house - and taxes are just financing payments for having hot water piped to it and sewage piped out.
Permalink Flasher T 
January 4th, 2006
But Flasher, I get all those same things, except for the college, and the government only takes a 35% cut out of my pay (I'm in the highest bracket). If you include my health insurance thats only another 4% or so of my take home pay. What if your kids don't go to university? What if you had the extra pay i'm getting and invested it for the 20 years while you have no kids and/or they grow? Wouldn't you rather have all the extra money we get, which I can choose to give to the poor or buy a big screen TV?
Permalink Phil 
January 4th, 2006
Phil, the existence and usefulness of that big-screen TV comes from the taxes you pay to support the FCC, transmission standards, government funding of research.

You keep asking the question as if its either/or -- either I pay my taxes, OR I have these extra savings and choices. If people didn't pay their taxes, then you wouldn't have the extra choices.

And yes, even if you have no children, part of your dues to society is to fund the education of other people's children.
Permalink AllanL5 
January 4th, 2006
One mistake is that people think of health care as something that has value to an individual only if they themselves consume it. Not so.
Spend a day on a public bus, for instance, listening to the tubercular hacking of the poor... then consider the value of a public health system.
Permalink God 
January 4th, 2006
"Phil, the existence and usefulness of that big-screen TV comes from the taxes you pay to support the FCC, transmission standards, government funding of research."

Again, i am not arguing for no taxes.

"You keep asking the question as if its either/or -- either I pay my taxes, OR I have these extra savings and choices. If people didn't pay their taxes, then you wouldn't have the extra choices."

All i'm saying is I pay considerably less of my income to the state then Flasher, yet I live at a similar or higher level of comfort.

"And yes, even if you have no children, part of your dues to society is to fund the education of other people's children."

Says you.
Permalink Phil 
January 4th, 2006
wow, interesting thread guys.

::grabs some popcorn::
Permalink Jesus H Christ 
January 4th, 2006
"But Flasher, I get all those same things, except for the college, and the government only takes a 35% cut out of my pay (I'm in the highest bracket)."

(Assuming that's the right figure and there are no hidden taxes you've forgot about) Yes, and I keep hearing people bitch about how the US economy is in the dumps. My government takes more of my money because it doesn't take any of the corporations' money, so the corporations come here and give people high-paying skilled-labour jobs, so the economy is booming and I'd have to make a conscious effort to be poor. Salaries are expected to grow 7% overall next year - if I only get a 7% raise, I'll be pissed because it's meager. Whereas Warner, working in the industry that accounts for more of your national spending than defense, had to beg for a 5% and was happy to get it.

"What if your kids don't go to university?"

They will, because it's free; the only requirement is to be moderately good at what you want to study and to make a decent effort. I'm a very lazy person and I had a choice between two of the most competitive majors in the nation's best university by far, both with zero tuition.

"What if you had the extra pay i'm getting and invested it for the 20 years while you have no kids and/or they grow?"

I wouldn't, I'd just buy an Archos PMA430. :) Like I said, it's finance payments on infrastructure. Centralized control of infrastructure is more efficient, it's been proven.

"And yes, even if you have no children, part of your dues to society is to fund the education of other people's children."

...so the guy controlling the nuclear power station down the road has a PhD and not a GED. Exactly.
Permalink Flasher T 
January 4th, 2006
"All i'm saying is I pay considerably less of my income to the state then Flasher, yet I live at a similar or higher level of comfort."

So you live at a similar level of comfort as me, but have no infrastructure or safety net? How is that an achievement? :P

Well, you don't, obviously. You live at a higher level of comfort than me particularly because a) this is a postsoviet state and we've only started from more or less scratch 15 years ago, and 2) I am twenty-one years old and six months out of college. :) Compare your level of comfort to that of a Swedish person of your age, with your sort of working history. In fact, wait and compare it to mine when I'm your age.

You'll find that it's not significantly different. Which is the point of my original post: people in First World nations of different socioeconomic systems will have about the same purchase-power-adjusted pocketed earnings irrespectively of how much tax they pay. But in a high-tax welfare state, they have the added value of an infinitely superior infrastructure.
Permalink Flasher T 
January 4th, 2006
"So you live at a similar level of comfort as me, but have no infrastructure or safety net? How is that an achievement? :P"

Flasher, in America its about PERSONAL responsibility. I'm not counting on the government to save my ass. I have savings, I have disability insurance, etc.. We also have plenty of infrastructure if you mean roads, lights, wires, etc?
Permalink Phil 
January 4th, 2006
Shame there's very little corporate accountability to go with that personal accountability.
Permalink Colm O'Connor 
January 4th, 2006
>>I'm not counting on the government to save my ass.
Hmm. What, then, is government for?
Permalink Star Wars Kid 
January 4th, 2006
"I'm not counting on the government to save my ass. I have savings, I have disability insurance, etc."

Savings don't last, and I would not entrust my social security to a commercial enterprise. Common sense. :P

"We also have plenty of infrastructure if you mean roads, lights, wires, etc?"

Not at the moment, no. I mean community services like healthcare, education and so on. Yes, the US has quality healthcare - for the few who can afford it (the issue of whether doctors have the guts to treat you in the face of lawsuits is for another thread). Here I can go to the best specialist in the field and what I pay is about $3.50 as a "showing up" fee.
Permalink Flasher T 
January 4th, 2006
"Phil, the existence and usefulness of that big-screen TV comes from the taxes you pay to support the FCC, transmission standards, government funding of research."

BS. The standards bodies that developed MPEG and the HDTV standards are, in the US, "The Grand Alliance". The early members were Zenith, Thomson, GI/MOT. In Europe it is DVB another corporate body of Thomson, Philips, et al.

They own the patents, they did the research, they put up the money.

The FCC did very, very little if anything to promote MPEG standards. Any impetus toward digital standards were spearheaded by DirecTV - which finally gave cable and terrestrial something to worry about.

Along the same lines, cable modems gave the phone companies something to worry about.

The FCC allocates spectrum and regulates shared resources. Something that I'm not convinced they have done a good job of in terms of promoting competition and extracting revenue due the federal gonverment.

WTF? FCC. My ass.
Permalink hoser 
January 4th, 2006
its interesting how phil seems to assume that any money not taken by the government as tax would naturally be passed onto the employee.

isn't it just as likely (more likely?) that the company itself would simply pocket the difference?

I mean, money paid by the company as tax on my behalf belongs to the *company*, its not *my* money as phil keeps saying, is it?

I really think that flasher has a point. assuming that the free market works, the amount he is receiving in his pocket at the moment is already at the amount the company believes is the value of his work (you know what I mean).
So if the taxes were decreased, where is the incentive for the company to pass that on to him?

I can see that in the short term it might make a difference, but in the 'long run' in the economic sense all that would happen is that the salary would be reduced to the same takehome pay that it is now, because that is clearly the point at which supply and demand meet.

Phil? do you see what I am getting at?
does that mean that the lower taxes will *never* benefit the individual worker? just the companies who employ them? (which is a good thing in itself, sure, but its not the argument you have been making)
Permalink Jesus H Christ 
January 4th, 2006
"Savings don't last, and I would not entrust my social security to a commercial enterprise. Common sense. :P"

True, but i've been laid off before for months on end, and I didn't ever have to go on welfare. I currently have enough savings to live at my current standard of living for 6 months, i could drop down to a lower quality of life for much longer. If i'm out of work that long, then something is so bad that a state welfare probably wouldn't have been able to pay me either.

"I mean community services like healthcare, education and so on. Yes, the US has quality healthcare - for the few who can afford it (the issue of whether doctors have the guts to treat you in the face of lawsuits is for another thread). Here I can go to the best specialist in the field and what I pay is about $3.50 as a "showing up" fee."

Well my tax dollars go into medicaid, and education is funded up through the high school level, and college loans are subsidized by the government, etc... I dunno Flasher, i'm happy you enjoy your state nanny program, but I feel like mine is working out pretty well too, and I have more of my paycheck to spend to boot. Out of curiosity how easy is it to start a business there? I know in some countries in europe you have to put up substantial "social captial" first.
Permalink Phil 
January 4th, 2006
JHC, I suppose you could be right, but they can already do that now. Wages are decided by the market, so those companies who choose to pass the extra money down to their employees will get better workers and presumably have a better product as a result. Assuming they all keep the profit, the money would end up back in the economy somehow, creating more jobs, etc...
Permalink Phil 
January 4th, 2006
>isn't it just as likely (more likely?) that the company >itself would simply pocket the difference?

Unlikely. I don't think companies are in the habit of docking their employees pay each time there's a tax cut.
Permalink Colm O'Connor 
January 4th, 2006
>Out of curiosity how easy is it to start a business there?
>I know in some countries in europe you have to put up
>substantial "social captial" first.

Actually, I've heard that Estonia is quite a good place to start a business. Skype come from there, for instance.
Permalink Colm O'Connor 
January 4th, 2006
"Unlikely. I don't think companies are in the habit of docking their employees pay each time there's a tax cut."

ah. you clearly missed the point where I talked about the 'long run'

the idea oconner is that although companies are clearly not going to dock the pay of their current employees, they can achieve the same thing *over time* by delaying or decreasing pay rises and/or lowering their initial offerings to new employees.
Thus over time...months, or years depending on how the companies deal with it, the 'take home' pay will level out again to pretty much the same as flasher is receiving now.

its a complex idea so Im not surprised you had a little trouble grasping it.
try taking a little longer and reading through the posts Ive made a couple of times....maybe you would also benefit from a quick look over a couple of basic economic/microeconomic textbooks.
Permalink Jesus H Christ 
January 4th, 2006
In the long run, profits go to zero.

In theory...
Permalink Rick Tang 
January 4th, 2006
"True, but i've been laid off before for months on end, and I didn't ever have to go on welfare. I currently have enough savings to live at my current standard of living for 6 months, i could drop down to a lower quality of life for much longer."

Good for you.

A few years ago, my twins were born three months premature. My daughter had to undergo eye surgery, stomach surgery, and brain surgery (twice) within the first three months of her life. My son was on oxygen for four months.

Even today (they turned three in December), they are regularly seen by a pantheon of follow-up specialists and therapists, to help them catch up physically and developmentally with other kids their age.

Overall, the cost of keeping them alive has totalled well over a million dollars, well beyond the amount of coverage provided by the insurance policy I had at the time.

Thankfully, rather than going into debt for the rest of my life to cover those costs, they were paid by medicaid.

You may have been fortunate thus far to have avoided the kinds of calamities that require federal assistance. But you might not continue to be so lucky forever. And when disaster does strike, it won't be because you were lazy or otherwise deserved it somehow.
Permalink BenjiSmith 
January 4th, 2006
>>> its interesting how phil seems to assume that any money not taken by the government as tax would naturally be passed onto the employee. <<<

Most likely that is what will happen.

>>> isn't it just as likely (more likely?) that the company itself would simply pocket the difference? <<<

If it could get away with it.

>>> I mean, money paid by the company as tax on my behalf belongs to the *company*, its not *my* money as phil keeps saying, is it? <<<

No. This statement doesn't make a lot of sense. The company has revenues. It has expenses. The money belongs to the company as long as it's in the company's bank account.

>>>I really think that flasher has a point. assuming that the free market works, the amount he is receiving in his pocket at the moment is already at the amount the company believes is the value of his work (you know what I mean).<<<

If the free market works, the company is going to employ someone as long as the value of the work is at least as great as the expense of having that person on the payroll. It is not going to make much difference to the company whether the money goes to the employee or to the government. Either has the same effect on the bottom line.

>>> So if the taxes were decreased, where is the incentive for the company to pass that on to him? <<<

That money is already an expense to the company, so it wouldn't change their budget to pass it along. Of course, they would probably keep it if they could. The incentive for passing it along is other companies. Perhaps your current employer will just keep all that money that becomes available when this hypotheticall tax cut occurs. Their competitors will find that they can offer much higher salaries at no additional expense.
Permalink 2653589793 
January 4th, 2006
heh. all that typing and you could have made the same points with this last bit only:

"Of course, they would probably keep it if they could. "

exactly :)

"The incentive for passing it along is other companies."

right. as is the incentive for keeping it. if they keep it that lowers their bottom line, which allows them to *decrease their prices*

"Their competitors will find that they can offer much higher salaries at no additional expense."

only if they maintain their now higher prices relative to those companies who dropped the salaries as an opportunity to decrease prices.



so now we have the tax cut benefiting the consumer, not the company *or* the employee.
still good, just not the argument usually presented as a reason for the government to cut taxes.

or do you see a flaw in my logic?
Permalink Jesus H Christ 
January 4th, 2006
The reason most people are concerned about their salary is that it makes it possible for them to be consumers.

So the situation could be:

Companies bid up salaries - employees benefit.
or
Companies lower prices - consumers benefit.

But employees are consumers, thus benefitting from either outcome.
Permalink 2653589793 
January 4th, 2006
yeah, you could definitely see room for a company to specialise in either direction...kind of dell vs apple I guess.

clearly however the benefits are greater to employees if they get the full benefit of the salary increase, rather than that benefit dissipated amongst all the consumers of the product.

and *clearly* the idea thats taxes are the government taking money from your pocket is simply a simplistic myth.
Permalink Jesus H Christ 
January 5th, 2006
"Out of curiosity how easy is it to start a business there? I know in some countries in europe you have to put up substantial "social captial" first."

To start a limited liability company, you need to give it a starting capital of $3000-ish, but half of that can be in assets. (Actually all of it can be in assets, but if it's 49.9% then the assets don't have to be audited - you just declare the value yourself.)

If it's a co-op with the owner carrying personal liability, the starting capital is less than $1000.
Permalink Flasher T 
January 5th, 2006
"Actually, I've heard that Estonia is quite a good place to start a business. Skype come from there, for instance."

Yes, the team that developed Skype is the same one that made the protocol underlying Kazaa, and the Hotmail engine was built by an Estonian (then sold to MS).

You'll also probably see the name of my employer in the news soon enough.
Permalink Flasher T 
January 5th, 2006
"right. as is the incentive for keeping it. if they keep it that lowers their bottom line, which allows them to *decrease their prices*"

Economics 101: supply and demand are represented in a curve, the lower the price, the higher the sales. Where the two curves meet is the optimal price point; the seller will not lower the price just to sell more items, because he's getting a bigger profit at this sale number with this margin.

If there is an established market price for an item, and you have two or three major companies, each with a healthy share of the market, they will not easily start undercutting each other - not least because the market may not produce significantly more demand at a lower price.
Permalink Flasher T 
January 5th, 2006
"the seller will not lower the price just to sell more items, because he's getting a bigger profit at this sale number with this margin."

heh. I was getting to that. you have to take these guys around *slowly* or they dont get it.
Permalink Jesus H Christ 
January 5th, 2006
>>> heh. I was getting to that. you have to take these guys around *slowly* or they dont get it.<<<

JHC, you seem to know a bit about economics. Could you explain the term "elasticity of demand" and how it applies to this situation?

Also, in an earlier post you stated that the company would lower prices (in response to lower taxes) yet now you seem to agree with Flasher T who just said that the company would not lower prices because they would then lower their profits.
Permalink 2653589793 
January 5th, 2006
>>> Economics 101: ... <<<

I am not sure I get your point here. The demand curve shows how many of some item will be bought at various prices. So if our hypothetical company raised its prices by, say 50%, it would still sell some of its product. That 50% price increase would be all profit. So why wouldn't they just raise their price? What keeps the price down that the level it's at?
Permalink 2653589793 
January 5th, 2006
Because profit is margin multiplied by sales. The optimal price point, where the two curves meet, gives the seller the most profit. If they raised prices, they would sell so little merchandise that profits would drop.

As for elasticity of demand, like I said - many things have a finite demand. If you flood the market with cheap washing machines, you're not going to sell all of them, because one household will not buy more than one washing machine, no matter how cheap they are.
Permalink Flasher T 
January 5th, 2006
"Could you explain the term "elasticity of demand" and how it applies to this situation?"

yes. yes I could.


"now you seem to agree with Flasher T who just said that the company would not lower prices because they would then lower their profits."

yes. yes I do.


any further questions?
Permalink Jesus H Christ 
January 5th, 2006

This topic was orginally posted to the off-topic forum of the
Joel on Software discussion board.

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