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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

#301

Post by BSousa »

ptaipale wrote: post #259
BSousa wrote: post #178

Earlier quoted context omitted.

There are various reasons, and I never said that it wasn't their fault they got into this mess. But lets not pretend it was ALL their fault. But independently of whose fault it is, there are two options: a) try to get to an agreement that can get Greece back into shape, even if it means postpone debt payments, restructuring, haircut, etc where it is beneficial for all parties b) continue to blame them for this situat…

> a) try to get to an agreement that can get Greece back into shape, even if it means postpone debt payments, restructuring, haircut, etc where it is beneficial for all parties And that is what has been tried. Debt payment has been postponed a lot, there' been plenty of debt restructuring. Still, that is what Syriza now does not want to do. Greeks are still paying less taxes (in proportion to their national income) t…

Can I ask if this taxation note is based on http://i.imgur.com/NWQ7zTM.jpg ?

I honestly don't know about Greece, but I can tell you that graph is very wrong in so many levels. For example, Sweden is at 44.5%, but they count all money paid as taxes (according to a Deloitte report I was given when I had a job offer there, I can try to dig it up if needed) including what will go to social security/retirement/etc. In Portugal, you pay income tax (let's say around 20% give or take), but then, you as an employee pay 11.5% to social security and your employer pays 22.5%. So roughly, 34.5% to social security alone, but this doesn't go to the 'tax revenue' bracket. So, if we take in account corporation tax at 23% (lower in 2015), VAT at 23% for most stuff (including electricity!!), and income tax (variable between 14 and almost 50%), + social security, that 33.1% is way off. In 2012, a person in Portugal would have to work until August to have his 'taxes paid'. This means, more than 60% of his work output is taxes one way or the other.

Re: Croatia just canceled the debts of its poorest citizens

#302

Post by ptaipale »

BSousa wrote: post #301
ptaipale wrote: post #259

Earlier quoted context omitted.

> a) try to get to an agreement that can get Greece back into shape, even if it means postpone debt payments, restructuring, haircut, etc where it is beneficial for all parties And that is what has been tried. Debt payment has been postponed a lot, there' been plenty of debt restructuring. Still, that is what Syriza now does not want to do. Greeks are still paying less taxes (in proportion to their national income) t…

Can I ask if this taxation note is based on http://i.imgur.com/NWQ7zTM.jpg ? I honestly don't know about Greece, but I can tell you that graph is very wrong in so many levels. For example, Sweden is at 44.5%, but they count all money paid as taxes (according to a Deloitte report I was given when I had a job offer there, I can try to dig it up if needed) including what will go to social security/retirement/etc. In Por…

No, I did not look at that picture; data is much more easy to handle in text format. I looked two days ago at Wikipedia [0], but primary source should actually be Eurostat [1].

And you are of course right in that different countries have different systems, and numbers are not always directly comparable. A small difference is not necessarily significant, or there may be quite some difference in practice even if numbers are the same.

But if we look at those Eurostat numbers, what the paper says is Total revenue from taxes and compulsory social contributions - % of GDP so also for Portugal and Greece, those mandatory social security contributions of employer and employee are included as tax revenues in this comparison, like they are for Sweden.

What is significant is that the employment rate of people varies a lot in different countries; it is 73-74 % in Sweden, Netherlands and Germany, while it is below 50 % in Croatia and Greece.

It should also be noted that tax revenue to GDP is just a ratio, a number. It does not mean that taxes are a certain proportion of GDP, because a sum of all tax revenues is not a component of GDP.

Interestingly, in Portugal this ratio actually dropped from 33.2 % to 32.4 % between 2011-2012. Most countries were tightening taxes at that time. But since this number is ratio to GDP, if GDP increases and tax revenue stays the same, the ratio drops.

[0] http://en.wikipedia.org/w/index.php?title=List_of_countries_...

[1] http://ec.europa.eu/taxation_customs/resources/documents/tax...

Re: Croatia just canceled the debts of its poorest citizens

#303

Post by igravious »

meric wrote: post #215
igravious wrote: post #75

Earlier quoted context omitted.

Yes. I am not an economist but it troubles me that economists would be unawares (or claim to be unawares) about this aspect of the history of debt. As usual Wikipedia (the wise, the all-knowing) has a page[1] about it. Mass debt relief and forgiveness is unexceptional in history and certainly has precedent. Even as recently as the turn of the century (only a decade-and-a-half ago!) there was an international movement…

Coincidentally 2001, 2008 and 2015 are Debt relief "Shmita" years according to Abrahamic tradition. The Bible instruction is to provide debt relief to creditors every seven years. Putting my non-religious hat on, I wonder if this crept into the bible from ancient society's observations that human credit cycles last seven years.

I thought it mentioned every 50 ((7*7)+1) years in the bible?

Very interesting about this coinciding with a notion of a short human credit cycle in actuality. Wasn't there an economics article on here recently that claimed that there are natural short and long human credit cycles?

Re: Croatia just canceled the debts of its poorest citizens

#304

Post by rebootthesystem »

popee wrote: post #45

Hi, croat here. Just one detail, this year there will be elections in Croatia and current gov didn't do anything useful for our economy, so this is kind of popular measure. Don't get me wrong, it's always nice to help, but situation is little bit complicated, taxes are very high and in some way this is not fair to people that are paying everything. Also, there are huge number of people living and exploiting social me…

What you are describing is happening and has happened for decades in many countries and at different levels: Governments with failed philosophies buy votes en-masse from various numerically large groups of people by (a) pretending to be aligned with their interests and, (b), gift-giving to that group.

I think it is fair to say this is now happening along the entire American continent, from Argentina to the USA. I know nothing about Canadian politics so I can't comment.

The framework is the same everywhere: Socialist or socialist-leaning ideology coupled with failing policies. If you truly study history from, say, Evita Peron in Argentina to Obama in the USA the parallels are scary. It's almost like they study each other's techniques and replicate them across time and space.

Of course, this makes sense. Politics responds to evolutionary forces. It is easy to see that "survival of the fittest" converged on a solution that swaps favors to the masses for votes. The only thing that matters is the survival of the organism, in this case a politician and the party they are associated with.

Of course, what happens to the masses and the ecosytem within which they live (the country) is of no importance to the organism aiming to survive (politician and party). Again, Argentina is a perfect example of killing the host or the environment in exchange for the survival of the political species. The country goes to hell but the politicians live it up. Same in the US where not one of our populist politicians has to live by the very rules they push on us. For example, Obama and his daughters will never have to worry about healthcare because they exist on a plane far above ours.

Humanity has to come up with a way to prevent political actors from manipulating the masses for their own gains. Easier said than done.

Re: Croatia just canceled the debts of its poorest citizens

#305

Post by meric »

igravious wrote: post #303
meric wrote: post #215

Earlier quoted context omitted.

Coincidentally 2001, 2008 and 2015 are Debt relief "Shmita" years according to Abrahamic tradition. The Bible instruction is to provide debt relief to creditors every seven years. Putting my non-religious hat on, I wonder if this crept into the bible from ancient society's observations that human credit cycles last seven years.

I thought it mentioned every 50 ((7*7)+1) years in the bible? Very interesting about this coinciding with a notion of a short human credit cycle in actuality. Wasn't there an economics article on here recently that claimed that there are natural short and long human credit cycles?

In the Bible, "At the end of every seventh year you must cancel the debts of everyone who owes".

In Judaism, on Shmita years debt is remitted.

On Jubilee year, land lost is returned. Indentured slaves are freed. (I interpret this as returning lost collateral.)

1987 was also a Shmita year.

1967 was a Jubilee year. Israel's land was returned.

The long credit cycle you referred to, may it be the Kondratiev wave?

Re: Croatia just canceled the debts of its poorest citizens

#306

Post by radisb »

calinet6 wrote: post #281
radisb wrote: post #272

Earlier quoted context omitted.

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?

Exactly because the situation is reversed: the banks are much more likely to be strategic and self preserving than the general public, due to concentration of power and many other factors.

I hear you, but isnt deposit interest an incentive for the depositor? Doesn't the interest partly reflect the risk the depositor takes? Theory aside, deciding between a bank with such precedent and one without and with equal interests, I don't think anyone would choose the 1st. This alone says something.

Re: Croatia just canceled the debts of its poorest citizens

#307

Post by BSousa »

ptaipale wrote: post #302
BSousa wrote: post #301

Earlier quoted context omitted.

Can I ask if this taxation note is based on http://i.imgur.com/NWQ7zTM.jpg ? I honestly don't know about Greece, but I can tell you that graph is very wrong in so many levels. For example, Sweden is at 44.5%, but they count all money paid as taxes (according to a Deloitte report I was given when I had a job offer there, I can try to dig it up if needed) including what will go to social security/retirement/etc. In Por…

No, I did not look at that picture; data is much more easy to handle in text format. I looked two days ago at Wikipedia [0], but primary source should actually be Eurostat [1]. And you are of course right in that different countries have different systems, and numbers are not always directly comparable. A small difference is not necessarily significant, or there may be quite some difference in practice even if number…

Hi! This is late but I seem to have missed your reply but didn't want not to reply to it :)

In any case, you are probably right and it includes all taxes, including Social Security and the likes. I just find it odd, that at least on normal people's taxes (income tax + social security + VAT) the numbers don't add up. Maybe GDP in Portugal is generated a lot by non individuals (corporate, where tax is around a fixed 23%) and the income gap is quite large giving out those percentages?

I know I'm on the top percentile tax wise, but my tax percentage, if we include VAT is close to 60% (I bill through my own company, so I'm responsible for all tax). When I was working for a third party circa 2010, it was around 45% or so. Not doubting your figures at all, they may even bring to light the actual problem which is, normal folks actually pay a lot of the countries taxes (so, not exactly lazy, which was my main point a few posts ago) but a lot of the elite is syphoning the money somehow. There is a reason our former prime minister is in jail (preventive, sorta like pre-bail) for corruption charges, like most of our politicians, they seem to be able to get very rich in short amount of time while having very small tax declarations.

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