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The Nordic socioeconomic model

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    The Nordic socioeconomic model

    So, Ireland's newest party, the Social Democrats, seek to emulate Copenhagen, with higher levels of taxation funding greater public investment in universal healthcare and education. Of course, the key question is how can the general public be convinced that a reduction of personal income in the national interest would be preferable to immediate tax cuts? As things stand, the Nordic model is being reformed by the governments of their own countries in response to the rise of the right, and while salaries may be higher, Irish citizens may baulk at the concurrently elevated cost of living.

    #2
    The Nordic socioeconomic model

    Socio-economic models need to look beyond traditional frameworks and respond to current conditions and future trends, and tax accordingly. Corporate/multinational tax evasion schemes, huge concentration of capital, consolidations in the banking system: this is where the funds are available to maintain the social net. As far as other specific taxation policy items, tax breaks should be aimed at small businesses and manufacturing firms.

    Ireland is a bit of a special case because it had benefited from subsidizing multinationals to promote local European hubs, at the expense of the continent.

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      #3
      The Nordic socioeconomic model

      Of course, the key question is how can the general public be convinced that a reduction of personal income in the national interest would be preferable to immediate tax cuts?
      This is how the media like to frame the argument. That Sweden has better services because the "general population" is taxed to the hilt.

      If you are in the working or middle class in Sweden, your take home salary is likely to be higher than your counterpart in another western European country. On top of that, you don't pay any health insurance. None. Electricity is dirt cheap. Mobile phone bills are the cheapest in Europe. Road tax is approx 120 euros per annum for a petrol hatchback. There is almost free day care for children. There are 480 (not a typo) days of parental leave to be shared between both parents. You can get a train ticket from Malmö to Stockholm (650 km) on a TGV style train with free WiFi for 30 euros.

      How can they have their cake and eat it? Through taxing the rich, taxing corporations and through strong unions.

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        #4
        The Nordic socioeconomic model

        Sweden have very high VAT as well, which isn't classically progressive. Is that not a problem?

        I see a big corporation tax cut was made a couple of years ago. Now 22%.

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          #5
          The Nordic socioeconomic model

          Is 25% for the full rate (to which exceptions apply) really "very high"?

          Denmark is also at 25% (as is Croatia), Finland is at 24%. Hungary actually has the highest full rate within the EU at 27%.

          Though to echo linus' point, headline rates tell a very limited story in the current environment.

          I'd also question the assertion that there is a single "Nordic model" now (if there ever was). Norway has become a special case due to its energy-based windfall, Finland is faced with very real challenges grounded in developments in Russia, Iceland is still recovering from the bust of its overblown financial sector and both Denmark and Sweden have been tacking in response to changes in the party in power.

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            #6
            The Nordic socioeconomic model

            It's high compared to what we're used to- Osborne couldn't go above 20% or risk losing the election. But I take your point about exemptions. And re CT, I don't know anything except the headline rate.

            "Arc of prosperity" is the preferred term, surely.

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              #7
              The Nordic socioeconomic model

              The headline rate in Luxembourg and Malta is low compared to what you are used to.

              Do you mean "above 20%"? Isn't that the current headline rate in the UK?

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                #8
                The Nordic socioeconomic model

                Yeah, I did mean above, edited, sorry. It's 20% now, and was considered a very big thing when it went up in 2010, even with the "we're like Greece" shit flying about.

                More generally, I'm thinking of VAT as a regressive tax and I wouldn't associate it instinctively with a progressive system. But that might be me not understanding the exemption in Sweden.

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                  #9
                  The Nordic socioeconomic model

                  The Irish rate is 23%, so pretty much identical to Sweden in that regard. As Antonio says, Irish indirect taxation seems much higher than the EU average, which balances out any direct income savings, so redistributing revenue models wouldn't actually cost much more.

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                    #10
                    The Nordic socioeconomic model

                    On your opening post, I reckon a party putting up taxes for more investment is probably dead in the water. Also, would it be the time to tax more? Would that hit demand?

                    I'd do it, whatever.

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                      #11
                      The Nordic socioeconomic model

                      Here's a different angle: the socio side. I'd posit that, for this idea to work, you'd need a populace that's willing to undergo transformation based on the idea that they like their fellow citizenry and believe that they - as a country - only 'succeed' when they all succeed. Is that the mood in Ireland or England?

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                        #12
                        The Nordic socioeconomic model

                        WOM wrote: Here's a different angle: the socio side. I'd posit that, for this idea to work, you'd need a populace that's willing to undergo transformation based on the idea that they like their fellow citizenry and believe that they - as a country - only 'succeed' when they all succeed. Is that the mood in Ireland or England?
                        A hoary Irish saying: An American looks at a millionaire's mansion and says "Some day, I'll live in a house like that". An Irishman looks at the same house and says "Some day that fecker will lose that house!"

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                          #13
                          The Nordic socioeconomic model

                          WOM wrote: Here's a different angle: the socio side. I'd posit that, for this idea to work, you'd need a populace that's willing to undergo transformation based on the idea that they like their fellow citizenry and believe that they - as a country - only 'succeed' when they all succeed. Is that the mood in Ireland or England?
                          That's a fair point. I've long maintained that right-wing parties feed from sociopathic populations, whose sociopathy is in turn fed back by the political-media complex.

                          That's not to say there are no sociopaths in the Nordic countries, but they tend to live in the fringes, joining white supremacist Internet forums and shooting Labour youth on islands.

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                            #14
                            The Nordic socioeconomic model

                            As far as other specific taxation policy items, tax breaks should be aimed at small businesses and manufacturing firms.
                            Why, exactly?

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                              #15
                              The Nordic socioeconomic model

                              It's also about being like your fellow citizenry, I suspect.

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                                #16
                                The Nordic socioeconomic model

                                Ginger Yellow wrote:
                                As far as other specific taxation policy items, tax breaks should be aimed at small businesses and manufacturing firms.
                                Why, exactly?
                                There used to be a lot of talk about the SMEs and growth. Has that been challenged?

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                                  #17
                                  The Nordic socioeconomic model

                                  According to the FSB, in 2014 "Small and medium sized businesses employed 15.2 million people and had a combined turnover of £1.6 trillion". That's about half the employment of the country, isn't it? So no, you won't get "growth" without "growth" in SMEs. But that's pretty much by definition really.

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                                    #18
                                    The Nordic socioeconomic model

                                    How likely are they to grow? How many of them even want to?

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                                      #19
                                      The Nordic socioeconomic model

                                      No sector is monolithic (especially one as huge as "SME"), but there certainly are lots of SMEs that both want to grow and have the ability to do so.

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                                        #20
                                        The Nordic socioeconomic model

                                        Indeed.
                                        Which takes up back to the original point of concentrating tax breaks on them. Is that sensible?

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                                          #21
                                          The Nordic socioeconomic model

                                          I'm not sure that I would describe something that effects more than half of all people in employment as "concentrated".

                                          Though as a general rule, more targeted benefits tend to be more efficient from a purely economic standpoint.

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                                            #22
                                            The Nordic socioeconomic model

                                            He also said "and manufacturing", so we're well over half.

                                            Which blows away my word "concentrating" anyway.

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