Jobs guarantee with income support in response to technological unemployment?

tomar

Ad Honoris
Jan 2011
13,815
Yes, a VAT is not the problem here in the US, but it's not the solution either, if we understand the problem as:
1. Wealth = power
2. Left unregulated, wealth (and power) tend to concentrate in very few hands
3. The tax code can be used to break up, or at least slow down, the concentration of wealth (and power)

The VAT, by taxing only spending and consumption, incentivizes saving and investment. It therefore encourages the accumulation and concentration of wealth by those who can afford to save and invest. We don't need to encourage the accumulation and concentration of wealth. We need a tax that will distribute wealth more widely. The income and inheritance taxes used to do this before our national tax philosophy changed to the advantage of the wealthy.
As I wrote this power is more concentrated in anonymous corporation and funds.....

Everybody can afford to save..... its a mindset (yeah, I know , its un-american)..... And no , its not right to disincentivize saving and investment... Saving and investment are engines for the creation (among other things) of small businesses.... Your family restaurant, your laundromat, your souvenir shop etc.... typically created by people who saved, invested and worked a lot.... and once they did that they created jobs and generated additional tax revenue for the state.... In some countries small businesses contribute over 40% of the GDP (almost as much as large corporations)

This is for Canada

Based upon estimates, the contribution to GDP by business size did not vary significantly throughout the period 2002−2014 (Figure 13). On average, from 2010−2014, the contribution of small businesses to GDP was 38.4 percent, the contribution of medium-sized businesses was 11.8 percent and the contribution of large businesses was 49.8 percent.

Key Small Business Statistics - January 2019 - SME research and statistics

This is for emerging economies

SME Finance

Formal SMEs contribute up to 60% of total employment and up to 40% of national income (GDP) in emerging economies.

This if for the EU

file:///C:/Users/Thomas.Martin/Downloads/Annual%20Report%20-%20EU%20SMEs%202016-2017.pdf

SMEs are the backbone of the EU´s economy … All but 0.2 % of enterprises which operated in the EU-28 non-financial business sector in 2016 were SMEs. These SMEs employed 93 million people, accounting for 67 % of total employment in the EU-28 non-financial business sector, and generating 57 % of value added in the EU-28 non-financial business sector. Almost all (93 %) of the SMEs were micro SMEs employing less than 10 persons.

 

Chlodio

Forum Staff
Aug 2016
4,488
Dispargum
As I wrote this power is more concentrated in anonymous corporation and funds.....

Everybody can afford to save..... its a mindset (yeah, I know , its un-american)..... And no , its not right to disincentivize saving and investment... Saving and investment are engines for the creation (among other things) of small businesses.... Your family restaurant, your laundromat, your souvenir shop etc.... typically created by people who saved, invested and worked a lot.... and once they did that they created jobs and generated additional tax revenue for the state.... In some countries small businesses contribute over 40% of the GDP (almost as much as large corporations)

This is for Canada

Based upon estimates, the contribution to GDP by business size did not vary significantly throughout the period 2002−2014 (Figure 13). On average, from 2010−2014, the contribution of small businesses to GDP was 38.4 percent, the contribution of medium-sized businesses was 11.8 percent and the contribution of large businesses was 49.8 percent.

Key Small Business Statistics - January 2019 - SME research and statistics

This is for emerging economies

SME Finance

Formal SMEs contribute up to 60% of total employment and up to 40% of national income (GDP) in emerging economies.

This if for the EU

file:///C:/Users/Thomas.Martin/Downloads/Annual%20Report%20-%20EU%20SMEs%202016-2017.pdf

SMEs are the backbone of the EU´s economy … All but 0.2 % of enterprises which operated in the EU-28 non-financial business sector in 2016 were SMEs. These SMEs employed 93 million people, accounting for 67 % of total employment in the EU-28 non-financial business sector, and generating 57 % of value added in the EU-28 non-financial business sector. Almost all (93 %) of the SMEs were micro SMEs employing less than 10 persons.
I was never talking about the kind of saving and investing that the poor and middle class do. It's the mega saving/ hoarding of wealth by the super rich that I've been talking about. We started this conversation talking about regressive vs progressive taxes and their effect on the rich and the poor. I'm not talking about the millionaire down the street who owns a dry cleaners. I'm talking about the multimillionaires and the billionaires. If we did a better job distributing the wealth, a lot more people would have higher incomes, they'd spend more money, buying more goods and services, the businesses who provide these goods and services would make more money, and everyone would be happy. The only reason the super rich exist is because they're more ruthless than the rest of us. Ruthlessness should not be a basis for the distribution of wealth. Leveling the playing field is a legitimate function of government. If economic policies are driven only be the quest for efficiency, we're basically handing the country over to the most ruthless among us. Is that what you want?
 

tomar

Ad Honoris
Jan 2011
13,815
I don't like it either (well, at least one point of agreement ...)



Nevertheless, the impact of the TVA is totally different depending on the level of the income.

From a certain level, one earns more than is needed for the bare necessities. And that part is making the difference, as a lot of those aren't VAT-ed.

I wanna decorate my house: I'll buy a nice poster/copy of a master/whatever/ from the mall. I'll pay TVA in it (used Vaxhall talking now).

Or:

I'll buy an original by some Flemish Master or by an art student. I'm not paying any TVA on that. (new VW talking now).

Really, it isn't just some exception: a reasonable high level of revenues permit having activities, hobbies that often are TVA extempted. Going to the Theatre, to Opera, buying not a reproduction but an original. Aso.
First, people are free to do what they like with their money... They can sit on their toilet and watch it burn, its their problem... Not the state's or anyone else's

Second, all this talk again means that social taxes on salary should be the NUMERO UNO target.... not VAT... because among other things the amount of VAT one pays CAN be controlled by one.... unlike social taxes which cannot....and VAT is much lower than social taxes...

Also Opera tickets are subject to VAT (at least in some countries)... and buying paintings from flemish masters, its really now talking about exceptions (and typically such purchases are investments, and when such paintings are sold again in many coutries the proceeds would be taxed)....
And then there is case of people who earn more because they work more.... Someone who chooses to work 1 day per week will obviously make 5 times less than the next guy at the same job working full time..... Why exactly should the full time guy be proportionally more taxed than the 1 day per week guy ?
 

tomar

Ad Honoris
Jan 2011
13,815
I was never talking about the kind of saving and investing that the poor and middle class do. It's the mega saving/ hoarding of wealth by the super rich that I've been talking about. We started this conversation talking about regressive vs progressive taxes and their effect on the rich and the poor. I'm not talking about the millionaire down the street who owns a dry cleaners. I'm talking about the multimillionaires and the billionaires. If we did a better job distributing the wealth, a lot more people would have higher incomes, they'd spend more money, buying more goods and services, the businesses who provide these goods and services would make more money, and everyone would be happy. The only reason the super rich exist is because they're more ruthless than the rest of us. Ruthlessness should not be a basis for the distribution of wealth. Leveling the playing field is a legitimate function of government. If economic policies are driven only be the quest for efficiency, we're basically handing the country over to the most ruthless among us. Is that what you want?
Ok, then you need to define what the limit is and what is the logic for that limit....

I have no sympathy for the "super rich" (does anyone ?) but I dont think its just a matter of ruthlesssness..... I think that LUCK is a huge part of it... (at any moment in time there are thousands -at least people- trying to do the same thing -or similar things- yet only one will turn into a Bill Gates or a Bezos or a Zuckerberg.... the main difference between those who succeed and fail ? LUCK)......
The other thing is that those "super rich" are often theoritically rich because their net worth is mostly shares of their company (ies), which they cannot sell if they want to retain control....

Also if you were to eliminate the Bezokergatebergs of this world, you'd still have the problem of corporations with huge piles of money... For example Apple is sitting on $250 billion of cash, the Norway investment fund almost $1 trillion, Brigwater associates $130 billion etc...
 

deaf tuner

Ad Honoris
Oct 2013
14,533
Europix
First, people are free to do what they like with their money... They can sit on their toilet and watch it burn, its their problem... Not the state's or anyone else's

Second, all this talk again means that social taxes on salary should be the NUMERO UNO target.... not VAT... because among other things the amount of VAT one pays CAN be controlled by one.... unlike social taxes which cannot....and VAT is much lower than social taxes...

Also Opera tickets are subject to VAT (at least in some countries)... and buying paintings from flemish masters, its really now talking about exceptions (and typically such purchases are investments, and when such paintings are sold again in many coutries the proceeds would be taxed)....
And then there is case of people who earn more because they work more.... Someone who chooses to work 1 day per week will obviously make 5 times less than the next guy at the same job working full time..... Why exactly should the full time guy be proportionally more taxed than the 1 day per week guy ?
Cool down man, I wasn't accusing rich for being rich.

...Someone who chooses to work 1 day per week will obviously make 5 times less than the next guy at the same job working full time..... Why exactly should the full time guy be proportionally more taxed than the 1 day per week guy
And that's what French name "foutaises"[*].

There are plenty of people working more than a full-time for a wage at the limit of poverty.

_____
[*]BS
 

tomar

Ad Honoris
Jan 2011
13,815
There are plenty of people working more than a full-time for a wage at the limit of poverty.

_____
[*]BS
And there are plenty of people NOT working 40 hour weeks.... A good example is teachers, who in general have 50% or even less of the work hours of a regular full time guy.... Of course their salaries are not that great (though on a per hour basis they are not that bad either) but it is a choice they made....
 

deaf tuner

Ad Honoris
Oct 2013
14,533
Europix
And there are plenty of people NOT working 40 hour weeks.... A good example is teachers, who in general have 50% or even less of the work hours of a regular full time guy.... Of course their salaries are not that great (though on a per hour basis they are not that bad either) but it is a choice they made....
And there are ... and there are ....

Again, I wasn't judging, and as Yourself said, each one makes what he wants with his life and his money.

And that isn't an argument against what I said: under a certain level, the impact of the TVA is different from that on an upper level of income.
 

Chlodio

Forum Staff
Aug 2016
4,488
Dispargum
Ok, then you need to define what the limit is and what is the logic for that limit....

I have no sympathy for the "super rich" (does anyone ?) but I dont think its just a matter of ruthlesssness..... I think that LUCK is a huge part of it... (at any moment in time there are thousands -at least people- trying to do the same thing -or similar things- yet only one will turn into a Bill Gates or a Bezos or a Zuckerberg.... the main difference between those who succeed and fail ? LUCK)......
The other thing is that those "super rich" are often theoritically rich because their net worth is mostly shares of their company (ies), which they cannot sell if they want to retain control....

Also if you were to eliminate the Bezokergatebergs of this world, you'd still have the problem of corporations with huge piles of money... For example Apple is sitting on $250 billion of cash, the Norway investment fund almost $1 trillion, Brigwater associates $130 billion etc...
I wouldn't draw a line at say, $10 million - below this line you can have as much as you like but above this line you can't have any more.

There are two definitions of wealthy - you can be wealthy because of a high income or you can be wealthy because of a high net worth. Most people qualify under both definitions. I have no problem with people having a high income so long as they earn it by providing goods and services that people want to buy. My problem is with accumulated net worth. People with high incomes should be taxed to the point that it becomes more difficult than it currently is to accumulate large fortunes. I wouldn't stop the accumulation of wealth. I doubt anyone could. A certain amount of financial security is one of the incentives our economy offers to people who are willing to work hard. But the accumulation of wealth does need to be slowed down, and massive accumulated wealth should not pass to people who haven't earned it. I have no problem with an inheritance tax of 70% on estates worth more than $1 million.

I agree about wealth being tied up in company shares, but sooner or later Bill Gates was going to cash out. Does he still own a controlling share in Microsoft? He couldn't sell it all at once, but is he slowly divesting? He doesn't seem to be interested in running the company any longer. I will say this in his credit - he's parting part of his wealth to good work.

And you're right about lots of companies sitting on huge piles of cash. Can't solve that problem with a VAT either.
 

tomar

Ad Honoris
Jan 2011
13,815
I wouldn't draw a line at say, $10 million - below this line you can have as much as you like but above this line you can't have any more.

There are two definitions of wealthy - you can be wealthy because of a high income or you can be wealthy because of a high net worth. Most people qualify under both definitions. I have no problem with people having a high income so long as they earn it by providing goods and services that people want to buy. My problem is with accumulated net worth. People with high incomes should be taxed to the point that it becomes more difficult than it currently is to accumulate large fortunes. I wouldn't stop the accumulation of wealth. I doubt anyone could. A certain amount of financial security is one of the incentives our economy offers to people who are willing to work hard. But the accumulation of wealth does need to be slowed down, and massive accumulated wealth should not pass to people who haven't earned it. I have no problem with an inheritance tax of 70% on estates worth more than $1 million.

I agree about wealth being tied up in company shares, but sooner or later Bill Gates was going to cash out. Does he still own a controlling share in Microsoft? He couldn't sell it all at once, but is he slowly divesting? He doesn't seem to be interested in running the company any longer. I will say this in his credit - he's parting part of his wealth to good work.

And you're right about lots of companies sitting on huge piles of cash. Can't solve that problem with a VAT either.

First this illustrates the different understanding of "rich" even in this forum: Deaf Tuner gave the example of someone making 15 000 euros per month, Dan of someone who had several million and played the system to pay less taxes, you talk about $10 mio and others probably have different numbers in mind....

Second I actually had similar ideas (but thinking more between $50 and $100 mio... but no matter... any number can be challenged or put forth, the principles remain the same)... I assume that this is per head (i.e. a household of 4, would be $40 mio) ?

Third I suppose the usual objections to this approach include the following main ones:

1. Companies like Microsoft, Apple or Amazon would not have happened if such restrictions were in place so with such restrictions everyone loses
2. How does it actually work ? Say someone has $10 mio worth of share (10 million shares worth 1$ each to keep it simple)... Due to stock market fluctuations one day the share is worth $2... So the tax guy comes and says "you are over limit, you got to sell 5 million shares and give me the money"... So that someone is left with 5 million shares... Then a week after there are bad news and the share price falls to $0.5..... So now the guy has only $2.5 mio whilst the tax man walked away with $10 mio
3. How do you deal with all kinds of "optimization".. The simplest one being: assets are put in the name of a front man/woman (grandmas, old school friends, hired help etc...) with a side contract allowing to get them back anytime ?
4. How do you deal with people who simply become citizens of a country with much lower tax rates and thus evade the punishing taxes of whichever country practices them ?
5. What happens to the luxury business ? No one will buy expensive art, jets, yachts, jewels, houses etc....So that's a lot of jobs that will go and lots of companies that will go bust....