living in country with high income taxes/high tax exemptions

[Axel Janssen]

Originally posted by Thomas Paul:
(What I don't understand is how the ethic of taxing the rich to benefit the poor results in high European tax rates on ordinary people like us, who are neither rich nor poor.)

The problem is that the rich aren't so plentiful that you can get a huge amount of money when you tax them unless you downgrade "rich" to mean anyone who isn't poor. And the truly rich are fairly good at moving their income to places where they pay less income tax.

want to keep my answer apart from the tsunami thread, because this is about men-made evil.

In Germany everybody who knows a bit or who has friends/relatives who know does not pay much income tax in the end.
You just collect all kind of receipts you receive the year when paying for stuff. Then its about writing very boring lists about what you have done all year long (buying, move to other city for consulting, rent a room, rent a truck for job related relocation, make phone calls, internet) and you get tax exemptions for nearly everything which is remotely job related. If you buy a house you get also lots of tax exemptions.
For a thing like being in another city for consulting, you get a small amount of money for food even without receipt. If you stay in your home city you won't get that, though your stomach need some food at home, too.
A lot of people are lying when they are assembling their tax declaration. But even with being honest this year I got back >2 month neto income paid back by my state as tax exemptions for last year. I do expect the same this year.
Its very boring to keep up all those receipts and write the stuff. People who don't care and concentrate more on other more productive or/and nice things won't get it. It creates a huge industry of tax exemption consultants and very weird argumentations for richer people.
My state once wanted to help the economy with this massive legislation. Oh those great guys who travel a lot in their job. They are good for the economy. Lets give them tax exemptions. Or those solid ones who build a house. Etcetera.
In the end it creates no other but boring bureaucracy, lies, lots of work for administration and pure chaos.

[Warren Dew]

It gives the politicians a good answer to the "what have you done for me lately" question, though. With enough different deductions, they can almost certainly name one that benefits any given voter.

[Axel Janssen]

Problem is that its very difficult to cut back such a proliferated system.
There is a deep sentiment that we should do. One politician from the conservatives started campaign under moto: "Every tax declaration should fit on one coaster" (simplified system).
But when they get to specific tax exemptions, you allways have a lobby pressing hard.
"No tax exemptions for kilometers to work": Car lobby starts crying.
"No tax exemptions for house-building, because we have mostly longliving stone houses and a shrinking population": Construction lobby starts crying.
... and so on...

[Svend Rost]

Question:

Axel:

..you get tax exemptions for nearly everything which is remotely job related.

I have a problem seeing that this is a problem. Since the things you pay
for are job related, like say a train ticket, it isn't something that your
average joe have to pay for. It's not like it's fun to use x days/month to
travel/be away from home.

Ofcause, it's problematic if people are taking advantage of the system -
but is that then the systems fault, or the peoples ?

/Svend Rost

[Axel Janssen]

The exemption examples I mentioned are the more simple ones I use.
Richer people do invest in house construction where its not needed, only to get tax examption or even movies in Hollywood.
Even some regular guys select their departments in a way that they honour the complicated rules that one room can be declared as their office.
I think its not business of the government to pay me for train driving. I take the money, of course. Anyway its very boring to create an Excel list about all my activities.
In the end the State can't create justice and it would be much better if anybody
- would pay less taxes
- would spent less time to the paperwork to get back exemptions
- would have less incentives for fraud
- less demand for 100% unproductive tax exemption consulting industry

A complicated system like that leaves sanity quickly. If there is incentive for train driving the cultural industry (movies and stuff) quickly starts demanding tax exemptions for people who in invest in their projects. In the end its good for the nation to have lots of culture activities. Next ones are those who try to atract money to finance cultural activities in other countries that its not fair that there aren't incentives for financing cultural stuff in other countries and so on.


Axel

[Jeroen Wenting]

What it all comes down to is that people who work harder and as a result have a higher income get taxed so much more that they have (after taxes) less left as a result or have to pay so much to tax consultants to get their excemptions and refunds that they end up poorer as a result than when they'd not filed for those in the first place.

An example: my father was (until his retirement) CEO of a company with 1000+ employees.
He got taxed at the highest rate which at one point was 78%.
My niece works as a nurse in a retirement home, she gets taxed at the lowest rate.
Before taxes my father had several times the vacation money my niece did. After taxes she had more...

It gets more extreme. I've met people who turned down a wage increase because they'd have LESS income after taxes if they'd accepted it.
Tell me how such a system of stealing from workers for the benefit of the Swiss bank accounts of politicians and senior government officials is far...

[Svend Rost]

Don't get me wrong, im against social fraud as much as you are. Btw. it's
not only the high class who cheats.

Im just saying, that I think it's fair that a business man can get a
tax exemption for business related expenses. If a person pays 100$ for,
say, a train ticklet then 20$ will goto the state (in Denmark - I know
the VAT in Germany ect. is lower). I have a hard time understanding why
it's unfair that this person can't get a tax examption for the ticklet.

/Svend Rost

[Thomas Paul]

Originally posted by Jeroen Wenting:
It gets more extreme. I've met people who turned down a wage increase because they'd have LESS income after taxes if they'd accepted it.

That is madness. That doesn't happen in the US because the increased tax rate only affects additonal income, not income taxed at the lower tax rate.

Example:

Income between $0 and $7,000 is taxed at 10%
Income between $7,000 and $28,400 is taxed at 15%

So if you earned $25,000, you would pay $700 ($7,000 * .10) plus $2,700 ($18,000 * .15).

Where this MIGHT happen is at the higher income levels because some deductions are phased out as you earn more income. I never figured it out but I suppose it is possible that a person may get to keep less income than someone else because they lost a deduction that the other person got to keep. However, it may be that the deduction has been phased out in such a way as to prevent that from happening.

[Thomas Paul]

Originally posted by Svend Rost:
Don't get me wrong, im against social fraud as much as you are. Btw. it's not only the high class who cheats.

In the US, the majority of tax fraud is committed by the lower income levels who hide income in order to qualify for the earned income tax credit.

[Steven Bell]

Instead of having thousands of pages of tax law, that nobody can understand, why not just set the tax rates to a 'resonable' level and forget all the exemptions. Maybe I'm a little crazy, but that seems to make more sense to me.

Of course there will probably be a fairly wide range of what people consider 'reasonable'.

[Max Habibi]

Originally posted by Thomas Paul:


In the US, the majority of tax fraud is committed by the lower income levels who hide income in order to qualify for the earned income tax credit.

Perhaps the majority of frauds, but only because there are so many more lower income taxpayers vs. higher income. It's a cinche the vast amount of tax fraud, as measured by the amount of money involved, is committed by the higher income earners, and I'm betting they have a higher proportion of tax fraud as well.

M

[Steven Bell]

Originally posted by Max Habibi:



Perhaps the majority of frauds, but only because there are so many more lower income taxpayers vs. higher income. It's a cinche the vast amount of tax fraud, as measured by the amount of money involved, is committed by the higher income earners, and I'm betting they have a higher proportion of tax fraud as well.

M

I don't think that is quite right. Higher income earners often have many more exemption (business expenses, ect), but they are much more lickely to be audited and tend to be more careful about getting their taxes done right. The chances of lower income earners getting audited for a few thousand bucks not showing up is slim to none, unless they piss off the wrong official (which is just another problem I have with the whole overly complicated tax code, you can get just about anybody on something).

[Thomas Paul]

Max is correct that there is more money in tax fraud at the higher income tax levels but most of these are among self-employed and corporations. Among individual taxpayers, the compliance rate at even higher tax rates is very good. This is probably because it is difficult to hide income. However, at the lower tax rates that qualify for EIC, the incidence or fraud is as high as 21%. This is why you are more likely to be audited if you are in low icome levels and have claimed EIC than if you are an upper tax bracket and have no special deductions.

[Max Habibi]

Interesting. Thanks Thomas.

M

[Steven Bell]

I just looked up some statistics at the IRS site. Based on number of cases filed, general tax fraud (individuals) is investigated and charged about 10 times more than corporate and business tax fraud.

[Frank Silbermann]

Originally posted by Jeroen Wenting:
It gets more extreme. I've met people who turned down a wage increase because they'd have LESS income after taxes if they'd accepted it.

People who advocate small government and low taxes are criticized as being selfish and uncompassionate. Do critics say the same about people who turn down raises that would lower their net income? Isn't that even more selfish? To avoid a small personal loss he imposes a much bigger loss upon society! (Assuming, as most socialist do, that government == society.)

[Steven Bell]

Originally posted by Frank Silbermann:
People who advocate small government and low taxes are criticized as being selfish and uncompassionate. Do critics say the same about people who turn down raises that would lower their net income? Isn't that even more selfish? To avoid a small personal loss he imposes a much bigger loss upon society! (Assuming, as most socialist do, that government == society.)

Could it be said that people who advocate for larger government are selfish and uncompasionate, as the private sector does nearly everything better and cheaper than the government is capable of. So a larger government takes more from it's people and gives little back creating a drain on the society as a whole.

[Alan Wanwierd]

Originally posted by Steven Bell:


Could it be said that people who advocate for larger government are selfish and uncompasionate, as the private sector does nearly everything better and cheaper than the government is capable of. So a larger government takes more from it's people and gives little back creating a drain on the society as a whole.

From what perspective to private company perform "better"?
I might be prepared to accept that consumers are likely to get improved customer services in some cases where competition is introduced on previous government monopolies (although evidence based on deregulation of telcos and public transport in UK might suggest otherwise), and I might also concede that private corporations are quite likely to be more fiscally efficient in the running of their business. BUT...

Government run operations do not have to generate profits for shareholders and so can concentrate on their core business goals (i.e. providing healthcare, providing education, building raods etc etc) rather than the grubby business of generating money.

Also - consider another primary purpose of government - providing employment! A large, inefficent, government machine keeps thousands gainfully employed. Switching these services to private enterprise automatically causes job losses in the name of productivity. Private enterprise doesnt care about job losses or the effect of its policies on wider community - it is concerned only with making things efficent and less costly. Large scale job losses woudl effect not only those who have lost their jobs but the whole of society since an increased drain on social security funds drains government funds and forces tax increases. (..and I wont even get into the costs of increasing poverty causing increased crime, increased policing costs etc etc etc...)

Marketing - we live in a world where sales and marketing plague us all... In the days of government run monopolies in the telecoms industry (at least in UK and Australia) There was no great need for enormous amounts of customers money to be spent trying to brainwash people to spend money with XYZCom or ABCCom... Is it possible that all the savings introduced by cutting jobs in the now privatised telecoms industry have just served to pay for all the TV ads and cold-calling vermin that now polute my leisure time?

Would we not rather have our inefficient benevolent government run agency keeping more people employed and serving the people rather than the shareholders?

[Warren Dew]

Thomas Paul:

That is madness. That doesn't happen in the US because the increased tax rate only affects additonal income, not income taxed at the lower tax rate....

Where this MIGHT happen is at the higher income levels because some deductions are phased out as you earn more income

It does happen, and it doesn't require all that high an income - unless things have changed from a few years ago, a married couple each earning $60k/year can easily end up with a higher than 100% marginal tax rate if they own a rental property and have children (both of which involve deductions that phase out).

I agree it seems like madness.

My previous post about what a complex tax system does for politicians is an observation about why the system works so poorly, not an attempt to find a silver lining.

Max Habibi:

It's a cinche the vast amount of tax fraud, as measured by the amount of money involved, is committed by the higher income earners, and I'm betting they have a higher proportion of tax fraud as well.

I don't think it's so obvious, for two reasons:

(1) Higher income earners have proportionately more to lose from going to jail, since their life style starts out better but they go to the same jails.

(2) The complexity of the tax code gives people with more money lots of ways to game the system and reduce their taxes without having to actually commit fraud.

[Warren Dew]

Adrian Wallace:

Also - consider another primary purpose of government - providing employment! A large, inefficent, government machine keeps thousands gainfully employed. Switching these services to private enterprise automatically causes job losses in the name of productivity

Only in the short term. Consider the opposite situation: a stable economy where these services are provided more efficiently. What happens when you switch those services to the government?

More people don't get employed, because we're talking about an economy that's already stable - there aren't more people to employ. Instead, because of the government inefficiency you mention, the services are provided less well by the same number of people. No one is better off, but many are worse off.

The only areas of the economy where it might make sense for the government to be involved are natural monopolies - areas where it doesn't make sense to have competition. That includes roads, since it wouldn't be so great to have several road systems and only be able to visit that fraction of people who happen to use the same road system as oneself, but not health care, where competition between doctors for customers can be expected to improve efficiency and service.

[Alan Wanwierd]

Originally posted by Warren Dew:

Consider the opposite situation: a stable economy where these services are provided more efficiently. What happens when you switch those services to the government?

More people don't get employed, because we're talking about an economy that's already stable - there aren't more people to employ. Instead, because of the government inefficiency you mention, the services are provided less well by the same number of people. No one is better off, but many are worse off.

The only areas of the economy where it might make sense for the government to be involved are natural monopolies - areas where it doesn't make sense to have competition. That includes roads, since it wouldn't be so great to have several road systems and only be able to visit that fraction of people who happen to use the same road system as oneself, but not health care, where competition between doctors for customers can be expected to improve efficiency and service.[/QB]

I accept than in the case of a society with 100% employment that part of my argument is invalid - but there is no such place!! Here in Brisbane Australia I'd guestimate that 10-20% of the population works for Government - Many in quite bureacratic inefficient ways. If we were to reduce the size of Queenslands government to a US style minimalist one - the impact (I can only imagine) on the city would be horrendous..

In terms of suggesting that private business will always imin the short term. prove service I have to object. Having seen public transport go from public ownership to private ownership in the UK, seen utilities deregulated (in the name of increased competition) in Australia and seeing the massive growth in recent years of private medicine in Australia I would suggest that private interests are quite good at efficiently serving the most profitable parts of a market - but consumers in less profitable areas are much better served by governments. The decay of rural bus and train services in the UK and the spiraling costs of telecoms for outback Australians serve as good indicators of this. Furthermore - look at UK TV, Commercial channels may be more efficient and get bigger audiences, but the government funded BBC provides a whole range of high quality services that just would not exist if everything were measured in terms of economic return alone.

I wish I could think of an example of a private industry going public so I could try and see more your point, but I'm too young!! In my life all that seems to have happens is government run services being sold off and run down and cheapened for short term financial gains by private enterprise - Can you offer me an example of the reverse? (A cheap service being government purchased and then subsequent price hikes and service drop outs?)

I would suggest that to leave as much as possible in the hands of a free market economy is to leave society to become a tyranny of the majority... Live in the city, listen to mainstream music, watch mainstream reality TV, catch commuter trains in morning, afternoon and get sick with cheap to cure common ailments - and you will me be served well by comercial interests... but speak a different language, live in an slightly remote area and have tastes for non-pop culture and god forbid suffer an expensive illness - all of a sudden theres no access for anyone other than the hyper-rich....

[Jason Menard]

Originally posted by Adrian Wallace:
Also - consider another primary purpose of government - providing employment!

In no way is it a purpose of the government to provide employment. A government must employ a certain number of people in order for the government to function, but no more than the minimum number of people required to get the job done. A purpose of the government is to promote the general welfare, but this does not mean that the general welfare is served through providing jobs. I don't know what the deal in Australia is, but in the US, people do not have the right to employment, and it is certainly not a benefit that society has a duty to bestow on an individual.

[Alan Wanwierd]

Originally posted by Jason Menard:


In no way is it a purpose of the government to provide employment. A government must employ a certain number of people in order for the government to function, but no more than the minimum number of people required to get the job done. A purpose of the government is to promote the general welfare, but this does not mean that the general welfare is served through providing jobs. I don't know what the deal in Australia is, but in the US, people do not have the right to employment, and it is certainly not a benefit that society has a duty to bestow on an individual.

Ok - granted - purpose was probably the wrong word. But its a GREAT secondary function isnt it?

..and to be honest I'd rather employ slightly more people than is absolutely necssary to do a job (and have the additional costs passed on to society through taxation) than pay people to sit around on the dole doing nothing and getting depressed/unhealthy and delinquent because there are no jobs.


..but you are correct - Citizens do not have the right to employment.

That said Australian governments (States and Federal) are without a doubt the biggest employers in this country and Austalia is very much a economy of high taxation, high level of services, reasonable high and even standard of living across society. This is compared with USA where [and I apologise for the following which is born of my fairly ignorant uneducated impressions only] taxation is very low, services are low and standard of living varies enormously dependending on which social strata you occupy with large number of society under the poverty line and in contrast some seriously scary over-rich....
[ January 03, 2005: Message edited by: Adrian Wallace ]

[Manish Hatwalne]

This is how it is in India -

Upto INR 50,000 - Nil
INR 50,000 - INR 60,000 --> 10%
INR 60,000 - INR 150,000 --> 20%
INR 150,000 + --> 30%

So, basically INR 19,000 + 30% whatver our income is after 150,000 (most s/w professionals, including freshers would have income over INR 150,000).
So if you make 500,000 a year, you and up paying 19,000 + 105,000 = 124,000 + some educational cess this year. Prety high considering the kind of infrastructure govt makes available!! My cityhas power cuts of 3 hours each day for 5 days a week!!! Pathetic!!!

And there are tons of sub-rules for exemptions, additional taxes etc. They are beyond me!!!

I agree with Steven Bell , i would be better to have a flat rate of tax after a certain amount.

HTH,
- Manish

[Jeroen Wenting]

Originally posted by Thomas Paul:

That is madness. That doesn't happen in the US because the increased tax rate only affects additonal income, not income taxed at the lower tax rate.

Where this MIGHT happen is at the higher income levels because some deductions are phased out as you earn more income. I never figured it out but I suppose it is possible that a person may get to keep less income than someone else because they lost a deduction that the other person got to keep. However, it may be that the deduction has been phased out in such a way as to prevent that from happening.

Yes, that's the reason. But also social security premiums skyrocket once you get over a certain income. As a result a 5% (say) raise which puts you just over that limit can cause a sharp decline in disposable income, you'd need a 10% or higher raise to actually benefit from it yourself.
I've had that happen myself once, got a 20% raise but after taxes I'd almost nothing more than I had before.
Health insurance more than doubled (went from our equivalent of medicare to private insurance causing my premiums to more than double), social security doubled almost, etc. etc.

[Jeroen Wenting]

Originally posted by Max Habibi:



Perhaps the majority of frauds, but only because there are so many more lower income taxpayers vs. higher income. It's a cinche the vast amount of tax fraud, as measured by the amount of money involved, is committed by the higher income earners, and I'm betting they have a higher proportion of tax fraud as well.

M

sure the majority of the money from taxfraud is in a very few very large cases.
If one person commits fraud for $10 million it takes 10.000 cases of people comitting fraud for $100 to make up the same amount.
That single case is newsworthy (the more because the socialists who control the press love to see "big money" go down and portray high income people as anti-social criminals cavorting in the spoils of the labour of the masses), those 10.000 small cases never get reported except in statistics which are boring for reporters.
Those 10.000 people never have the opportunity to commit fraud for $10 million each because they simply don't have that amount of taxes to pay. If they had had that much to pay they'd possibly each commit fraud to that amount...

[Jeroen Wenting]

Originally posted by Steven Bell:


I don't think that is quite right. Higher income earners often have many more exemption (business expenses, ect), but they are much more lickely to be audited and tend to be more careful about getting their taxes done right. The chances of lower income earners getting audited for a few thousand bucks not showing up is slim to none, unless they piss off the wrong official (which is just another problem I have with the whole overly complicated tax code, you can get just about anybody on something).

indeed. My father who has a quite decent income and hideously complex deductions (healthcare expenses, 2 houses one of them abroad, income from multiple sources including foreign stock exchanges, etc. etc.) has been audited every single year for the last decade.
Someone at the tax office is probably out to get him out of spite, as the audit is each year ordered by the same person... The people internal there don't understand the tax code they're auditing against, each year my father once again has to explain to them how the obscure parts of it his taxes fall under work (he's a tax consultant for over 20 years).

At one point the company he worked for was audited so severely he filed a complaint after which the auditing staff were replaced.
These people just would not stop. They could find no wrongdoings so they checked again and again, each time requiring more detailed and obscure details (down to the supermarket receipts for ground coffee for the canteen and things like that) just so they might find an error somewhere.
Their replacements doublechecked what was done already and agreed there was nothing wrong, which was hardly surprising...

[Thomas Paul]

I wish I could think of an example of a private industry going public

The NYC subway system. If it hadn't been taken over by the city there would be no subway system. The private sector proved that running a subway is not profitable. But without it, NYC would die.

[Jeroen Wenting]

or take the entire private sector in Russia after the bolschevik revolution (and repeated in all countries under their influence).

Of course they proved the opposite: the government cannot run businesses without making a mess of things

[Warren Dew]

Adrian Wallace:

Here in Brisbane Australia I'd guestimate that 10-20% of the population works for Government - Many in quite bureacratic inefficient ways. If we were to reduce the size of Queenslands government to a US style minimalist one - the impact (I can only imagine) on the city would be horrendous..

I think you have some misconceptions about how small the U.S. government is. The federal government constitutes about 20% of the economy, and state and local governments are probably another 20%. Direct and indirect employment by the government may not be as high as 40%, but it's higher than the figures you cite for Australia.

[Thomas Paul]

In the USA:

2.7 million federal government employees
15.7 million state and local employees

That is about 14% of the workforce.

Australia reports government employees are 17.8% of the workforce.
[ January 04, 2005: Message edited by: Thomas Paul ]

[Jeroen Wenting]

And as only about a third of the population (at most) is economically active (aka holds a job) that's 20% of the employed population.

[Thomas Paul]

Originally posted by Jeroen Wenting:
And as only about a third of the population (at most) is economically active (aka holds a job) that's 20% of the employed population.

I originally had the percentage of the population. But I found the figures for the workforce and edited my comment. So Jeroen is commenting on a post that I changed.

[Steven Bell]

Originally posted by Adrian Wallace:

I would suggest that to leave as much as possible in the hands of a free market economy is to leave society to become a tyranny of the majority... Live in the city, listen to mainstream music, watch mainstream reality TV, catch commuter trains in morning, afternoon and get sick with cheap to cure common ailments - and you will me be served well by comercial interests... but speak a different language, live in an slightly remote area and have tastes for non-pop culture and god forbid suffer an expensive illness - all of a sudden theres no access for anyone other than the hyper-rich....

You have some bizarre logic going on here. First off about government employment. Having people employed by the government is a drain on the financial resources of a state. The government does not produce anything it only consumes. A massive government layoff would be overly harsh and painful, but a slow reduction in the size of a government would allow more money to be in the hands of people who can actually use it to create something.

In the US before the telephone service was broken up and privatized long distance calls cost more than $1.00, sometimes more than $2.00 a minute. Allowing for competition and the free market to work has brought prices down to $0.05 a minute.

The NYC subway was built by private industry and was working great. The reason it was bought out by the government was the government told the subway companies that they would not be allowed to raise their rate to more than 5 cents a ride.

In Chicago the city (I think it was actually parts of the city) was having problems with their ambulance service. They went with a private company. Service was improved, response time was shortened, and the ambulance technicians were happier because they actually had modern equipment to work with. All this saved the city around 10% what they were paying before.

Red Cross, the non-profit organization, provides lifeguard service for many swimming pools across the US. A man (and his name escapes me now) decided he could do a better job. He was able to provide better service (mre alert guards), he developed new rescue methods, and he saved his customers money. The Red Cross has started to use some of his methods in the locations they still service.

The common factor here is private companies motivated by, greed and money, hunt and find ways to save money and provide a better service (as a better service attracts more customers). The private company has a huge motivator. What is the motivation for governemnt to do better? If a company performs poorly another company will drive it out of business with better service for less money. If the government performs poorly it crys for more money citing the fact that it failed as proof that it needs more money.

As for government servicing the few over the majority better than a private company, I just can't understand that. A goverment only has to react to the people every few years on elections. They only react and represent the majority that will get them elected. In the private sector if a small group of people are being underserviced that create a demand that a free market will fill.

Think of a supermarket. You walk in and see beef, chicken, pork, cod, salmon, squid, crabs, fat-free food, fatty food, frozen food, fresh food, organic food, ect... This is the market bending over bacwards to accomidate everybody. If the supermarket were run by the government you would probably end up with huge lines to get some bread... oh wait, that did happen.

[Frank Silbermann]

Originally posted by Adrian Wallace:
Government run operations do not have to generate profits for shareholders and so can concentrate on their core business goals (i.e. providing healthcare, providing education, building roads etc etc) rather than the grubby business of generating money. ... Marketing - we live in a world where sales and marketing plague us all... In the days of government run monopolies in the telecoms industry (at least in UK and Australia) There was no great need for enormous amounts of customers money to be spent trying to brainwash people to spend money with XYZCom or ABCCom...

Actually, people in government spend more effort in money grubbing than people in the private sector. Every agency must justify its budget request and the way it spent its last year's money, and the effort generates _tons_ of paperwork.

That is in contrast to the private sector, where a junior vice president meets with the executive vice-president over golf. The executive vice-president decides what budget to give the junior vice-president's department, with the understanding that if the executive vice-president isn't pleased with the results (or even "just because"), the junior vice-president may have his budget cut the next year -- if he isn't tossed out on his ear.

Originally posted by Adrian Wallace:
Also - consider another primary purpose of government - providing employment! A large, inefficent, government machine keeps thousands gainfully employed.

When the Pilgrims landed at Plymouth Rock, they felt the need to form a government. Oddly enough, provision of employment was NOT one of the tasks they assigned to it.

Of course, it's quite easy for a government to create jobs -- all it needs are guns and whips. _Wages_ -- now that's another story.

Originally posted by Adrian Wallace:
Large scale job losses would effect not only those who have lost their jobs but the whole of society since an increased drain on social security funds drains government funds and forces tax increases.

The world doesn't owe anyone a living, you know.

The argument is sort of like one man's solution to global warming. He suggested that every automobile should have a hydrogen-based electric generater and an electric motor. The car would get hydrogen from the local service station, which creates it using electricity from the grid. Where would the grid get its electricity? Whenever they were parked, the cars would plug into the grid and run their hydrogen-burning motors to generate electricity!!! Apparently, like most humanisticly educated liberals, this guy didn't dirty his mind with the more boring details of physics (e.g. the 2nd Law of Thermodynamics). I suppose he'd argue that we'll never benefit from a perpetual motion device unless the government gets involved to see that one is built.

Arguments that more government spending is good for the country, because it increases income tax revenues and decreases dole payments strike me as somewhat analogous to the idea of using automobiles to generate electricity for the creation of hydrogen for the cars to burn.

Originally posted by Adrian Wallace:
(..and I wont even get into the costs of increasing poverty causing increased crime, increased policing costs etc etc etc...)

It's not clear that poverty causes crime; back in the days when many Americans could not afford television sets, crime was very low in poor neighborhoods (until they got television, many of the children who lived there didn't even realize that they were poor).

Most crime is caused by young men who want to gain an advantage over their peers in the competition for women. You would have this competition regardless of the overall standard of living. (That's why even people who have all they need commit crimes -- they want to raise their social status by getting even more.) It's sort of like people who cheat in tennis -- no matter how well you play, somebody you want to beat plays better so there's still the temptation to cheat.

[Alan Wanwierd]

Originally posted by Frank Silbermann:
It's not clear that poverty causes crime; .... Most crime is caused by young men who want to gain an advantage over their peers in the competition for women.

Whoaaa there..

I think Frank, Steven et.all and I have pretty much covered enough of "high taxation good or bad?" question and are unlikely to come to any kind of agreement - but I have to follow this one up:

Where do you get this "sexual competition" crime idea? I'm no criminologist, but I would have thought that massive social inequality and percieved injustice were pretty big drivers for criminal activity?

Take the guy who stole my jacket in Peru - Did he do it so that he could impress his girlfriend? or did he do it because I was a "rich" tourist who could afford to be ripped off so that he could eat a couple of decent meals for a change? - I'm sure its more likely to be the latter!

I woudl have thought the most abundant criminal activity would be theft (although I'm willing to be correctd if someone can dig up stats!)- the motivation for theft surely being overwhelmingly economic gain??

In fact if social inequity or poverty are not huge drivers in crime why do you suggest that crime rates tend to be higher in areas of low socio-economic population?

Is it your hypothesis that males in this environment are somehow more sexually driven than their more privelidged peers in the smart neighbourhoods?
[ January 04, 2005: Message edited by: Adrian Wallace ]

[Steven Bell]

I looked up some stats for the US.

The highest in terms of occurance is 'Property Crimes' in which theft takes up about 75%.

That is followed by 'Personal Crimes' in which assult makes up about 85%.

'Property Crimes' outnumber 'Personal Crimes' about 3 - 1.

I while crime rates do tend to be higher in low income areas that is not necessarily a causal relationship. If social inequity were the main drivers you would see more targeted crimes against higher income people. A more telling statistic is that of stability of the social structure (family). In area's where you have low income but a high percentage of stable families (mother, father, even grandparents help) you tend to have much lower crime. If you look at the higher crime areas you're usually looking at areas where the 'out-of-wedlock' birth rates are well over 50%. Children growing up with only one parent, often a younger parent, and little social support.

[Frank Silbermann]

Originally posted by Adrian Wallace:
Where do you get this "sexual competition" crime idea?

From the writings of Darwin. (You're not one of those "Creationists", are you?)

Originally posted by Adrian Wallace:
I'm no criminologist, but I would have thought that massive social inequality and percieved injustice were pretty big drivers for criminal activity?

Massive social inequality? Nope. There was much greater social inequality in Victorian England than in the Wild West, but much less in the way of train and stage coach robberies.

Perceived injustice? Probably. (That would make vocal Marxists a prime cause of crime, because they're always going around trying to convince poor people to perceive themselves as victims of injustice.)

Originally posted by Adrian Wallace:
Take the guy who stole my jacket in Peru - Did he do it so that he could impress his girlfriend? or did he do it because I was a "rich" tourist who could afford to be ripped off so that he could eat a couple of decent meals for a change? - I'm sure its more likely to be the latter!

I guess that depends on whether he sold the jacket or wore it. If he wore it, it was probably so he could impress the girls -- and maybe get a girlfriend. (If it was just warmth he needed, he could have begged for someone's discarded rags.)

Originally posted by Adrian Wallace:
I woudl have thought the most abundant criminal activity would be theft - the motivation for theft surely being overwhelmingly economic gain??

Yes, but once a person is fed and has a place to sleep, the prime motivation for economic gain is competition for sex and social status.

In fact if social inequity or poverty are not huge drivers in crime why do you suggest that crime rates tend to be higher in areas of low socio-economic population?

Better-off people face more risk in doing crimes. If a barely literate man on the dole is caught in a burglary, all he risks is a short stay in prison. If I were to be caught doing a burglary, I'd risk not only that, but also the loss of a career I've worked decades in building, my marriage and my family. Someone like me would also be likely to have a much worse time in prison, due to my lack of experience in fistfighting and my general greater reluctance to engage in personal violence.

Also, the two are correlated because crime causes poverty. For example, my track record for resisting the temptation to engage in petty theft is one of the reasons I have a job that raises me above the poverty line. I have plenty of opportunity to steal office equipment, but if I had ever been caught doing things like that I wouldn't have been hired, and I'd now be poor.

There's also a correlation because crime is more tempting to people who overly discount future desires for the sake of the present. (That's because the benefits of crime are immediate, whereas the risks involve future contingencies.) People whose personal utility function sharply discounts the future also tend to be poor, as they are less willing to take pains to invest in themselves.
[ January 05, 2005: Message edited by: Frank Silbermann ]

[Warren Dew]

Thomas Paul:

In the USA:

2.7 million federal government employees
15.7 million state and local employees

That is about 14% of the workforce.

Thanks for the actual data.

That would seem to indicate that the U.S. Federal government is far less efficient at providing jobs than private industry - with Federal expenditures of about 20% of GDP, they only employ about 2% of the workforce. Not exactly an argument for "government as source of jobs", even if you do believe that unproductive jobs are a good thing!

The figures might look better for the U.S. government if you include indirect employment - for example people employed making the tanks and cruise missiles that the government buys. Any figures on those?
[ January 05, 2005: Message edited by: Warren Dew ]

[Steven Bell]

Originally posted by Warren Dew:
Thomas Paul:
The figures might look better for the U.S. government if you include indirect employment - for example people employed making the tanks and cruise missiles that the government buys. Any figures on those?

[ January 05, 2005: Message edited by: Warren Dew ]

I think that would be really hard to quantify. Most of the private industries that government uses also perform non-government related work.
example:
Boing builds and designs many (most, all?) of the US military aircraft, but they also supply commercial aircraft to many companies around the world.