Greece: Will this nightmare ever end?

[Binary]

Name one deveoped country that doesn't belong to your group of big spenders.

Sweden? Iceland? Estonia?
Some countries can get away with it due to natural resources they own, or else they'd be bankrupt by now (Norway)

On the other hand, free market capitalism has also turned out to be a bitch and needs to be regulated in so many ways.

And this is so wrong in so many ways. Free market capitalism (?!) was never a bitch. Excessive regulation was. The problem wasn't that a few banks and financial institutions went bankrupt. The problem was that governments moved in to save them, using taxpayers money.
And you can ask, how did some financial institutions get so powerful that their crash could have such a ripple effect? And I'll answer you with a question: when was the last time YOU checked what YOUR bank does with YOUR money? That's right, nobody knows, nobody cares. People just go for the ones with highest interest rates and lowest maintenance charges.

I defend the liberty of individuals. If people are dumb enough to put money in banks that have dubious investments, that's their choice, and their consequence - not everyone else's.

We are not starting from scratch, governments have already piled up debts they are supposed to pay back at some point, have promised pensions which would hurt too much if you slashed them entirely so raising tax income has to be part of the agenda. And personally I'm all for very high marginal tax rates for high incomes, up to 90%, no problem. Nobody earns millions per year - while the average wage is at 25.000 Euros/year (in Germany) - because they are that good, no,

Jesus H. Christ bro, this is so wrong in so many ways. Want to "tax the rich" at 90%? I thought only the "Syrizas" out there thought this way. Of course, why make people responsible for their own money while governments can tax tax tax tax TAX their way out of the mess they made? And what about Laffer's Curve? And what about motivating the high incomes, who also create jobs, to STAY in the country?

they live in a fucked up (lottery) system that allows a few to get very rich on the backs of everybody else.

Are these "rich people" gaining their money illegally?
If YES prosecute them and try them and put them in jail
If NOT leave them alone. It's a free market out there last time I checked

I see no good argument preventing the rest of us from taking most of that money back and redistributing it to those who have next to nothing.

I'd feel really terrible if someone came to me and said: "hey there, take some money, we robbed a "rich man" and are redistributing the wealth he had". There's only one word for it: theft. Robbery.
What is this, CE now stands for Communist Europe or something?

[Tripod]

I have argued all sides of this issue myself, there are so many shades of gray. You definitely have a point when you say people should... care more, should think more. Read contracts before they sign them, read the labels of products they buy in supermarkets and so on. Things I usually do, but then I was well educated and I know you're a pretty bright fellow so I'm sure you do these things, too. Sadly, most people don't. The best solution I can come up with for this is better education. I'm thinking there should be a mandatory class alongside language, maths, physics and so on that teaches life. Democracy, capitalism, the big theories behind it all as well as practical advice. Real life is a pool of sharks, to paraphrase a German saying, and people enter it ill prepared. Until we've improved upon the current situation the government should interfere as much as necessary imho.

Are these "rich people" gaining their money illegally?
If YES prosecute them and try them and put them in jail
If NOT leave them alone. It's a free market out there last time I checked

As for this argument, I'm with you on the YES part. As for the NO part, taxing somebody is not telling them "you made this money illegally". I think society should decide this together, you know, like a real democracy. Isn't there a point at which even you say (more importantly, people on average say) "enough is enough"? I'm fine with people earning 10x as much as the average wage, 50x, 100x maybe. But everything above that is just sick. Also, I'm afraid there lies a big misunderstanding in the phrase free market (in this context). Does the free market really decide how much CEOs earn? There is no free market for CEO paychecks, it's decided by a pretty small number of people. Oh, and the Laffer Curve is a lie (like a lot of economic theory).

Imagine life now - in Greece especially - just a lot worse. Moscow maybe, one of the most expensive cities in the world, despite the large majority of inhabitants being extremely poor. Actual starvation while the few who got lucky in the lottery system are eating sushi off some naked chick. All perfectly acceptable, because, hey, it's the free market, it's legal, and so it must be fair.

What I will say is, simply "taxing the rich" is not going to solve deficit problems by itself. I have crunched the numbers for Germany, raising the marginal income tax rates starting at 50.000 pa fairly aggressively and tax revenue would increase by about 30 billion Euros per year at most. That's nothing to sneer at but not very impressive, either. So services will have to be cut, too. It's true that just about all governments have bitten off more than they can chew. But also people have to understand that all the services the government supplies, infrastructure, police, military, schools, teacher, social security... it all costs real money. And the goverment can't create it out of thin air (well, it can try, but it won't end well). It'll have to be collected as taxes - or they take out loans, but that has real consequences like it does for anybody who takes out a loan.

Back to your libertarian stance. In an ideal world, you'd be right, we wouldn't need much of a government and we'd be more efficient and productive without it. But that's far away from where we actually are. Corporations are doing a great job at making us not think about what we do and buy - or think the wrong things, like this is the beer with the hot girl in the TV spot. We're lulled into believing that since we do have such a big "nanny state" we don't have to take care of ourselves. The same side that cries "less government is the solution" is the reason why we need big governments, more independent of lobbyism preferably.

[Rodolfo]

Tripod wrote:Nothing wrong with a marginal tax rate of 100% - you can earn, say, up to 1 million Euros a year and that's simply enough, nobody needs more than that. And the same goes for companies, of course. What, they'll stop creating jobs because of higher taxes and lower profits? Bullshit, the only reasons companies exit is to make a profit, they don't need an incentive. If that sounds radical to you you've been brainwashed (I'm looking at you, Rodolfo ).

Rodolfo wrote: Marvellous. 100%!!! Perhaps you forget to consider one simple aspect: the money collected by a 100% tax would be ZERO. Nobody would keep on working once you get to that level, because normal humans work for their own profit. Once you discard profit, you discard the activity you wanted to tax. That only goes unless you efectively abolish freedom and reinstate slavery, in order to save mankind, of course. That was always the Left plan: saving mankind by screwing individuals.

The Brante-Hood tax reform again! this was already hinted on this very thread on page 2. I did not carry on quoting ourselves, but yes I do know what marginal means. I work on taking care of other people taxes. And the truth is, as sad as you may feel about it, that the higher the tax rate goes, the more money is hidden from the Government. And in the end, as it is impossible to keep and eye on how many clients entered today in the dentist clinic (or lawyer bureau, or tyre repair bussiness, etc...) and therefore he can hide as much money as he wants, the Government will have no other solution than to screw the middle class which get their salaries by payroll.

Besides this, Pedro has already covered very well all other objections.

[alkis21]

Moral issues aside, overtaxing the rich simply does not work. The left sings the same song of their people over and over again: Tax the rich and increase the salaries. As if it's the brightest idea in the world that nobody else thought of. However at the slightest indication of that activity, corporations just take their business to other countries where taxes and salaries are more profitable.

[gdh82]

Not sure about the 90% detail but I personally thought the thrust of what Alex was saying is very reasonable, for what it's worth. More importantly, good to see some pluralism in the Democratic Republic of the KOA.

[Tripod]

Thanks Garry, and of course it's just food for thought.

As for the very real problem of hiding money - sure, sadly, Rodolfo is right. Though my government is starting to use new technologies to catch people. Taxis now record not only every kilometer travelled, but how many people are in the car, even how much luggage is carried. And while government cannot count the number of people entering a pub, it figured out that it can record all the beer deliveries by the big breweries to every pub and thus estimate the revenues made. Again, two sides of the coin - I hate the idea of Big Brother and I certainly don't want the government spying on me and my personal life.

My moral arguments are: People are indeed kidding themselves if they think just taxing the rich pays for everything, it doesn't. Sadly, services, benefits, etc also need to be cut in most countries. But for me it's a question of which step we should take first. And I'd say maximise revenue before you start cutting. Legal yes, but nonetheless income inequality has risen lately, "Reagonomics", "Thatcherism", "trickle down effect" and so on do not work like the theories suggest, we have empirical data to prove it.

Now, I'm wary of taxing wealth, by the way. I came up with this thought: Imagine we started from scratch and everybody earns the same, say 5000 Euros a month, but there is no public pension fund and people are told they'll have to save up for their retirement. Some people just won't, they'll go and spend it all on useless stuff. While others will be overly prudent, live very cheaply and save up a lot. Should we later on force those who saved up their money to share with those who didn't? So I'm not too hot on wealth/property taxes. But income tax is a different story. Families who only earn 2000 Euros a month are simply unable to save up anything while people who earn millions are unable to spend everything. When it comes to taxing wealth, maybe a one-off is in order to "correct mistakes" made earlier (lowering income taxes on the rich), but in principle it's fairest to just tax income "properly".

As for what Alkis said about corporations moving to other countries, sure, that's true. Theoretically, you don't have to tax corporate profits at all and you can still have a fair society. The profits they make and don't reinvest become dividends for natural persons in the end - and then we are back talking about income tax. The same if they "reinvest" profits by raising bonuses and CEO pays. Of course, if all shareholders are Chinese (or Norwegian in the shape of their huge oil fund, on average it now owns 1% of all shares worldwide, according to the Wikipedia entry)...

[Binary]

Thanks Garry, and of course it's just food for thought.

As for the very real problem of hiding money - sure, sadly, Rodolfo is right. Though my government is starting to use new technologies to catch people. Taxis now record not only every kilometer travelled, but how many people are in the car, even how much luggage is carried. And while government cannot count the number of people entering a pub, it figured out that it can record all the beer deliveries by the big breweries to every pub and thus estimate the revenues made. Again, two sides of the coin - I hate the idea of Big Brother and I certainly don't want the government spying on me and my personal life.

Agreed. The idea of a government controlling everything, most likely just to squeeze a few more taxes is damn scary.

My moral arguments are: People are indeed kidding themselves if they think just taxing the rich pays for everything, it doesn't. Sadly, services, benefits, etc also need to be cut in most countries. But for me it's a question of which step we should take first. And I'd say maximise revenue before you start cutting. Legal yes, but nonetheless income inequality has risen lately, "Reagonomics", "Thatcherism", "trickle down effect" and so on do not work like the theories suggest, we have empirical data to prove it.

Purely from an economic and financial point of view "Reagonomics" (based on the Chicago School of Economics or Cato Institute) worked, and so did "Thatcherism" (Hayek's Libertarianism) that basically saved the UK from the tragic downfall it was suffering (despite other errors later).

Now, I'm wary of taxing wealth, by the way. I came up with this thought: Imagine we started from scratch and everybody earns the same, say 5000 Euros a month, but there is no public pension fund and people are told they'll have to save up for their retirement. Some people just won't, they'll go and spend it all on useless stuff. While others will be overly prudent, live very cheaply and save up a lot. Should we later on force those who saved up their money to share with those who didn't?

While I'm all for people using their brains, I can see your point and I often defend mixed pension systems. Not the full-state ones as in Portugal or Greece, but something hybrid like in Ireland: the government gives you a flat rate when you retire (after 65), regardless of how much you earned when you were working. Anything more than that has to come from your private ones or your savings.

So I'm not too hot on wealth/property taxes. But income tax is a different story. Families who only earn 2000 Euros a month are simply unable to save up anything while people who earn millions are unable to spend everything. When it comes to taxing wealth, maybe a one-off is in order to "correct mistakes" made earlier (lowering income taxes on the rich), but in principle it's fairest to just tax income "properly".

What have the rich done wrong or illegally to get stamped with a new tax? As many have said, if you are an employer making $1M and the government robs you of 900.000, first concern is: why would they bother? Second obvious concern is: what is the state going to do with the 900.000 they robbed? Can we assume it will be to the best interest of all? As Mises used to say, if you have a political system with a big government and that attracts wealth, it's also going to attract the more corrupt to power.

The state isn't above everything and we CANNOT assume it's looking after our best interests.

As for what Alkis said about corporations moving to other countries, sure, that's true. Theoretically, you don't have to tax corporate profits at all and you can still have a fair society. The profits they make and don't reinvest become dividends for natural persons in the end - and then we are back talking about income tax. The same if they "reinvest" profits by raising bonuses and CEO pays. Of course, if all shareholders are Chinese (or Norwegian in the shape of their huge oil fund, on average it now owns 1% of all shares worldwide, according to the Wikipedia entry)...

But whyyyyyyyyyyyyyy does everything have to be sorted with taxes and taxes and more taxes?
The low flat tax rate in Estonia is working wonders. Governments should tax less and they should also do less and meddle less.
Then we will have free market at work, or "capitalism" at its prime.

Also, +1 to everything Rodolfo wrote. He's spot on. But then, both me and him have probably felt on our skin the effects of Socialism (high taxes, state controls everything) more than most of the other forum members on this topic.

[Tripod]

Both you and Rodolfo are intelligent guys, though. I was defending having to read the labels on supermarket products instead of hoping the government protects you from all the bad food and rip-offs. But then I looked up the literacy rate in Germany and a large study from last year concludes that 4% of all German adults are totally illiterate and 14% of all adults are "functional illiterates". (And sure, we have a lot of immigration, but 60% of these people have German as their mother tongue.) Boy, that's a lot of people. They survive school somehow, 60% of them even have a full-time job, without being able to read or write. These people cannot read a contract - they'll sign it anway and say they read it cause they're too embarrassed to admit they are illiterate, of course. As I said, educate the people enough so they can properly fend for themselves and then we can talk about "less government meddling".

By the way, I didn't write more the first time I picked up the subject (on page 2, Rodolfo says), cause it's pretty much OT. Maybe we should split the thread or start as new one.

Let me present you two interesting moral arguments I got from watching Michael Sandel's Harvard course Justice online, which I generally really recommend. He takes you through the history of ideas, Aristotle, John Locke, etc but towards the end, he tells this, I believe i's all from John Rawls:

Imagine life was a race to a finish line - whoever crossed it first, gets the best job (or the highest paid or he can choose from all available jobs), and it goes down from there, those who are last only get the shitty jobs.

Now in a society with high wealth inequality (aka most of our civilised life) and no "government intervention", the starting line is different for every participant depending on his heritage. Some start just meters away, others kilometers, so to speak. Meters for those who go to good, expensive schools, have private tuition, etc. Kilometers for a peasant who never visits a school and starts working on the field at the age of 5. Is that a fair system? Sandel calls it "the accident of birth" (from wiktionary: A fact, situation, or personal characteristic, which may be desirable or undesirable, resulting from the circumstances into which a person was born, and which is therefore entirely beyond his or her control.)

So what we do nowadays in our countries is to try and get everybody to the same starting line and start the race from there. But still those most gifted will win the race. Even if you took money out of the equation entirely it's then very dependent on genes. Those born of brighter parents will perfom better. Is that fair? Because the accident of birth is totally out of your control.

Now that made me very uncomfortable. Because it does cry for a "socialist heaven", everybody is equal, everybody's the same - and apparently, nobody is responsible for anything he or she does. Which is totally contrary to my general view that people are responsible for their own actions. But still, it is a powerful point: Have an unlucky combination of poor, bad and dumb parents, and you're not going to do well and it's not your fault. I can't let those people hang out to dry.

And the other thought, this one is definitely from Rawls: Imagine you wanted to create a real social contract. That is, get everybody together and have them agree on the details. How much social security? How much protection for minorities? To actually make this fair, Rawls envisions a "veil of ignorance" under which we all slip for this meeting. Under the veil you still have an idea of what the outside world looks like, but you no longer know who you are. You might be a Muslim. Or an immigrant. An old person or a child. Or even a woman. If we could slip under such a veil, Rawls believes, we'd create a fair society, we'd really want equal rights for everybody because we might be anybody.

Maybe that got somebody interesting in watching Sandel. The whole course lasts 12 hours, he's a good speaker, he involves his audience, he's got great real life examples. http://www.justiceharvard.org/watch/

[alkis21]

It's been so many years since the last time it happened, I've lost count. But today, my country made me proud.

[Freshmaker]

[Vag]

It's so funny seeing these scums in handcuffs and I'm so happy, I can't tell you. Golden Dawn was the real nightmare for Greece, not its economic situation, and now this nightmare is over (we should change the thread title).
On top of that, I can wear black clothes again and I can tell my wife racist jokes, she won't mind anymore

[Danny D]

I think we should respect the current context of the Greek nightmare.

Greece is still the sick man of the EU. The Germans don't want to and won't pay for a country's negligence. 6 years of the begging bowl is long enough, it's time to put the patient out of their misery.

I would suggest selling of chunks of Greece itself. I'm sure the Turk's would pay top dollar.

[alkis21]

I doubt Spyros would go for much if we sold him to a harem as a eunuch, but I guess it wouldn't hurt to try.