France Election Fallout

[SebC]

Originally Posted by GGG

Do you have evidence to suggest that in France this is true?

I mean spending as a fucntion of gdp by the government has been increasing over the last 50 years

https://ourworldindata.org/government-spending

This does not address the debt financing of this spending or how progressive taxation is but in general I think it provides evidence that a significant portion of the problem is a demographic one. If it was as you suggest about who receives tax breaks and services then the government spending should be flat while who pays for it would change.

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https://cepr.org/voxeu/columns/income-inequality-france-economic-growth-and-gender-gap

Moreover, while the wealthiest 1% of them seized 7.7% of all pre-tax income in the early 1980s, in 2022 this figure has risen to 12.6%.

https://www.lemonde.fr/en/economy/article/2024/06/06/who-s-rich-in-france-the-inequality-observatory-revives-the-debate_6673925_19.html


Note: that's all pre-tax

Here's the tax situation.

While France has had greater inequality in the past, since 1983, the richer you are, the faster your income has been growing. And your taxes have generally been going down. It is not USA-level inequality growth, but France has not dodged Reaganism.

In combination with your data this suggests that whatever the government may have done to address inequality, the capitalists are still successfully gaining wealth faster than anyone else by capturing the value of workers' labour.

[CliffFletcher]

Originally Posted by opendoor

The tensions in France aren't from immigration; they're from people reacting negatively to the changing demographics of the country stemming from disparate birth rates among different ethnic groups.

The issue in France isn’t the number of immigrants, it’s the culture clash of some of the immigrant populations. When you mix one of the most liberal and secular cultures on the planet with ferociously conservative religious fanatics, you’re going to get political tension. Cutting off the heads of teachers goes beyond the awkwardness and misunderstanding you typically see from immigration.

[CliffFletcher]

Originally Posted by SebC

Of course it's not just that. It's also billionaires and corporations who are perpetually receiving tax cuts at the expense of middle and lower class tax rates, services, and wealth.

That’s the narrative, but are they?

The countries with the most robust public services in the world have quite moderate corporate tax rates.

Germany 30
Netherlands 26
Canada 26
Denmark 22
Norway 22
Sweden 20
Finland 20

https://tradingeconomics.com/country...ntinent=europe

Northern European governments fund their public education, health care, and pensions through 20-25 per cent sales tax and higher income taxes at every income level than their Canadian counterparts pay. That’s the model proven to deliver a more equitable social democratic society. The barrier to implementing it in Canada isn’t corporations and billionaires. It’s Canadian voters who will turf any candidate who even proposes that kind of taxation.

The notion that we can have the kind of public services we want and expect on the taxes average Canadians pay is a fantasy.

[Fuzz]

Presumably European countries don't have so many loopholes to escape paying taxes though. And taxes are so different in how they are applied, and the affects of different taxes and who pays them that you can't just post a few corporate tax rates and prove a point. Your analysis will need to be much deeper than that.

[belsarius]

Originally Posted by Fuzz

Presumably European countries don't have so many loopholes to escape paying taxes though. And taxes are so different in how they are applied, and the affects of different taxes and who pays them that you can't just post a few corporate tax rates and prove a point. Your analysis will need to be much deeper than that.

The difference in tax system and available "loopholes" or tax avoidance mechanisms can definitely be a factor.

Another example, looking at Finland with a relatively low corporate taxation, they also have a relatively high union participation. This would lead to increased wages for workers and presumably lower profits on the companies. These increased wages are then taxed higher than in Canada but cash wise the corporation pays out of pocket to people who then pay the government taxes as opposed to a system that pays the worker less but then is forced to pay more to the government directly.

And then it would be harder than just comparing the wages in Finland to Canada to see if they make more, as it needs to be compared to corporation operating expenses in both countries and how much they pay for labour as a % of total expenditures.

To the point of having voters pay more taxes, if I told voters that corporations would be paying them 25% more than they do now, would they be opposed to paying 10% more to taxes to increase services?

[Azure]

Very hard to convince anyone to pay more taxes when you can't actually promise better services, especially health care services.

If there would be a direct line from increased taxation = increased amount of knee replacement surgeries, lowered wait times (as examples) people wouldn't have an issues paying higher taxes. But will that actually happen? Unlikely.

Canadian government wastes a lot of money. Bloat, corruption, programs where funds are allocated to faceless corporations, on and on you go. Nobody actually trusts the government to spend money wisely anymore, and I'd bet in countries like Finland, there is a higher level of trust in government, and likely rightly so.

[opendoor]

Originally Posted by CliffFletcher

That’s the narrative, but are they?

The countries with the most robust public services in the world have quite moderate corporate tax rates.

Germany 30
Netherlands 26
Canada 26
Denmark 22
Norway 22
Sweden 20
Finland 20

https://tradingeconomics.com/country...ntinent=europe

Northern European governments fund their public education, health care, and pensions through 20-25 per cent sales tax and higher income taxes at every income level than their Canadian counterparts pay. That’s the model proven to deliver a more equitable social democratic society. The barrier to implementing it in Canada isn’t corporations and billionaires. It’s Canadian voters who will turf any candidate who even proposes that kind of taxation.

The notion that we can have the kind of public services we want and expect on the taxes average Canadians pay is a fantasy.

You're ignoring payroll taxes/social security contributions, which are largely what funds the healthcare systems in those countries.

So sure, Swedish corporations pay ~20% tax on their profits which is lower than Canada. But they also pay 31.42% of all labor costs towards social security vs. Canada's mandatory employee related costs which are more like 10-11%.

Assuming 25% of gross revenue is labor costs and a 10% net margins, you'd get the following in Sweden:

~8% of revenue towards social security
2% of revenue to corporate tax

TOTAL = ~10% of revenue paid as taxes/social security

vs. Canada:

~3% of revenue paid as CPP, EI, vacation, etc.
2.6% of revenue to corporate tax

TOTAL = 5.6% of revenue paid as taxes/social security

So Swedish corporations clearly contribute more to the social welfare system than Canadian ones do. And the same holds true for most of those countries.

[belsarius]

Originally Posted by opendoor

You're ignoring payroll taxes/social security contributions, which are largely what funds the healthcare systems in those countries.

So sure, Swedish corporations pay ~20% tax on their profits which is lower than Canada. But they also pay 31.42% of all labor costs towards social security vs. Canada's mandatory employee related costs which are more like 10-11%.

Assuming 25% of gross revenue is labor costs and a 10% net margins, you'd get the following in Sweden:

~8% of revenue towards social security
2% of revenue to corporate tax

TOTAL = ~10% of revenue paid as taxes/social security

vs. Canada:

~3% of revenue paid as CPP, EI, vacation, etc.
2.6% of revenue to corporate tax

TOTAL = 5.6% of revenue paid as taxes/social security

So Swedish corporations clearly contribute more to the social welfare system than Canadian ones do. And the same holds true for most of those countries.

How do you know.. everything.. on every topic?

You seem to have a well researched and thought out answer for everything.

[Doctorfever]

Originally Posted by belsarius

The difference in tax system and available "loopholes" or tax avoidance mechanisms can definitely be a factor.

Another example, looking at Finland with a relatively low corporate taxation, they also have a relatively high union participation. This would lead to increased wages for workers and presumably lower profits on the companies. These increased wages are then taxed higher than in Canada but cash wise the corporation pays out of pocket to people who then pay the government taxes as opposed to a system that pays the worker less but then is forced to pay more to the government directly.

And then it would be harder than just comparing the wages in Finland to Canada to see if they make more, as it needs to be compared to corporation operating expenses in both countries and how much they pay for labour as a % of total expenditures.

To the point of having voters pay more taxes, if I told voters that corporations would be paying them 25% more than they do now, would they be opposed to paying 10% more to taxes to increase services?

I think you have something, but let’s go big. Everyone gets a 75% pay raise and only has to pay 30% more tax. With 30% more taxes, services will be 3x better. Win win.

Someone text Jagmeet!

[opendoor]

Originally Posted by belsarius

How do you know.. everything.. on every topic?

You seem to have a well researched and thought out answer for everything.

I mean, I don't have Sweden's payroll tax rate memorized or anything. But I've looked into this topic before because I largely agree with Cliff's point. There is simply a lot more funding going into social services in those countries and it's more broad-based across the income spectrum and in some ways less progressive (e.g. social security taxes are often flat). The only real point I disagree on is that corporations don't foot a much larger bill there than here, because they clearly do.

But that funding (along with being able to pay lower salaries to medical professionals because they're not directly competing with the US) is why they can have much more effective systems than Canada.

[Azure]

Not only is there more funding, but the social / welfare systems simply work better.

Any country can throw money at a service. Most can't actually effectively deliver it to the taxpayers.