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Comment by sofixa | Hacker News Reader

> France passed through unconstitutional reforms without the votes

As confirmed by higher courts, including the constitutional one, the reforms were constitutional and pushed through via a constitutional measure (49.3) that gives the government the (limited in number of attempts) power to force legislation, unless a motion of no confidence brings them down. The fact that the motions didn't get a majority means that the reforms had enough votes for them, but the members of parliament didn't want to be directly associated with having voted for them, which required the maneuver. The reforms are highly unpopular, controversial, imperfect, but in the end were needed. You could frame it as stealing from the people, I'd frame it as an imperfect attempt to ensure a long-term financial stability (France spends a lot on pensions, regularly runs deficits, and the projections were pretty terrible - optimistic scenarios for 2050 had 15% of the GDP going for pensions, for a median Quality of Life 75% of that of the median active worker. That's fundamentally unsustainable, and vague populist "we'll just tax X" won't fix it. We could have had a better reform, but I'll take a poor one over none at all).

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First politicians make unrealistically high pensions to gain votes and then they find out that economy cannot sustain paying them. What a surprise. And now poor 62-year old Frenchmen have to work hard to pay for those politicians' mistakes.

Also, I wonder, if the law is such controversial, why not hold a referendum? Why not let people decide for themselves, whether they want to raise the pension age or lower the pension to more realistic figures? I think that would be the most democratic way to resolve the issue instead of beating people by police.

> First politicians make unrealistically high pensions to gain votes and then they find out that economy cannot sustain paying them. What a surprise

It took multiple decades for it to become unsustainable thanks to increasing life durations.

> Also, I wonder, if the law is such controversial, why not hold a referendum

Because fundamentally, if you ask people if they want to work 2 more years, very few will say yes. This is an unpopular decision, like carbon cutting measures, that is needed at the higher level, but few will choose to make the sacrifice.

> Because fundamentally, if you ask people if they want to work 2 more years, very few will say yes

What's the point of democracy if you don't let people decide anything? (also what's the point of having a Parliament that doesn't decide anything). If people don't want to work, then lower the pensions to realistic figures.

> If people don't want to work, then lower the pensions to realistic figures.

People don't want that too, of course.

> also what's the point of having a Parliament that doesn't decide anything

Parliament decides most things, it's just that there is the option to force stuff through them in limited types of scenarios and a limited amount of times (which they can refuse with a motion of no confidence). So it's not like the President can just rule by decree and do whatever they want.

> What's the point of democracy if you don't let people decide anything?

What can I say, democracy has it's flaws. People are easily attracted to empty populists that promise stuff that doesn't make sense, or would be downright catastrophic; politicians are incentivised to think short term (next election cycle) instead of medium and long term (nobody got reelected because they gave money to a nuclear research programme that is scheduled to finish in 30 years time). Having politicians with the guts to make reforms that are needed, even if unpopular, is crucial for the long term health of a country. Sadly it's quite hard to have that without spiralling into authoritarianism, and downright impossible to differentiate between that and a politician doing things for their own (friends/business partners) benefit - e.g. did Macron force this reform through because, as he says, he believes it's necessary to avoid French debts spiralling out of control, or because it will push more people into private retirement schemes and he's getting a cutback from that?

France has an extra-constitutional mechanism for dealing with an aristocrat class, or so I heard in history class.

Note that that clause was added to the constitution as a consequence of De Gaulle's military coup in 1958. The coup is what created the extremely strong French presidency.

And that it has been used dozens of times since, by both sides of the aisle.

I find it funny to use "both sides of the aisle" in the context of the French political system.

> Usage of the term "aisle" comes from the United States Congress. In the Senate, desks are arranged in the chamber in a semicircular pattern and the desks are divided by a wide central aisle. By tradition, Democrats sit on the right of the center aisle (as viewed from the presiding officer's chair) while Republicans sit on the left.

https://en.m.wikipedia.org/wiki/Aisle_(political_term)

Doesn't it actually come from UK houses of parliament?

From the linked Wikipedia entry

> a similar phrase used in countries operating under the Westminster system, is "crossing the floor"

Sure, and the whole 'left' and 'right' system comes from 18th century French politics :)

https://en.m.wikipedia.org/wiki/Left%E2%80%93right_political...

I'll admit I was lazy and did not want to look how to write "both sides of the political spectrum".

Don't know who voted down, but on the off chance that it helps arrange your gripe, here's the list of statesmen and their use of 49.3 (since 1958)

  Michel Rocard  28 "left"
  Élisabeth Borne  11 "center"
  Raymond Barre  8 "center"
  Jacques Chirac  8 "right"
  Édith Cresson  8 "left"
  Pierre Mauroy  7 "left"
  Georges Pompidou 6 "right"
  Manuel Valls  6 "right"
  Laurent Fabius  4 "left"

.. Rocard was in power 3 years, and Borne only 14 months, so if one extrapolates naively she will eventually arrive in top position. But 1) we're not voting on pensions every day and 2) I think one has to admit that the political climate has changed since 1993 and the current opposition does not make a super constructive partner. In the end, the country has to move forward. That's precisely why 49.3 exists.

And was added to avoid the chaos and instability of the Third and Fourth Republics which were parliamentary but had big difficulties establishing lasting consensus, and thus had most governments lasting barely a few months.

So the military took power, installed a general, and had the constitution changed to allow the president to force through legislation without a parliamentary majority.

The military didn't take power, there was a coup attempt that failed.

> allow the president to force through legislation without a parliamentary majority.

Unless there is a motion of no confidence which can be called immediately after such an act, and if it passes with a simple majority, the legislation doesn't pass and the government falls. Therefore it allows the president's government to force through laws only if there aren't enough members of parliament to vote for them, but not against them.

The 1958 coup was successful. You might be confusing it with the failed 1961 coup.

In 1958, the military in Algeria (then still part of France) rebelled against the government, and successfully invaded Corsica. They threatened to invade metropolitan France unless the government stepped down, which it did. They then installed Charles de Gaulle in power and rewrote the constitution.

As French Wikipedia notes, "il s'agit du dernier coup d'État réussi en France" ("it's the last successful coup d'état in France").[0]

> Therefore it allows the president's government to force through laws only if there aren't enough members of parliament to vote for them, but not against them.

It forces parliament to choose between deposing the government or allowing the law to go through. There's no option to simply reject the law, as would be the case in most normal democracies.

0. https://fr.wikipedia.org/wiki/Coup_d%27%C3%89tat_du_13_mai_1...

> The 1958 coup was successful. You might be confusing it with the failed 1961 coup.

Indeed you're right, I'm confusing my coups.

> It forces parliament to choose between deposing the government or allowing the law to go through. There's no option to simply reject the law, as would be the case in most normal democracies.

Yes, that's the whole point of the 49.3 provision, for the government to be able to force legislation that parliament wouldn't agree to. That's why there are guardrails around it, like parliament having the option to bring down the government if it disagrees.

Consider me old-fashioned, but I prefer that legislation only pass if parliament approves it. This is an antidemocratic element of the French constitution.

It is antidemocratic, but it's entirely on purpose after the highly unstable Third and Fourth Republics. Therefore it was decided that it's better to have a strong president with limited powers to override democracy, over chaos, instability and lack of progress (if you have a new government every 6 months because majorities are thin and depend on multi-sided compromises that often fall apart, nothing serious can get done)

And now the president is using that antidemocratic element of the constitution - added as the result of a military coup - to force through a highly unpopular (a large majority of the population opposes it, which is why parliament won't pass it), highly impactful pension reform.

> I'd frame it as an imperfect attempt to ensure a long-term financial stability

I somehow seriously doubt raising retirement age by 2 years (from 62 to 64, life expectancy is 82) will "ensure a long-term financial stability". There are usually many other way to optimize the system, but macron chose exactly to take from people.

Which number would you tweak to make a retirement fund financially balanced?

I am not an expert, but of the top of my mind we have the following possibilities:

[1] balance the bottom of the age pyramid: get more working people. Either by creating a social/financial situation that gives young people the security to get kids or by easing work migration from places with many young people.

[2] balance the top end of the pyramid: make the health aystem worse so people die earlier and you don't have to pay pensions so long

[3] raise the retirement age so the fewer payers raise more money and you have to pay out less over time.

[4] change the way retirement funds are allowed to work with the money so they can work with the interest

[5] If bureaucratic cost is an issue with the retirement system you can save some money here, but it is going to be peanuts in comparison to the other measures.

[6] Raise the money from elsewhere (e.g. by taxing investment gains oe by raising wages and have a bigger fraction of the wage going to retirement funds)

Option 1 either takes long (kids that will be born in a few years will not be able to work until decades later) or has cultural side effects (a significant amount of migration can lead to all kind of tensions with the local population).

Option 2 is not an option on ethical grounds.

Option 3 is the easy option, although it has the side effect that people who know they are never going to retire might not want to get kids so the problem gets worse without some measure to counter this.

Option 4 is something scandinavian pension funds already do (investing the money for returns), although the risk has to be managed properly then.

If you can't motivate people to get more kids (well paying secure jobs and a positive outlook on the future) the only number you can reasonably adjust in an aging society is the retirement age. People live longer so they have to work longer. As a fraction of the average livespan they work the same.

If France raises the retirement age by two years to 64 they are still retiring earlier than all surrounding countries. Italy: 67, Spain: 66, Germany, Belgium: 65

> [6] Raise the money from elsewhere (e.g. by taxing investment gains oe by raising wages and have a bigger fraction of the wage going to retirement funds)

yeah, for example I googled and found that corp tax dropped from 33 to 25 in last five years, so they literally took money from employees and gave to employers.

But trivial change could be to make pensions base on retirement age: someone can retire at 62, but get smaller pension, and another could retire at 78 but get much larger pension, plus have pension base on contribution.

> But trivial change could be to make pensions base on retirement age: someone can retire at 62, but get smaller pension, and another could retire at 78 but get much larger pension, plus have pension base on contribution.

That trivial change is essentially already the case. There's no law that requires you to work like some kind of slave. You can retire whenever you want. The laws are about the age to be eligible for full-retirement. You can already retire early and receive a lower retirement, or keep working for much longer and have a much higher income in retirement.

> corp tax dropped from 33 to 25 in last five years

To drive economic growth. France's gdp per capita is lower today than it was 15 years ago. In the US it's 45% higher than it was 15 years ago. France's corporate system wasn't working, and high taxes were a key reason from lots of studies.

Anyway, taxes aren't really that relevant for retirement. If a person needs to consume 10 units of goods/services (e.g. food, clothes, healthcare, whatever), and workers produce 40 units each, a population of 25 workers can produce 1000 units and sustain another 75 retirees (1000 production, 1000 consumption).

If you lower the retirement age such that there are just 15 workers and 85 retirees, you're now still consuming 1000 units, but only produce 600 units. There's massive shortages, prices skyrocket, and many people become poor because there's not enough production to meet their needs.

Raising lots of money through taxes doesn't change this fundamental issue. Even if you give everyone $ 1 trillion dollars of money, in this economic system, there's still not enough production to meet needs. So you need one of two things to solve it: more workers (= more production), or more productivity per worker (= more production). That latter point is not something the government can really control, although high taxes tend to drive productivity per worker down because economic activity is less rewarding to the source of the activity, as the activity is taxed. So high taxes can actually make this situation worse.

I'm aware I'm simplifying a lot but I hope it helps to show taxes don't address the root-cause issue.

> To drive economic growth. France's gdp per capita is lower today than it was 15 years ago. In the US it's 45% higher than it was 15 years ago. France's corporate system wasn't working, and high taxes were a key reason from lots of studies.

actually, high corp taxes can drive economic growth, because they give incentive to companies to reinvest into the business and not into shareholder's pockets.

The real solution would've been to not create an unsustainable pyramid scheme in the first place. Unfortunately the negative effects of it take so long to appear that the people who created the system will never feel them.

Exactly. We should have based much more of our politics around dealing with the age structure in society, just like we should have dealt with climate change when it was still easier to deal with.

But on the other hand the shareholders were very happy, so there's that.

The population pyramid is mostly due to the post WW II babyboom. Not sure what you're proposing then (family planning?) and now (also family planning but now reverse, mass migration?) going forwards to get a grip on a balanced population pyramid.

I think the population pyramid for most countries before WW1 and WW2 looked to be about the same shape.

Here's Japan throughout the 20th century: https://commons.wikimedia.org/wiki/File:Japan_population_pyr...

France: https://commons.wikimedia.org/wiki/File:France_Animated_Popu...

I don't think they expected the population pyramid to turn out the way it did. People in the past worried about global overpopulation, I don't think they would've done that if they had had an idea that population would naturally cap itself out without anybody even doing anything.

It's understandable why these systems were set-up, but some generation in the future (maybe us) will pay the price.

What about a system that could encourage partial retirement into part time service industries or consulting? Or to working at non-profits, subsidized by retirement funds. Of course this is already the case, but if it was formalized it could continue to help offset the retirement gap and provide a meaningful opportunities to retirees, and retirement could be seen as an opportunity to pursue a long sought secondary interest or make a difference, rather than being a net drain on society.

The projected annual pension defecit was 30 billion in 15 years, then gradual reduction (as people die). This was the most optimistic scenario, based on x% growth and y% unemployment. Other scenarios were analysed.

Btw, these analyses were performed by the Council for the Orientation of the Pensions, a bi-partisan entity.

The other options you mention were :

* more tax on people (france famously already has the highest in the OECD)

* more tax on companies (which will just increase cost of work and thus drive jobs elsewhere)

* run a defecit (debt is already scary high, and it means essentially making pay our kids for grandma's old age)

What is the other way you had in mind?

Note: two years later paying out means two year more paying in. So two years "effectively is 4 years".

> * more tax on companies (which will just increase cost of work and thus drive jobs elsewhere)

this is false statement. Corp tax usually applied on profit after wages paid, thus doesn't impact cost of work.

in the context of pensions, "tax on companies" generally means "increasing the employer part of social charges" (as apposed to the employee part). The French system requires that the various social systems operate as separate funds, at equilibrium, and does not foresee paying shortcomings from general revenues such as VAT or income tax.

Hence, increasing the employer part of social charges increases the cost of work.

Anyway, the direct tax burden on French companies is already quite high. This means that French companies have difficulties competing with foreign companies. Mutatis mutandis they either raise the price to compensate (and so are more expensive) or keep the same price and lose margin (and have therefore lower capacity to invest).

Countries can fix tax levels as they want (it's one of few policy areas where European countries have full autonomy) but they can't use tariffs or import taxes to protect their market. We have all agreed to free trade, and the WTO will punish those who do. So in reality, you can't just tax any way you want, unless you want to destroy part of your local economy.

> in the context of pensions, "tax on companies" generally means "increasing the employer part of social charges"

I cited specifically recent decrease of french corp income tax above, everything else is your speculations.

> lose margin (and have therefore lower capacity to invest).

investments are not included into margin, losing margin doesn't have impact on investments unless company become not profitable

It's quite significant. Life expectancy is about 82 in France. Retiring at 62 vs 64 means:

1. Years of retirement: -2 2. Years of retirement payments: +2 3. Years of retirement fund returns: +2

(3) is significant because at the end the fund will have about 40 years of payments. Suppose an 8% nominal return for two years on average, this means you're getting about 16% on 40 years of savings, or ±6.5 years of savings, on top of 2 years of extra savings by working two extra years, on top of needing 2 years of fewer pay-outs, meaning the 20 year retirement is cut by 8.5 years, or a -42% decrease.

Not to mention side benefits. (ample evidence that working and staying active longer, reduces healthcare costs on society, for example).

I'm simplifying the calculations quite a bit of course, but this actually has a massive impact.

> Years of retirement fund returns: +2

There is no significant retirement fund in France's main pension scheme.

When getting the life expectancy numbers did you exclude all deaths from before "working age"?

Because a significant effect is imparted by childhood deaths to the average life expectancy, especially for men, and those individuals never contribute to any pension fund nor taxes.

That has a massive impact on the results of the calculations.

This is a strange attempt at trying to justify a clearly undemocratic move that is widely unpopular.

Ohh but the system said it’s constitutional to do it this way … as long as it’s only done a few times ….

Ohh and it was necessary to protect the financial stability of France which has historic wealth inequality … lol.

Sad times for western civilization.

This political debate was shitty enough when it happened, there is no need to rehash that political bullshit whenever you see the topic mentioned somewhere.

Just because something is legal doesn't mean it's ethical. The french government has a long history of very legal genocides and working camps, for example.

Those pension reforms were not "needed", unless you can argue it with a proper source. There was no present or foreseeable deficit for decades ; you say 2050 yourself. Moreover there's plenty of money around: Macron could just reinstate the ISF tax on wealth he removed, or he could fight corporate tax fraud which is in the dozens/hundreds of billions of euros every year. No, he just wants to tax the poor and redistribute to the rich.

> We could have had a better reform, but I'll take a poor one over none at all

You either say this because you are very young and not yet tired with work, or because you have very comfortable work that does not break your entire body. If you know some people working in factories, in trash collection, or in construction business, ask them what they think about working 2 years more before retiring, while white collars have pre-retirement champagne in the Bahamas built on their backs. Many blue collar workers do not even make it to the retirement age, and work injuries/death have increased dramatically in the past decade.

Since the 19th century, human productivity has increased a hundred-fold. Scientists and politicians across the spectrum back then predicted we would soon have a 4-hour working day. How can you humanely justify taking all this productivity increase and giving all the benefits to the already-rich, even taking away some of the few scraps poor people have?

>Just because something is legal doesn't mean it's ethical.

As long as a country is governed by rule of law, the only form of justice that should have any standing is legal justice.

Ethical justice, more commonly known as social justice, has no place because that flavor of justice is going to vary wildly depending on the individual passing judgment.

None of this is to say legal justice is inherently "right", laws can absolutely be malformed or otherwise unsuitable for purpose. But so long as the laws say something is "right", that is legal justice.

> As long as a country is governed by rule of law, the only form of justice that should have any standing is legal justice.

I don't disagree, but by this standard i don't know any country that is governed by rule of law. France and USA are very famous for high-profile corruption and criminal cases in which politicians/cops/CEOs are either not found guilty (of proven crimes) or somehow never end up in jail despite being convicted (such as in the Balkany case).

As the cynical saying goes, make one crime for a million dollars, end up in jail. Setup a corporation that does thousands of crimes for billions of dollars, get rich.

Pensions schemes as invented in the 20th century are essentially ponzi schemes which are fundamentally unfundable. If you are born in the West after 1980 do no expect your government pension to provide any sort of significant income after retirement. Especially considering the demographical changes in the western world - there will not be enough workers paying for the retired population.

I don't expect to have a retirement, but not due to demographic factors. I don't expect to have a retirement because Sarkozy then Macron have reformed the pension system despite quasi-unanimous opposition across the political spectrum. They are taking it away from us, and short of an actual revolution there's nothing we can do about it.

However, it's important to note that the equation cannot be equated to euros and jobs. As i previously mentioned, due to the increase in productivity in the past centuries, it's now possible to feed and house the entire population with lesser people working these fields. If a government wanted to find a solution, they would at least study the emergence of bullshit jobs, what jobs are actually "essential" (as they said during COVID lockdowns) and how to better share the actual workload and benefits across society.

> Those pension reforms were not "needed", unless you can argue it with a proper source. There was no present or foreseeable deficit for decades ; you say 2050 yourself

https://www.cor-retraites.fr/node/595 (research organisation composed of employers and unions). Again, their optimistic projections, which count on economic growth which isn't a given, project a bleak situation by 2050; that doesn't mean in 2040 it will be perfect. Even 2050 is merely 27 years away, and as was seen, a pension reform isn't easy nor fast to do.

Regarding blue collar manual labour, that's why there's adjustments for such work (it counts more enabling faster retirement). And that's where the real discussions should have been had, IMO, on adjusting for a better scenario for blue collar and similar work, instead of unions and populist political parties flat out rejecting a reform and calling for bringing down the age of retirement. It made compromise impossible.

> Since the 19th century, human productivity has increased a hundred-fold. Scientists and politicians across the spectrum back then predicted we would soon have a 4-hour working day. ?

And in the 19th century they couldn't even dream of the things we have today. The amount and quality of labour that goes into providing all needs and amenities of modern life is much higher than before.

> How can you humanely justify taking all this productivity increase and giving all the benefits to the already-rich, even taking away some of the few scraps poor people have

Where am I doing that, and what does a pension reform have to do with that? France is already one of the countries with the highest tax burdens for the well-off.

That's funny because the report is really not as pessimistic as you say. First, because the part of pensions in the GDP stays more or less the same across their projections, and they say (p.3 synthesis) « the results of this report do not validate the idea that pension spendings are growing uncontrolled ».

Second, because as they say, the government is supposed to bring the pension funds to balance... The same austerity government, who by destroying public service is defunding the pension system (p.5 synthesis): « It is a paradox that the austerity measures on public servants will negatively affect the balance of the pension system ».

> Regarding blue collar manual labour, that's why there's adjustments for such work (it counts more enabling faster retirement)

This is close to non-existent lately. Macron in his working law reform (2016) and pension reform (2023) made it much harder for work hardship to be recognized.

> unions and populist political parties flat out rejecting a reform and calling for bringing down the age of retirement. It made compromise impossible.

Well of course they did just that. We need to work less, not more. The government makes compromise impossible by repeatedly fucking over the poor and giving to the rich (taking from housing aids APL the same month they remove ISF tax on the rich). Then they send riot cops, imprison many and maim countless others. In the early 20th century it was common for workers to be killed by the boss or the government during a strike, so the workers gathered guns and dynamite... we are slowly moving back to this era.

> The amount and quality of labour that goes into providing all needs and amenities of modern life is much higher than before.

This is a non-argument. The "amenities of modern life" are provided by slave labor, mostly from Africa and Asia. Half of people who work in Europe are producing nothing of value to anyone. And those who try to find meaning in their work are prevented by the bureaucrats. I recommend reading David Graeber's Bullshit Jobs, and watching his talk from CCC called Managerial feudalism and the revolt of the caring classes.

> Where am I doing that, and what does a pension reform have to do with that? France is already one of the countries with the highest tax burdens for the well-off.

Well you're doing it right here in the next sentence. The rich have it super easy around here. To quote a friend of mine, who's only middle class, « we should pay more taxes ». And she's not even super rich! There's so many ways for the super rich and the powerful to escape any justice in France... Most multinationals do not pay any taxes, while well-known fortunes pay a very small amount due to various montages (see LuxLeaks/BahamasLeaks & others).

And that has to do with poor people breaking their backs producing the wealth of this country, making food and cleaning spaces and working the factories and building infrastructure... and the rich doing absolutely nothing but enjoying life. We french people have a tradition of chopping heads, the rich better start sharing soon or the guillotine will be put back up. Pensions are historically one part of the social contract that convinced people after WWII to stop hanging and chopping heads.

EDIT: Sorry my message was very impersonal. You should ask yourself: are you a billionaire with dozens of empty villas? If not, why defend a fascist government who's only concerned about the rich? There's good chances you are on the side of those who have everything to win and little to lose, but have been convinced otherwise by school and the media.

> « the results of this report do not validate the idea that pension spendings are growing uncontrolled »

It's an organisation which contains unions, and it's not their place to discuss the public budget.

> That's funny because the report is really not as pessimistic as you say

Which is asinine. Their "pessimistic" vision is for 2% year on year growth, which is wildly optimistic in my view; their "it's not too bad, only 15% of GDP" is among the worst in the OECD (along other countries with budget issues like Spain and Italy); their "for pensioners to have 75% of the median quality of life of working people" sounds far from great, and a massive downgrade from today. So they're saying it's going to cost a crapton of money which the country doesn't have, for worse quality of life, but that's fine?

> Well of course they did just that. We need to work less, not more

We need to, and should, ideally. But who will pay for it?

> (taking from housing aids APL the same month they remove ISF tax on the rich)

As I said elsewhere, removing the ISF resulted in a net tax benefit (https://www.selexium.com/actualites/bilan-suppression-isf-gr... as a source that highly wealthy people are coming back to France, Insee have the stats on tax income per wealth).

> This is a non-argument. The "amenities of modern life" are provided by slave labor, mostly from Africa and Asia. Half of people who work in Europe are producing nothing of value to anyone. And those who try to find meaning in their work are prevented by the bureaucrats. I recommend reading David Graeber's Bullshit Jobs, and watching his talk from CCC called Managerial feudalism and the revolt of the caring classes.

Amenities of modern life is electronics (most of which comes from Asia indeed) but also cars, entertainment (movies, books, series, food, music, amusement parks), everything digital, etc. Not saying all of it has value in itself, but modern people consume a lot of things that didn't even exist a century ago. A lot of the surplus productivity has went there.

> To quote a friend of mine, who's only middle class, « we should pay more taxes ».

That's commendable attitude, but the problem is, many people don't see it like this. And when you raise taxes too much for those, they'll simply move to Belgium or Switzerland or Luxembourg, and then you lose.

> Most multinationals do not pay any taxes, while well-known fortunes pay a very small amount due to various montages (see LuxLeaks/BahamasLeaks & others).

Yes, and this is things France is actively working on fixing. They require multinational cooperation so it's not easy, but France is one of the most active countries on that front, consistently pushing the OECD and the EU.

> If not, why defend a fascist government who's only concerned about the rich

Oh please, there's nothing fascist about that government. Even the pretty far to the right Darmanin isn't fascist, let alone them as a whole. And I'm going to disagree they're only concerned about the rich; their focus is on the economy and budget as a whole, which translates into serious focus on the wealthy capitalist class, yes; but I've also seen big improvements making it easier for people to start their own business or get to work. Some of them are highly misguided like reducing unemployment benefits to push people to get back earlier, but still.

To make it more personal: it stings a bit when I see how much of my salary goes to taxes, but I'm well off and I could be taxed a bit more without it impacting my life in the slightest; but I'm not one of those people who see money earned as the ultimate objective in life, so I'm not going to run away if my taxes get too high. That being said, my partner worked in the public sector for a few years, and it really pained me to hear the amount of incompetent fools stealing a living and the amount of layers of waste; that hasn't changed my view on taxes though, and I still happily pay them because I know the majority of it goes to good places for good reasons, and I can stomach some waste.

> and vague populist "we'll just tax X" won't fix it

The richest people and biggest corporations own such an unimaginably large amount of wealth that taxing them would fix just about anything.

In 2017, Apple's cash reserves were $250 billion. That's just a single company, hoarding reserves that could clear the national debt of most countries. Think about that for a second.

There is absolutely no shortage of wealth in the world. There is easily enough to pay all the pensions, including far into the future, even considering demographic change.

But of course, if governments are OK with allowing corporations to act like sovereign countries, raising the retirement age can seem like a reasonable alternative to moving all that wealth to where it actually belongs.

If wealthy companies should pay French pensions, simply because they can, do you think that wealthy westerners should pay for, say, pensions or services in Africa?

Raising taxes on wealthy companies to cover pensions seems arbitrary and unfair (by which I don't mean that taxes shouldn't necessarily be raised).

> wealthy westerners should pay for, say, pensions or services in Africa?

actually this sounds reasonable, and Western countries obviously pay already through various programs.

> do you think that wealthy westerners should pay for, say, pensions or services in Africa?

If they have business interests in Africa, absolutely.

The world's biggest corporations are profiting massively from having access to the French market. But that access is not a given, it is being granted by the French people, and can be taken away at any time for any reason the French people consider valid.

Care to break down the actual math of how that would work?

1) We take the cash reserves from large companies

2) Large companies either go bankrupt or leave the country

3) The economy is completely wrecked

4) Venezuela

5) We spend the cash reserves, increasing inflation but not getting any more work done

If we taxed wealth at 1%, the wealthiest would still be getting wealthier and we'd be able to cover the needs of so many more people, fight climate change, or whatever else.

You think Apple stops operating here because of a 1% headwind? No way.

Some info...

All of these problems are due to population collapse, due to incredibly low birthrates.

Canada is choosing another method, with current targets of 500k/year, and talk of even higher numbers:

https://globalnews.ca/news/9836414/canada-immigration-aging-...

With 40M people, that's more than a 1% per year. And note, those are immigrants, not refugees, or other classes of new Canadians.

Just the housing and infrastructure needs alone, and initial support, as well as dealing with validation -> full citizenship is mind bogglng.

But beyond that, I believe it is too fast as a culture shift. I want new blood, new ideas, but I also want the ideals of a hoghly democratic nation, its openness to newcomers, its tolerance to not be lost in a voice of newness.

EG, I want newcomer input, but I don't want it to drown out what's here.

But that's how worrisome the population graph is. There are not enough young people to take care of the old, the old who have worked their entire lives, building what is around us, and paying for tgeir elders to retire, a social contract that is vital.

So we know we are doing a risky thing, as all fast change is risky.

But we must, or... what?

France chose another path. I can't say it is right or wrong.

But ... if nothing is done, it won't be good.

The stupid part is, everyone is dealing with this. China, Russia, the entire West, we all knew. We all knew the numbers, all of us, decades ago.

But we waited. For example, Canada could have ramped up immigration a decade ago, thus softening the social impact.

Peeeew.

Dude.

> The richest people and biggest corporations own such an unimaginably large amount of wealth that taxing them would fix just about anything.

Still peanuts comparing to the "global" economy or a country needs (in terms of pension or health). Also a significant portion of this wealth is paper money that will take a significant hit at sale.

> In 2017, Apple's cash reserves were $250 billion. That's just a single company, hoarding reserves that could clear the national debt of most countries. Think about that for a second.

Why not then, dip into your bank account? By this logic, there are trillion of $$ in bank accounts all around the world. That's a lot of money.

> There is absolutely no shortage of wealth in the world. There is easily enough to pay all the pensions, including far into the future, even considering demographic change.

> But of course, if governments are OK with allowing corporations to act like sovereign countries, raising the retirement age can seem like a reasonable alternative to moving all that wealth to where it actually belongs.

Sure, let's make every 20-30-40 something work for these 60+ all day instead of having a life. The reality is that the pension system of France was pretty good when it started because there were very few pensioners. Now that the situation is not the same, it means each pensioner will get a little less. And the system is already maxed out to maximum max. Many people are deserting France because of the high taxes and high pension system contributions.

> Sure, let's make every 20-30-40 something work for these 60+ all day instead of having a life.

Most of the value produced by workers goes into the pockets of corporate overlords. For their bosses and managers, for the shareholders, and for the landlords of the corporate mafia who take in 30-70% of working people's income. By your own logic, abolish corporate profits and for-profit housing, and let every worker enjoy huge benefits and retirement.

> Now that the situation is not the same, it means each pensioner will get a little less.

This is not wrong. But it's entirely due to Macron reforming the pension system with a "point" system. Without such reform, pensioners would continue to get just as much money, adjusted for inflation.

> By your own logic, abolish corporate profits and for-profit housing, and let every worker enjoy huge benefits and retirement.

Corporations are owned by pension funds. Investment funds own 80% of the S&P 500. They would be insolvent if corporations stopped posting profits.

But also, the reason corporations make so much money is regulatory capture. They buy laws that foreclose competition which makes everything cost more. It's the same reason housing is so expensive (the anti-competition laws there are zoning rules). You can't fix this with taxes -- tax them and everything still costs too much. Meanwhile the government is not going to give the money to you, they give it to the politically connected or use it to buy votes from interest groups with inefficient programs.

You have to actually fix the laws that enable this -- as in repeal them, not add some more to the pile.

Let's breakdown the "tax the rich argument"

Government has become captured by wealthy interests and has created a legal system that benefits the rich at the expense of the working class.

If the power of the government can be seized, the wealth of the rich can be taken and used to help the working class.

Problems with this:

A) this essentially is a revolution to seize control of the government to take the wealth from the powerful and wealthy. B) there is a high risk that the attempt to seize control of the government will fail, but the wealth transfer will still occur, just from the middle class to the government/wealthy. C) it's unsustainable.

When most people say tax the wealthy they are actually literally saying, tax them on what they make. The middle class pays pretty much all the taxes in the US while the world's wealthiest tend to pay as much as someone who is upper middle class.

Some people are now proposing a wealth tax on anyone with more than a billion dollars. That's surprisingly reasonable. It is also completely sustainable, and does not require overthrowing any government ...

Where does your idea that “the middle class pays pretty much all the taxes in the US” come from?

As far as I can tell, the top 1% of earners pay 42.3% of income taxes and earn 22.2% of income. The average 1%-er makes 1.76 million dollars a year. They pay as a group approximately 722 billion dollars annually in income taxes [1]. Then factor in estate taxes and corporate taxes which are disproportionately ultimately borne by the very rich. Then factor in payroll taxes, which are 50% paid by companies. The top 1% bears an incredibly large portion of the national tax burden, as I see it. One could argue it should be more, but I don’t see the argument that the middle class pays “pretty much all the taxes”.

As for a wealth tax, a lot of wealth isn’t in a liquid form. Would you see it forcibly liquidated or would you like the government to have substantial holdings in US companies?

Personally I think there are much more fruitful ways to go about addressing inequality than the progressive “eat the rich” agenda.

[1]: https://taxfoundation.org/publications/latest-federal-income...

I am highly sceptical of this accounting. Many properties, in say, London, are owned through shell corporations in secretive jurisdictions.

My landlord is in a tax heaven. It's a corporation and there is no way for me to know who own it! What if I am paying rent to a war criminal? How do they account for this?

But let's look at a simpler situation - say you own a company, company let's out apartments, the rent is used to buy new apartments -> if you time purchases of new property well, there is never a profit to tax, corporation tax is zero. If I never take money out, but just grow my net worth, then my personal tax is zero too. So my net worth can keep growing forever, without ever paying tax.

You only ever pay tax on the small amount of money you take out of the company for living expenses, like food.

https://thehill.com/changing-america/respect/equality/558352...

https://www.cnet.com/tech/tech-industry/bezos-musk-and-other...

https://www.nytimes.com/2022/12/21/us/politics/trump-taxes-i...

https://ktla.com/news/how-does-tesla-get-away-with-paying-0-...

The list goes on and on. Once you have enough money you use staff lawyers at your company to pay nothing taxes either for your company or for yourself.

> Corporations are owned by pension funds. They would be insolvent if corporations stopped posting profits.

Not in France, where retirement fund is a nation-wide socialized entity, which was the core of this debate. Private pension funds are close to non-existent here ; i personally cannot name a single person doing that because the public model worked so well for decades.

> It's the same reason housing is so expensive (the anti-competition laws there are zoning rules).

I don't entirely disagree because France has the more draconian housing regulations you can imagine: it's to my knowledge the only country in the world where it's illegal to build your own house (or lightweight housing) and produce your own electricity off-grid on land you actually own.

However, the argument doesn't stand scrutiny. According to public studies there's hundreds of thousands of empty dwellings in France... not even counting secondary/vacation housing or AirBnBs. There's two faces to the housing crisis here in France.

The first is the landlord mafia keeping apartments empty on purpose for speculation. Because if the entire supply was put on market, the prices would collapse, and people could actually afford housing. We could design a law to tax empty housing proportionally to the owner's wealth, and see how fast we get housing for everyone.

The second is the government backed off on public housing. Low-cost housing (HLM) programs started after WWII have been mostly cut, and whatever funding is left has been diverted to "ownership accession" and higher-standing "low-cost" housing which are luxury housing below market rates but very inaccessible to minimum-wage workers. To give you an idea, a two-bedroom apartment in standard HLM usually costs 200-500€/month in Paris. The newer ones being produced from public funds are rented for ~800-1500€/month, while the minimum wage is around 1300€ after taxes.

I have a hard time calling this a "crisis" when it's a massive defrauding operation orchestrated by the State and the housing mafia.

> Not in France, where retirement fund is a nation-wide socialized entity, which was the core of this debate. Private pension funds are close to non-existent here ; i personally cannot name a single person doing that because the public model worked so well for decades.

It's not that extreme. There are a lot of "assurances-vie" which are quite literally meant to be private pension funds (with lots of tax incentives...). That being said no-one actually relies on it, and the core of pensions are definitely the nation-wide entities. (Yes plural, we wouldn't be french if there weren't dozens of competing institutions doing the same thing, with of course people getting sucked dry but that administrative complexity)

> The first is the landlord mafia keeping apartments empty on purpose for speculation. Because if the entire supply was put on market, the prices would collapse, and people could actually afford housing. We could design a law to tax empty housing proportionally to the owner's wealth, and see how fast we get housing for everyone.

I don't agree on the "proportionally to the owner's wealth", simply on the empty apartments' value. But yes, we need to tax empty housing. And we're getting there. There has been a lot of changes with regards to housing taxes that are largely going towards taxing (relatively) more empty housing, with this year being the first year you need to properly declare for every housing you own what its use. And I feel like it's just the start, and we're going to keep those taxes evolving towards taxing empty apartments while taxing less family housing.

The labor theory of value is simply incorrect. Profit isn't stolen from workers.

The biggest problem in this day and age is cost of living, not wages. Housing is way too expensive. But that's not because it's provided by the market for profit, it's because government hasn't allowed it to be build in large enough volume to satisfy the demand of people moving into cities.

> The labor theory of value is simply incorrect. Profit isn't stolen from workers.

Why?

I mean you don't provide a justification that's more defended than me saying the opposite is true.

> Why not then, dip into your bank account? By this logic, there are trillion of $$ in bank accounts all around the world. That's a lot of money.

Because wealth is immensely concentrated. There isn't nearly as much money in everyday individual bank accounts as in those of ultrawealthy individuals and corporates; and the trend since the 80s is for this to accelerate.

Way to attack a straw man. >> The richest people and biggest corporations own such an unimaginably large amount of wealth that taxing them would fix just about anything.

> Still peanuts comparing to the "global" economy or a country needs (in terms of pension or health). Also a significant portion of this wealth is paper money that will take a significant hit at sale.

> In 2017, Apple's cash reserves were $250 billion. That's just a single company, hoarding reserves that could clear the national debt of most countries. Think about that for a second.

> Why not then, dip into your bank account? By this logic, there are trillion of $$ in bank accounts all around the world. That's a lot of money.

Well they mentioned Apple's cash reserves that's traditionally easily accessible funds that do not take a significant hit at sale (although the number I read is $55 Billion), but if we talking about Apple's cash and cash equivalents, that was $20,535. That money would fix quite a few economies (and pension funds).

I'm not sure why you bring up peoples bank accounts. They were specifically talking about the worlds richest people and companies, you're average Joe doesn't count. The whole argument is that many economies are in this mess because the super-rich companies and individuals have not been paying their fair share of taxes (as sufficiently document by e.g. the Panama papers etc.).

>Why not then, dip into your bank account? By this logic, there are trillion of $$ in bank accounts all around the world. That's a lot of money.

My bank account is dipped into. It's called "tax". I pay it at a considerably higher rate than Apple does. Does that seem fair?

> Does that seem fair?

No, though it is not about fairness. Your slave owner takes part of the fruits of your labor. Why do you allow that?

It is entirely about fairness. We live in a society. Tax is necessary to maintain that society. Everyone needs to pitch in. If you want "rights", that comes with "responsibilities" - they invariably pair.

Responsibilty to maintain road and sewer, for example, are funded by use tax and sales tax. Those who use it are paying to maintain it.

Income tax pays for ... ridiculous things like endless wars and spying on American income tax payers.

> Income tax pays for ... ridiculous things like endless wars and spying on American income tax payers

12% of federal budget went to national defense.

Most of it went towards Health Insurance, Social Security, and Welfare programs.

Federal budget includes deficit spending.

Did trustfundians pay income tax? How does the son of George Soros, who does not need income, pay income tax? The children of ultra rich are not tax slaves. They escaped.

How do you think those kids acquire money? I guarantee you it's a in a form the government classifies as income.

Yes, a small percentage went to paying interest on loans, and some of the money spent was borrowed. And the majority of spending from income tax still went to the things I mentioned prior.

I'm not sure I'm following what you're implying.

Are you talking about the idea that taxes are theft, (which I didn't disagree with more) or the idea that wage labor is theft because your employer sells the products for more than they pay you to produce them (which is absolutely theft, imo)?

Sales tax and use tax pay for what we consume. Those and a few others, such as import duties, are reasonable.

Normally, I'd just flame you for this.

There's a baseline level of consumption required to survive. Meaning everyone eats, rents, drives to work, buys an entertainment system. Paying for what you consume is a regressive way of generating tax revenue as the tax is raised from the poor masses.

Progressive taxation exists because people with more income have more disposable income. When you tax a poor working single mother of three and she must choose between buying food or paying tax, you will get riots eventually. When you tax a millionaire who's choice is buying a sports car or paying tax, riots don't usually happen.

The cornerstone of a fair tax system is to avoid double taxation. Most countries currently practice triple taxation - they tax personal income, they tax the same income again through taxes on consumption, and a third time through corporate tax. And then there are still countless other small taxes. A fair system would tax people once, on their earnings, and stop there.

So, to answer your question, there should be no corporate tax, and no VAT, if income tax is set at the correct level. It makes no sense for you, as an individual, to compare yourself to a corporation.

> So, to answer your question, there should be no corporate tax, and no VAT, if income tax is set at the correct level. It makes no sense for you, as an individual, to compare yourself to a corporation.

This is outrageous. Why does, in your world, a corporation have amore rights than a real person?

On the contrary, there should be no personal income tax, only Corporate taxes.

Or no taxes other than a flat national sales tax, probably with some rebate to assist the poorest X% of families.

Which, like the "only income tax" would enrich the hereditary wealth dynasties at the expense of the sort of people that actually have to spend most of their income.

And repeal the income tax. And exempt from sales tax uncooked food at grocery stores.

Corporate taxes are among the taxes with the highest dead weight loss, and the cost just gets passed on as lower worker compensation or higher prices of goods and services.

The overhead associated with corporate taxes is also much higher for small businesses.

I know that's what a set of economists say theoretically happens, but I'm not sure that's actually borne out in the data.

If you look at periods of wage stagnation and/or inflation, they aren't exactly positively correlated with relative high corporate taxes.

> the cost just gets passed on as lower worker compensation

This applies to payroll taxes, but I don’t think it applies to corporate income taxes. Since corporate income taxes are typically levied against profit, not revenue, wages are paid out of “pre-tax” money. A high corporate income tax rate would actually incentivize paying higher wages and/or hiring more employees.

>The cornerstone of a fair tax system is to avoid double taxation

That's pretty arguable. To me, "fair" simply means that we all obey the same rules. Those rules can be anything we want, if we think they'll make society work better. In our current system, taxes are levied on money movement, which serves important functions. These functions include signalling to the economy which activities we'd like to encourage and discourage, and providing fair and proportionate funding to government services which deal with that specific activity. For instance, road tax is levied only on car users, and goes towards the maintenance of the infrastructure which car users disproportionately benefit from. That is much more "fair" than what you are suggesting. When you use terms like "double taxation", you are presupposing that tax is "attached to a person", and that income tax is the only "valid" form of tax, which is a radical departure from how most of the world thinks about tax - a fact you acknowledge.

>It makes no sense for you, as an individual, to compare yourself to a corporation.

I agree with this, but probably not the way that you mean.

Apple isn't even a person. It deserves no consideration of things like "rights" and "personal sovereignty". It's merely an organization - essentially, a pile of paperwork - that exists entirely subordinate to the parameters that we agree on through the engine of representative democracy, which is our current best effort at creating an avatar of societal cooperation, for the benefit of all. Ethically, we would be entirely within our rights to tax Apple at a rate of 100%, if we felt it would be a net benefit to society as a whole.

> Apple isn't even a person

Legally, that pile of paperwork gives the Apple corporation some rights of a person. Obviously it is not a living, breathing person in the biological sense. But it is treated as one from a legal perspective.

Should it be? That's a different question. Changing that would probably upend contract law.

IANAL

https://en.m.wikipedia.org/wiki/Corporate_personhood

> Why not then, dip into your bank account?

The government does it every time when it prints money. Note that with cryptocurrency or golden money that would become impossible. Maybe that is why government set up obstacles for buying gold or cryptocurrency.

> The richest people and biggest corporations own such an unimaginably large amount of wealth that taxing them would fix just about anything.

They don't have wealth though, they have capital or money but not wealth. Wealth is actual goods and services, money is an abstract representation of the ability to obtain these things. As the pandemic proved it doesn't matter how much money you have, if there just isn't stuff to spend it on.

To quote Douglas Adams "Many solutions were suggested for this problem, but most of these were largely concerned with the movement of small green pieces of paper, which was odd because on the whole it wasn't the small green pieces of paper that were unhappy."

Any real solution needs to focus on wealth creation, and not on moving around small green pieces of paper. As long as people's standard of living is increasing they really care a lot less about money and income inequality, people only start caring about that when they realize things are getting worse.

I mean put it into perspective. There's 300 million Americans who will live on average 15 years in retirement, currently at an average retirement income of $75k. So this group will be spending about $1 million in retirement per person, so for 300 million Americans you're talking about 300 trillion in spending during their retirement.

Now you take the most wealthy and successful corporation in the history of mankind, Apple, take its cash reserves (250 billion), subtract its debt (100 billion), and tax it (e.g. 10%) and you're left with 15 billion, which gives you the fraction 0.00005 of the 300 trillion you'll want to raise for US retirement of everyone alive in the US today. So in actuality you'd need to have another 20 thousand Apples, and you'd get to your number, just for the US population.

Ignore of course the rest of the 97% of the world population, despite Apple having earned its cash reserves from its global business, they'll need to find their own first-in-class corporate behemoth to tax for their retirement.

----

I think more importantly, you have to acknowledge that money is just a tool for expressing value, but fundamentally has no value. What does have value is actual production. Everything that the people of the Earth can produce in a given year, and consume in a given year, constitutes their wealth. The more people work & produce, the richer we are, in total. Apple could have 1 quadrillion in cash, if nobody on the planet is working, Apple and everyone else is extremely poor. Retiring simply means: you do not produce, but you do consume what others produce. And that's fine if it's sufficiently balanced, where the working produce sufficiently for their and the non-working's consumption. And in France it was extremely clear from all studies that this condition wasn't going to be met the coming decades. Raising money through taxes doesn't change that fundamental truth, that this system is only sustainable if it is balanced, and it wasn't.

To simplify it, if every working person produces 2 loafs of bread, and every person eats 1 loaf of bread per day, in a population of 10 people you need 5 to be working, and 5 can retire. 10 loafs are produced, and 10 loafs are consumed.

If the retirement age is low enough that 3 people work and 7 retire, you'd produce 6 loafs, but the population still needs 10 loafs to consume.

Taxing companies in this population to finance this earlier retirement age, just puts money in the hands of the 7. It doesn't change the fundamental issue, which is that there's 6 loafs of production and 10 are necessary. So you'll see rapid inflation, bread becoming very expensive, some working and some retirees having no bread, in other words, poverty, versus the situation where the retirement age was a bit higher and all demand was being met by supply.

Of course actual economic models are way more complex, but this example illustrates: it's not money, or taxes, that constitutes or generates wealth, it's just a unit of account. What makes us wealthy is that which we produce. And human activity (= work) is the engine of that production. Reducing the retirement age = less human activity = less work = less production = less wealth. You can put taxes at any level, but that remains true. And France chose heed this rule, because all actuarial & demographic tables showed it can't sustain the wealth with the growing number of retirees, lower number of working age population, and growing life expectancy, at the old retirement age.

Look, I completely agree that the wealthiest should be sharing more of the burden. However France already has quite high taxes, and is in the EU, so when the taxes get too high, people and companies can very easily move to a neighbouring country. Removing the fortune tax in France resulted in a net tax benefit because people who were subject to it returned to France and their regular taxes were added.

> In 2017, Apple's cash reserves were $250 billion.

To put it in context, in British, _annual_ health spending is 280 billions.

Those reserve can't last for a year in a smaller country.

250 billion isn’t much relative the revenue and expenditures of governments. Government operates in the trillions. California lost 40 billion in a couple months trying to administer unemployment insurance, something you would expect a government to be able to do with some competence, having many decades of experience. But nobody cares in the government if the government should lose 100 billion here, a trillion there, because hey there are still rich people we can tax to get more money! There are no consequences for losing tens or 100s of billions on dollars, you get promoted in the public sector because your budget was large, not because you spent the money well.

Government will never be incentivized to function properly until their revenue, like any and all successful institutions, is dependent upon their own competence. Endless skies the limit money with no consideration for how wisely or efficiently that money is used is an obvious recipe for national failure.

California has a larger economy than Germany and is only beaten by US, China, and Japan. It just has vastly more money than most countries.

governments need to balance their budget

many do, even ones with big pensions programs and social safety nets

even many currently indebted ones have before

government revenues via passive rent seeking behaviors of other people’s production are not the only ways governments have raised revenues before

It seems like a fundamental error to believe that money itself has value, but many people make this error all the time, as you just have.

Just because cash exists somewhere as numbers in a system, it doesn't mean those numbers can jump out of the system and suddenly manifest as young, capable humans who can help retires. Plus, as others have pointed out, 250 billion it isn't even a drop in the bucket.

If there is 2 trillion dollars of profit held as cash by companies, that doesn't mean they are holding back 2 trillion dollars worth of production. It means they're holding a claim on the purchasing power of 2 trillion dollars VS the total of all worldwide cash value, say 2% as an example.

If the 2 trillion is taken out of the bank and spent, say on social services, it just dilutes the current purchasing power of the remaining cash value. It does not create 2 trillion dollars worth of value from nowhere. I return to my opening claim, that money itself doesn't have value.

If anything, money could be described as, "A claim on a certain percentage of the worlds output at any given moment, limited by locale." That percentage claim is wildly unstable and changes as money is created/destroyed.

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