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Most countries go in for progressive income tax, which does collect quite a bit more from the rich - who can afford it - than from the poor, who find it more of an imposition to part with what they do pay in tax.

This may be seen as making everybody more nearly equal than they would be if income tax wasn't progressive, or if most of the governemnt revenue was collected in sales tax or value-added-tax.

They don't end up as anything like equal in any society that I've lived in. The rich still own bigger houses than the poor - and often several of them - drive bigger cars, ride fancier bicycles, eat out in more expensive restaurants and spend more of their money on books, education and entertainment.

The difference may be less extreme than they are in the US - primarily because the poor are better supported in more socialist countries, but they still exist, as they do everywhere.

-- Bill Sloman, Nijmegen

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You might read about the city of Bell here in the Los Angeles area where a public employee (city manager) was paid $800,000 a year and could draw pension benefits of 30 million total. Taxing the rich to accomodate the poor may be a good idea when implemented without corruption, but it sure doesn't work in the real world when politicians get their hands on the money.

-Bill

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In the case of tax it would be far better to tax disposable income, calculated as what's left over after a literal "cost of average living" is taken into account.

--
Dirk

http://www.neopax.com/technomage/ - My new book - Magick and Technology

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Your "real world" doesn't seem to keep the politicians under particularly tight control. Other countries do better.

The USA comes out at rank 17, a bit behind the UK, at 15. Australia and the Netherlands are more respectable at ranks 7 and 8, though well the first rank countries - Singapore, New Zealand and Denmark.

Proportional representation does seem to help. Tight controls on electoral spending - which I'd expect to help - haven't done much for the UK's ranking, but their politicians are mostly upper class, and seem to think that they deserve to be given bribes, and that they ought to do favours for the people with whom they went through secondary school.

-- Bill Sloman, Nijmegen

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We already do that. The standard deduction is around 6K plus another

6k for each dependent while the zero tax threshold is 6k, so a family of three earning 24k owes no tax. But the so-called "earned income tax credit EIC" (alias welfare payment) returns 5036 for being low income with 2 dependents. The result is a net gain of 5036 for low earners with 2 kids. I have heard commercials on the radio offering advice on filing tax returns that will bring you back more than you paid, maybe several thousand. They don't say it that way, just that they will help you out for a small fee. Why else would illegals file a tax return?

-Bill

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Interesting that Iraq and Afghanistan rank near highest on the corruption list at 123 and 146 while Cuba is only 54. I would have thought them about the same, but maybe growing opium is more profitable than sugar cane, and thus more corruptive?

And another example of California politics is the outgoing governor's decision to pardon the son of former Assembly Speaker Fabian Nu=F1ez for political paybacks. The pardon reduced his sentence from 16 to 7 years. And I voted for that guy.

-Bill

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Cuba has had a stable government for fifty years now. It's not a great government, but it obviously works and looks as if it might evolve into something better.

Irak and Afghanistan are both ruled by people who were put in place by a foreign army of occupation, who can expect to be seen as collaborators by their neighbours. Collecting as much money as you can and sticking it in a Swiss bank account is not an unusual reaction in that situation.

There is that, too.

But who paid for the TV advertising that got him the job?

-- Bill Sloman, Nijmegen

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It's the personality that counts. Voters love actors and despise CEOs. Meg Whitman ex CEO of Ebay spent 150 million of her own money trying to beat Jerry Brown for governor who was financed by public employees unions at lower cost. Spending didn't count and Jerry won because he's a nice guy (I like him, he's fairly honest) but he has already made deals with the unions to reduce non-union wages and leave union wages intact. It's the unions I can't tolerate. They came into existence to bring up the wages of the working class, and now dictate how everything is done.

As for Swiss bank accounts, I hear Yasser Arafat stashed away 150 million, while Fidel Castro only made it to 100 million.

-Bill

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The beauty of taking money from the people who earn it and giving to people who haven't is that the opportunities for and recruitment to poverty blossom so handsomely.

That allows everyone to flourish equally in utopian bliss regardless of their work ethic, albeit at about a half or third of our standard of living.

But, per Thatcher, the problem with socialism is that eventually you run out of other people's money. In our case, make that "eventually

*everyone* runs out of money."

By the former director of the Congressional Budget Office:

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The Coming Deficit Disaster "The president says he understands the urgency of our fiscal crisis, but his policies are the equivalent of steering the economy toward an iceberg."

(Note: he was too optimistic. He wrote we'd top $17T in debt by 2019-- but the current burn rate will get us there in a couple years.)

-- Cheers, James Arthur

Consider the dynamics of a bubble. The first influential person who yells "bubble" will burst it, and get the blame for doing so. So everybody pretends things are fine, knowing it will burst, hoping someone else will get the blame.

This all comes from the illusion that the financial markets have some sort of value to society.

John

It is not an illusion*. The problem is that in financial markets, when you *lose*, you should really *lose*. Utterly. But that has very real collateral damage.

For all man's history, there's been some kind of hard constraint on activity - distance, materials, labor of a muscular form, food.

We kind of don't have that now. So people use paper constraints as a substitute. It hasn't been long enough to know how this works yet.

*if it was an illusion, then there would have been no panic after Andrew Jackson dismantled the Bank of the United States, or there would have been no real growth attributable to the activities of J. Pierpoint Morgan.

The emerging perception that financial markets represent a form of privilege is a problem. That does not mean financial markets are inherently corrupt. It means our present regime of political economy makes this look preferable to not having it to certain people.

-- Les Cargill

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And also if financial markets are in fact corrupt, one only has to bet the other way (sell short) to take advantage of the situation. Who is to say which way the market will go, up or down? It's a crap shoot, and all players are welcome, please place your bets and live with the consequences. That's the capitalist way.

-Bill

Not at all. It simply stops the people at the bottom of the pile from starving to death or worse still resorting to criminality just to stay alive. UK used to have a lot of bother with that in the old poor law days and a fair number of people were transported to Australia for stealing a days food. You can still technically be transported to Oz for poaching rabbits after dark as the law was never repealed.

It will be interesting to compare and contrast what happens in the US and UK. UK got some praise at Davos for slash and burn austerity cuts that it is making. But so far it looks like all the easy targets of a civilised society are going to get it in the neck. Public libraries are about to be annihilated as are various other social goods. Public parks and forests sold off - the things that Victorian free trade liberals fought hard to establish for the benefit of the general population.

That clearly isn't true. There were a handful for smart people pointing out that it was a bubble prior to it going pear shaped. And there were very specific allegations made against conman Madoff at the highest levels but the SEC authorities did not see fit to investigate. That was astonishing as his returns were obviously too good to be true but a lot of supposedly clued in people fell for it hook line and sinker.

Communist lackey!!! The financial capital markets do have value in matching up excess funds in cash rich companies and individuals with people with new ideas and a lack of money to develop them. The US does this much better than the UK (or at least did when I was involved). No UK bank wanted to lend to us when we needed money to get started, but US backed venture capital did.

I have met a few of them in my time. The worst one was a jumped up barrow boy doing a presentation on "shareholder value". His message was pretty much that it was OK to tell as many lies as possible to make the share price go up provided you bailed out again at the peak.

The problem arises when they think they can create money for nothing and pay themselves according to virtual paper profits obtained by trading worthless paper in a merry-go-round. When the music stops there simply are not enough chairs and someone goes to the wall. But they are all "too big to fail" so the taxpayer gets to pay for their failures of "irrational exhuberance". The bankers have set up a "heads we win and tails you lose" system where whatever happens they always get their bonuses, golden parachutes and massive pension pots.

Previous banker induced global MFUs include 1837 when paper money failed in a US land boom property scam and affected the whole world. The obvious great depression initiated in 1929 (at least some of the cowboy bankers had the good grace to jump out of windows then). These days they expect to get early retirement on a full pension and compensation for breach of contract at being forced to leave early after wrecking the entire institution. Fred the Shred being the UKs worst offender.

The pattern appears to be the every couple of genrations some smart alec comes up with a way to make money out of nothing. Based on the pattern so far the next one will be around 60 or 70 years from now.

These days the hedge funds are buying up commodity foodstuffs to drive prices ever higher. You can make money this way by choking supply at the cost of triggering food riots in poorer countries as has happened in Tunisia and now Egypt. They are truly amoral - and immoral with it.

Regards, Martin Brown

In theory it does. But when you have people collecting $6 an hour from unemployment insurance looking for a $8 an hour job, there isn't much incentive to go to work for $2 an hour in the US. Maybe in China things would be different.

-Bill

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