William wrote :
> Christian - how is it in your opinion that most/all of the
> Western European
> countries adopted a high tax / socialistic govt?
Well, these governments are not socialist in the strictest sense of the
term, in its Marxist definition, with a state economy and so forth. High
tax, definitely. Marxist, certainly not. If we set aside a few exceptions
(some companies are still state owned in France, for example), Europe is,
economically speaking, a free market economy. And, AFAIK, has always been.
The SPD (socialist Party) in Germany shed its Marxist doctrine at the famed
Godesberg Congress in 1969. France's Socialist party never formally shed its
Marxist doctrine, but it has not used it for a while. For instance, Lionel
Jospin's government, which had most its ministers belong to the Socialist
Party, is the one who privatized the highest number of companies on record.
That being said, Europe, especially France, is definitely a high-tax area.
For instance, the share of GDP that's levied off the national wealth in all
tax forms you can imagine is 47% in France. In the USA, the same levy (all
taxes, not just income tax) is, I believe, 33%.
How did we get there ? Very simple : The welfare state did it all.
> When Germany was trying to recover from the war, they adopted early an
> almost pure capitalistic govt - under Adenaur I believe -
> thus fueling the
> "Wirtschaftwunder" - economic wonder - or miracle. Germany's rate of
> economic growth through the 1960s was stupendous.
Yes, I agree. The FRG (Federal Republic of Germany) was free-market from day
1 in 1949, under Bundeskanzler Konrad Adenauer. You are correct. Did you
know that Germany's GDP was estimated to be the equivalent of US$20 in 1945
? They really did wonders to rebuild the country, and they succeeded.
Then came the welfare state, with subsidies of all sorts granted to this or
that segment of the population this is in no way specifically German. It
happened in France, in Sweden, in Britain. Basically, it happened everywhere
in Western Europe (west of the Iron Curtain). That's where these high taxes
come from. When I had my first summer job in 1977, the employee's share of
payroll taxes was 9% of base salary. Today, it's about 22%. Although that
does not belong as income tax, it's a levy on national wealth anyway.
So in a nutshell, Europe = Socialist = Marxist ? No. Europe = welfare state
= high taxes ? Yes.
> I don't know when they really became socialist - perhaps in
> the 1970s - but
> now they have such taxation rates that business is discouraged from
> expansion.
They did not switch to Socialism, they just raised taxes. See above for
details. BTW, I say 'they', but 'we' would be more accurate. France
definitely belongs in there.
> The labor rules I've heard make almost impossible to fire anyone.
Not exactly impossible, but about as difficult in France and Germany, and
much more difficult than in the US.
> Not that this situation is unique to Western Europe -
> politicians here too
> like to tell us how much they are giving us while playing
> down the fact that
> whatever they give they have to take. Actually the cynic in
> me says that
> they always must give back less than what they take.
In the business world, we call taht a profit margin. In politics, they use
the 'profit margin' to keep themselves in power.
> I think it is natural for politicians to seek more power and control.
>
> A lot of the anger in this recall in Calif is over the fact
> that business
> here are fleeing the state - moving to more business friendly
> states. It
> would take years here to get approval to build a factory.
It took us about 3 weeks just to fill in the monstrous paperwork to register
our company. How long does it take in, say, California ? Hours ? Minutes ?
>
> BTW my HP 3000 is fine - just keeps running.
Yeah, same here. All 3 work like charms, and they're not even on
maintenance.
> Bill Brandt
Christian Lheureux
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