Of monsters and presidents | 30 comments (30 topical, editorial, 0 hidden)

Re: Of monsters and presidents (none / 1)

[...] it shows that despite(?) the economic upturn, the poor [...]

Not so.
From FAZ
"Der Bericht führt aus, dass bis 2005 die Bruttolöhne gesunken sind und die Einkommensverteilung ungleicher geworden ist. [...]
Das Armutsrisiko für Ältere [poverty risk for olders] ist aktuell berechnet worden. Es ist gering. Ende 2006 haben nur 2,3 Prozent der Alten Grundsicherung bezogen. Die Wahrscheinlichkeit, auf arme Kinder zu treffen ist viel größer als die, armen Rentnern zu begegnen."
The report focuses on numbers until 2005. And until 2005 the economy was very weak, wage increases were low, but the stock market soared despite that... I'm not convinced, that this is too telling about now, at least not that the trend is still the trend today.

Der Amerikaner ist die Orchidee unter den Menschen
Volker Pispers

by Martin (weiser.mensch(at)googlemail.com) on Mon May 19th, 2008 at 05:55:19 PM EST

Re: Of monsters and presidents (none / 1)

OK, so my sources did over-interpretation.

I note that this about data only up to 2005-6 is not in the Bild interview, and the report is not yet up on the BMAS site, but I just found an internet short version on the government site. I quote one interesting graph, showing poverty on the basis of income without social transfers (grey) and with them (blue):

I note critically however that you, like FAZ and the government, picked out positive developments (minimal number of poor old people, halving of the homeless since Schröder took office) while the overall poverty number rose.

_{*Lunatic*, n.

One whose delusions are out of fashion.}

by DoDo on Mon May 19th, 2008 at 07:03:16 PM EST
[ Parent ]

Re: Of monsters and presidents (none / 0)

OK. This is so bizarre I could write a separate diary deconstructing it:

Der Anteil der Beschäftigten im Niedriglohnbereich hat von 2002 auf 2005 um 0,9 Prozentpunkte von 35,5 auf 36,4 Prozent zugenommen. Das ist aber nicht nur auf die gezahlten Löhne zurückzuführen, sondern auch auf die Zunahme von Teilzeitbeschäftigung und rückläufige Arbeitszeiten. Während Arbeitslose ein Armutsrisiko von 43 Prozent aufweisen, reduziert es sich bei Erwerbstätigen deutlich auf sechs Prozent. Das zeigt, wie wichtig es ist, Menschen in Beschäftigung zu bringen.

_{*Lunatic*, n.

One whose delusions are out of fashion.}

by DoDo on Mon May 19th, 2008 at 07:06:41 PM EST
[ Parent ]

Re: Of monsters and presidents (4.00 / 2)

A lot of relevant information is missing. How do they define low wages? Per hour, or per month? How large is the share of part time workers in this increase in the number of low wage jobs? The percentage of the people who work and are poor is of course lower than the percentage of jobless people who are poor, but that does not need to mean anything. Has there been an increase in the percentage of the working poor?

by nanne (zwaerdenmaecker@gmail.com) on Fri May 23rd, 2008 at 04:05:52 AM EST
[ Parent ]

Re: Of monsters and presidents (none / 1)

It may have technical reasons why the poverty number for old people is more up to date than the general number. And its being more up to date was the reason I cited it.

The FAZ article as a whole is of course very selective, e.g speaking of the high share the rich pay of the income tax, despite indirect taxes in the meantime make a higher share. Or speaking of people with incomes around 50000 Euro brutto a year, while this is as well the number, where one can choose a privat health insurance, which is much cheaper for a single (not so for a family, as one has to pay for each family member separatly).
But I think the point that 2005 may not show the whole picture may well be valid and therefore your picture could be slightly to negativ.

However, as I recently complained there would be too few focus on the very poor, I can hardly complain that you focus the view on exactly those poor - as you have done before, but I think with relatively few comments=acknowledgement(?)

Der Amerikaner ist die Orchidee unter den Menschen
Volker Pispers

by Martin (weiser.mensch(at)googlemail.com) on Mon May 19th, 2008 at 07:21:26 PM EST
[ Parent ]

Re: Of monsters and presidents (none / 0)

But I think the point that 2005 may not show the whole picture

Yes, I acknowledge that. (As I said, when writing the diary, I didn't realise the data is only up to date to 2005.) But, in the case of Olaf Scholz, he also defends Schröder's reputation.

relatively few comments=acknowledgement(?)

I'm not sure I understand what you mean. Do you mean that when I wrote on such issues, others didn't comment much in my diary? And, you interpreted that as lack of acknowledgement on part of the majority? If that is the case, I note I often got lots of recommends even if I got few comments.

_{*Lunatic*, n.

One whose delusions are out of fashion.}

by DoDo on Tue May 20th, 2008 at 05:49:28 AM EST
[ Parent ]

Re: Of monsters and presidents (none / 1)

Ooops, didn't read the New Users guide that well.
I didn't know how to recommend a diary at all until just now.

Der Amerikaner ist die Orchidee unter den Menschen
Volker Pispers

by Martin (weiser.mensch(at)googlemail.com) on Tue May 20th, 2008 at 09:10:52 AM EST
[ Parent ]

Re: Of monsters and presidents (none / 1)

Some commentary on that graph of below-60%-of-median poverty in Europe.

I said it before, I say it again: despite the antics of the insufferable Václav Klaus, the Czech Republic has been rather modest in terms of 'reforms' until recently. (Klaus himself didn't do much more in his time as PM than the ill-fated coupon privatisation.) So it being both co-best in after-social-transfers poverty, and being one with a broader social support, is less of a surprise to me.
On the other hand, all of the Nordic countries are surprisingly uneven pre-social-transfers. What could this mean?
Note Slovenia [Slowenien]. Just recently, I was reminded that it is the perfect counter-example to flat tax arguments: it has a very high growth like the the flat tax countries from Slovakia to Lithuania, yet it has much higher wage levels - and a progressive tax peaking above 40%.
You see that despite high poverty rates, running against the stereotype, the social state is not at all dead there. Meanwhile, the Mediterraneans - Spain, Italy, and above all Greece - seem to have very ineffective social states. (Either that, or they have lots of social benefits given in nature for free rather than in the form of money transfers.)

_{*Lunatic*, n.

One whose delusions are out of fashion.}

by DoDo on Tue May 20th, 2008 at 06:05:20 AM EST
[ Parent ]

Re: Of monsters and presidents (none / 1)

As to your second bullet, I would hazard the guess (and a guess is all it can be without access to the raw data) that severance payments and employer-paid unemployment insurance do not count as social transfers, whereas government-paid unemployment subsidies do. That would take something on the order of five percentage points off the noted difference.

And the incomes that go into the poverty calculation, are they before or after tax? Are all taxes taken into account if the latter? Are employer-paid benefits (health care, etc.) included? If so, are the equivalent publicly funded parts of the Nordic social infrastructure given similar treatment?

In general, I suspect that the pre-redistribution figures say very little about economies like the Nordic ones and are insanely sensitive to the operative definition of "redistribution." It is in many cases very nearly impossible to tell where the government ends and the rest of society begins, making the distinction between income distribution and income redistribution rather unclear.

For instance, the partly labour-union-managed unemployment insurances handle something on the order of 5 % of GDP - better than 80 % of which comes directly from general revenue, making them one of the largest single items on the finance bills. Are they public or private? Are they "redistribution" or "insurance?" I don't know. Does it matter? Not a whit.

- Jake

Friends come and go. Enemies accumulate.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Tue May 20th, 2008 at 06:53:39 AM EST
[ Parent ]

Re: Of monsters and presidents (none / 0)

Check for more detailed data on page 21 [pdf!].

_{*Lunatic*, n.

One whose delusions are out of fashion.}

by DoDo on Tue May 20th, 2008 at 07:09:29 AM EST
[ Parent ]

Re: Of monsters and presidents (none / 0)

You see that despite high poverty rates, running against the stereotype, the social state is not at all dead there.

I somehow deleted "UK" from that sentence.

_{*Lunatic*, n.

One whose delusions are out of fashion.}

by DoDo on Tue May 20th, 2008 at 07:02:45 AM EST
[ Parent ]

Re: Of monsters and presidents (none / 0)

But if 40% tax is rather progressive depends on other questions.
Is capital income taxes by the personal income rate, or is there a special capital income tax? Is there an additional pay roll tax, which is at least partially as well used for redistribution, or not? What's the tax for enterprises? Are there additional wealth taxes or not?

For people with an income close to, but below the health insurance cap, the current marginal tax and social insurance rate in Germany is more than 73%, and before Schroeder's income tax cuts, you could have more than 80% marginal rate (in a narrow but densely populated income band).

Der Amerikaner ist die Orchidee unter den Menschen
Volker Pispers

by Martin (weiser.mensch(at)googlemail.com) on Tue May 20th, 2008 at 09:36:31 AM EST
[ Parent ]

Re: Of monsters and presidents (none / 1)

If the band is sufficiently narrow, then talking about marginal tax rates becomes largely a red herring. To take the extreme example, it is possible to imagine a 200 % marginal tax in a band precisely one € wide (I know that this example is ridiculous, but I hope it illustrates the point). The bandwidth is needed if you want to make an apples-to-apples comparison across borders (along with much else, as noted upthread).

- Jake

Friends come and go. Enemies accumulate.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Tue May 20th, 2008 at 04:25:46 PM EST
[ Parent ]

Re: Of monsters and presidents (none / 0)

The band is narrow in case of single income households. In case of double income households it can be large, because income tax billing can be done together for married people, while social insurances are bound to the working place.
That means if your spouse earns significantly more than the health insurance cap, for your part of the household income the marginal tax rate maybe (depending on how much your spouse is above the cap) from the first Euro to the cap (43.200 EUR) at this marginal rate.
For the calculation of the marginal tax rate I have included employer's contribution to the social insurances.

As said above, the cap is not simply a cap. You can leave the public health insurance if you earn that much, which is way cheaper. So a single with gross income of 43201 EUR, can end up with 200 EUR more each month than a person with an income of 43199 EUR.

Der Amerikaner ist die Orchidee unter den Menschen
Volker Pispers

by Martin (weiser.mensch(at)googlemail.com) on Tue May 20th, 2008 at 05:16:43 PM EST
[ Parent ]

Re: Of monsters and presidents (none / 0)

With the cap and private insurance are different values, I just found out. The cap indeed is 43200 EUR, but the possibility to leave the public health insurance system only starts at 48150 Eur.
However, I think the general point is clear.

Der Amerikaner ist die Orchidee unter den Menschen
Volker Pispers

by Martin (weiser.mensch(at)googlemail.com) on Tue May 20th, 2008 at 05:45:56 PM EST
[ Parent ]

Re: Of monsters and presidents (none / 0)

I'm not sure I understand. What does the cap do?

- Jake

Friends come and go. Enemies accumulate.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Wed May 21st, 2008 at 06:28:25 AM EST
[ Parent ]

Re: Of monsters and presidents (none / 1)

Above a certain income, health insurance payments are fixed. It used to be identical with the limit above which you could choose private health insurance, but the Schröder government raised the latter.

_{*Lunatic*, n.

One whose delusions are out of fashion.}

by DoDo on Wed May 21st, 2008 at 07:31:25 AM EST
[ Parent ]

Re: Of monsters and presidents (none / 0)

What is the goal of this exercise? Do you mean to test if one could say that even if Slovenia is different from the flat-tax countries, relative to Germany, Slovenia's tax rates are still very low?

If so, I ask you to define me the inputs I should look up in the form of a formula.

Now I can say the following [pdf!]:

income tax: steps are 16%-27%-41%, the last kicking in above €13.600
corporate tax: 22% (annual 1% reductions ongoing)
tax on dividends and interest: 20% (raised 5% recently)
capital gains tax: 20%, reducing to zero for 20-year idle holdings
payroll tax: steps are 0%-1.1%-2.3%-4.4%, the last kicks in above €3.129.69 (than halved from one year earlier)
social security contributions, total: employee's part 22.1%, employer's part 16.1%
property tax: vacant building land is locally taxed, buildings have progressive taxes, among these the rate for dwellings is 0.1-1.0%, for business 0.15-1.25%, idle business premises 50%(!), rest/recreation facilities 0.2-1.5%. But there are lots of exemptions that appear to favour small business.

_{*Lunatic*, n.

One whose delusions are out of fashion.}

by DoDo on Wed May 21st, 2008 at 07:23:01 AM EST
[ Parent ]

Re: Of monsters and presidents (none / 0)

Not very low, but significantly lower, btw. originally I wanted to say, that other forms of taxes do play a significant role to judge about the general progressiveness of the system. The numbers you posted just now, affirm a mixed picture, but with generally lower taxes than in Germany.

Der Amerikaner ist die Orchidee unter den Menschen
Volker Pispers

by Martin (weiser.mensch(at)googlemail.com) on Wed May 21st, 2008 at 08:01:13 AM EST
[ Parent ]

Re: Of monsters and presidents (none / 0)

Generally lower, but, when compared to the flat-taxers, is it significantly lower?

I note however that Slovenia is a less obvious argument as I originally thought: the present income tax reflects tax cuts by current right-wing government, and even if those were less 'ambitious' than original proposals, the biggest gift to the rich was the elimination of a top income tax rate of 50%.

_{*Lunatic*, n.

One whose delusions are out of fashion.}

by DoDo on Wed May 21st, 2008 at 08:30:28 AM EST
[ Parent ]

Of monsters and presidents | 30 comments (30 topical, 0 editorial, 0 hidden)

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