Money, money, money... ain't it funny!

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Money, money, money... ain't it funny!


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Old 29th April 2011, 06:35 AM
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Originally Posted by Coton90 View Post
Both countries need to tax the rich more. Obama just announced he intended to do it. One big obstacle is the lawmakers tend to write the laws in ways that will benefit them the most economically.
I had written a fairly lengthy response to this when our Internet connection went down on Wednesday night.

I'll agree that the US needs to "screw their courage to the sticking place" and raise taxes, certainly on the rich, but overall, too. The last time taxes were raised at the federal level (under Clinton), the economy picked up big time.

But in France, it's precisely because of the relatively high level of taxes that we didn't suffer nearly as much in the recent recession. Largely because there IS a functional safety net here. I think one reason the French don't take to the streets over tax increases is because they fully expect certain services from the government (otherwise, why have one?) and the notion of "solidarity" seems to sell the notion that you pay taxes for an overall social benefit, not for what you will get in return on an individual basis. This notion has never really caught on in the US.
Cheers,
Bev

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Old 29th April 2011, 10:20 AM
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Hi,
One reason the french don't take to the streets over tax increases, is that less than 50% of them pay any income tax, and the habitual street demonstrators come largely from that tax-free portion. (Apart that is from the SNCF workers who are so overpaid and featherbedded that even they would probably be embarrassed protesting about paying a bit back in taxes).
People don't seem to notice so much, the stealthy, and ever increasing, CSG, which takes in far more than the income tax. The unions, however , are constantly demanding that more CSG is taken from "the rich" who have" savings and investments"-ie. you and me-and less from the "workers"- ie their members.
The french icon of "solidarity" is a huge one-way con. It is used to cover the constant increase in taxes and cotisations taken from the "rich" (those who have worked and saved) to buy the votes of the "poor" (those who live very well on government handouts-especially those who produce large numbers of children). Calling it "Solidarity" rather than "forced equalisation downwards" makes people reluctant to criticise such a high-minded sounding concept.

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Old 29th April 2011, 11:40 AM
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Originally Posted by Bevdeforges View Post
I had written a fairly lengthy response to this when our Internet connection went down on Wednesday night.

I'll agree that the US needs to "screw their courage to the sticking place" and raise taxes, certainly on the rich, but overall, too. The last time taxes were raised at the federal level (under Clinton), the economy picked up big time.

But in France, it's precisely because of the relatively high level of taxes that we didn't suffer nearly as much in the recent recession. Largely because there IS a functional safety net here. I think one reason the French don't take to the streets over tax increases is because they fully expect certain services from the government (otherwise, why have one?) and the notion of "solidarity" seems to sell the notion that you pay taxes for an overall social benefit, not for what you will get in return on an individual basis. This notion has never really caught on in the US.
Cheers,
Bev
I know Iím a relative newbie and Illogical and just donít get it, but I think Iím catching on.

High taxes are a good thing. If we let people have more disposable income (NOT CREDIT), they could, heaven forbid, spend it in the economy. This could lead to a demand in consumer goods. A demand in consumer goods could lead to entrepreneurs opening new factories. New factories could lead to higher employment and a drop in the unemployment rate. As we all know this is a very bad thing.

Pierre can drive that clunker another year and doesn't need to buy a new Renault.

Iím totally convinced and see the errors of my ways as I find this logic to be impeccable.

To ensure the US tax payers get their money's worth, taxes should be increased and the Government should spend, spend, spend and not cut back on spending and try to live within their means. Who wants to return to the Clinton years of balanced budgets and surpluses?

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Old 29th April 2011, 12:15 PM
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I know Iím a relative newbie and Illogical and just donít get it, but I think Iím catching on.
Well, sort of, kind of - but you're definitely making progress.

I perhaps have a slightly different view from parsnips because I am part of the 50% that doesn't pay any income taxes. (I love to raise that issue when we get the telemarketing calls offering investments guaranteed to "lower our taxes as business owners". How much lower than 0 can you go?)

One interesting phenomenon pointed out, however, is the division of French society into the "workers" (to which I usually add "peasants and soldiers") and the "bosses" who are automatically assumed to be "rich" here.

The laws have changed in recent years, but when we first started our company, the laws were very clearly established to stick business owners with heavy responsibilities - legal, fiscal, financial, you name it - and to deprive them of "too many" benefits reserved for the proletariat. Just a simple example: the sťcu health care benefits for "bosses" were considerably less than for employees, even if you were only a "boss" by virtue of owning a majority interest in you business. We had to get a third shareholder into the company simply to avoid my husband becoming a "gťrant majoritaire."

Fortunately, by the time my sister-in-law got sick of playing "silent partner/shareholder" in the company, the laws had changed and the business owner statute offers virtually the same benefits (health, retirement - but NO provision for unemployment except through a strange quasi-retirement scheme) as for the masses (though the business owner clearly pays both the employee and employer parts on his or her own).

Anyhow, business here isn't given the same limitless freedom to advertise and market and whip up consumer "desire" for products as back in the US, so having more spending money often means enticing the masses to open tax-free savings accounts (livret A's for example) rather than simply "buying more junque" (which really ought to become the motto for the US these days).
Cheers,
Bev

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Old 29th April 2011, 01:12 PM
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Originally Posted by Bevdeforges View Post
I perhaps have a slightly different view from parsnips because I am part of the 50% that doesn't pay any income taxes. (I love to raise that issue when we get the telemarketing calls offering investments guaranteed to "lower our taxes as business owners". How much lower than 0 can you go?)

Anyhow, business here isn't given the same limitless freedom to advertise and market and whip up consumer "desire" for products as back in the US, so having more spending money often means enticing the masses to open tax-free savings accounts (livret A's for example) rather than simply "buying more junque" (which really ought to become the motto for the US these days).
Cheers,
Bev
I see no great distinction between paying income tax and paying VAT upon VAT for a liter of gas and other essential items. At the end of the day, it's still money out of your pocket. The rising food prices are sure to increase the misery index.

When I sometimes watch French TV, I haven't noticed a shortage of advertising.

Every Sunday, I can look forward to opening my mailbox and finding at least 1/2" worth of advertising (I know I can stop it but my wife wants to see whats on sale at Intermarche and she doesn't like to look online). It ends up in the recycling so I don't feel guilty.

Quite often the parking at the commercial centers are full and I'm not talking about food stores. Actually none of the big supermarkets here sell only food as they're like department stores. This plus the above supports my hypothesis that the French are indeed buying les junques. Mais c'est bon pour l'economie Francaise.

At any rate, this is all anecdotal evidence and has no statistical significance.

Cheers

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Old 29th April 2011, 01:38 PM
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Interesting cover story this week in The Economist - at least here in Europe. (Hm, were they eavesdropping on our thread here?) Quite a bit on "what's wrong with America's economy" and they even say they could learn a few things from Europe.
Cheers,
Bev

PS Maybe we need to start another thread on money and the economy. We aren't really talking about Schengen anymore....

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Old 29th April 2011, 03:02 PM
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Quote:
Originally Posted by Coton90 View Post
I know Iím a relative newbie and Illogical and just donít get it, but I think Iím catching on.

High taxes are a good thing. If we let people have more disposable income (NOT CREDIT), they could, heaven forbid, spend it in the economy. This could lead to a demand in consumer goods. A demand in consumer goods could lead to entrepreneurs opening new factories. New factories could lead to higher employment and a drop in the unemployment rate. As we all know this is a very bad thing.

Pierre can drive that clunker another year and doesn't need to buy a new Renault.

Iím totally convinced and see the errors of my ways as I find this logic to be impeccable.

To ensure the US tax payers get their money's worth, taxes should be increased and the Government should spend, spend, spend and not cut back on spending and try to live within their means. Who wants to return to the Clinton years of balanced budgets and surpluses?
I think all we are trying to say is that the Europeans believe that giving more disposable income to wealthier people is useless because they are not going to spend more.
Americans (and republicans particularly) believe that giving tax breaks to the wealthiest stimulates the economy. But it's wrong because PROPORTIONALLY the more money you make, the less of this income you are going to spend.
If you have taxes on the wealthiest, you re-distribute this money to the poor and you then ensure that it spent into the economy. Which stimulates demand, and businesses and reduce unemployment.

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Old 29th April 2011, 03:06 PM
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About the advertisement, I would like to point out that watching TV in the US is a real nightmare
Commercials every 10min!!!!!!
In France you only have one pause during a program of movie (at the middle). In that matter US tv is really annoying. Thank god you have TIVOs and recorders to avoid this now.

Something that I love in the US is customer service and the way businesses treat client.
In France they really dont care about Customer service and you are often treated like a xxx.

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Old 29th April 2011, 04:55 PM
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Originally Posted by Jeffy14 View Post
I think all we are trying to say is that the Europeans believe that giving more disposable income to wealthier people is useless because they are not going to spend more.
Americans (and republicans particularly) believe that giving tax breaks to the wealthiest stimulates the economy. But it's wrong because PROPORTIONALLY the more money you make, the less of this income you are going to spend.
If you have taxes on the wealthiest, you re-distribute this money to the poor and you then ensure that it spent into the economy. Which stimulates demand, and businesses and reduce unemployment.
A corollary to this is that when the economy crashes (like during the recent banking crisis), there are some added protections against job losses, and even when there are massive layoffs, the social safety net kicks in so that spending by the working classes is not abruptly pulled back (like in that large country we all know and love ).

When France wants to stimulate the economy a bit, the government goes out and builds a new TGV line or a new nuke (as in nuclear power plant) or some other big investment in the infrastructure - which creates jobs as well as benefiting the society at large. The US tries to rely on cutting taxes on the well-off, who don't actually put their tax savings back into the economy anyhow, so in the US you're stuck with less tax revenue (due to the cuts) and a patchwork approach to maintaining the infrastructure just as you have less tax revenue to work with.
Cheers,
Bev

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Old 29th April 2011, 06:01 PM
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I think all we are trying to say is that the Europeans believe that giving more disposable income to wealthier people is useless because they are not going to spend more.
Americans (and republicans particularly) believe that giving tax breaks to the wealthiest stimulates the economy. But it's wrong because PROPORTIONALLY the more money you make, the less of this income you are going to spend.
If you have taxes on the wealthiest, you re-distribute this money to the poor and you then ensure that it spent into the economy. Which stimulates demand, and businesses and reduce unemployment.
Just as clarification, the wealthiest, both in the US and France are not paying their fair share of the tax burden. In the US, the wealthy can find all kinds of loopholes, e.g., setting up a foundation. Everyone should pay proportionately their fair share of taxes. I wouldn't be opposed to a flat tax in the US where everyone pays the same percentage.

Giving tax breaks to the wealthiest,championed by the Regan Administration, doesn't work. Often, new factories are opened where the labor market is dirt cheap, so its not helping the US. I read somewhere that something like 10% of the US population owns a quarter of all the wealth in the US. If this trend continues, pretty soon there won't be a middle class, just the haves and the have nots. We need to reverse the trend in the direction of the pre-Reagan years when the American Dream was still achievable.

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