Jobs guarantee with income support in response to technological unemployment?

Aug 2014
4,579
Australia
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).
Exactly. What is the point of having laws if they aren't enforced? Instead of piling even more of a burden on those least capable of bearing the load, we should be closing loopholes (which only the rich have the resources to exploit) and enforcing current taxation regulations properly.
 
Aug 2014
4,579
Australia
The secret to credit card debt is quite simple: pay off the entire amount every single month. Do this and you won’t pay ANY of the outrageous interest rates these companies charge.
And how many people do this? The poorest people are using credit to pay for the basics of life, they can never get out of debt. Financial literacy needs to be taught in school. A lot of credit card users think that they only need to meet the minimum payment every month.
 
Likes: joaocm
Apr 2018
979
Upland, Sweden
I don't think I misdiagnosed the reasons of tax evasion.

Jesus and Mother Theresa are dead, so I think I can reasonably say nobody likes to pay taxes and if he can, he will not pay them. Nor deaf tuner, nor Mark Zuckerberg.

But that isn't a reason, and it doesn't mean as a principle that taxes are bad, that state is a thief by definition and that me and my buddy Mark are right.
I think taxes are necessary. However, I also think taxes will always be one of the primary means that an unjust government uses to behave in bad ways to its citzens. The government will always have an interest to have more taxes...

Of course people will always have an interest to cheat their taxes. Doesn't mean they always will. The main thing I meant when I said you misdiagnose the reason is that you are ignoring the impact of free movement of capital, it is this combination, together with the welfare state and much taxation that leads to tax evasion, not just "not applying rules".

I don't buy that tax evasion is usually in the form of that Belgian Monsieur X with the plastic bags, as lovely as it would be if it was.

I talked about corporate tax, not income tax, and not without a reason. Corporate tax is afaik a flat taxe, it's the same percentage for all. So Your argument isn't one.
Alright, sure. The whole flat tax argument is peripheral anyway. My main point is that income taxes and corporate taxes are going to be difficult to enforce in the future, just like they are more difficult to enforce today than three decades ago.

If we talk about morality, to pay the same percentage on income can be anything but moral, anything but equitable. IDK how You can find morality in taking (say) 10% of taxes on an income that is at or under the level of poverty.
Ideally people under a certain level of income shouldn't pay any income taxes what so ever. That said, I think a progressive rate is generally not a good idea: the only people who lose from a progressive income tax are the middle classes, and people who are dependent on their salaries. People who own capital, have their own company or whatever will just avoid income taxes on labour, and be taxed by (usually flat) either capital gains taxes or corporate taxes, which they will either 1) avoid or 2) pay, but in that case pay a proportional share lower than that payed by the middle class guy. Is that fair? There are all sorts of other more practical problems as well, such as that the more complex you make a system - and many progressive tax systems usually have lots of deductions and loopholes etc. - the more negotiable everything will become. All this will just feed the government bureaucracy, and it will also encourage politicians to use change tax laws every election. That kind of instability is not good for the economy.

Still, the argument is academic. As I said, my main point is that both corporate taxes and personal income taxes (all taxes really, that are not clearly tied to something concrete, like VAT or property taxes) are getting increasingly hard to enforce in todays environment. This is why I've said that either the tax system has to change or the political and regulatory environment has to change, and if its the second than I think I disagree with you about how radical those changes will have to be for the system to be functional.


I would like to see some data on that.
Sure, here is the same data I provided in a post where I quoted @tomar.

historical-gov-spending-gdp(1).png



social-spending-oecd-longrun.png
 
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Apr 2018
979
Upland, Sweden
@deaf tuner

Maybe we only could build so large welfare states with so much public spending in Europe (and America for that matter) because we were in a very particular historical situation. After WW2, you had the Bretton Woods agreement, everyone agreed to the same macroeconomic principles and there was also very limited competition for the first 35 years from the poorer parts of the world. A country like Sweden could afford so much social expenditure because there were no real consequences. All nations in the West did similar things. Sure, garment manufacturing moved to Hong Kong and there was some Japanese firms that outcompeted Western ones in niche sectors in the 50s and 60s, but overall the situation was much different from today. Industrial jobs were not going to move overseas because of taxation. Capital was not going to move overseas because of taxation. The ability or firms and individuals to profit-maximize on a global scale was not there.

Now, this post-war consensus broke down in the 70s, and as a response to this the likes of Thatcher and Reagan etc. liberalized the economy, but they liberalized the financial markets much more than the liberalized the rest of the economy (any cursory glance at the data I provided and 5 seconds of thinking will give an indication that this is true). So what does all this mean? Well what it means is that we are in a situation now where we - if you take the long view, as I think you should - still have very high taxes (not as high as in the 70s, sure), still have lots of government interference in the economy and yet we have almost totally free financial markets, when looked at from a historical perspective. Surprise surprise, you get an economy dominated by debt, weird patterns of capital accumulation and also tax evasion (because this global financial system requires free movement of capital for it to work). It is largely reforms of this kind that are responsible for much of the wealth increases in the West for the past 70 years, but also for the increases in inequality and deindustrialization, and also for - as we are talking about - tax evasion.

So this is why I say, either you stop free movement of capital somehow - or condition it, which in practice means a half stop, like transaction taxes - or your dreams of eliminating tax evasion are dead. Either that or you radically cut taxes across the board to better match the tax havens. Or you could try to eliminate tax havens from the global economy. All of these changes are very radical, and would require much more than to just stop the guy with the plastic bags.

The problem with "de-liberalizing" and "de-globalizing" the financial system is 1st that it is very difficult and complicated and I wouldn't know what the hell to do and 2nd that I think this is a bad idea, if you do not liberalize the rest of the economy at the same time. We only have so much financial freedom because money has to come from somewhere, and if the regular part of the economy that is easily taxed is very heavily taxed and regulated growth is sure as hell not going to come from that part of the economy. Another reason why I lift tax reductions and more efficient government is because this is really the only thing a small state has control over. No country can close down tax havens on its own, and if any one country unilaterally implements transaction taxes - well good luck with that. The EU could do it perhaps (as I think I wrote), but then Europe will effectively make itself financially isolationist from the rest of the world unless you get the US onboard, which I don't think is likely.
 
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Apr 2018
979
Upland, Sweden
Exactly. What is the point of having laws if they aren't enforced? Instead of piling even more of a burden on those least capable of bearing the load, we should be closing loopholes (which only the rich have the resources to exploit) and enforcing current taxation regulations properly.
I'm not against this on paper, the real question is how do you do this in practice? How do you do it in such a way that you do not screw with the entire global financial system? Perhaps there is a reason these laws are not enforced, and that is because they are not easy to enforce in today's world.

If you want to screw with the entire global financial system, I am okay with that in theory provided you come up with something better. I'm just saying, there will be consequences to that and that the situation is complex...

This is why I think the world might in the future coalesce into regional economic blocs, and free trade and free movement of capital might become a thing of the past.
 
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tomar

Ad Honoris
Jan 2011
13,509
And how many people do this? The poorest people are using credit to pay for the basics of life, they can never get out of debt. Financial literacy needs to be taught in school. A lot of credit card users think that they only need to meet the minimum payment every month.
Indeed...

This guy does a lof of advice on the radio... some of the stories are amazing (hundreds of thousands of dollars of debt for minimum income.... of course a lot of the debt is student debt..... which in the US has pretty high interest rates - not as much as credit cards but still high)




 
Oct 2013
14,438
Europix
How do you do it in such a way that you do not screw with the entire global financial system?
I'm sorry, putting a bit of order is "screwing"?

If I'm not mistaken, the recent crisis were more about the financial system going totally out of control. So out of control that even the financial system itself didn't controlled whatsoever.

As far as I can see, last turbulences were more about the financial system screwing itself and other systems than vice-versa.

You mentioned a couple of times the free movement of capital.

Why free movement of capital is automaticaly supposed to be totally deregulated, to be totally totally irresponsible? (irresponsible in the sense of not having any legal, juridical, social, aso, responsibility).

What is that sacrosanct in an irresponsible freedom of movement of the capital that force us to change radically all systems, change any sector of society, all but the financial one?

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PS: thank You for the graphs.and the link.
 

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