MercoPress. South Atlantic News Agency
Eight of the richest people on earth own as much combined wealth as half the human race
Just eight of the richest people on earth own as much combined wealth as half the human race. The charity Oxfam does the math each year and publishes its results just in time for the World Economic Forum in Davos, Switzerland, where many of the spectacularly wealthy are often among the attendees, along with diplomats, political figures, and business and cultural leaders. Read full article
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Disclaimer & comment rulesWTF!
Jan 17th, 2017 - 11:28 am - Link - Report abuse -2No wimmin?
“Oxfam blames that gap on corporate tax dodging, the squeezing of workers and producers and an overall obsession by companies with maximizing shareholder profits. Crony capitalism also gets a mention”
Jan 17th, 2017 - 11:33 am - Link - Report abuse -2Then Anglo-saxon economic system in a nutshell.
And… several of them are giving the bulk of the fortunes they EARNED, to global good causes. Unlike Nostrils a scrounger who doesn't work and is resembles a leech.
Jan 17th, 2017 - 01:43 pm - Link - Report abuse +1If Oxfam really wanted to do something more useful than soiling their silk nappies perhaps they could provide a quick summary of how the Kirchnerists acquired their fortunes.
Jan 17th, 2017 - 02:44 pm - Link - Report abuse +2Ah of course. Pointing out the criminality of those you oppose to justify and exculpate the criminality of those you support. Typical Marti Llazo.
Jan 17th, 2017 - 02:52 pm - Link - Report abuse +1@fidelito
Jan 17th, 2017 - 03:38 pm - Link - Report abuse +2And just who, in your characteristically mistaken notions, do you think I “support” ? Other than the Karppi subcommittee of the Suomen Sosialidemokraattinen Puolue.
And while you're at your argentine best, describe for us the heinous crimes against humanity committed by Mark Zuckerberg.
Whatever anyone might say it does sound like a ridiculous state of affairs - no matter how philanthropic these 8 very rich individuals might be.
Jan 17th, 2017 - 05:55 pm - Link - Report abuse +1@FC
Jan 17th, 2017 - 09:03 pm - Link - Report abuse 0If inequality is caused by the Anglo-Saxon economic system, why are the Latin American countries consistently among the most unequal in the world?
@The Voice
In a sense they earned their fortunes, but you have to consider that they basically get to set their own rate of pay. Who wouldn't increase their pay by 10 times, or 100, if they had the opportunity? But it doesn't mean they are working 100 times harder or providing 100 times the value than if they took a more modest share.
And I agree that philanthropy doesn't justify it. People know their own needs best, they're better off being able to earn money fairly rather than have some charity swooping in to rescue them.
Oxfam and this silly story try to reinforce the absurd but popular image that people with wealth sit atop a pile of gold ingots and contribute nothing to their fellows. Nothing is further from the reality of the situation. People with wealth create wealth for millions of others, not through mere philanthropy but through their investment in a wide range of productive activities generating valuable goods and services, and the creation of new jobs. Perhaps the clowns at OxAssFam should turn their attention to how much those 8 people have invested in the development of valuable technologies such as alternative energy sources and medical research.
Jan 18th, 2017 - 12:08 am - Link - Report abuse 0You still don't get it do you.
Jan 18th, 2017 - 01:37 am - Link - Report abuse -1If a teacher does a good job and influences positively the future of her/his students, and if the teacher invest his/her money in retirement accounts where through buying stock he or she (as small as the amount may be), helps to fund expansion and job hiring... does that give the teacher the right to dodge paying taxes, to blackmail the school for luxurious perks or if not he/she “stops teaching”, and to give better grades to family members?
NO. She would go to jail or be fired.
That's exactly what you defend. Because these corporations actually hire people (as if they are doing us a favor... they hire people because they NEED to and that's all!), and create wealth for others (false again, people's hard work create wealth, companies don't create wealth for anyone), then you say they have the right to tax dodge, to set countries and regions against one another for all kinds of breaks and even often have those places BUILD facilities for them, to squeeze workers beyond what is economic, proper, or morally right? No it does not.
I don't give a ____ if or how much they invested in “valuable technologies”. If they break the law, if they try shady things, they are criminals.
You are the typical nobleman's toady. Behavior that you would throw a commoner to the stake to burn for, you completely justify for those with serious money or fame. So what is your threshhold to get away with being a felon? 1 million? 10 million? 100 million?
Loser.
Fidelito, comunacho, tell us again about all the heinous crimes against humanity committed by Zuckerberg. It seems we all missed your first chance to reply to that one.
Jan 18th, 2017 - 03:49 am - Link - Report abuse +2Snr. Fidel Nostrils,
Jan 18th, 2017 - 07:54 am - Link - Report abuse 0“Ah of course. Pointing out the criminality of those you oppose to justify and exculpate the criminality of those you support. Typical Marti Llazo.”
Er... actually that sounds more like you, Nostrils.
You're the one who responds to articles about Kirchnerist corruption, violent SA government oppression, La Campora thuggery, extreme Argentine poverty rates, etc., by arbitrary rants against “Anglos”.
Gates charity isnt 'swooping in' , its trying to eliminate disease as far as I can tell. Modern charity concentrates on helping people to help themselves. In situations like Biafra, Ethiopia and Yemen presently are you saying we shouldnt step in with food and shelter and just leave people to starve and freeze? Typical cynical anti capitalist nonsense.
Jan 18th, 2017 - 08:54 am - Link - Report abuse 0How's that Lula's name is missing? https://i1.wp.com/www.humorpolitico.com.br/wp-content/uploads/2017/01/Lula-ainda-Solto.jpg?resize=564%2C420
Jan 18th, 2017 - 09:48 am - Link - Report abuse 0“Extreme Argentine poverty rates?”, so about 75%? 80%? Most are subsistence farmers?
Jan 18th, 2017 - 10:04 am - Link - Report abuse 0The poor in Argentina outside of some pockets in the northeast have it far better than the real poor. The real poor don't have satellite tv, eat fresh grilled meat every weekend, and certainly don't get to go on a vacation. Get out of here, you know nothing about Argentina.
As for Marti Llazo, of course, the questions “what crimes did that rich guy commit?” I don't know specifically in Zuckemberg's case, maybe none. Maybe he did. The point is not one individual, it is the whole.
To a person like Marti Llazo, the same crime (theft and embezzlement), are completely different beasts. One is an abonimable crime if it looks like this:
http://3.bp.blogspot.com/-zWhFBpxIRyA/T1pTXASf5vI/AAAAAAAAEYs/ZhK4HtovhKQ/s1600/pickpocketing-china02.jpg
The other is “Altruists creeating jobs and wealth” for the people if it looks like this:
http://3.bp.blogspot.com/-zWhFBpxIRyA/T1pTXASf5vI/AAAAAAAAEYs/ZhK4HtovhKQ/s1600/pickpocketing-china02.jpg
That is why the 8 men above can do no wrong. Marti Llazo and millions like him defend the idea that if you are above a certain pay rate you are above all law. In 500 years history will look at this time, indeed, as a time when while there were no real king and emperors anymore, in reality there were still de facto rulers above the law and only below God. Because they are allowed to. Because when they commit crimes they are not arrested, they are bailed out with the poor's money.
The morality there fits with the moral level of most posters here. Which is one so few object to this ANGLO-SAXON economic model.
As for Latin American countries and inequality, depends where. Mainly it comes down to a cultural stratitifaction that dates from the beginning of colonial times, and it is very hard to change. I also think that in general Native Indian culture is collectivist and as result anathema to the character you need to have in a capitalist environment. So both conspire in inequality.
Nothing against Zuckerberg personally, but it's true that as a group, the super-rich have greatly influenced laws to benefit themselves, and the giant multinationals take advantage of loopholes to pay almost no tax anywhere, giving them a huge advantage against smaller competitors and actually stifling economic development.
Jan 18th, 2017 - 12:48 pm - Link - Report abuse 0Wealth is created by everyone who works, and even people who don't such as pensioners are necessary; without consumers to buy their products and services, no company could make money. And wealth is least useful to society when it is concentrated in only a few hands, there is a positive correlation between a more equal wealth distribution and the strength of a country's economy.
@The Voice
Of course I don't think we should leave people to starve and freeze, although many other people apparently do when it comes to spending their tax money on foreign aid. I think it would be better if we changed the system so people in poor countries were paid more in the first place, then there would be less need for charity. Why is a CEO any more qualified than a government official to judge what projects will help people most, or where money needs to be spent? At least the government official is elected so the people can replace them if they do a bad job.
Some charities these days try and help people to help themselves, but depending on charity is no substitute for actual economic development.
@FC
The new Mercopress only allows one link, you had better repost your second one.
Also capitalism was really invented by the Dutch, so you can start complaining about them instead. But if you don't think that is what is causing the inequality in Latin America, why do you think it is the problem elsewhere? How much Native Indian culture is left in the various countries anyway? Surely not much in Argentina? To me it sounds like your tax system is as much to blame, taxing poor people more than rich and allowing all the tax evasion and rich people hiding money abroad.
Fidelito continues to rant and rail at nameless presumably sudaca phantoms and fails to address the question of exactly, specifically, concretely, what crimes have been committed by precisely the 8 fellows named in this article.
Jan 18th, 2017 - 12:58 pm - Link - Report abuse +1On the other hand, the news pages are full of examples that contradict Fidelito's absurd notion that “if you are above a certain pay rate you are above all law.”
I happen to have a couple of books that would help Fidelito el Comunacho Tercermundista to better understand his plight:
Here's one: “Manual del perfecto idiota latinoamericano”
Léalo y llore.
In this case I agree with FC, although Kanye is right that he does the same thing himself.
Jan 18th, 2017 - 01:44 pm - Link - Report abuse 0The point is that if you are above a certain pay rate you can to some extent change the law to make the things you want to do legal. Companies don't spend millions on lobbying for nothing.
If you want an example, Facebook paid less tax in the UK than I did last year, all perfectly legally. Small companies do not get these tax breaks, how can they compete? People who are merely well off have to pay their taxes, but the really rich can move their money around and avoid them, and with no risk of being prosecuted. We'd all be better off if everyone paid their fair share.
Its…… Globalisation! It produces huge worldwide companies, get used to it. Like the Roman Empire, the Mongol Empire and the British Empire, in the end they all die or get replaced by Dictators (the rise of Ceasar). Nostril, Stink etc know all about Dictators.
Jan 18th, 2017 - 03:30 pm - Link - Report abuse 0@DT - clear evidence of a lack of understanding of why governments provide tax incentives in exchange for broader economic benefits. If an enterprise provides hundreds of millions in economic advantage to a country, it is receiving far greater benefit than what is lost in a small reduction in direct revenue. Unfortunately, the nature of economies and the long-term advantages of revenue-related incentives is beyond the grasp of many.
Jan 18th, 2017 - 03:49 pm - Link - Report abuse 0@The Voice
Jan 18th, 2017 - 06:51 pm - Link - Report abuse 0Sounds like you agree with CasTroll that these people are modern day royalty and unelected rulers. Isn't that reason enough to object to them?
@ML
Paying approximately zero tax is a SMALL reduction in direct revenue? But regardless, you are missing the point. Why do governments have to give these companies tax breaks in order to receive the economic benefits? Because the companies are too big and powerful, so the people, as represented by our elected governments, cannot control them.
Money is power, and as I said above, we don't want too much power in the hands of unelected, unaccountable CEOs.
@Fidelito
Jan 18th, 2017 - 08:37 pm - Link - Report abuse 0Despite your usual bs, and the attempt to blame the rich for being 'rich', the fact that these billionaires own such fortunes is because they are successful at what they do....provided they have acted inside the limits of current tax laws, and only took advantage of the opportunities that presented themselves - and which are there for the taking by anyone in a free society that has a brain - criticizing them and being envious is a waste of time.
Now, if it's to be considered imoral to own such a fortune, government could always pass laws to make it illegal to try to become wealthy by exploring great ideas, which in turn would 'kill' the initiative of anyone who had an idea which could benefit society...but that sounds slightly 'anti-democratic', doesn't it ...or a bit like Castro's Cuba, where people don't have to, or aren't allowed to think for themeslves - they are told what to do and they obey.
@JB
Jan 18th, 2017 - 10:41 pm - Link - Report abuse 0You mean, provided they have donated enough money to politicians to leave the loopholes in the tax laws and keep the tax havens legal, and only taken advantage of the opportunities available to anyone who can afford an expensive tax accountant, and has enough money to make complicated schemes worthwhile?
There are plenty of examples of tax laws that are rigged to favour the rich. Here's one that Trump brought up in his campaign; currently hedge fund managers in the US are able to take their profits as capital gains, which are subject to a much lower rate of tax than normal income.
In the UK, certain people are able to claim 'non-domiciled' status, which means that despite actually living in the UK, they are able to avoid paying tax on income earned outside it. Several of these people are politicians or major donors to political parties.
In Brazil half of all tax revenue comes from indirect taxes on consumption and production which fall most heavily on the poor (and also are horrible for the economy). Whereas inheritance tax, which primarily affects the rich, has a maximum rate of 8%, compared to 40% in the UK.
I agree it would be very stupid to stop people innovating and making money, but there's nothing wrong with setting up the tax code in a rational way, and no reason the rich should be immune from criticism. Do you think any of the people mentioned above would not have worked just as hard for half or one tenth of the money they currently have?
@DT “Why do governments have to give these companies tax breaks in order to receive the economic benefits?”
Jan 18th, 2017 - 10:54 pm - Link - Report abuse 0You do indeed need some fundamental 100-level instruction in economics - along with some guided observation of the real world. Maybe a survey class to start with. Do you at least understand the concept of “incentives” and rewards, and how human motivation functions? Where there is competition for investment which will result in high levels of economic advantage, the successful nations, states, provinces, suzerainties, whatever, weigh concessions in direct revenue streams against larger scale and typically long-term benefits, or other desirable outcomes. Now, if you have a poor reputation as an unreliable country for investment, as is the case and history for Argentina, you're going to have to come up with some very serious incentives, but that's another story. But it's relevant here, because the present government of Argentina has failed to produce sufficiently promising incentives and credible guarantees to overcome the effects of a long history of spectacular disincentives (yes, that is a word).
@ML
Jan 19th, 2017 - 12:11 am - Link - Report abuse +1I guess someone underbid the UK in the case of Facebook, as they were funnelling their UK profits through Ireland because the tax rate was lower there. I'm sure it was totally worth it for those 362 UK jobs they created though.
There's no reason countries should allow companies to dodge taxes in this manner; if they are making a profit from UK consumers, they should pay taxes in the UK. This is why we need to keep an eye on them and pressure our governments to close these kinds of loopholes. It would also be better for everyone if countries would agree not to undercut each other in this manner, something the EU is actually trying to do now.
And you still don't see that nations having to compete for the favour of these rich and powerful multinationals is in itself an anti-democratic force, changing government policies usually to the detriment of the citizens.
What is 100-level instruction anyway?
@DT
Jan 19th, 2017 - 11:32 am - Link - Report abuse 0The “loopholes” you refer to are not designed by the mega rich in collusion with corrupt politicians as you seem to be implying. They are legitimate strategies to reduce tax liabilities that exist because different tax jurisdictions set different levels of tax as is their right. They are certainly not the preserve of the mega rich, such schemes are very beneficial to small businesses too.
Take for example a small british business that sells an intangible product (business software for example) into multiple countries. This business is registered in the UK so it is liable for UK corporation tax on its profits, despite the fact that much of the profit may have been earned on foreign sales. Your argument would conclude that this business was using a “loophole” to avoid paying tax in all those countries in which it made profit, which is clearly not the case.
It is not practical in the digital global economy to form a business entity in every county you sell into (as you suggest Google and FB should), so it is inevitable that businesses, big and small, will choose safe, low tax jurisdictions.
I agree that companies should pay profits tax where profit is earned but its so difficult to enforce it. I can see all sorts of fiddles going on. One company I worked at sourced one component that cost a pound to make from Ireland. And the Irish subsidiary charged £17 for it. All their profit was thus made in 'tax haven' Ireland and not taxed. Starbucks does a similar thing by sourcing their coffee from Holland at well over the odds. A turnover tax is the best thing with no rebates for losses, particularly for Facebook, Google etc. Any effective accountant can show up losses where there are actually none.
Jan 19th, 2017 - 02:07 pm - Link - Report abuse +2@DT You might wish to do a little study on the modern (and not so modern) aspects of taxation theory. In addition to the use of taxation as a revenue source (which is where the incognoscenti get stuck), taxation and taxation policies are used by governments to encourage or discourage certain types of activities. That's why allegedly progressive governments might heavily tax such things as cigarettes and machine-guns, but offer lower tax burdens for those who modify their homes for greater energy efficiency. If we applied the simplistic “everybody pays their fair share of tax” leveling to include the banishment of such incentives, then governments would lose a valuable tool for promoting beneficial practices.
Jan 19th, 2017 - 04:13 pm - Link - Report abuse +1As with any other private, government, or lower-primate practice, abuses can be introduced, but tax-related incentives and disincentives are widely and successfully employed by governments that reasonable people would associate with low levels of corruption and similarly dysfunctional argentine practices. You will also note that some jurisdictions are nothing less than abusive in their oppressive tax burdens, and thus deserve their avoidance by investors and businesses. One of the many factors that keep Argentina from realising potential economic growth is the extraordinarily high (for the region) tax rates; and the lack of reliable, meaningful, beneficial tax incentives.
@DT
Jan 19th, 2017 - 05:45 pm - Link - Report abuse 0Loopholes aren’t necessarily exclusive to wealthy individuals…but there is greater incentive to use them when it involves billions. “Lavajato” investigations uncovered massive corruption, promoted by Lula & Dilma, who signed ‘executive orders’ aimed at creating incentives for part of the automotive industry, allowing them tax breaks of billions, in exchange for enormous bribes…in other words, the law was tailored to their specific needs. But those laws - and their ‘loopholes’ were the result of criminal intent and not available to the general business community, differently to legal incentives available to anyone with the brains to know how to use them.
History shows that great ideas lead (nearly) inevitably to large fortunes…take a look at Vanderbilt, Carnegie, Rockefeller, JPMorgan and Ford, in the US, in the 1890/1900’s ; they were instrumental in forging modern progress, beneficial to society, and into the bargain, generated fortunes....now, just imagine the world without them - it’s easy to say that someone else would have appeared, but someone had to give the initial kick-off. Like Bill Gates, 25 years ago ; However, I do think that those whose fortunes come exclusively from financial speculation/manipulation or, those who produce little or no benefit to anyone but themselves, should be taxed out of existence...also, as you implied, after the first billion, the rest adds nothing…however, a fortune is the result of, not the origin of an idea…you can’t teach people to come up with great ideas…they either do or they don’t.
Inheritance taxes in Brazil vary from State-to-State (max 8%, in SC), but depending on your personal situation, you might agree with them, or not. Legislators claim it’s essential to avoid the perpetuation of inequality, in that large fortunes passed down, produce concentration. To many it's government’s insatiable hunger to increase revenue at any cost.
As to 'rational' tax reform - complicated and almost utopic.
Do the fiddles mentioned by The Voice sound like legitimate strategies to reduce tax liabilities or like activities the government would wish to encourage with tax incentives? Why would the US government wish to encourage the speculative activity of hedge funds over businesses that actually produce something useful and employ a lot more people? How is it an advantage to the UK to allow a rather arbitrary class of individuals to pay less taxes than others?
Jan 19th, 2017 - 08:19 pm - Link - Report abuse -1When one country benefits from offering a low tax rate, it is effectively taking tax money from those who have higher ones. The others can retaliate by lowering their rates to tempt companies back, but the result will be that everyone is worse off on average, only the multinationals gain.
And don't forget that the time and effort businesses put into avoiding taxes is time and effort than could have been spent on improving their product or increasing productivity. I know someone who works as an accountant helping companies avoid tax, and according to her there are always a million loopholes to take advantage of. If the government had any sense they would employ these people themselves to block the loopholes in advance.
@JB
I completely disagree that great ideas inevitably lead to large fortunes. Many inventors died poor or were only moderately successful. The ability and means to successfully run a company and commercialise an idea is quite different to coming up with it in the first place, and they don't often go together. Nevertheless some people obviously manage it, and we ought to make it easier for more to do so. Rigging the rules in favour of those who are already very successful does the opposite.
As for inheritance taxes, if the government raised them, but lowered taxes on food and fuel to compensate so no extra revenue was generated, would you object? If enforced, it certainly should help improve inequality, and without a single handout.
For those who think the world is too competitive, that it is unfair, they are probably right ; Life is not, utopically, always fair ; contrary to common belief, no one's born the same - and even if they were, their individual differences would soon take them in different directions....but for those who can't live with reality there are plenty of desert islands.
Jan 20th, 2017 - 06:27 pm - Link - Report abuse 0@DT
I said ” that great ideas lead (nearly) inevitably to large fortunes”...'nearly' always, not 'always'. Of course it's possible that in the course of trying to implement a great idea, things can derail, due to a number of factors, but my point is that those who have great ideas deserve to benefit from them ; As to the likeliness of these 'successful' people rigging the system for personal gain, that is just human nature....and unlikely to change. But when they are caught red-handed, hopefully Justice can sort it out.
Speaking from the standpoint of a Brazilian citizen, my reality differs from that prevalent in most 'civilized' societies...anyway, considering inheritance taxes, while on principle I can see both sides - in favour and against - I defend them only when applied to humungus fortunes, but even then , without going crazy ...for example, if someone inherits US$ 1 million, the result of their family's hard, honest work, throughout a lifetime, why should the government get to put their hands on 40% of it, given that 1 million is already net, after taxes ? and, worse, just to have it stolen, or to be handed out, most times , to those who don't deserve a cent ? Then again, it all depends of where you stand...the paying side, or the receiving side...
Indirect taxes here are ridiculously high, and obviously impact the poor far harder than those that are well off, but regarding income tax, the poor, literally don't pay a cent. Sure, reducing indirect taxes would benefit everyone, but when so few actually pay income tax, where's the revenue gonna come from ?
@JB
Jan 20th, 2017 - 08:31 pm - Link - Report abuse -1I don't think it's anywhere near inevitable, but I agree with your main point that people with great ideas deserve to benefit from them. But there needs to be a balance between rewarding people fairly and allowing wealth to become concentrated in too few hands, which gives them excessive power and influence.
About inheritance taxes, nearly all taxes are paid from your already-taxed income, whether it's Sales tax/VAT, property tax, capital gains, or tax on savings and investments. In some ways inheritance tax is fairer: who should pay more tax, someone who earned their money themselves, or someone who is given it as a bequest?
It's natural for people to want to leave their money to their relatives, but it's bad for society to have wealth build up in families too much. Wealthy people can already do so much for their children, giving them a good education, the contacts to find a high paying job, lending or giving them money to start a business, or to buy a house or a car. It's not so unreasonable to expect them to stand on their own feet after that.
You ask where the revenue will come from if indirect taxes are reduced. Income tax would be a good candidate for increase, your top tax bracket is something like US$15,000 and the highest rate only 27.5%, both of which are extremely low. In the UK income over £43,000 (currently US$53,000) is taxed at 40%. I already suggested inheritance taxes; there is also capital gains tax which apparently was recently increased and made more progressive.
As for what taxes are spent on, that is a separate question, and evidently there is a big problem in Brazil - although I don't see why poor people deserve to have their money wasted any more than rich ones. Apart from what is stolen by politicians, do you know how much is used for 'handouts' of whatever kind, and how much for other spending?
@DT
Jan 21st, 2017 - 09:05 pm - Link - Report abuse -1“...But there needs to be a balance between rewarding people fairly and allowing wealth to become concentrated” sounds nice, but easier said than done. Penalizing people for being successful, discourages hard work as well curbs individual initiative…..if the tax laws go overboard in that they become to be seen as punitive, it encourages tax evasion…who is going to try to excel in what they do ? sounds a bit like what happens under communism.
Agree that inheritance of big fortunes concentrates wealth, and that one inherent problem with this can be rigging the law, for personal gain….but let’s be reasonable….40% is nuts.
While you think that 27,5 % income tax (in Bzl) is low for the highest bracket - compared to the 1st world - it’s not really, when you literally get nothing back in the form of decent public services ? very few people, percentage wise, earn decent salaries, and the indirect taxes chew up an average of 15% of earnings; these taxes, to simplify it greatly, are tantamount to paying ‘your’ VAT, at levels of 40 to 60%....even on basic items…such as food. These indirect taxes should be down in the region of 8 to 12% ; in the 1st world, you pay higher income tax (and lower indirect taxes), but you don’t need to worry about expensive health plans, decent schooling for your children, or private security – unless you want to - because what the State offers is substandard or non-existent, due to mainly, rampant corruption.
I’m not 100% sure about these numbers, but excluding politicians, abt 1,5 million individuals earn salaries over US$ 100,000/year, and double or more than that, abt 700,000….so it’s kind of difficult imagining these 2.2 million individuals compensating for the reduction in indirect taxes ; data from 1 year ago, estimates that indirect taxes represent about 40% of the volume of tax revenue, and income tax about 28%...looks like the income tax payers already pay enough.
Handouts cost abt US$ 10 billion/yr.
@JB
Jan 21st, 2017 - 10:34 pm - Link - Report abuse +1You think paying 40% inheritance tax is nuts, I think paying 40% or more VAT on food is much crazier. Plus in the UK everyone has a tax free allowance of £325,000; the 40% is paid on anything over that. Many people are completely unaffected, and few pay anything close to 40% in practice. There is also an exception for couples leaving money to each other.
Besides, why do you think it is fair that someone who earns $1m by their own hard work, has to pay 27.5% tax, but someone who is left the same amount by a relative only pays 4%?
As for increasing income tax: based on what you have said, if indirect taxes were lowered from 40% to 10%, the income tax on the average person could be raised by 10% and they would still be better off. People earning less than the average would also have more money left and only those earning more than average would be worse off.
The latest figures I can find are from 2008, but they show that households earning up to 2 times the minimum wage paid 53,9% of their income in taxes, those making 8 to 10x the minimum wage paid 35,0%, while those making over 30x MW paid only 29,0%. Even just making everyone pay the same percent would be much fairer.
I also found this nice chart showing distribution of income in Brazil: http://image.slidesharecdn.com/opportunitiesinbrazil2015-150104092934-conversion-gate02/95/digital-media-opportunities-in-brazil-2015-14-638.jpg?cb=1420581618
If the top 10% get 41% of the income, they should be paying at least 41% of the taxes, right?
Your argument that income tax should be lower than in developed countries makes sense - Brazil does have a very high tax burden for a developing country - but why does the same not apply to indirect taxes? Given just how much corruption (and incompetence) there is in the Brazilian government, it probably WOULD be possible to lower taxes without affecting services, but the tax system should also be made fairer.
You still don't get it, DT.
Jan 22nd, 2017 - 01:46 am - Link - Report abuse -1@DT
Jan 23rd, 2017 - 05:17 pm - Link - Report abuse 0It’s no use comparing inheritance taxes in the UK and Brazil, they're 2 completely different realities ; OK, if the UK system follows a scale, whereby the average Joe ends up pays nothing, I suppose it’s acceptable…for UK reality. The incidence of indirect taxes on consumption, of 40 to 60%, is indeed absurd, but the chance lowering it is nihil.
Ryr question “why do you think it is fair that someone who earns $1m by their own hard work, has to pay 27.5% tax, but someone who is left the same amount by a relative only pays 4%?” because, 1st : while I'm aware direct taxes taxes will always apply proportionately, I can see the perversity in being “rewarded” with a higher rate just because you work harder than most, and 2nd : as I’ve already said, that $ 1m has already been taxed, as it was being generated.
A better balance between the revenue from income tax - i.e., more people paying, and paying less - and indirect taxes, would undoubtedly be fairer. Years ago, there were 7 income tax brackets, which meant the scale distributed the burden more evenly amongst payers…today, besides the free allowance (don't know how much), income tax has only 2 brackets, 15 & 27,5%, and concentrates income tax in the higher earning bracket.
The 2008 figures just confirm that, as the indirect taxes account for nearly half the tax revenue, the poor are harder hit. The chart you sent shows the richer are gradually participating less in overall wealth, but the notion that if the 10% richest get 41% of all income, they should pay 41% of the taxes, would only work with regards to direct taxes…the percentage, or absolute value, of an indirect tax paid on any product will always be identical for all consumers, regardless of earning power. And the fact that 28 % of overall tax revenue comes from income tax, and is paid by less than 2% of the population, shows the existing imbalance. The whole tax system here needs to be overhauled, to eliminate the current distortions.
Why do you think the UK system or something similar would not be suitable for Brazil? Do you mean people would object? I'm sure if Brazil had the same tax free allowance as the UK then the great majority of people would pay nothing. Or do you mean it would have some bad effect? If so what?
Jan 23rd, 2017 - 10:12 pm - Link - Report abuse 0And if you shouldn't pay tax twice on the same money, why is income from savings taxed? It was already taxed once when you earned it. And why do you pay tax when you buy something? Or, suppose you employ a cleaner, the employee must pay income tax, even though you are paying them from your own already taxed income. Concentration of wealth in families is bad for equality and social mobility, both of which are pretty dire in Brazil. So there is no reason the government should be incentivising it with low taxes.
As for being 'rewarded' with a higher tax rate if you earn more, you will still be making more money even if you also pay more tax; as long as the rate is not totally unreasonable I don't see the problem. I spent some time doing badly paid temp jobs after I left university, and it makes a hell of a lot more difference when you are struggling to get by. I would much rather pay higher taxes on what I earn now than then.
The fact that indirect taxes mean the richest part of the population don't pay their fair share is exactly the problem with them. If Brazil switched to more direct taxes and less indirect taxes, it should be possible to balance this out better. The OECD average contribution for Income and Capital Gains tax is 33% compared to 19% from Brazil, and Merchandises, Services and Goods contribution is 34% for OECD vs 45% for Brazil, so it's a long way from the norm. And apparently the tax system is extremely complicated, which puts companies off investing. Totally agree it needs to be overhauled, and probably taxes as a whole should be lowered too.
Also do you know where there is some info on how many people pay income tax in the two bands? I couldn't find anything.
Very interesting discussion. Oxfam should be congratulated for pointing to the tip of the iceberg, which is a shocking but still partial picture of the increasing gap between the wealthy, the highly paid and those who live one paycheque away from disaster in case something such as sickness, accident or layoff were to happen.
Jan 24th, 2017 - 02:24 am - Link - Report abuse -2And that gap has been widening since the 1980s, as concentration of business and wealth in fewer hands occurred of the hand of globalization and Capitalism pretty much ceased to be productive to become speculative.
This, of course, demolished the promises of the 1960s and 1970s that unending Capitalist expansion and the resulting economic growth would achieve prosperity for all.
That is why this disfonctional system that rewards not the hard workers but the cheaters must be replaced by a system that allows technological progress to serve the people and not just a few. If Capitalism as we know it reveals incapable of doing that, it will inevitably be dumped and replaced by a more viable, progressive system.
Says reekie, living where he does and wallowing in the benefits of one of the most capitalist nations in the world.
Jan 24th, 2017 - 03:01 am - Link - Report abuse +2@ML
Jan 24th, 2017 - 05:02 pm - Link - Report abuse +1Canada is capitalist, but it has a sensible tax system, and plenty of policies such as government-funded health care that would be decried as socialist in the USA. It's also a lot more equal and has lower crime than the US, so it seems like a pretty good compromise.
The Canadian economic system where reekie lives - and profits greatly from its benefits -- is everything that reekie says is evil in the world.
Jan 24th, 2017 - 09:01 pm - Link - Report abuse +2Macri would have Argentina bend slightly towards the Canadian “compromise”, and already itnis too much for Enrique and Fidel Nostrils.
Jan 25th, 2017 - 02:38 am - Link - Report abuse +2@Enrique Massot
Jan 25th, 2017 - 01:08 pm - Link - Report abuse +2What do you think about the Canadian economic system? Would you like Argentina to be run more like Canada?
When we think of comparing Canada with Argentina, which country do you think comes to mind when considering contemporary events involving 35% of the population in poverty, the theft of private pension funds by a sitting government, annual inflation of over 40 percent, a proclivity for bimonthy defaults on sovereign debt, world-class levels of corruption adversely affecting economic development, massive per-capita consumption of cocaine, the highest levels of theft in the Western Hemisphere, and a national VAT of 21 percent?
Jan 25th, 2017 - 09:59 pm - Link - Report abuse 0@DT
Jan 26th, 2017 - 01:16 am - Link - Report abuse 0What works in the UK, would hardly work in Bzl of today…too rational, too transparent ; Brazil’s tax system is very complicated, full of laws contradicting each other (loopholes), and is something Congress is loathe to address, however desirable, because to them, it’s an extremely unpopular issue…on one side you’ve got Govt (and political parties), afraid to lose income (to sustain corruption and personal benefits, and will undermine their popularity if they can’t throw money around in their electoral zones), 'n on the other there’s the population, who want reform, but are the weak end of the rope.
Brazil’s income tax system has various levels of free allowance, but they’re piddling…even then, one would expect them to be readjusted yearly, by official inflation - but they aren't, pushing people into higher income tax brackets without earning more.
“Interest” on all savings accounts except one, is taxed – once, not several times ;
Savings: the simplest form (used by the poor) pays no tax, but then again, yields less than inflation. Nothing wrong with a cleaner paying income tax on what I pay him, but the bill to me, also has a (10 to 15%) service-tax built-in. Energy bills : 30% is actual supply, 70% is taxes and other charges…besides some specific taxes, and others grouped under a generic name which no one knows the meaning of, you also pay for transmission, distribution(?).
I suppose being in favour of /against high income tax depends on how much you earn…but if it’s 'reasonable' - whatever that may be - is ok ; Indirect taxes are flat, across the board, never proportional to income…the amount of tax on a car is the same for all, but what other direct taxes are you referring to, besides for ex., land taxes, income tax ? only 27 million people submitted an income tax declaration in 2016, but no idea how many actually paid.
Altho Bzl ranks 70th worldwide in the IHD, our middle class pays more tax than those in 6 of the top 7 countries.
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