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bookmylectures1 · 3 years ago

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Difference between Direct & Indirect Tax

Taxes are one of the largest sources of income for the state. From your salary, to eating at a restaurant, watching a movie at the multiplex, driving down the street to buying a packet of biscuits at the general store, you pay different types of taxes in many different ways.

As a responsible citizen, you have an obligation to pay taxes. However, it is equally important to know the different types of taxes applied in the country. All the different taxes in India can be broadly divided into two categories – direct and indirect taxes. Let’s see in detail the meaning of the two types of taxes.

What Is Direct Tax?

In simple terms, direct taxes are taxes that you pay directly to the tax-collecting authority. For example, income tax is collected by the government and you pay it directly to the government. These taxes may not be transferred to one or more other persons. There are several laws that regulate direct taxes.

In India, the CBDT (Central Board of Direct Taxes) managed by the Ministry of Revenue is responsible for the direct taxes management. This department also participates in planning and informing the government about the implementation of direct taxes.

Common Types Of Direct Tax In India:

Some of the most common types of direct taxes applied in India are as follows:

1. Income tax:

The most common type of direct tax in India is income tax. It is charged on the income you generate in a fiscal year based on the IT department’s income tax code. Taxes are paid directly to the IT department by individuals and companies. In addition, there are several tax deductions for individual taxpayers, which are regulated in various sections of the Information Technology Act.

2. Taxation on securities transactions:

When you trade stocks, each of your transactions also has a small component called a securities transaction tax. Whether you make money or not, you have to pay this tax. The broker collects this tax from you and transfers it to the exchange, which then pays it to the state.

3. Tax on capital gains:

Whenever you generate capital gains, you must pay capital gains tax. These capital gains can come from the sale of the property or from investments. Depending on your capital gains and investment holding period, you will have to pay LTCG tax (long-term capital gains) or STCG (short-term capital gains) taxes.

Direct Tax Benefits:

Direct taxes have several big advantages, such as:

Curb inflation – In the event of monetary inflation, the government can increase direct tax rates to reduce the demand for goods and services. When demand falls, it will help reduce inflation.

Fair – Direct taxes are also considered fair because the principle of development is fundamental. Low-income people pay lower taxes and high-income people pay higher taxes.

Reducing inequality – Higher taxes imposed on the rich are used by the government to launch new initiatives for the poor. Initiatives provide a source of income for low-income people and help them improve their standard of living.

Disadvantages Of Direct Taxes:

Direct taxes also have some disadvantages, such as:

Considered as burden – Since taxpayers have to pay direct taxes in the form of flat rate income tax each year, they are considered as an expense. In addition, the entire documentation process is complex and time consuming.

Evasion is Possible – Although the current government has made tax avoidance extremely difficult, there are still many fraudulent practices that allow individuals and businesses to evade taxes or pay lower taxes than they otherwise would.

Limiting Investments – Due to the collection of direct taxes, such as taxes on securities transactions and income taxes, many people avoid investing. Therefore, direct taxes to some extent limit investment.

What Is Indirect Tax?

While direct taxes are levied on income and profits, indirect taxes are levied on goods and services. The main difference between direct and indirect taxes is that while direct taxes are paid directly to the state, there are generally intermediaries who collect indirect taxes from the end user. Then it is the responsibility of the mediator to forward the taxes received to the government.

In contrast to direct taxes, indirect taxes do not depend on a person’s income. The tax rate is the same for everyone. CBIC (Central Council for Indirect Taxes and Customs) is primarily responsible for dealing with indirect taxes in India. Just like CBDT, CBIC works in the Ministry of Finance.

Common Types of Indirect Taxes in India

Some of the main types of indirect taxes in India are as follows:

1. Goods and Services Tax (GST):

GST includes a total of 17 different indirect taxes in India, such as service tax, central consumption tax, state VAT and many more. It is a single and comprehensive indirect tax levied on all goods and services under the list of taxes established by the GST Council. One of the biggest advantages of GST is that it largely eliminates the cascading or taxing effect on the previous tax system.

2. Customs:

If you buy something that needs to be imported from abroad, you will have to pay customs duties. Regardless of whether the product arrives in India by air, land or sea, you have to pay customs duties for it. The purpose of collecting this indirect tax is to ensure that every product that enters India is taxed.

3. Value Added Tax (VAT):

A value added tax is a type of consumption tax levied on a product as its value increases throughout the supply chain. It is imposed by the state government, which also sets VAT rates on various goods. While the GST primarily removes VAT, it is still levied on some products such as goods containing alcohol.

Indirect Tax Benefits

Some of the significant indirect tax benefits are listed below:

Poor contributes too – It is very important for the country that every individual contributes to its development. Because the poor are often exempt from paying direct taxes, indirect taxes ensure that the poor also help build the country.

Convenience – Unlike direct taxes, which are usually paid once, indirect taxes like GST are paid in small amounts. When you buy a product or service, a small amount of GST is included in the price, making it more convenient for taxpayers to pay.

It’s easy to collect – If you want to know the difference between direct and indirect taxes, one of the biggest is how they are paid. Unlike direct tax, there are no complicated paperwork or procedures associated with paying indirect taxes. When you buy a product or service, you must pay tax laws.

Disadvantages of Indirect Taxes

Some of the disadvantages of indirect taxes are as follows:

Regressive – Indirect taxes are commonly known as regressive. While they make everyone pay taxes regardless of their income, they are not fair. People in all income groups must pay indirect taxes at the same rate.

More expensive products and services – As indirect taxes are added to the prices of goods and services, they become more expensive. For example, products such as cigarettes, high-end motorcycles, premium cars, etc. included in the 28% GST tax slab.

Lack of public awareness – With indirect taxes added to the price of a product or service, consumers usually don’t know what taxes they are paying. This is the opposite of direct taxes when taxpayers know exactly what taxes they are paying.

Summing up:

As you can see, both direct and indirect taxes have their advantages and disadvantages, but they are both very important to the economy. While taxes are generally seen as an unnecessary burden, governments build nations, invest in defence, health care and infrastructure, launch social initiatives, and thrive. Our dream of making our country a global superpower can only be achieved if its citizens continue to pay taxes with honesty.

That is all about direct and indirect tax in India. If you are a student studying CA, CS and CMA, then we at Book My Lectures offer online lectures for Taxation. We also offer online classes for CS, that helps students to achieve their goal by getting success in examination.

#CS #Direct Tax #Indirect Tax #Book My Lectures

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tcifiscal · 5 years ago

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State Funding Proposals Include Regressive Tax Increases – Many without Offsets

Last week, the 2020 General Assembly session reached the point of the legislative calendar known as “crossover.” From crossover until the end of session, the House of Delegates only considers legislation that has passed the Senate, and the Senate only considers legislation that has passed the House (the lone exception is the budget bill). Although many significant state tax policy bills filed for this year did not move beyond the committee level, several proposals remain under consideration. A large transportation funding package (HB 1414 and SB 890) and several standalone regional transportation funding bills have advanced from their respective chambers in the Virginia General Assembly. In addition, proposed increases to cigarette and tobacco taxes are included as part of the House and Senate budget proposals.

These transportation bills would generate needed new revenues for transportation projects across the state, including public transit. However, in their current form, several of these and other proposals, such as increased cigarette taxes, would worsen Virginia’s already upside-down, or regressive, tax system (where families with the lowest incomes pay the highest share of their income toward state and local taxes on average, while those with the highest incomes pay the lowest share). Lawmakers should make sure that proposed offset measures, such as fee reductions, are included in the final version of the legislation.

State and regional transportation funding

As initially proposed by the governor, the statewide transportation funding overhaul would increase state gasoline taxes by 4 cents per year for the next three years (12 cents total) and grow along with inflation after that. The governor proposed eliminating the state’s annual vehicle safety inspection requirement and reducing annual vehicle registration fees, which would offset most of the impact of the gas tax increase for state residents. In addition, the legislation would establish a new highway use fee and voluntary mileage-based user fee program, which would place new fees on owners of electric and fuel-efficient vehicles.

In contrast to the governor’s original proposal, the House version (HB 1414) retains the state vehicle safety inspection but changes it from an annual requirement to every two years. The Senate version includes larger differences. As passed in the Senate, the Senate bill (SB 890) eliminates the third year of the proposed gas tax increase, so that gas taxes would increase by a total of 8 cents per gallon after two years (and be subsequently adjusted for inflation). The Senate bill also adds an additional regional fuels tax of 7.6 cents per gallon of gasoline and 7.7 cents per gallon of diesel fuel purchased in regions of the state that do not already have an additional regional fuels tax. (Northern Virginia, Hampton Roads, and the I-81 corridor already have regional fuels taxes.) Regional fuels tax amounts would also be indexed to inflation. The Senate transportation bill also retains the annual safety inspection and keeps annual vehicle registration fees at their current level, while another Senate bill (SB 972) would increase the registration fee by $4. Additional revenue from the increase would go to the State Police.

The versions of SB 890 and a corresponding vehicle safety bill (SB 907) that passed the Senate do not contain offsets to reduce the impacts of the tax increases on families with low incomes. For simplicity, the Senate could offset much of these impacts by mirroring the House legislation and including reductions in annual registration fees or other fees that are flat dollar amounts paid by state drivers. An alternative approach would be to address these impacts through tax credits for families with low and moderate incomes, such as an Earned Income Tax Credit (EITC). Virginia created its current EITC as part of the 2004 tax reform package that included sizable increases to the state cigarette tax. Several states also offset regressive sales and excise taxes with modest refundable credits, such as Arizona’s “Increased Excise Tax Credit,” Idaho’s “Grocery Credit,” and Maine’s “Sales Tax Fairness Credit.” These kinds of credits would also help to make sure that families with low or moderate incomes would not face disproportionately higher taxes.

Several standalone regional transportation bills have also passed:

One bill (HB 1541) would create a new transportation authority for the Richmond region to fund road projects and provide new investments for public transit.

House (HB 1726) and Senate proposals (SB 1038) to fund a new transit program in the Hampton Roads region have passed, although the House version includes a clause that the bill will only go into effect if similar legislation is passed during the 2021 session. The Senate version as passed did not include this clause.

A House bill (HB 729) would adjust transportation funding in Northern Virginia, including regional funds directed to the Washington Metropolitan Area Transit Authority.

A Senate proposal (SB 452) would add an additional fuels tax on a regional basis, similar to the regional funding provision contained in SB 890.

Cigarette and tobacco taxes

The House and Senate budget proposals include the governor’s proposed increase to cigarette and tobacco taxes. This would increase the cigarette tax from 30 cents per pack to 60 cents per pack and impose a tax of 6.6 cents per milliliter of liquid nicotine. The House and Senate budgets include clarifying language, such as specifying that a corresponding increase on other tobacco products also goes into effect in July.

Cigarette taxes are also regressive. To address this, these tax revenues have been paired in the past with credits like the EITC or were directed toward health care funding for people with low incomes. For example, in 2004, Virginia paired increased sales and cigarette taxes with creation of a nonrefundable EITC and a new fund for health care.

Sports gambling, lottery, and “games of skill”

Both the House and Senate have passed bans on “games of skill” (HB 881 and SB 971). The governor’s budget assumed that legislation to regulate and tax these devices would be enacted and generate about $125 million in new revenue over the two-year budget. The House and Senate have revised lottery forecasts upward to partially offset the decrease in these gaming revenues and the House has invested $45 million from the state’s General Fund into a supplemental lottery program to fully offset the change.

In addition, both chambers have passed legislation to authorize sports gambling and online lottery ticket sales (HB 896 and SB 384). The House bill would generate about $21 million and $31 million in the budget year that begins July 1, 2020 (fiscal year 2021) and in fiscal year 2022, respectively. These funds would be directed to the Lottery Proceeds Fund, the state General Fund (GF), and a gambling treatment and support fund. The Senate bill would generate about $10 million and $19 million in FY 2021 and FY 2022, respectively, with most of the funds directed to state reserves and smaller portions deposited into a Sports Betting Operations Fund and a gambling treatment and support fund.

The House budget assumed about $37 million in new GF revenue from sports gambling legislation. The Senate budget assumed additional revenues, most of which ($27 million) would be deposited into state reserves.

Local revenue options

Two proposals (HB 785 and SB 588) have advanced that would largely equalize taxing authority for Virginia’s counties. These bills would allow counties to have greater access to revenue sources, including admissions, meals, transient occupancy, and cigarette taxes, and shift away from reliance on real estate and personal property taxes. As passed by the House, HB 785 would allow counties greater latitude to levy cigarette taxes, while SB 588 (as passed by the Senate) caps these amounts at 40 cents per pack. By expanding revenue options for local governments, this will give them greater ability to meet state required spending for items such as public education.

Progressive tax proposals

Several bills that would have markedly improved the progressivity of Virginia’s tax code did not survive crossover and are no longer able to be considered during the 2020 session, unless similar provisions are written into the budget, including:

A proposal to strengthen Virginia’s EITC by making it fully refundable, which would have provided an additional tax refund to working families with low and moderate incomes in the state (HB 1435)

Multiple proposals to reform the state corporate income tax by adopting unitary combined reporting and minimize corporate tax avoidance opportunities (HB 739, HB 1109, SB 756)

Two proposals to restore the state estate tax that would have applied to the largest estates in Virginia (those valued at $11.58 million or more), which include substantial amounts of capital gains income that has escaped state taxation (HB 736 and SB 637)

A proposal to annually update the state individual income tax code for inflation to prevent inflation from eroding key tax measures, such as the standard deduction and personal exemptions (HB 735)

As state lawmakers work to finalize 2020 tax policy legislation, they should consider ways to address the regressivity of these proposals, either by establishing offsets for families with low incomes or by directing more funding to public investments that would boost opportunity for households with low income or low wealth.

– Chris Wodicka, Policy Analyst

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Learn more about The Commonwealth Institute at www.thecommonwealthinstitute.org

#regressive #tax #legislation #virginia

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cazort · 7 years ago

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well, some Americans learned it by observing others, or from studying history, or from the experiences of people who survived the holocaust. I’ve been to Germany three times and I saw a lot of these cultural differences firsthand and it made some of what people call “patriotism” in the U.S. seem even more ridiculous to me.

It’s tricky when you have significant disagreement on what it means to be patriotic.

America has a lot of disagreement and polarization, and I think more so than Germany, the polarization is institutionalized in the political system, including both in the two-party system, and in how the media covers it. I’m not convinced that the populace of America is really all that different, because I feel like I’m a political moderate and have been one for years and have always been poorly represented by the U.S. I just get a primary (pick one party or the other) and then a general election where it’s almost always Democrat vs. Republican. Other parties, like green, libertarian, etc. almost never even have a fighting chance.

Issues like taxation are also hardly straightforward; fixing the tax code isn’t as simple as voting for higher taxes on yourself. I did taxes as a professional, first for H&R Block and then independently for a few years, and I’ve also run my own business, and worked a little bit in information technology designing databases related to accounting and finance, so I know the tax code more intimately than a lot of people.

In the U.S. you can be failing to make enough money to make ends meet, yet still pay / owe a lot of tax. The tax code also heavily disincentivizes working, including taxing activities that don’t inherently place any burden on others (mainly, working), while allowing behaviors that consume resources and/or impose on others to go un-taxed. For example, wages, salary, self-employment income, and contracting income are taxed with a payroll tax of about 15% (between your and employer’s share) with no deductions or exemptions, and the tax is not progressive. Rather, it’s regressive -- it’s only levied on the first $100K or so of income. Investment income and other passive income is not subject to this tax at all.

It’s ridiculous. And I rarely hear people talking about or objecting to this. I haven’t seen a serious proposal to eliminate this tax or even fix its regressive nature, from anyone of political power nor have I ever read an editoral calling for this, in a prominent publication.

The U.S. government also has a lot of waste. I drive on the local interstate, there’s this GIANT welcome center a few miles up and it has one of the largest restrooms I’ve ever seen...two giant sets of restrooms...nearly empty. A simple restroom with 3 stalls would suffice, I’ve never seen more than a couple people in the restroom at once, even at busy times of day. Government money was used to build this center...and not funnelled towards other, more important things. Often, contractors are making huge profits off these projects too. There’s a small town in Ohio with a population of a couple thousand with a giant bypass around it. There’s an interstate highway in Pennsylvania that is probably entirely unnecessary. We probably waste a ton of spending in the military too, I’ve heard stories of utterly ridiculous things from people who served. And then there’s the crazy high salary and benefit packages we pay people in U.S. congress, more than most Americans will ever make.

Yeah. It’s a little more complicated than this German person’s answer makes it out to be.

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ericfruits · 6 years ago

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Overhaul tax for the 21st century

IF YOU are a high earner in a rich country and you lack a good accountant, you probably spend about half the year working for the state. If you are an average earner, not even an accountant can spare you taxes on your payroll and spending.

Most of the fuss about taxation is over how much the government takes and how often it is wasted. Too little is about how taxes are raised. Today’s tax systems are not only marred by the bewildering complexity and loopholes that have always afflicted taxation; they are also outdated. That makes them less efficient, more unfair and more likely to conflict with a government’s priorities. The world needs to remake tax systems so that they are fit for the 21st century.

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Let me tell you how it will be

Jean-Baptiste Colbert, the finance minister of Louis XIV of France, famously compared the art of raising tax to “plucking the goose so as to obtain the largest possible amount of feathers with the smallest possible amount of hissing”. Tax systems vary from one economy to another—Europe imposes value-added taxes, America does not. Yet in most countries three flaws show how the art of plucking has failed.

One is missed opportunities. Expensive housing, often the result of a shortage of land, has yielded windfall gains to homeowners in big, global cities. House prices there are 34% higher, on average, than five years ago, freezing young people out of home ownership (see article). Windfall gains should be an obvious source of revenue, yet property taxes have stayed roughly constant at 6% of government revenues in rich countries, the same as before the boom.

Another flaw is that tax sometimes works against other priorities. Policymakers in the rich world worry about growing inequality, which is at its highest level in half a century. In the OECD, a group of mostly developed countries, the richest 10% of the population earn, on average, nine times more than the poorest 10%. Yet over this period, most economies (though not America’s) have shifted the composition of labour taxation slightly toward regressive payroll and social-security levies and away from progressive income taxes.

Tax systems have also failed to adapt to technological change. The rising importance of intellectual property means that it is almost impossible to pin down where a multinational really makes money. Tech giants like Apple and Amazon stash their intangible capital in havens such as Ireland, and pay too little tax elsewhere. This month it emerged that Amazon’s British subsidiary paid £1.7m ($2.2m) in tax last year, on profits of £72m and revenues of £11.4bn. By one recent estimate, close to 40% of multinational profits are shifted to low-tax countries each year.

The “solutions” to such problems often only exacerbate the daunting complexity of today’s tax code—and, if lobbies have their way, add extra loopholes too. The European Union wants to determine when firms have a “virtual nexus” in a state, and will then allocate profits across countries using a complicated formula. America’s supposedly simplifying recent tax reform included stunningly complex new rules for multinationals. International efforts to co-operate to prevent profit-shifting have made progress. But they are hamstrung by disagreements over how to treat technology firms and competition for investment in a world where capital crosses borders.

Fundamental tax reform can boost growth and make societies fairer—whatever the share of GDP a government takes in tax. Fortunately, the principles according to which rich countries can design a good system are clear: taxes should target rents, preserve incentives and be hard to avoid.

All countries should tax both property and inheritance more. These taxes are unpopular but mostly efficient. In a world where property ownership brings windfalls that persist across generations, such taxes are desirable. A conservative first step would be to roll back recent cuts to inheritance tax. A more radical approach would be to introduce a land-value tax, the most efficient of all property taxes and one with a long liberal heritage (see Briefing).

Economists are sceptical of taxing other forms of capital, for the good reason that it discourages investment. But capital’s share of rich-world GDP has risen by four percentage points since 1975, transferring nearly $2trn of annual global income out of paycheques and into investors’ pockets. Given that competition is declining in many markets, this suggests that businesses are increasingly able to extract rents from the economy. Taxes on capital can target those rents without disturbing incentives so long as they include carve-outs for investment.

To stop companies shifting profits, governments should switch their focus from firms to investors. Profits ultimately flow to shareholders as dividends and buy-backs. But few people are likely to emigrate to avoid taxes on their investment income—Apple can move its intellectual property to Ireland, but it cannot put its shareholders there. Corporate tax should be a backstop, to ensure that investors who do not pay taxes themselves, such as foreigners and universities, still make some contribution. Full investment expensing should be standard; deductions for debt interest, which incentivise risky leverage for no good reason, should be scrapped.

As the labour market continues to polarise between high earners and everyone else, income taxes should be low or negative for the lowest earners. That means getting rid of regressive payroll taxes which, in North America, could be replaced with underused taxes on consumption. Though these are also regressive, they are much more efficient.

One for you, nineteen for me

Adam Smith said that taxes should be efficient, certain, convenient and fair. Against that standard, today’s tax policies are unforgivably cack-handed. Politicians rarely consider the purpose and scope of taxation. When they do change tax codes, they clumsily bolt on new levies and snap off old ones, all in a rush for good headlines. Rewriting the codes means winning over sceptical voters and defying rapacious special interests. It is hard work. But the prize is well worth the fight.

This article appeared in the Leaders section of the print edition under the headline "Stuck in the past"

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leftpress · 8 years ago

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The Irish water insurgency: no more blood from these stones

After the government tried to privatize and raise the costs of water, the Irish drew a line: “they are not going to draw any more blood from those stones.”

February 6, 2017 | Andrea Muehlebach

bh, the “Great Island” located just off Ireland’s Southern Coast, can be reached only via Belvelly Bridge, which was of strategic importance in 2014 when it became central to some of the most coordinated mass mobilizations that the island had seen in a long time.

When it became clear that the semi-state water company Irish Water was going to install household water meters in Cobh as it had done elsewhere already — meaning that Irish Water would come in with trucks, dig up sidewalks, hook up individual households with water meters and begin charging people for water — people revolted.

Standing guard on the mainland side of Belvelly Bridge, activists would text others standing guard at the other end of the bridge, alerting them to the approaching trucks and tracking the direction the trucks were taking. Many of the organizers were women, the elderly, and the unemployed — those who were at home during the day.

By the time the trucks arrived at their locations, people were often already waiting for them in groups, blocking the trucks’ entry into the estates, or crowding around them and imprisoning the workers. People simply would not budge. Women, men and children locked arms and sang. Blockages lasted for hours, sometimes even days, which meant getting organized into shifts and holding nightly meetings about everything from what to wear to who would collect the children from school and make food.

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People set up tents and the estates started to compete with each other about who could make the best stews and sandwiches to feed the protesters. Striking red and white posters were stuck in windows that said “No Consent. No Contract. No to Water Privatization. No Water Meters Here.” As one water activist put it to me:

People had each others’ backs. Many of the working-class estates, not just in Cobh but all over the country, were in complete lockdown. We simply wouldn’t let Irish Water in. Communities, so alienated from each other and broken by poverty, evictions, unemployment, came together. It was magic.

MASS MOBILIZATIONS AGAINST AUSTERITY

Cobh is just one example of the sustained mass mobilizations that austerity-ridden Ireland saw in the years 2014 and 2015. The installation of water meters and the prospect of Irish households being saddled with yet another bill led to intense and still ongoing protests, with the people of Ireland telling politicians and Irish Water that they could just “Stick Their Water Meters Up Their Arse.”

Hundreds of mainly working-class communities engaged in coordinated acts of mass civil disobedience, blocking trucks and demonstrating in several enormous national demonstrations. The water insurgency gained momentum so quickly that Irish Water workers routinely came flanked with police protection to fend off and sometimes also beat the crowds that sat, lay, or stood, often for hours, on sidewalks and streets as they blocked the meters. Elderly ladies brought out folding chairs and sipped their cups of tea as they sat on sidewalks, while younger men blocked the holes the company had already dug.

Activists argued that water had up to that point been considered a public good for which they paid through general progressive taxation, meaning that low-paid workers, the unemployed and the most vulnerable would not pay as much as the very wealthy. Adding an additional bill to what people were already paying would mean that they would pay for water twice.

Activists also tore into the ecological arguments made by Irish Water. In fact, metering would not automatically lead to the conservation of water since the Irish use on average 15-25 percent less water than the U.K., where water charges have existed since 1989. The water charges were thus by far the most contentious austerity measure imposed on Irish citizens since Ireland’s 2008 economic crash.

After a 70 billion bank bailout, which has been called “the costliest banking crisis in advanced economies since at least the Great Depression,” paid for with taxpayers’ money and resulting in large public-sector salary cuts, the reduction of welfare and social spending, and an increase of regressive taxes and user fees, the water charges were what the people called the straw that broke the camel’s back — a moment where they shouted: “You are not getting any more blood from these stones.”

THE PRIVATIZATION OF WATER

Irish Water was founded in 2013 in response to Ireland’s massive fiscal crisis following the bank bailout. The creation of this nominally public but in fact public private partnership (PPP) or, as it is called in Ireland, a Design-Build-Operate (DBO), is part of a global trend where austerity-starved governments seek to invest in ailing infrastructure by accessing loans directly through global investors, including banks, pension fund managers and elite private equity firms.

The design of this state-corporate form allows for new debt to be moved off the public balance sheet and for government spending to be deferred because payments are made somewhere down the road when the project is completed. As one Canadian report put it, governments “are essentially ‘renting money’ that they could borrow more cheaply on their own because it’s politically expedient to defer expenses and avoid debt.”

Research in Canada has further shown that PPPs in fact cost an average of 16 percent more than conventional public provisioning, not only because private borrowers need to make a profit but also because they usually pay higher interest rates than governments do. Transaction costs for lawyers and consultants also add to the final bill, as the Irish know all too well. The cost of these expensive projects are, in Ireland as elsewhere, downloaded onto “end-users” — the very people who can afford it the least.

Money for water infrastructure investment is easy to come by these days. A huge global liquidity bubble is intersecting with the growing anticipation that water is rapidly emerging as one of the most lucrative commodities on the planet. Public water works like Irish Water are thus prime targets for the “new water barons” who have rushed to invest in water not just because it is so lucrative, but also because water is considered to be a low-risk investment. As a non-optional service basic to human life, water is, as one London-based analyst at HSBC Securities put it, “inflation-proof and there’s no threat to earnings, really. It’s very stable and you can sell it anytime you want.”

This intimate relationship that has emerged “between the flows of water in Irish taps and the flows of money in global financial markets” has therefore meant that unmetered water needs to be transformed into a “predictable, well-performing asset circulating in secondary financial markets.” Whatever flowed out of taps had to be rendered countable and measurable so that it can be made subject to speculation. Hence the installation of water meters, and hence the ire that the Irish reserved for this small, seemingly innocuous technical device.

Until today, one might be lucky enough to run into a water meter fairy — clandestine guerrilla plumbers who have in the last years un-installed hundreds of meters across the country; meters that are symbols of plunder but also objects to be laughed at — photographed in unlikely places such as beaches and posted on Facebook or exhibited publicly in little front gardens.

Local protests against water meters in 2014 spread like wildfire from places like Dublin, Cork, Cobh, Ballyphehane and Bray and were buoyed by already existing anti-austerity groups such as Dublin Says No. First arrests were made of citizens who had refused access to Irish water workers by blocking off roads with their cars.

By late 2014, Right2Water was founded, a national umbrella organization supported by trade unions, left-leaning political parties and a variety of community groups and activists. What followed were several riveting national days of action that saw tens of thousands of people demonstrate in the streets of Dublin — the last of which was held on September 17, 2016, and which drew an estimated crowd of 80,000.

To this day, many Irish working-class estates are barely metered. Others only half, with small groups of activists such as one in Ballyphehane still patrolling the streets in bright yellow reflecting jackets that signal their continued vigilance. Two-thirds of the members of parliament who were elected into office in March 2016 stood on an anti-water charges platform. Over half of these politicians are not paying their water charges and insist, instead, on general progressive taxation.

The water charges have since been suspended for nine months, and an Independent Water Commission set up by the Irish government recently concluded that water charges should be scrapped altogether, that water should be paid for through general taxation, and that the Irish overwhelmingly insist on water being a public good — publicly owned and managed. It’s a massive victory for Irish water protesters that the government-appointed commission confirmed in almost every single respect what they had been saying all along.

SOCIAL CONTRACT VS. HOUSEHOLD CONTRACTUALIZATION

Since the 2008 global financial crisis, middle and especially lower-income households have suffered increasingly under what some have called household contractualization, meaning that they have increasingly had to enter contracts with private or partially privatized corporations and therefore pay more for the basic social reproduction of the household (gas, electric, water).

These household payments on utilities such as energy, water and phones (but also on insurance, rent, healthcare and loans for housing, education and vehicles) are increasingly bundled up and traded on global markets. They have thus become central to an intensifying frontier of capital accumulation and “anchors” to which the global financial system is attached.

The financialization of household assets is felt particularly strongly in countries like Ireland, which was already saddled with the bank bailout that came with a whole plethora of new taxes and charges for citizens. There had therefore already been a number of previous rumblings in Ireland in 2012 about the inability of low-income households to pay a new household charge that was supposed to be an interim measure for future property taxes, a measure Dublin had agreed to under its European Union and International Monetary Fund bailout program.

But it was the looming water charges where the Irish drew the line. By refusing the contract and insisting on paying for water through general progressive taxation, the Irish did something incredibly radical for our times: they refused the very mechanism — the contract and bill — through which households are made subject to the logics of financialization. “No Consent. No Contract. No to Water Privatization. No Water Meters Here,” as the posters stuck to windows read.

The people of Ireland instead insisted on a very different contract altogether — a social contract where the state would commit to just, progressive taxation. This was a demand for the state to turn away from its current model of dealing with crippling sovereign debt through the short-sighted sell-off of its vital services and to instead re-think the collective fiscal arrangement and its futures: Who pays what kinds of taxes? And what what happens with these taxes?

This was not a “nostalgic vision” of the state-managed model of the past, but a demand for novel and progressive forms of public financing. It is no wonder that the Irish water insurgency has repeatedly been compared to the famous water wars in Cochabamba, Bolivia. The Irish drew a line and were ready to put their bodies on that very line. Irish Water is not going to draw any more blood from those stones.

Andrea Muehlebach is a Professor of Anthropology at the University of Toronto, currently conducting research on water struggles in Europe.

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whittlebaggett8 · 6 years ago

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What Sri Lanka’s 2019 Budget Tells Us About Its Economic Health

Next 1 of the most extraordinary political crises in the modern background of South Asia, Sri Lanka’s govt funds for 2019 was authorized by the vast majority of the parliament on March 12. The 2019 spending budget was supposed to be introduced to the parliament in November 2018, but President Maithripala Sirisena’s surprising (and later overturned) determination to change primary ministers in October 2018 pushed again the funds. Later, a Vote of Account was handed by the parliament to present finances until eventually the funds could be introduced in March.

The political turmoil, which surrounded the place with terrific uncertainty, took a toll on the economic system. With the increasing political instability in light-weight of the tumble 2018 constitutional crisis, a few businesses downgraded Sri Lanka’s credit history ranking.

On major of that, economic expansion in the fourth quarter of 2018 dipped down to 1.8 percent from 3.2 percent reported in 2017. Even though the entire reduction of quarterly growth can not be attributed to the political disaster, it is fairly crystal clear that a incredibly sizeable part of the slowdown was a final result of the political instability. This resulted in the once-a-year expansion price rising just somewhat, reaching 3.2 % in 2018 from 3.1 % in 2017. Financial progress continues to be stagnant. This 12 months anticipated development is 3.5 percent, soaring to 4. % in 2020. Amid this outlook the governing administration will search for to carry down Sri Lanka’s price range deficit to 4.4 of GDP in 2019 and 3.5 per cent in 2020 to fulfill pledges made the IMF when the country acquired economical assistance to solve a equilibrium of payment crisis in 2015.

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Funds Worries

The 2019 funds was prepared amid this complicated economic ecosystem, and displays a selection of sometimes conflicting targets. Very first, the governing administration feels the force to enhance the country’s growth fee, which has been small for the final few a long time. 2nd, and related, the governing administration need to attempt to enhance its acceptance in gentle of the presidential and parliamentary elections due in 2020. In addition, the governing administration is compelled to decrease macreconomic instability by minimizing the funds deficit increase tax revenue and the tax foundation and rationalize expenditures as a component of its guarantees to the IMF. On major of all that, the authorities is supposed to handle massive financial debt repayments because of in 2019 and 2020.

Details from Sri Lanka funds estimates and the Section of Treasury.

In accordance to the price range estimates, the Sri Lankan governing administration expects to cut down the spending plan deficit to 4.4 percent of GDP in 2019 from the 5.3 percent ratio recorded in 2018 and subsequently achieve a budget deficit of 3.5 percent of GDP in 2020, in line with the agreements with the IMF. On the other hand, as formidable the targets are, the latest knowledge implies that conference budget deficit targets are very tough a lot more usually than not the federal government has unsuccessful to achieve this sort of aims. In 2018, the budget deficit concentrate on was 4.8 p.c of GDP but Sri Lanka ended up recording a deficit of 5.3 p.c, largely because of to a failure to raise tax income up to the focused stage.

The consistent failure of the governing administration to meet budget deficit targets is mainly because of to troubles pertaining to tax revenue. In excess of the very last two decades or so, Sri Lanka’s tax income-to-GDP ratio has develop into among the lowest in the entire world. In 2014, the tax-to-GDP ratio dipped down to 10.1 per cent considering that then, a lot of initiatives had been put towards increasing tax earnings. Many thanks to that target, tax profits greater to 12.6 % of GDP in 2017. Even so, the tax profits-to-GDP ratio noticed an additional slight decrease in 2018 as it fell to 11.9 per cent, mostly owing to the reduction of tax revenue from external trade. However, the govt is optimistic that it can increase tax profits to 13.3 percent of GDP in 2019 and assembly the budget deficit concentrate on of 4.4 per cent would mostly depend on achieving that. Although it may appear an extremely optimistic concentrate on, the authorities may be ready to pull it off if the just lately introduced Inland Profits Act final results in a sizeable increase of income tax collection.

Information from the Sri Lankan Office of Treasury and the Environment Financial institution.

New Profits Tax Rules

To stem the steady drop of the tax earnings-to-GDP ratio in Sri Lanka, the authorities released a new Inland Revenue Act in 2017 with the major aims of increasing the cash flow tax web, simplifying the tax system, and going toward a far more progressive taxation program. The Act came into influence in April 2018 and increases the basic company tax price to 28 p.c in addition to the rationalization of tax exemptions delivered for the two company cash flow and work cash flow. Due to this, it is truthful to think that the revenue created through revenue tax will raise considerably.

However, Sri Lanka’s taxation program is incredibly regressive, like in most establishing international locations, and only about 20 % of the tax income is created by means of money tax. Pretty much 80 per cent of the govt income is produced by taxes on goods and companies these kinds of value-additional tax, tailor made responsibilities, and excise duties. This usually means that a substantial portion of the tax burden is borne by the prevalent people today, and those people who are wealthy pay a fairly reduce share of their money as taxes. The weighty reliance on taxes on exterior trade is mainly owing to the substantial informal sector of the Sri Lankan economic climate and a solid field lobbying to hold up high concentrations of protectionism by imposing taxes on imports.

Significantly less than 20 percent of the complete tax profits of Sri Lanka is lifted as a result of profits taxes. Data from 2019 funds estimates.

Progressive ways these as the introduction of a new Inland Revenue Act and the adoption of new engineering by the Inland Profits Office might assistance to get over the difficulty of taxing the casual sector and improve the tax base, but it will take some serious political effort to reduce taxes on the exterior sector devoid of becoming influenced by domestic field lobbying.

Sri Lanka’s Credit card debt Disaster

Having said that, a price range is about not only balancing taxes, investing, and development. In Sri Lanka, general public debt repayments have come to be the major ingredient of govt investing and the sum keeps having bigger and even larger. In 2017, governing administration expending on wellness and instruction was 1.5 percent and 1.9 percent of GDP, respectively, though govt spending on personal debt repayments was 4.8 percent.

Data from the Central Financial institution of Sri Lanka and Planet Bank.

The sizeable rise of the personal debt repayments is mostly owing to the enhance of international industrial borrowing from worldwide cash marketplaces. Sri Lanka entered global cash marketplaces in 2007 with its initially global sovereign bond concern worthy of $500 million. Due to the fact then the place has issued intercontinental sovereign bonds much more than 10 occasions. This has resulted in not only a substantial increase of personal debt reimbursement, also enhanced Sri Lanka’s vulnerability to struggling with stability of payment crises.

The 2019 price range is quite essential from a financial debt management stage of perspective, mainly owing to the huge debt repayments commencing from 2019 thanks to the maturity of sovereign bonds. Debt repayments amounting to $5 billion will appear owing among 2019-2022 as bonds issued about a 10 years back experienced. $1.5 billion in sovereign bonds will experienced this calendar year a different $1 billion each and every in 2020 and 2021, and an more $1.5 billion in 2022.

However, Sri Lanka was ready to fork out the financial debt installments due in January 2019 thanks to sovereign bond maturity without the need of substantially inconvenience, mostly thanks to the superior techniques carried out by the Central Bank in foreign reserve management in excess of the very last calendar year. Inspite of the significant fall of the exchange amount all through 2018, Central Lender intervention to the trade price market was incredibly constrained. On best of that, the country has been receiving economical aid as for every an arrangement concerning Sri Lanka and the IMF to acquire an Prolonged Fund Facility (EFF). With these guidelines, the nation was in a position to retain a sufficient stage of overseas reserves and correctly settled the sovereign bonds, worth $1 billion, that matured in January.

The 2019 spending budget has to handle these massive financial debt repayments even when cutting down the budget deficit and lifting up expansion. Large financial debt repayments mean that the authorities has to cut other expenditures or raise tax revenues considerably to reach the budget deficit target of 4.4 % of GDP in 2019.

The government has performed effectively in phrases of fiscal consolidation in the past couple many years. Sri Lanka was ready to realize a main surplus in its government funds of .6 % of GDP in 2018. On the other hand, progress was continue to stagnant and the government will require to raise it and showcase some growth, given the two large elections because of following yr. By this time in 2020, we will know how politically and economically profitable this year’s funds was.

Umesh Moramudali served as a journalist and a columnist in a countrywide newspaper in Sri Lanka for five a long time prior to pursuing a Master’s of Economics at the University of Warwick.

The post What Sri Lanka’s 2019 Budget Tells Us About Its Economic Health appeared first on Defence Online.

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goarticletec-blog · 6 years ago

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Paris riots show failure of Macron carbon tax with public

New Post has been published on https://www.articletec.com/paris-riots-show-failure-of-macron-carbon-tax-with-public/

Paris riots show failure of Macron carbon tax with public

The turmoil sparked by French President Emmanuel Macron’s proposal to boost gas taxes is just the latest example of an emerging political truism.

While economists hail them as the best, most effective way to limit greenhouse gas emissions, carbon taxes are proving a tough sell for politicians who have to work and win elections in the real world.

The climbdown by Mr. Macron’s government — delaying for at least six months planned gas tax hikes in the face of the worst Paris street riots in 50 years — is just the latest retreat for green-oriented governments in North America, Asia and Europe. The long-term benefits of lower carbon emissions tend to get swamped in the polls by the immediate pain of higher costs at the gas station and on the home heating bills.

President Trump weighed in on Twitter on Tuesday evening, saying the Paris demonstrators and the Macron government have come around to his way of thinking on the dubious wisdom of higher fuel taxes as a way to fight climate change.

The global climate deal signed in Paris — and rejected last year by Mr. Trump — “is fatally flawed because it raises the price of energy for responsible countries while whitewashing some of the worst polluters …,” Mr. Trump tweeted. “American taxpayers — and American workers — shouldn’t pay to clean up others countries’ pollution.”

The debate presents a classic clash between theoretical elegance and political pragmatism.

Led by Paul Romer, who won the 2018 Nobel Economics Prize for his work on integrating climate change into macroeconomic analysis, top economists argue that the argument is straightforward: The quickest, most efficient way to reduce carbon production is to tax it and force the market to find cheaper, cleaner alternatives.

“Tax the usage of fuels that directly or indirectly release greenhouse gases,” said Mr. Romer, a former chief economist with the World Bank. “People will see that there’s a big profit to be made from figuring out ways to supply energy where they can do it without incurring the tax.

“The problem is not knowing what to do,” Mr. Romer recently told a Canadian radio station. “The problem is getting a consensus to act.”

Critics are everywhere, even in places as unexpected as leading environmental groups, including the Sierra Club, which has objected to carbon tax proposals that return some of the proceeds to taxpayers. It argues that the money should be earmarked for clean energy projects.

Politicians face the largest stumbling blocks in avoiding the fears of everyday citizens that new taxes will crush them, policymakers say. Higher gas and home heating taxes also tend to fall on rural and working-class voters who rely on cars more than their urban compatriots. That argument factored heavily in France’s “yellow vest” protests against Mr. Macron’s proposed diesel tax hike, which exploded into France’s largest riots in decades.

“It’s pressure that’s been building for some time, not just in France but abroad,” said H. Sterling Burnett, senior fellow at the free-market Heartland Institute.

He echoed Mr. Trump’s suggestion that the Macron government is proving to be out of touch with the French people.

“Nothing reveals the disconnect between ordinary voters and an aloof political class more than carbon taxation,” the conservative Wall Street Journal wrote in an editorial this week.

Some carbon tax skeptics are so convinced of the idea’s political toxicity that they are pre-emptively moving to strike it down.

House Majority Whip Steve Scalise, Louisiana Republican, and Rep. David B. McKinley, West Virginia Republican, last summer proposed a nonbinding resolution to condemn all carbon taxes. It passed by a 229-180 vote.

“I think the case is very clear by anybody who’s looked objectively at what a carbon tax would do to the economy,” Mr. Scalise argued on the floor of the House at the time. “It would be devastating to our manufacturing base, it would kill jobs, and I think most devastating, it would rise in increased cost for families all across this country.”

The world reacts

Once seen by governments as a possible way to spur the development of cleaner energy sources while filling their coffers, carbon taxes are increasingly the source of short-term social combustion.

Last week, inspired by the French “yellow vests,” demonstrators in Belgium took to the street in a similar movement.

Prime Minister Justin Trudeau’s plan to impose a federal carbon tax on Canadian provinces has also recently been greeted by significant political headwinds, and questions of whether Ottawa had the authority to levy such a tax in the first place.

“Governments around the world, including Canada’s, sold us on the idea the magic beans of carbon taxes would save our planet from climate change, while we made trillions of dollars doing it,” Toronto Sun columnist Lorrie Goldstein wrote this week, “except it hasn’t worked out that way.”

Perhaps the most striking cautionary tale came in Australia, where the Labor government introduced a carbon pricing scheme in July 2012. Resistance to the idea was so strong that it was repealed just over two years later.

In a subsequent analysis, the Center for Public Impact wrote: “The government that introduced the policy failed to sell it, while its critics portrayed it as a burden that would hurt businesses and cost households. So even though public support — along with concerns for climate change — increased over time and the scheme was succeeding in reducing emissions, it failed to get the support it needed.”

Critics say the popular skepticism is amply justified.

“Gasoline taxes are one of the most regressive taxes a government can impose, because everyone buying gas pays the same price regardless of income,” Merrill Matthews, resident scholar with the Institute for Policy Innovation, said Tuesday, noting the chaos and policy confusion in France.

Experiment in Washington

In the U.S., the political viability of carbon taxes has been put to the test — and found wanting — repeatedly in Washington state.

State voters there last month considered yet another ballot question proposing to place a carbon fee on fossil fuel emissions, the third such effort proposed for the state.

The proposal triggered the largest ballot measure spending spree in Washington state’s history and included high-profile endorsements from Microsoft co-founder Bill Gates, who donated $1 million to the campaign supporting the tax.

Supporters hoped to institute the first state-level carbon fee, which would have taken effect in 2020. All revenue generated was to be overseen by governor-appointed board as well as the state’s utilities.

But opponents also mobilized against the idea.

CNBC reported that the Western States Petroleum Association solicited $31.2 million from oil companies and business groups against the idea — a record amount for a Washington state ballot initiative, according to state records.

In the end, voters in the politically liberal state rejected the idea 57 percent to 43 percent.

In 2016, Washington state voters rejected a similar ballot initiative that proposed a carbon tax alongside a cut in the state sales tax in an effort to ease the financial bite on citizens. That ballot measure lost 59 percent to 41 percent.

Despite the historical record, green activists say they have not given up on the carbon tax idea. Democratic gains in Congress and in statehouses across the country have sparked renewed talk about the idea, according to Inside Climate News.

“At least seven state governments are poised at the brink of putting a price on climate-warming carbon emissions within the next year,” according to the publication. “Some are considering new carbon taxes or fees. Others are making plans to join regional carbon markets.”

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algeroth · 6 years ago

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#economy #economics #taxes #inequality

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sallysklar · 7 years ago

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Janresseger: Red States: Waking Up to Public Responsibility for Educating Children?

This is the first of two updates on this spring’s wave of walkouts by schoolteachers. Today’s post will examine the fiscal implications. Tomorrow’s will explore what the walkouts may mean about shifting attitudes across some of the Heartland’s Red-states.

In a fine piece for NPR’s All Things Considered, Cory Turner provides some context for the fiscal crisis beneath walkouts across a number of states: “How did we get here? When you put that question to people who study teacher pay, you’ll often hear something like this: ‘I have been saying, Why aren’t (teachers) in the streets? What took them so long?‘ says Sylvia Allegretto, a labor economist at the University of California, Berkeley. She’s compared teachers’ weekly wages to workers with similar levels of experience and education and says teachers consistently earn less.”

In a brief for the Economic Policy Institute, Allegretto’s bar graph displays the nationwide disparities in pay between schoolteachers and other college graduates—but it is a lot worse in some places than others. Oklahoma’s teachers have been making only 67 percent of the income of their college-educated peers in other fields. Arizona’s teachers (the lowest-paid) have been making 62.8 percent; West Virginia’s teachers 74.6 percent; and Kentucky’s teachers about 78.8 percent. Across the United States, teachers’ wages average 77 percent what others make with equivalent education, and in not one state do teachers’ salaries exceed what their peers are making.

Turner also quotes Bruce Baker, the school finance expert at Rutgers University: “‘Teachers in Arizona are actually at the bottom of the heap…. And teachers in Oklahoma are pretty near that’… He mentions Tennessee and Colorado as other states with a teacher wage gap. ‘What’s really so striking to me is that it’s had to get this bad. It was kind of like that slow boil over time.'”

Turner adds: “When you focus on teacher salaries, which make up the lion’s share of schools’ spending, data published by the Education Department show that, after adjusting for inflation, U.S. teachers earned less last year, on average, than they did back in 1990. In Oklahoma, teachers’ wages averaged $45,245 last year, down roughly $8,000 in the past decade. Over the same span, in Arizona, teachers’ wages are down roughly $5,000.”

Turner also addresses the myth of the gold-plated teacher pension: “(I)n many states, teachers don’t qualify for Social Security benefits, either. So they really depend on that pension.” However, new teachers usually have to teach in a school district for five years even to qualify for the pension system. Turner quotes Chad Aldeman, who edits a publication about teacher pension systems: “In the median state, about half of all new teachers won’t stick around long enough to qualify for any pension at all.” And while school districts must pay, on average, 17 cents on retirement costs for every dollar in teachers’ salaries, Aldeman explains: “Of that 17 cents, about five of it is actually going in benefits, and 12 cents of it is going to pay down unfunded pension obligations.”

One reason the massive walkouts have exerted so much pressure on legislatures is that huge salary disparities across state borders have fed teacher shortages in states paying less. Teachers in West Virginia have been leaving for Maryland and in Oklahoma for Texas. POLITICO’s Caitlin Emma quotesTulsa School Superintendent, Deborah Gist speaking from her cell phone as she marched with striking teachers from Tulsa to Oklahoma City. Gist compared the average teachers’ salary in Texas at $52,575 to the Oklahoma average of $45,245: “I’ve had superintendents in Texas thank us because they hired our teachers. It creates an extraordinarily unstable situation.” Emma adds: “The Sooner State has had to issue emergency certifications to thousands of people in recent years to staff classrooms, raising concerns about qualifications.”

What have teachers won so far through the mass walkouts? Though teachers have won raises and in some cases school funding boosts, legislators have not been willing to restore cuts to progressive income taxes or to bring back capital gains taxes on wealthy residents and corporations. Sadly, regressive sales, consumption and sin taxes have prevailed.

Last month West Virginia’s teachers achieved a five percent raise, after the state’s governor had previously offered only one percent. And the state will give the five percent raise to all state employees. It is still unclear where the money will come from as the Governor has promised not to increase taxes.

In Oklahoma, teachers also will get a significant raise, though not the kind of increase they’d hoped for to increase overall school funding. The NY Times‘ Dana Goldstein and Elizabeth Dias report: “In a deep-red state that has pursued tax and service cuts for years, teachers won a raise of about $6,000, depending on experience, while members of schools’ support staff will see a raise of $1,250… To fund the measures, as well as some limited new revenues for schools, the Republican-controlled Legislature and Gov. Mary Fallin instituted new or higher taxes on oil and gas production, tobacco, motor fuels, and online sales. The state will also allow ball and dice gambling, which we will be taxed.”

After days of striking, Kentucky’s teachers returned to their classrooms after the legislature passed a budget that increases funding for K-12 education and a tax plan to pay for the increase, but Governor Matt Bevin vetoed the spending plan and the taxes to pay for it. So, last Friday, Kentucky’s teachers closed school for an additional day and brought their enormous presence back to Frankfort. The legislature responded, according to the Associated Press report: “With the chants of hundreds of teachers ringing in their ears, Kentucky lawmakers have completed an override of Gov. Matt Bevin’s veto of a more than $480 million tax hike that helps pay for increases in public education spending.”

The Washington Post‘s Jeff Stein adds that Kentucky’s funding scheme, important as it is, is the definition of regressive: “The plan would flatten Kentucky’s corporate and personal income-tax rates, setting both at 5 percent. Currently, Kentucky’s corporate tax rates runs between 4 and 6 percent, while its income-tax rate ranges from 2 to 6 percent. The new flat rate of 5 percent for everyone means that small companies and Kentuckians with below-average incomes will face tax hikes, and higher earners will get tax cuts. The bill attempts to make up for those cuts by nearly doubling the cigarette tax and imposing sales taxes on 17 additional services, including landscaping, janitorial work, golf courses and pet grooming.”

Pressure from teachers’ walkouts in all these states and a #RedforEd movement threatening its own walkout in Arizona seems to have awakened Arizona’s Governor Doug Ducey, who announced a plan late last week to raise teachers’ salaries 20 percent by 2020. The Arizona Republic reported: “Gov. Doug Ducey on Thursday boosted his proposal for teacher raises next year to 9 percent, up from 1 percent he proposed in January, saying lawmakers would work through the weekend to figure out how to fund the plan. Coupled with 5 percent raises the following two years—and the 1 percent raise given last year—Ducey said his proposal would give teachers a ‘net pay increase’ of 20 percent by 2020.”

Columnist for Tucson’s Arizona Daily Star, Tim Steller warned, however, on Saturday that it’s too early to celebrate in Arizona: “Everybody was right that the governor’s announcement was hopeful news, but this is no time for teachers or the #RedForEd movement to declare victory and stash away their crimson shirts. The only thing that has gotten them this far is collective action and increasing pressure. They cornered the governor in an election year, and they shouldn’t let him out till they’ve got their raises and increased school funding in hand… Ducey’s dramatic announcement was a great relief, but it was just words. It was a proposal to use money of unclear origin to raise the pay for teachers but not other employees like counselors and teachers’ aides. It’s a good gesture, but so far nothing more.”

Meanwhile on Sunday, April 8th, legislators in Kansas—under pressure from the state’s supreme court which had, last October, set an April 30 deadline for compliance with its earlier court order to increase school funding—passed a $534 million increase in school funding over five years. The state’s funding for public schools had collapsed in recent years as a result of former Governor Sam Brownback’s failed experiment with tax cutting and supply side economics. However, after some hope early in April that the Legislature has likely appropriated enough money to meet the Kansas Supreme Court’s expectation, it turns out there was an $80 million flaw in the math behind the plan. The Associated Press‘s John Hanna reports: “The bill approved by lawmakers early Sunday was meant to phase in a $534 million increase over five years, and with the flaw, the figure is $454 million or perhaps a little less.” After a two week break, the Legislature will now return on April 26. There seems to be hope that the miscalculation will be fixed.

In these all-Red states across the Heartland, it is clear that a reckoning has begun. But so far there is neither clear agreement that paying taxes is a responsibility of citizens and businesses nor that taxation should be progressive with the heaviest responsibility falling on those who can best afford to support the public. At least, driven by the voices and actions of desperate schoolteachers—and in Kansas by a supreme court enforcing the state constitution—governors and legislators are having to face that their citizens seem suddenly to agree that there is a floor beneath which education services must not fall. And there seems to be an awareness that enough well qualified teachers are at the heart of what is necessary. That is a positive development.

elaine April 17, 2018

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takebackthedream · 7 years ago

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The "Center-Left" Had Its Chance; It's Time For Something New by Richard Eskow

The once-proud political project known as “centrism” is collapsing around the globe, despite increasingly desperate attempts by billionaire backers to revive it.

The center-right’s implosion can be seen in the weakened state of Theresa May’s Conservatives in Great Britain, the recent setback for Angela Merkel’s Christian Democrats, and the withering of the GOP’s Mitt Romney wing.

But what about the center-left, the “New Labour”/”New Democrat” phenomenon that once seemed to offer so much hope? Can it survive? More importantly, should it?

The Decline of the Center-Left

Political scientist Sheri Berman recently wrote an op-ed for the New York Times that made the case for Western Europe’s failing social democrats. “Across Europe, social democratic or center-left parties are in decline,” Professor Berman writes, adding:

“In elections this year in France and the Netherlands, the socialist and labor parties did so poorly that many question their future existence… Even if you don’t support the left, this should be cause for concern. Social democratic parties were crucial to rebuilding democracy in Western Europe after 1945. They remain essential to democracy on the Continent today.”

Professor Berman correctly diagnoses one aspect of what ails these parties, noting that center-left politicians like Britain’s Tony Blair and Germany’s Gerhard Schröder “celebrated the (free) market’s upsides while ignoring its downsides.”

It’s worth lingering for a moment on those downsides: Economic inequality continued to skyrocket under Blair in Great Britain and Schröder in Germany, and Bill Clinton in the United States. The global economy was gravely damaged by the financial crisis of 2008, as Professor Berman notes. but that near-catastrophe wasn’t caused by impersonal forces. It was the result of widespread banker fraud, made possible by the active collaboration of politicians from both parties.

The center-left rarely even chastised, much less prosecuted, bankers for their criminality in the runup to the economic crisis, whose devastation is still felt around the globe. Instead, it left them in charge of their institutions and in possession of their freedom and their ill-gotten gains.

When faced with the global economic disaster these bankers caused, Blair didn’t name names. Instead he said things like this: “Look upon this crisis not as an occasion to regress in policy or attitude of mind; but as a chance to renew, as an opportunity to open a new chapter in humanity’s progress to a better future for all.”

Fiscal Responsibility

The political program Professor Berman eulogizes didn’t just fail to “offer a fundamental critique of capitalism.” It provided capitalism’s worst excesses with ideological cover. Instead of hewing to well-understood professions of left-leaning values like “equality,” it offered cliches about “equality of opportunity” that were indistinguishable from those of its center-right opponents.

Worse, when confronted with the economic damage that bankers caused, the European center-left turned against its supposed constituency by bailing out the banks and imposing strict austerity measures on working people.

The U.K. Labour Party, like its European and American counterparts, became obsessed with proving its “fiscal responsibility” — so much so that it was considered a major gaffe when party leader Ed Miliband failed to mention the deficit in an address. “No one should doubt our seriousness about tackling the deficit,” he said by way of apology.

Democrats under Clinton and Obama shared the European center-left’s deficit obsession, but were forced to back away from it somewhat under political pressure. European social democrats stuck to the austerity program and lost even more support than Democrats did from their core voters.

Then there’s foreign policy. Blair misled his country into war in Iraq — a deception which most Britons still find literally unforgivable, according to a 2016 poll — while centrist Democrats largely voted to support it here in the United States. That hurt both parties. One study showed that Donald Trump, who cynically ran as an anti-war candidate, gained a statistically significant level of additional support from communities with high military casualties.

The study shows that, without those votes, the election might have gone the other way.

The Left Nobody Knows

Professor Berman’s characterization of left leaders like Bernie Sanders and Jeremy Corbyn and the movement they represent will be unrecognizable to anyone familiar with them.

Her characterization of them as “an anti-globalization far left,” without defining that label, repeats a canard that’s been articulated many times by figures like Blair and Clinton. In a 2009 speech, in the wake of the global financial crisis, Blair put it this way (in a speech that, oddly, recently disappeared from his foundation’s website):

“There is a myth that globalization is the result of a policy driven by Governments; and can be altered or even reversed by Governments. It isn’t. It is driven by people. Globalization is not just an economic fact. It is about the internet, its power to communicate, influence and shape a world whose frontiers are coming down. It’s about mass travel, migration, modern media. It is not simply an economic fact; it is in part an attitude of mind. It is where young people choose to be.”

Strip away the Soylent Green-esque language – “It’s people! Globalization is people!” — and this is nothing but airy-fairy gibberish. After all, who on the left is against migration, media, or some vaguely defined “attitude of mind”?

Barring an extraterrestrial electromagnetic pulse of unprecedented scale, the internet and modern media will carry on. The question Blair and his colleagues elide is this: The global trade deals they promoted have increased inequality, weakened labor rights, and ceded sovereign authority to an arbitration system that is heavily stacked in favor of the enormously wealthy.

People aren’t against globalization as Blair defines it. They’re against trade deals that hurt them economically in order to benefit powerful interests. The “globalization” the left opposes is something altogether different: the domination of multilateral decision-making by powerful financial interests. That’s worth opposing.

Practical Populism

Berman continues says the parties of the newly-risen left “generally offer an impractical mishmash of attacks on the wealthy, protectionism, increased welfare spending and high taxes.” Impractical? Those “attacks on the wealthy” and “high taxes” propose taxation rates that fall well below 1950s and 1960s-era levels.

Their “protectionism” would replace bad trade deals with better ones. These leaders are, if anything, overly conciliatory toward the “deficit” crowd, because they insist on offering “pay-fors” for their increased welfare spending.

“These policies may appeal to the angry and frustrated,” Berman writes, “but they turn off voters looking for viable policy and a progressive, rather than utopian, view of the future.” Leaving aside the question of viability, I would like to see some numbers to support that claim. There is growing support for bigger government and an improved social safety net in the US, while Corbyn’s proposals poll very well in Britain.

As for “the angry and frustrated” — yes, voters are both of those things. Why shouldn’t they be? For too long, the center-left ignored their needs in order to pursue the notion that government could be run by insiders from both parties, through that quiet process of back-room negotiation known as “bipartisanship.” Kenan Malik, also writing in the New York Times, accurately characterized the British and European center-left of recent decades:

“With the dismantling of the postwar political system has gone, too, the old division between social democracy and conservatism. The new fault line — not just in British politics but throughout Europe — is between an elite, technocratic managerialism, governing through structures that often bypass democratic processes, and a growing mass of people who feel alienated and politically voiceless.”

The same could be said of its counterpart in the United States. The consensus rule of political insiders across the globe, from center-left to center-right, has not responded to voters’ needs or wishes. As a result, it is falling. That’s not tragedy; it’s democracy. Europe’s center-left became complacent and complicit: complacent in its power, and complicit in its relationship to corporate power.

Professor Berman worries that, without, “populism will flourish and democracy will decay.” But the left’s populism is answering the unmet needs of people in Western Europe and the United States. That’s not decay; it’s progress.

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takahashicleaning · 8 years ago

Text

ベーシックインカムは、労働市場に対する破壊的イノベーションということ？2017（人間の限界を遥かに超えることが前提条件）

（個人的なアイデア）

As a kind of experimental thing to improve the economy when the reflation policy proposed by Ben Bernanke who also served as chairman of the Federal Reserve did not work at all as one policy of deflation deflation

デフレ脱却の政策の一つとして、FRB議長も勤めたベン・バーナンキが提案しているリフレーション政策が全く効かなくなった時の景気をよくするための一種の実験的なこととして

We propose to do 'helicopter money-like' policies several times.

「ヘリコプターマネー的な」政策を数度行うことを提案しています。

The "helicopter money-like" policy includes "income tax increase tax (income tax increase to income taxable income over 100 million yen (individual, corporation)" "deferred consumption tax increase" "consumption tax reduced from 8% to 5% (or 3 %) "

「ヘリコプターマネー的な」政策には、「所得１億円以上の裕福層への所得税増税（個人、法人）」「消費増税の繰り延べ」「消費税８％から５％への減税（あるいは、３％）」

"There is a theoretical and massive fiscal stimulation by Professor Sims US Princeton University and strengthening and continuing monetary easing done at the same time", and it is a point to implement all at the same time, including basic income.

「シムズ米プリンストン大学教授の言う理論的で大規模な財政出動と同時に行う金融緩和の強化、継続」があり、ベーシックインカムも含めて、すべて同時に実施することがポイントです。

As a prerequisite, we will use financial engineering in the artificial intelligence era with fluctuating exchange rate system as well as a long deflationary situation of more than a decade, zero interest rate policy, quantitative easing also come down and minus interest rates are introduced.

前提条件として、変動相場制で人工知能時代の金融工学を駆使するも十数年もの長いデフレ状態で、ゼロ金利政策、量的緩和も出尽くし、マイナス金利も導入してからです。

As the unemployment rate improves, it approaches the natural unemployment rate, even if it gets fully employed, the gap widens and the wage does not rise.

失業率の改善で自然失業率に近づき、完全雇用状態になっても、格差が拡大し、賃金が上昇しない場合です。

As another example, father of economics. Adams Miss also evaluates "helicopter money" in "Wealth of Nations" (fixed exchange rate system).

他の例として、経済学の父。アダムスミスも「国富論」で「ヘリコプターマネー」を評価しています（固定相場制）。

In other words, "helicopter money" in the floating exchange rate system is not implemented on a large scale by anyone in the world. "Friedman's negative income tax" is also said.

つまり、変動相場制での「ヘリコプターマネー」は世界の誰も大規模に実施していない状態です。「フリードマンの負の所得税」とも言われています。

Basic income is like distributing food distribution after the war in the form of money! The possibility of becoming consumed is great.

ベーシックインカムは、戦後の食糧配給を貨幣の形で配給するようなもの！消費するようになる可能性は大です。

Introduced into the current social system at the same time as the "helicopter money-like" policy, the age group where the deflation started in Japan.

「ヘリコプターマネー的な」政策と同時に現状の社会システムに導入し、対象を、日本でデフレの始まった年代層。

Currently starting from the 40s to 60s with an annual salary of less than 6 million yen as of 2017, if the policy goes well, expand the target to the younger generation in their thirties and 20s · · Eventually, to the baby

現在２０１７年時点の年収６００万円以下の４０代から６０代より開始し、政策がうまくいけば、対象を、３０代、２０代の若い世代に拡張・・・最終的には、赤ん坊まで

Is the world ’s currency supply amount reach the annual income of $ 60,000 per person, the lowest line of happiness?2017世界の通貨供給量は、幸福の最低ライン人間ひとりで年収６万ドルに到達しているのか？2017

Personally, basic income benefits from babies can be covered in conjunction with social security such as current education.

個人的には、赤ん坊からのベーシックインカム給付は、現状の教育などの社会保障との連動でまかなえる可能性がある。

Also, as an experience to embody "getting the hardships when young," even if you accumulate as basic income funds up to your 30s, you can accumulate your life experience and compete in the social system of the Internet age

また、「若い頃の苦労は買ってでもしろ！」を体現させる経験として、３０代までは、ベーシックインカム積立として積み立てておけば、人生経験を積み、インターネット時代の社会システム内で競争しても

Efforts may be effective as one of social security when the difference can not be filled (There is a merit that you can avoid the desperation phenomenon)

努力しても差が埋められない場合の社会保障の一つとして有効かも��れない（絶望現象を回避できるメリットがある）

It may be useful as a part of social security that fills the gap between pension payment, which is highly likely to increase the age of receiving salaries in the future.

今後、受給年齢が伸びる可能性の高い、年金支給までの間を埋める社会保障の一環としても有効かもしれません。

Basic income payment from 30 generations will be such that the annual salary of parent households is based on annual income of 6 million yen and the payment amount is maximized as the annual income decreases

３０代からの、ベーシックインカム支給は、親世帯の年収が年収６００万円を基準対象として、年収が低くなるほど支給金額を最大化していくようなシステムにする

why? The question of whether it is thirties is set for the following reasons.

なぜ？３０代なのかと言う疑問は、以下の理由から設定しています。

Since around 30 's is a "period of Saturn regression" in astrology, statistically test of life is tried, and this trend is stable in the forties. It is for opening.

３０代前後は、占星術で言うところの「土星回帰の時期」なので統計的に人生の試練が試されるため、そして、この傾��は４０代で安定。開眼するためです。

マイケル・サンデル：なぜ、株式市場に市民生活を託すべきではないのか？

If you tax evaded, exempt from sin or reduce or exempt from sin only when offering as funds of basic income in the afterward application, balance will be reduced and tax evasion will decrease?

脱税した人は、事後申請でベーシックインカムの原資として提供した場合のみ罪を免除、減免するようにすれば、バランスされて脱税は減少するかも？

Besides, it may be better to use the interest payment on the minus interest rate as a resource for basic income. Is it better enough to raise the negative rate rate?

他には、マイナス金利の利払い圧縮分もベーシックインカムの原資にすればいいかもしれない。マイナス金利率をあげるほど良い？

As a problem of internal retained taxes, it is pointed out that internal retained taxes after having paid corporate taxes will be double taxation. Although it exists in principle, it is effective for suppressing internal reserve if you think it well

内部留保課税の問題点として、よく法人税を支払った後の内部留保課税では、二重課税になるという指摘。一理あるが、よくよく考えてみると内部留保を抑制するためには有効で

You can also think that it is better to increase internal reserve tax to direct incentives in different directions.

インセンティブを異なる方向に向けるために内部留保課税を増やした方がよいと考えることもできる。

It is said that overseas relocation of large companies will be accelerated, but it will not be a problem even if Japanese companies accelerate the earnings of foreign companies, and where is it possible to expand freely globally?

大企業の海外移転も加速されるとも言われるが、外資を日本企業が稼ぐことを加速しても問題はないだろうし、自由にグローバルに展開できてどこが悪いのか？

Even people who do not like internal retained taxes are killed by guns even if they are moved abroad, or cause and response. Feedback is looped, the descendants are only burned in the fire of hell

内部留保課税を嫌がるような人間は例え海外移転しても銃で撃ち殺されるか因果応報。フィードバックされループし子々孫々地獄の業火で焼かれるだけだから

May be able to cultivate the next big company candidate from the new industry exceeding the human limit? From new industries that exceed the limit of human beings to listed companies at large enterprises will also increase and taxes may increase? It can be said that.

人間の限界を超える新産業から次期大企業候補を育成できるかも？人間の限界を超える新産業から大企業レベルの上場企業も増加し税金も増えるかも？ということも言える。

Better yet, it may be better to apply internal reserve tax as a source of basic income. Besides, tax can be imposed on the high retirement allowance of 100 million yen or more of the executive branch, the leading enterprise, the medium-sized enterprise, and it can be used as a resource of basic income

いっそのこと、ベーシックインカムの原資として内部留保課税を適用すればいいかもしれない。他には、行政府、一流企業、中堅企業の一億円以上の高額退職金に課税してベーシックインカムの原資にしてもいい

It is likely that the public will be inconvenienced by forcing the temporary benefit as basic income security by deducting the cost that restricted economic activity from the police budget because there is a high possibility that the National Police Agency National Police Agency National Police Agency will abuse authority What?

厳戒態勢名目で無理やり日本の警視庁警察庁は職権濫用する可能性が高いから経済活動を制限させたコストを警察予算から天引きさせてベーシックインカム保障として一時給付金支払えば国民も不便さを辛抱できるかも？

There is a great possibility that misdemeanor will also decrease. Although it is a small shop, since pressure is being applied from the police, it is a request to Prime Minister Abe who is also the head of the police.

軽犯罪も減少する可能性は大です。小さい店なのに警察から圧力がかかってるので警察の長でもある現在の安倍総理へのお願いです。

ヤニス・バルファキス：資本主義が民主主義を食い尽くす — 今こそ立ち上がろう？（サミュエルソン？）

Learning from the collapse of the Soviets is that it is impossible for low-income workers to gain power again like ancient Athens without creating new atrocities and waste, unless a miracle happens! (And before the appearance of the Internet)

ソビエト崩壊からの学びは、新たな残虐行為や無駄を生み出さすことなく、低所得労働者が古代アテネのように再び力を得るのは、奇跡が起こらないと無理だ！ということでした（しかも、インターネットの登場前）

But there is a solution. Lower the low-income workers. In capitalism, low wage workers are automated machines of artificial intelligence, android. I replaced it with a robot etc.

でも、解決策はあります。低所得労働者をなくせばいい。資本主義では、低賃金労働者を人工知能の自動化された機械、アンドロイド。ロボットなどで置き換えています。

The problem here is that as long as there are political and economic areas separately, no matter how much automation you advance, the two mountains will be even higher, the mountains of garbage will accumulate and the conflict of society will only deepen.

ここでの問題は、政治と経済の領域が別々に存在する限りは、どんなに自動化を進めても２つの山はさらに高くなり、ゴミの山は積み上がり社会の葛藤は深くなるのみです。

The world's first common digital currency with block chains. Also, it is necessary to rebuild the modern version with innovation far beyond the limits of human beings, helicopter money by block chains, negative interest rates, basic income, and human limitations.

ブロックチェーンによる世界初の共通のデジタル通貨。それに、ブロックチェーンによるヘリコプターマネー、マイナス金利、ベーシックインカム、人間の限界をはるかに超えたイノベーションによる現代版の再構築が必要です。

The difference between the Phillips curve from 2013 and the wage rise rate in the 1970s and 1980s is due to the policy of income doubling plan, so the latter goes up and the former is sluggish. Is there a solution to the wage increase rate still in the wage increase rate policy?

2013年からのフィリップス曲線と1970、1980年代の賃金上昇率の違いは所得倍増計画の政策があるから後者は上がり、前者は伸び悩む。賃金上昇率の解決策はやはり賃金上昇率政策にある？

The difference from the era of high economic growth is that the leading corporate monopoly company at the 2017 time reorganized by losing the large store laws abuses the superior position, so it is necessary to construct the large store law in the Internet age and redistribute it?

高度経済成長の時代と違いは、大店法が無くなることで再編した現在2017時点の一流企業独占企業が優越的地位の濫用をしてるため、インターネット時代の大店法構築、再分配が必要？

Current age of artificial intelligence. As other extended ideas such as MBS, REIT and ETF of effective monetary policy measures that began to be utilized after the financial crisis by the central bank, compensation other than options to raise taxes.

現在の人工知能時代。中央銀行による金融危機以降に活用し始めた有効な金融政策手段のMBS、REIT、ETFなどの他の拡張アイデアとして、賠償金をかける、税金アップ以外の選択肢。

In other words, central banks in each country actively purchase and forcibly buy industrial individual securities of platform companies that deflate goods other than the large public goods affecting low-income people who are currently de facto standards Support

つまり、いっそのこと現在デファクトスタンダードをとってる低所得者に影響大な公共財以外の財をデフレストリーム化させてるプラットフォーマー企業の産業個別の証券を各国の中央銀行が積極的に買取り、強制的に下支えして

Idea to stabilize price inflation by indirectly offsetting declines in prices by increasing the income of low-income earners by making profits on securities funded by basic income. Perhaps there is also the effect of increasing real GDP?

証券上の利益をベーシックインカムの原資にすることで低所得者の収入を増やし物価の下落を間接的に相殺させ物価を下支え安定化させるアイデア。もしかして、実質GDPも増加していく効果もあるかも？

In addition, central banks of neutral countries can improve redistribution function at basic income, as Plato says, it is possible to prevent the rise of populism which negatively falsifies dissatisfaction of the disparity which is the blind spot of ideal democratic politics maybe.

さらに、中立の各国の中央銀行がベーシックインカムで再分配機能を向上させることで、プラトンが言うように理想の民主政治の盲点である格差の不満を負に扇動していくポピュリズムの台頭を予防できるかもしれません。

In some ways, the information industry is also similar to credit markets.

情報産業はある意味、信用市場に似ているためもあります。

Do you eliminate current social security with introducing basic income protection? Such things are told. No, without losing, introduce basic income security introduction to the present social security and introduce it considering plusly.

ベーシックインカム保障導入で現在の社会保障をなくす？こういうことも言われている。否、無くさずに、現在の社会保障にベーシックインカム保障導入追加してプラス的に考慮して導入すればいい。

And Basic Income is the first full declaration of slavery released in human history that Lincoln could not have formed! Who can realize for the first time in the world? The competition of being an artificial intelligence era may also be important.

そして、ベーシックインカムは、リンカーン大統領も成し得なかった人類史上初の完全な奴隷解放宣言！世界で誰が初めて実現できるか？という競争も人工知能時代には重要なことかもしれない。

From the Millennium in 2000, in the Internet era and the artificial intelligence era, it can be said that the current amount of money has not kept up with the explosive increase of products, services and output of each country. The reliability of the currency is important, but is it possible that the balance with the price can not be measured and the distortion is becoming a factor of the deflationary spiral?

2000年のミレニアム以降、インターネット時代や人工知能時代では、各国の製品、サービス、全ての産出量の爆発的な増加に対して、現状、貨幣の量が追いついてないともいえる。通貨の信頼性は重要だが価格とのバランスが計測できずに歪んでることもデフレスパイラルの要因になってる可能性もある？

If happiness is aged by guaranteeing the annual income of 6 million yen on basic income to all citizens, political disorder cost by populism from dissatisfaction of low wages, cost of prevention of convergence cost and crime, cost of health and education. If you circulate money, there are too many returns that can achieve a further virtuous cycle.

ベーシックインカムで年収６００万円を全国民に保証することで幸福が熟成されるなら低賃金の不満からのポピュリズムによる政治の混乱コスト、収束コストや犯罪の予防、健康、教育にかかるコスト。マネーを循環させれば、あまりあるリターンさらなる好循��が達成することができる。

As a possibility, I think that the social system that helps human beings with an annual income of 6 million yen or less who is not blinded to greed is more natural. 可能性としては、強欲に目のくらんでない年収６００万円以下の人間を先に助ける社会システムの方が自然だと思うけど。

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tcifiscal · 5 years ago

Text

Virginia Supreme Court Provides Emergency Relief from Fines & Fees: Temporary Measures Underscore the Need for Additional Reforms

We all want to build a Virginia where everyone has the opportunity to thrive. Accomplishing this goal requires thoughtful policymaking and reforming laws that can perpetuate poverty, including court fines and fees. On March 16, the Virginia Supreme Court declared a Judicial Emergency, which created new powers and flexibilities to help the courts and the public navigate the challenges of COVID-19. The Judicial Emergency Orders, currently in effect through June 7, outline a variety of measures that protect public health and provide greater economic security during the pandemic. But of the many emergency steps taken, one has been largely overlooked: the temporary relief from court fines and fees.

The significance of this step is rooted not only in the economic turmoil caused by COVID-19, but also in the lessons of the Great Recession and its aftermath. Since 2008, many states have increased fines and fees, both in the civil and criminal context, including for minor offenses, in an attempt to fill budget shortfalls. Yet fines and fees operate as a kind of regressive tax: they place the heaviest burdens on low-income families and can create poverty traps, especially when an individual’s ability to pay is not considered. Furthermore, a 2017 report by the U.S. Commission on Civil Rights concluded that municipalities relying heavily on fines and fees for revenue often have a higher than average percentage of Black and Latinx residents, indicating that these policies can disproportionately harm communities of color.

Temporary Relief From Court Fines & Fees

In Virginia, fines and fees are generally set by law and court rules. As a general matter, “fines” are intended to serve as punishment and to deter future violations, whereas “fees” primarily exist to raise revenue and can often exceed the amount of the original fine. In fiscal year 2019, court clerks collected nearly $300 million and Commonwealth’s Attorneys collected over $63 million, which flowed to the state treasury or to localities, depending on the reason that fines and fees were imposed.

Once court debt is assessed, for those who cannot pay immediately or do not set up an installment payment plan, which can result in a $10 fee, interest begins to accrue after 40 days. If no payment has been received for more than 90 days after sentencing, the account becomes “delinquent,” at which point the amount owed is increased by 17%, and collection responsibilities shift to Commonwealth’s Attorneys. A Commonwealth’s Attorney can undertake collection in-house or delegate the responsibility to a private collection agency, a local governing body, a county or city treasurer, or the Virginia Department of Taxation. What can begin as a relatively modest fine for even a low-level offense can become a significant financial burden for low-income families.

The Court’s Declaration of Judicial Emergency, which gave it the authority to “suspend, toll, extend, or otherwise grant relief from deadlines,” brought these processes to a temporary halt. The Court has prevented any interest from accruing on court debt until after June 7, when the Judicial Emergency is currently set to expire. Moreover, any accounts that would have become delinquent in March or later have not been sent to collections. Unless the Judicial Emergency is extended, however, new delinquent accounts from March through June will be referred to collections on June 30. All courts have also been encouraged to provide additional flexibility to people seeking to enter into or modify an installment payment plan, including by phone, standard mail, email, or fax. This is an important step, given that the Judicial Emergency Orders have urged people in Virginia to avoid court buildings during the pandemic.

While the Court’s quick efforts to provide relief from fines and fees are commendable, they are currently scheduled to expire soon, even as the economy continues to reel from COVID-19 and many families are suffering from unemployment or underemployment. In March, when the first Judicial Emergency Order was issued, the unemployment rate was 4.4%, yet it rose to 14.7% by April. Since mid-March, more than 680,000 people in Virginia have filed an initial claim for unemployment insurance. But early data also show the pandemic’s impact is not even: communities of color are contracting COVID-19 at higher rates and likely facing the most severe job losses. In these circumstances, as many families are struggling to afford the most essential needs — including rent, food, and health care — court debt should not take priority.

Next Steps

Now, Virginia’s policymakers can work to advance reforms that end the poverty traps created by current fines and fees structures, respond to the immediate challenges of COVID-19, and build on the lessons from the Great Recession.

Extend Emergency Relief: Given current economic conditions, the case for providing emergency relief from court debt is even stronger now than it was in mid-March, when the Judicial Emergency was first declared. For that same reason, the U.S. House of Representatives recently passed the Health and Economic Recovery Omnibus Emergency Solutions Act” (“HEROES”) Act, which would make federal funding available for states that suspend imposition and collection of court fines and fees. The ultimate fate of that legislation is still pending, but even in the absence of new federal action, the Virginia Supreme Court has the legal authority to extend the Judicial Emergency for the “full extent” of the public health threat. At a minimum, the Court should extend the emergency relief until the special session of the General Assembly, when policymakers will reassess Virginia’s budget in light of COVID-19.

Avoid Using Fines and Fees to Address Budget Gaps: While many states and localities increased fines and fees in an effort to address budget shortfalls during the Great Recession, Virginia should avoid this approach in response to COVID-19. Of the many choices that policymakers will have to increase revenues, fines and fees are notably inefficient, as court debt is expensive to collect, and some debt is simply uncollectible. According to one study, jurisdictions in Texas and New Mexico spent more than $0.41 for every one dollar collected. In fiscal year 2019 — an economically prosperous time — Virginia’s court clerks collected only 63% of all total court debt that was imposed. This relatively low collection rate has long been the norm. State lawmakers should instead create more sustainable ways to increase revenue, from modernizing our tax code to making sure corporations pay their fair share.

Enact Structural Reforms: Longer term, policymakers should seize the opportunity to advance reforms that build a more efficient, sustainable, and equitable justice system. Certain fines and fees that are doing more harm than good should be repealed. This may include, for example, court debt generated in the juvenile justice system and certain counterproductive fees — like the $10 fee for installment payment plans, which are important for Virginians who cannot afford to pay debt upfront. Lawmakers should also strengthen laws requiring the courts to assess an individual's ability to pay court debt, including before fines and fees are imposed, and granting judges more authority to waive or reduce amounts owed by people in Virginia with low income. To inform future policy decisions, courts should collect and publicly report demographic data pertaining to the assessment of fines and fees, including by race and ethnicity.

In the 2020 legislative session, the General Assembly demonstrated that it could enact reforms in this policy area that are bold and bipartisan, including repealing the harmful policy of suspending driver’s licenses for unpaid court fines and fees. State and local leaders should build on that momentum, not only in response to the economic hardships caused by COVID-19, but also to build a better justice system for all Virginians.