Jobs guarantee with income support in response to technological unemployment?

Chlodio

Forum Staff
Aug 2016
4,074
Dispargum
...when you go to the ONS site you find out that VAT as a proportion of expenditures is pretty much the same across the board

(bottom quintile: 8.5%, top quintile 8.6%, all households 8.8%) ...
There's a difference between expenditures and income. The wealthy don't spend all of their income. They save major portions of their income. VAT doesn't tax savings. It only taxes expenditures. The percentage of income paid as VAT is significantly less for the wealthy.
 
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Chlodio

Forum Staff
Aug 2016
4,074
Dispargum
Isn't the whole notion of "jobs" a very modern - industrial era even - phenomenon?
In the context of this discussion, where government programs must be paid for with taxes and the most productive tax is the income tax, then yes, jobs become critical to the whole system working. The income tax is a relatively recent invention, but it's not the only way to finance government as there were plenty of taxes before the income tax was invented. I suspect you're right. Government can be made solvent once more simply by restructuring what is and what is not taxed.
 

Chlodio

Forum Staff
Aug 2016
4,074
Dispargum
This is true, but I still think especially one of @tomar's broader points still stands. Income tax can easily be evaded
Yes. Arguments that the income tax is more fair than VAT or other sales taxes rest on the assumption that the income tax is fairly legislated and enforced. If the wealthy have lobbied for tax loopholes and other advantages that the middle class can not take advantage of, then the income tax is no longer fair.
 
Apr 2018
979
Upland, Sweden
Yes. Arguments that the income tax is more fair than VAT or other sales taxes rest on the assumption that the income tax is fairly legislated and enforced. If the wealthy have lobbied for tax loopholes and other advantages that the middle class can not take advantage of, then the income tax is no longer fair.
Exactly. Isn't this more or less the situation today? Seems that way to me anyway
 
Apr 2018
979
Upland, Sweden
In the context of this discussion, where government programs must be paid for with taxes and the most productive tax is the income tax, then yes, jobs become critical to the whole system working. The income tax is a relatively recent invention, but it's not the only way to finance government as there were plenty of taxes before the income tax was invented. I suspect you're right. Government can be made solvent once more simply by restructuring what is and what is not taxed.
I think so too. I also think Governments have to shrink, at least in Western Europe - although it's not going to be pretty, it is necessary in the long term. It is simply absurd to spend 45% of GDP on the public sector (as we do in my country): unless we end up in a situation where the Swedish equivalent of Amazon owns half the economy, but then we can probably kiss capitalism goodbye anyway. This (or that Google et consortes actually could do things like this in a couple of decades) is perhaps not even that unlikely...

Anyway, supposing that doesn't happen then the real question is what the fallout from such a reduction in government spending would be (I'm thinking reductions by a third, to a more normal 30% of GDP). Higher taxes, greater public spending and a more welfare state model that tends to increase prices in the economy overall. With unproductive labour essentially priced out of the private sector, housing prices, consumer goods prices inflated etc. to compensate for the higher salaries etc... Obviously these things also increase the speed of automation and all of the modern technologically related problems the economy is facing. And then I haven't even talked about the probably not neglible psychological impact of a too large public sector on the population's entrepeneurial drive and spirit. High levels of government spending also encourages debt, it could be argued (but this isnt as clear cut). Trying to reform our welfare systems, with so much mutual interdependence and so much leverage seems like short term suicide, but I think the alternative is worse....

I guess we'll see.
 
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Apr 2018
979
Upland, Sweden
Wouldn't it be better to start with the begining: simply applying the regulations?

The estimated tax fraud in EU is 20% of the corporate tax (individuals, it's another sum, also not perceived).
I confess, I think current tax levels (but here I am probably shaped by coming from the country with the 1st/2nd highest taxes in the world) are immoral.

Still though, supposing I didn't think that, there is also an instrumental problem: why won't the wealth just move somewhere else?

I'm not a tax lawyer, but my general feel is that European equialents of the IRS do what they can, but it just isn't enough, the system is unworkable because the circumstances are crap. I really don't see how governments can deal with tax fraud in a globalized economy without either 1) cutting their taxes and giving out lots of carrots or 2) stopping free movement of capital abroad. While two is not impossible in theory - and maybe that is what will happen - it seems more radical than just cutting the sizes of governments.
 
Oct 2013
14,438
Europix
I confess, I think current tax levels (but here I am probably shaped by coming from the country with the 1st/2nd highest taxes in the world) are immoral
1. Swedish corporate tax is 21,4%

2. In Europe, from an average corporate tax of 48% in the 1980's we arrived at an average of 24% these days.

3. During that period, tax evasion didn't decreased, but increased.

Now, taking those three points into account, are You sure You apply the imoral adjective onto the right subject?
 
Apr 2018
979
Upland, Sweden
1. Swedish corporate tax is 21,4%

2. In Europe, from an average corporate tax of 48% in the 1980's we arrived at an average of 24% these days.

3. During that period, tax evasion didn't decreased, but increased.

Now, taking those three points into account, are You sure You place the "imorality" in the right place?
1. This is a good point. I think individual tax evasion is a bigger deal than corporate tax evasion, but I am also not sure it matters that much, or that there is necessarily much difference.

2. I don't see the causality? I think tax evasion has increased because of technological interconnectedness, financialization of the economy and the removal of capital controls. Back in the early 80s you still needed permission from the Swedish Central Bank to take capital from out of the country, (I don't know how it was in Belgium - presumably a bit different). I'm not sure how relevant corporate taxation or even income tax is anymore. This is my main point.

3. See "2.".


Yes, I do think I place morality in the right place. Why are we in this situation to begin with? Who benefits and who does not? The government still gets its tax money, more than at almost any other time in history - that the middle class pays for - and it often doesn't spend that money very well in my opinion. I am also not sure I really trust the govenment with "rectifying" this situation by redistribution, as doing so would rock the boat and risk lots of productive companies and wealthy people leaving. I think the government is more likely to talk a load of **** and lots of rhethoric, cozy up to the rich and powerful while they keep taxing the middle classes and nothing gets done about the real problem.

It is not a nice situation, but it is what it is. My priority is that I'd prefer if the middle class didn't have to pay as much taxes as they do (and also in the government not wasting taxpayer money), so I'm just thinking about ways that this can be avoided pragmatically. Unless you also want to implement capital controls or transaction taxes (which would require capital controls for them to work) I don't see how increasing corporate taxes or capital gains' taxes is going to rectify the problem.
 
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