H.R.Clinton on Tax Distribution
When I read this I was reminded of a report we watched recently–from a few decades ago–that reported that Swedes were the "happiest" people in the world, because of / despite their much higher tax rate and their solid commitment to a social-welfare state.
“The rich are not paying their fair share in any nation that is facing the kind of employment issues’’ that confront the United States and other nations, “whether it is individual, corporate, whatever the taxation forms are.”
Then she offered up an example. “Brazil has the highest tax-to-G.D.P. rate in the Western hemisphere. And guess what? It’s growing like crazy. The rich are getting richer, but they are pulling people out of poverty. There is a certain formula there that used to work for us until we abandoned it — to our regret, in my opinion. My view is that you have to get many countries to increase their public revenues.”
[Hillary Rodham Clinton, in remarks at the Brookings Institution on 26 May 2010; quoted in David E. Sanger, "Clinton Muses About Taxing the Rich", New York Times, 27 May 2010.]
p.s. Saying that this situation obtains during this "unusual" period of high unemployment may be politically expedient if one wished to restructure the current tax-rate scheme, but I expect it's true even in "normal" times.
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I welcome comments -- even dissent -- but I will delete without notice irrelevant, rude, psychotic, or incomprehensible comments, particularly those that I deem homophobic, unless they are amusing. The same goes for commercial comments and trackbacks. Sorry, but it's my blog and my decisions are final.
on Thursday, 3 June 2010 at 08.23
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Hilary Clinton telling us taxes are good. How hard was this to find?
The Swedes might be happier, but they are going extinct, so how good is that?
High IQ, high trusting individuals report greater happiness under all conditions.
Brazil's growth may need a little qualification. When you grow from ten to eleven, it is a lot. When you grow from 102 to 103, not so much.
I had some cohorts move to Brazil and start businesses. They rave (in a kind of "in your face way") about the low costs. It is a bit deceiving to rave about Brazil's high taxes when they subsidize labor, utilities, insurance, transportation, etc.
on Friday, 4 June 2010 at 20.59
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Somewhat paradoxically, the rich and super rich, who can afford whatever they want and need, resent high taxation for reasons of selfishness and perverse principles having to do with notions about encouraging a slacker culture among the nonwealthy. Yet these same people have ferociously destroyed jobs in the U.S. They'll buy any and and all forms of technology, overwork their most loyal and productive employees, send production and whatever else they can overseas, even forgo growth, to relentlessly reduce the payroll. They'll also willingly spend millions — in Wal Mart's case tens or hundreds of millions — to shun and break unions. But, by golly, they just can't stand the idea other people should get anything without having worked long and hard to pay for it.
It ruins people and their rugged individualism, their self-sufficiency, don't ya know?
Meanwhile, of course, these same rich and super rich types have their hands out to government for contracts, tax breaks, incentives of all kinds, protection or advantages vis à vis competitors, and any and all benefits they can get out of it.
Supposedly, the rich and super rich are immune. However, they're not smart enough, well-educated enough or sensible enough to realize things can't and won't continue on their present course indefinitely. Millions of marginalized people will come to realize, as they have in other countries, that there are worse things than paying the bulk one's income to government, in return for a high level of public services and freedom from constant worry about things like affording medical care and about losing one's home, business, health or mind at the tender mercies of employers who can and will dump their workers at the first opportunity — permanently if at all possible.
on Saturday, 5 June 2010 at 10.03
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SW, you embrace too many fallacies. The rich pay more. That is what drives prosperity. Real estate in San Francisco and New York is higher than in Caracas because the rich people in those cities pay more for it. Auto mechanics in Europe make more than mechanics in Mexico because Europe is a wealthier place and pay more for the same service. Never before in the history of the planet have the rich payed more in taxes, and never before in history has wealth creation been higher. That you want to redistribute even more wealth speaks more to your brain chemistry than the facts on the ground.
on Saturday, 5 June 2010 at 18.29
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RSF wrote: "Auto mechanics in Europe make more than mechanics in Mexico because Europe is a wealthier place and pay more for the same service."
The obvious answer to this problem, following the American model, is for Europeans who can afford cars to outsource as much of their repair work to Mexico as possible. Because only so much of that is feasible, the outsourcing should be accompanied by bringing in large numbers of Mexican auto mechanics as guest workers.
The result will be that some European repair shops will go out of business, some Mexican mechanics will make a little more and a lot of European mechanics will make a lot less or have to seek other work. Heinz will be able to get his Grosser Mercedes tuned up at previously unheard of low prices, though, which will be wunderbar. Meanwhile, don't be surprised if European taxpayers wind up having to deal with Mexican mechanics who disappear into the population when their visas and work permits expire. Worse will be the cost of dealing with increasing attempts by Mexican drug cartels to expand their drug exports to the continent, with all the murder and mayhem that will entail.
on Sunday, 6 June 2010 at 07.30
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SW has nicely described the American model. Study after study has shown that low wage immigrants are a net economic drain, but yet our politicians keep the pipeline flowing.
The breakdown in Sweden happens along different lines. A Swedish welfare State kind of works when you have a talented, homogeneous population. But those who build such a welfare state lose their demographic robustness, and to compensate they increase immigration. Current immigration patterns are eroding the talent pool and the social cohesiveness, and it's off tn the Balkans we go.
It is not a good idea to offshore your fecundity.
on Thursday, 17 June 2010 at 00.19
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RSF wrote "those who build such a welfare state lose their demographic robustness, and to compensate they increase immigration."
What incoherent horsepucky. I'm not aware of any breakdown in Sweden. Neither am I aware of any mass exodus of "the talent pool." What you refer to as a welfare state is a system developed over time that Swedes find works for them.
It comes down to what people in a democracy choose. They can choose to pay more in taxes, in return for more and more-extensive government services, benefits and protections. Or, they can pay less in taxes and take their chances with having the private sector meet more of their needs and preferences. If the Swedes weren't in favor relying more on government already, a close look at the U.S. over the past three decades would surely be all that would be necessary to cause them to make that choice.