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Croatia just canceled the debts of its poorest citizens

washingtonpost.com

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Re: Croatia just canceled the debts of its poorest citizens

#271

Post by cyphunk »

carona wrote: post #270
ricardobeat wrote: post #177

Earlier quoted context omitted.

These exact same words could come out of a Brazilian. Word by word. I don't know about Croatia, but in that case they are only half-truths. The idea that there are 'people who pay for everything' is usually misguided. There are the exploited, and the less exploited. Both pay in one way or another, and only a very small elite group is actually well off. You say "the situation is complicated" and "this is not fair", bu…

I don't know the exact scenario in Croatia or Brazil; In general, writing off loans sets a bad precedent. People would again take loans, and will want the Govt. to bail them out. I have seen these things happen in India. There were cases people took loans and were waiting for the next election, to get their loans waived off.

How is it that this logic is lost when it comes to cities and corporations that declare bankruptcy? While Detroit may spend a few years having trouble getting good loans I imagine GM (bailed out some years ago) is already able to claim low interest loans. And these are entities that were also bailed out.

Re: Croatia just canceled the debts of its poorest citizens

#272

Post by radisb »

bjt wrote: post #220
ricardobeat wrote: post #177

Earlier quoted context omitted.

These exact same words could come out of a Brazilian. Word by word. I don't know about Croatia, but in that case they are only half-truths. The idea that there are 'people who pay for everything' is usually misguided. There are the exploited, and the less exploited. Both pay in one way or another, and only a very small elite group is actually well off. You say "the situation is complicated" and "this is not fair", bu…

The obvious possible failure is that these people may find it hard to get credit in the future, as described in the last paragraph: > Some economists, among them Baker, are skeptical whether the scheme will succeed: "I am not sure that this is the best way to help low-income people. If lenders think this can happen again they will charge very high interest rates to low-income borrowers," Baker said. If you were a ban…

3 years ago, in Cyprus, the reverse happened (savings were cut off) but people still deposit money into their bank accounts without getting increased interest, despite this precedent. Why should a loan writing off cause loan interests to go up?

Re: Croatia just canceled the debts of its poorest citizens

#273

Post by radisb »

bsaul wrote: post #107
Moru wrote: post #82

Earlier quoted context omitted.

Greek trend? I can remember quite a few american banks doing just this recently.

Debt cancellation indeed has always existed, greeks just bringed it to another level, with their magic combo : fraud the state's accountings, get as much as you can from the eurozone before the crisis, get as much as you can from other european countries after the crisis, and then 2 years later when things start to stabilize, declare unilaterally that you're not going to reemburse people, and party in the streets ove…

>At least US banks had the decency to not laugh about it publicly.

It is good to know that US Banks take seriously and in a professional manner the frauds they commit.

Re: Croatia just canceled the debts of its poorest citizens

#274

Post by josephlord »

runj__ wrote: post #269
ptaipale wrote: post #260

Earlier quoted context omitted.

VAT hurts, but not as much as taxing income. People do not like consumption taxes, but even with high VAT, they still consume, while taxing employment or corporate incomes hurts economies more because they have a stronger impact on economic activity. Land value tax would be even better, because the land does not run away or stop working. How's that in Greece?

VAT is easier to "cheat" than income tax. Just don't buy stuff in your own country. Land Value tax makes the rich pay a lot but hits the poorest really hard since the threshold to owning land (and creating wealth) is substantially raised.

> Land Value tax makes the rich pay a lot but hits the poorest really hard since the threshold to owning land (and creating wealth) is substantially raised.

That seems a bizarre statement. Firstly I don't see any connection between owning land and creating wealth. Secondly taxing land value is a deterrent to land ownership and should reduce the desirability of owning land and reduce the price of land. This will make it more cheaply available to productive use and reduce the incentive to hoard land unproductively. Finally the poorest cannot afford to own land anyway so are not affected by the land taxes.

Have I missed something?

BTW I largely agree about cheating VAT especially in a small country with neighbouring countries that can be cheaply visited.

Re: Croatia just canceled the debts of its poorest citizens

#275

Post by rbehrends »

briandear wrote: post #159
ptaipale wrote: post #145

Earlier quoted context omitted.

Just nitpicking one thing: > taxes are very high Doesn't seem so: Croatia's tax to GDP ratio is 26.6 %. Compare that to 46.8 % in Belgium, 43.4 % in Austria, 40.6 % in Germany, 45.8 % in Sweden. 26.9 % in U.S. which is internationally known as a low-tax regime. Surely some taxes are high, and taxation is not necessarily fair, but I'd say that Croatia's taxes overall are not high. I would also expect that the "black m…

The U.S. is known as a low tax regime? They have among the highest corporate taxes in the world. Taxation as a percentage of GDP is not a good measure because that doesn't address the tax burden as a percentage of income, but as a percentage of GDP. That also doesn't measure the value received for the tax burden endured. As an extreme example, if you are receiving value from those taxes (perhaps education or public t…

> The U.S. is known as a low tax regime? They have among the highest corporate taxes in the world.

Nominally, yes, but the effective corporate tax rate is much lower [1]. US income tax is at the low end for the developed world, too (both nominal and effective).

[1] http://money.cnn.com/2013/07/01/news/economy/corporate-tax-r...

Re: Croatia just canceled the debts of its poorest citizens

#276

Post by blackstrype »

This sounds too ridiculous to manage... The cost simply of controlling who is eligible for debt cancellation adds more burden on taxpayers. I think they'd be better off to calculate a debt cancellation eligible for everyone. Tax rebates for those who wish to donate their debt cancellation to others. In large: let the community decide what to do with their own tax money.

Re: Croatia just canceled the debts of its poorest citizens

#277

Post by kjjw »

EpicEng wrote: post #193
kjjw wrote: post #113

Earlier quoted context omitted.

FUD. Worse in fact - xenophobic FUD.

Sounds like the parent if from an EU country... so the comment cannot be considered xenophobic.

Perception and reality often differ. Xenophobia has nothing to do with reality, but instead perceived notions of otherness.

Re: Croatia just canceled the debts of its poorest citizens

#278

Post by tom_scrace »

cyphunk wrote: post #271
carona wrote: post #270

Earlier quoted context omitted.

I don't know the exact scenario in Croatia or Brazil; In general, writing off loans sets a bad precedent. People would again take loans, and will want the Govt. to bail them out. I have seen these things happen in India. There were cases people took loans and were waiting for the next election, to get their loans waived off.

How is it that this logic is lost when it comes to cities and corporations that declare bankruptcy? While Detroit may spend a few years having trouble getting good loans I imagine GM (bailed out some years ago) is already able to claim low interest loans. And these are entities that were also bailed out.

I think you answered your own question didn't you? Those companies were 'bailed out'. The government didn't just wipe out their debts by fiat; it gave them money.

Re: Croatia just canceled the debts of its poorest citizens

#279

Post by runj__ »

josephlord wrote: post #274
runj__ wrote: post #269

Earlier quoted context omitted.

VAT is easier to "cheat" than income tax. Just don't buy stuff in your own country. Land Value tax makes the rich pay a lot but hits the poorest really hard since the threshold to owning land (and creating wealth) is substantially raised.

> Land Value tax makes the rich pay a lot but hits the poorest really hard since the threshold to owning land (and creating wealth) is substantially raised. That seems a bizarre statement. Firstly I don't see any connection between owning land and creating wealth . Secondly taxing land value is a deterrent to land ownership and should reduce the desirability of owning land and reduce the price of land. This will make…

What I'm trying to say is that social mobility will be severely stunted.

We can agree that the reason for owning land is to make money, yes? Planting crops would take a couple of months to return the initial investment. If I planted a forest it could take years.

If this investment possibility is removed from everyone without (massive amounts of, if the tax is high enough) capital it's going to create a further wealth gap for no apparent reason.

> Finally the poorest cannot afford to own land anyway so are not affected by the land taxes.

Yes, this is true for the poorest, bad phrasing on my part, but it is going to make the barrier of entry higher.

Also: land produces goods that everyone need the same amount of (food, wood, wool), this would increase prices in a way that wouldn't really bother the capital heavy but would seriously hurt the already poor.

Re: Croatia just canceled the debts of its poorest citizens

#280

Post by kbart »

sgustard wrote: post #188
baddox wrote: post #135

Earlier quoted context omitted.

How do poor people in Europe get cars? Or are you saying they don't need them?

Per capita car ownership: http://en.wikipedia.org/wiki/List_of_countries_by_vehicles_p... shows the US at 809 cars per 1000, vs Italy at 682, Germany 588, and so on. Which I would interpret as "Europe has slightly fewer cars per person", not "Europe has NO NEED for cars". It's hard with a straight face for anyone who's visited Paris or Rome to observe there's not serious traffic. (And, in fact, woe to any pedestrians…

The numbers do not show a full picture. A lot of people in Europe own a car but use it only occasionally -- going on holiday, weekend trip etc., and still use a public transport - which is well developed in most (even smaller) cities - for everyday commuting.
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