Monday, December 03, 2018

Unless it is for everybody transfer of payments will be resisted.

"Today, the provision of public goods and services at the global and regional level is dangerously inadequate," wrote Prof JD Sachs. Governments are essential to provide universal access to vital services such as health and education; infrastructure such as highways, railways and the power grid; and funding for scientific research and early-stage technology." In the world's most successful economies, notably the social democracies of Northern Europe, governments tax around 50% of the national income. They use these revenues for three vital functions: public services, public investments, and transfer payments from rich to poor." Transfer of payments from rich to poor means different things in different countries. Denmark levies income tax from 30% to 51.5% to fund its social welfare program which makes it a very equal society in terms of income, but "one reason why Denmark's system enjoys public support is that pretty much everyone, regardless of income, shares its benefits". In Britain the state provides a whole list of benefits to every citizen and the National Health Service is free for everyone. Taxes rise with income. Income tax is like any other country. Everyone gets a state pension, rising with National Insurance contributions, and an employer's pension from superannuation. In India politicians receive pensions, healthcare and travel expenses for life but taxpayers get nothing. Instead they are treated as thieves and lectured to pay more taxes. "Groups of neighbouring countries -- such as the EU and the African Union -- need public services, public investments, and transfer payments across national borders, and that often involve dozens of countries simultaneously," wrote Sachs. But, governments are elected by citizens of countries and anyone advocating higher taxes to pay for social services in another country is going to be booted out. Thus, Germany had a trade surplus of 244.9 billion euros in 2017 but severe austerity was enforced on Greece which received a bailout of 322 billion euros so that it could pay off its debts to banks, including German ones. While Germany made a profit from Greek bonds, young people in Greece are taking any menial job in order to survive. The British voted to leave the European Union because they want to stop migrants coming to Britain to take advantage of its social security. "The time has come to think about new global taxes," wrote Sachs, with which "to pay for an interconnected world under stress". Trouble is, the population which Sachs seeks to tax is decreasing fast while the world's poor are exploding so the program will soon run out of money. The only way is to pay people not to have children. But that will be politically incorrect.

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