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Taxes are high because the pension system is managed by the public sector and are financed by taxes. In a country when pension are a matter of personal responsi

Taxes are high because the pension system is managed by the public sector and are financed by taxes. In a country when pension are a matter of personal responsibility, they are paid to private companies. So you see, when a french person pay for their pension, it's taxes. When a person from another country pay for their pension to private companies, it's GDP. In the latter case, you have the additional freedom of not paying anything (especially if you don't make enough) and then hope that you die before retirement. I would not call this freedom though. Try to think outside of the conventional wisdom which is completely skewed

rayiner 4y ago
GDP is calculated using either income before taxes or total expenditure including government expenditures.
- skywal_l 4y ago
  It is an interesting comment but misleading and irrelevant to the subject. When you pay for your pension (in a country like France) it is not included in the GDP because it is considered a tax. When the government pay their pension to a pensioner it is not included in the GDP [0]. [0] https://www.investopedia.com/ask/answers/082415/are-social-security-payments-included-us-gdp-calculation.asp https://www.investopedia.com/ask/answers/082415/are-social-s...
  - rayiner 4y ago
    There are two ways to calculate GDP, an income approach and an expenditure approach. In the expenditure approach, transfer payments are not listed as an expenditure. But when a retiree buys something with that money is counted. Under the income approach, social security tax payments are included in income: https://staffwww.fullcoll.edu/fchan/macro/2gdp_computation.htm https://staffwww.fullcoll.edu/fchan/macro/2gdp_computation.h... You’re incorrect to say that an economy without social security artificially seems like it has a higher GDP than one with social security. It is counted as income to the employee, and anything purchased with it is counted as consumption.

rayiner 4y ago

GDP is calculated using either income before taxes or total expenditure including government expenditures.

skywal_l 4y ago
It is an interesting comment but misleading and irrelevant to the subject. When you pay for your pension (in a country like France) it is not included in the GDP because it is considered a tax. When the government pay their pension to a pensioner it is not included in the GDP [0]. [0] https://www.investopedia.com/ask/answers/082415/are-social-security-payments-included-us-gdp-calculation.asp https://www.investopedia.com/ask/answers/082415/are-social-s...
- rayiner 4y ago
  There are two ways to calculate GDP, an income approach and an expenditure approach. In the expenditure approach, transfer payments are not listed as an expenditure. But when a retiree buys something with that money is counted. Under the income approach, social security tax payments are included in income: https://staffwww.fullcoll.edu/fchan/macro/2gdp_computation.htm https://staffwww.fullcoll.edu/fchan/macro/2gdp_computation.h... You’re incorrect to say that an economy without social security artificially seems like it has a higher GDP than one with social security. It is counted as income to the employee, and anything purchased with it is counted as consumption.