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Comment by vasdae | Hacker News Reader

I live in the South of Europe and I can relate: the working people work and pay taxes just so those who live on welfare can live off us. So obviously we evade as much tax as we can.

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> so those who live on welfare can live off us

is if there is ANY welfare state in italy...

Italian public pension spending vs GDP is higher than anywhere else in the OECD.

I'd actually be happy if tax money went on welfare as opposed to funding government incompetence, mismanagement or subsidizing the tax avoidance (if not evasion) of those at the top.

..and your nominal tax rates are really high but the effective tax rates pretty normal.

The super-rich excluded of course.

A country without roads, amazing.

Not really, only Agio Oros doesn't have roads. Well they do have a few dirt roads.

The rest do have roads, they collect enough tax to support the infrastructure, some even manage to build new infrastructure. Usually when the authorities build infrastructure, the politicians also steal part of the taxpayer funds to enrich themselves. That's one reason why tax evasion is a cultural thing. The others are welfare and pension (unrelated to contributivity) freeloaders. So it's mainly as a form of protest.

There must be some incredibly expensive technology in those roads, considering how much governments are taking from us to build them.

I mean I can get a supercomputer in my pocket that allows me to access the sum of our civilization knowledge anywhere I am and to communicate with anyone of earth for a few hundred bucks and a monthly fee less than a meal, but roads?! Nooo, those are the real value at the center of our society.

> I mean I can get a supercomputer in my pocket that allows me to access the sum of our civilization knowledge anywhere I am and to communicate with anyone of earth for a few hundred bucks and a monthly fee less than a meal, but roads?! Nooo, those are the real value at the center of our society.

Well... Yeah? Roads are really fucking useful, like many more times than all the knowledge you can have in your pocket. Without roads you don't have that thing in your pocket, because it's not even getting to you, at least not in a convenient timeframe (and not for cheap).

Roads, sewers, water pipes, electricity cables, without those there would be absolutely no way for your supercomputer to be made, even less for that cheap.

Don't dunk on roads, there's a reason why the Romans are still praised for them.

Of course infrastructure is useful, even if not that amazing.

But why are governments charging us for it even more than the Romans did when countless other, much much more amazing things (and just as useful) came down in price dramatically during the last 2000 years?

I have a hunch: in my town all road repairs are made by companies owned by friends and relatives of the politicians in power…

Welfare is a small fraction of the value generated by labour. The vast majority of such value is appropriated by the owners of capital, as profits. They did no work yet they keep amounts much larger than your salary.

> majority of such value is appropriated by the owners of capital

majority of such value is appropriated by the governments

Here. Fixed that for you.

In almost any industry and company, profits are vastly higher than any tax paid. If they weren't, the owners of capital wouldn't bother exploiting workers.

Governments are taxing: salaries paid to employees, sales of products and services, profits made by the company, dividends paid and capital gains.

Also the great majority of value created by a company is captured by the society in improved productivity, products and services. Only a small part is retained by the capital owners.

Finally, these days anybody can easily become an evil capitalist with just a few bucks and a smartphone app, and anybody with a pension plan already is.

And? Per-employee profits are far higher than salaries or taxes, yet the source for both is value produced by the worker's labour. Somehow you're ignoring the majority of what is stolen by capitalists from workers, yet focus on a minor side-effect.

Oh, the old Labor Theory of Value. It's been debunked over and over again.

> Per-employee profits are far higher than salaries or taxes,

I don't think that assumption at all holds true for the majority of businesses. Even an extremely profitable tech company like Google "only" has a gross margin of around 28%.

That's ignoring other value extracted by the capitalist class, like "salaries" for capitalists that do no work (like CEOs), anything spent on the board of directors, value extracted indirectly via the stock market, etc.

It's also for a very narrow portion of the global economy, where workers are paid particularly well.

> for capitalists that do no work (like CEOs)

I mean... sure.

They still pay taxes on their income.

> value extracted indirectly via the stock market, etc.

Like how?

> It's also for a very narrow portion of the global economy, where workers are paid particularly well.

You misunderstood me, I cited Google as an example of a company which is relatively close what you're saying (high margins, a relatively high proportion of value goes direct to share-holders). Most companies which have high numbers of workers are less profitable that it.

Anyway this is pointless. Do you have any data?

That's not really true generally if your margins are low and you include all the taxes paid by the worker e.g.

A very oversimplified example (which I think should be somewhat approximately accurate):

- Your revenue is $100 + $21 (VAT)

- $40 goes to suppliers and other expenses

- $40 goes to labour (let's say they pay ~$18 in taxes)

- $20 is gross profit (you pay ~$5 in corporate tax on that, 25%)

on top of that there is VAT which is another ~4$.

So you end up with a profit of $15 and 'pay'(or rather 'generate') $27 in taxes (and you still need to pay personal income tax when you want to cash out).

And I think an 20% operating margin is pretty good for most businesses.

In most capitalist countries, only a small proportion of that that $18 + $4 paid in tax is used for welfare and the $15 is much larger than that. A lot goes to military, policing, law, prisons, etc. which serve to protect the profits of the ruling class.

It also assumes that profits are actually correctly accounting for the value appropriated by the owners of capital, which often hides various other ways in which they extract value from labour.

> A lot goes to military, policing, law, prisons, etc

I never implied it all goes to welfare. Yet other things, like healthcare, education, infrastructure and loads of other things do provide some utility.

> of that that $18 + $4

Assuming you agree my example is somewhat accurate it's actually $18 + $4 + $5 = $27

Capital gains etc. will also be paid on the $14 further decreasing it.

Now let's look at actual data instead of saying silly things about oppression, social spending:

OECD average: 21.1% of GDP France: 31.6% Italy: 30.1% Germany: 26.7% US: 22.7%

Total Government spending:

France: 59% of GDP Italy: 54.1% Germany: 51% US: 44.9%

So if more than half = tiny according to you, then yes you're correct. Of course since this data doesn't support your views who cares...

I had originally addressed someone saying most of their hard earned money goes to welfare, which is incorrect. I pointed out much more goes to profits instead. That’s all.

No. You posited that the majority of the value generated by labour is appropriated by the owners of capital.

You were corrected (with numbers) to the actual culprit capturing the majority of value generated by labor&capital: governments.

The discussion was about welfare, it’s childish to complain that I didn’t constantly refer to it.

Ultimately the difference doesn’t matter much, governments are capital too in countries where the ruling class is capitalists. What they are forced to spend to reproduce the working class is still for their own profits. Governments aren’t some thing separate from class society.

Governments confiscate an even bigger slice of the value produced in communist countries. The difference is that there is much less value produced there…

In socialist countries, workers form the ruling class. Taxes thus become a form of distributing surplus as the majority see fit.

There’s less value produced in countries that started our poorer and such countries tend to have successful proletarian revolutions. It shouldn’t be surprising that they can’t instantly be as developed as the countries that exploited them.

In the communist Eastern Europe where I grew up the nomenklatura formed the ruling class. And the only distribution of surplus was to themselves. The rest of us was starving. Common theme to all the “proletarian revolutions” I know.

All that changed dramatically with the switch to capitalist, market driven economy in the 90s leading to the amazing wealth and prosperity we are currently enjoying.

Meanwhile I am still waiting to hear about any communist success story…

I grew up in the 90s in Eastern Europe, all I saw was constantly worsening material conditions. Nowadays we’re forced to leave our countries to avoid poverty. Almost everyone older tells us how much worse off we are than they were during socialism.

But at least the remaining socialist countries are slowly winning. At this point it’s socialism or extinction.

> how much worse off we are than they were during socialism

All you need to understand how false that is is to remember that the machine guns on the border during communism were pointing inwards, so people couldn’t leave.

> constantly worsening material conditions

Every single actual, measurable life quality metric in the EE has improved singnificantly over the last 30 years.

> the remaining socialist countries are slowly winning

Please feel free to point out those “winner” countries.

My parents were paying 5% of one salary on rent. People younger than me can barely afford rent by pooling together several salaries. The metrics improved for the capitalists that pillaged our countries during the 90s, for sure.

It’s pointless talking when you’re so ideologically blinded. Probably because you profit from the exploitation of others, so it’s in your material interest.

> My parents were paying 5% of one salary on rent. People younger than me can barely afford rent by pooling together several salaries

Right. What about the people who had to wait for 10-15 years to be "assigned" an apartment?

> People younger than me can barely afford rent by pooling

Well... If you were fine living in communal flats with shared kitchens and bathrooms you'd be fine. Just like in the good old days.

> It’s pointless talking when you’re so ideologically blinded.

You were marginally entertaining but I think it's time to go back to reddit. Tanks go brr, amirite comrade?

> Nowadays we’re forced to leave our countries to avoid poverty

Well you're allowed to leave your country for one thing. How many more would have left the USSR et al. if they hadn't had to risk being murdered by border guards?

> Almost everyone older tells us how much worse off we are than they were during socialism

Which country is that?

> But at least the remaining socialist countries are slowly winning.

I'll bite... name a single "socialist" country that's winning.

> In socialist countries, workers form the ruling class

So you're one of those people who claim that USSR wasn't a socialist let alone a communist country?

It's a pretty common position outside of the USofA, one held by political students globally and, if you care to dig back, one held by the founders of the USSR who held (textbook) communism ahead as a worthy eventual goal that made up for the intermediate period od state controlled capitalism.

Ask around, no one who fled the USSR will tell you the actual people at ground level were in control.

Even within the US you can find people that weren't caught up with the McCathy era mislabelling and understood the abuse of terminology:

https://www.umass.edu/pubaffs/chronicle/archives/02/10-11/ec...

Sure, many in the USofA called the USSR state "communist" but that didn't make it an example of what intended when the word came about.

We can at least agree, I trust, that regardless of the naming of the state authoritarianism within the USSR that it sucked as a system to live under.

Right. So I'm just trying to figure which states do you think are/were actually socialist.

> held (textbook) communism

Not if bolshevism was textbook communism. They did reject some core ideas promulgated by Marx (already back in ~1918).

> outside of the USofA,

I don't think US is particularly special in that regard compared to most western countries.

The USSR had a state capitalist system (openly acknowledged early on as a transitional phase, but even though it stopped using the term it never transitioned out of it, and neither did most other Leninist-derived systems except a few into systems which incorporated more private capitalism later on while the “Communist” Party retained authoritarian power) with the claimed near-term intent of transitioning to functional socialism and claimed long-term intent of achieving communism.

The most actually socialist systems in the world are democratic states with mixed economies starting with the wave of reforms within advanced democratic capitalist economies in the early to mid-20th century that created them; that we tend to call them “capitalism” and the less socialist state capitalist regimes under Leninism and its descendants “socialism” or “communism” is largely a result of 20th century geopolitical block identities and not actual analysis of politico-economic systems against some set of clear consistent standards of what constituties “socialism”, etc.

> most actually socialist systems in the world are democratic states with mixed economies

Well by any reasonable metric they are still significantly more 'capitalist' than 'socialist'. Or rather are these days, due to some reasons there even those 'democratic pseudo-socialists' states from the 60s shifted to 'capitalism' much more since the 60s.

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