6 ms·

Ah, I live in one of these countries with low corporate income tax (it's 19% here), and yet right wing here wants to make it even lower to increase entrepreneur

by xyzzyz 14y ago

Ah, I live in one of these countries with low corporate income tax (it's 19% here), and yet right wing here wants to make it even lower to increase entrepreneurship, and everybody complains how hard it is to do business here, because taxes and insurance contribute additional ~13-15% cost to base salary, so that they have to use law loopholes to escape that (which is very widespread, and recent attempts by government to fixed it resulted in an public outcry). Hearing all that, one could imagine that in countries like France, with >30% corporate tax and high employment cost, no business can take place at all, and it must have fallen in a deep economic depression a long time ago.

yummyfajitas 14y ago
Hearing all that, one could imagine that in countries like France, with >30% corporate tax and high employment cost, no business can take place at all, and it must have fallen in a deep economic depression a long time ago. That is generally the case. Unemployment rates in the 8-12 neighborhood are considered a disaster in the US. In France they are normal. France is as poor as Arkansas and Idaho, two of the poorest US states. If the US in general fell to this level, we'd definitely be calling it a deep depression. http://mjperry.blogspot.com/2010/01/paul-krugman-extols-europes-economic.html http://mjperry.blogspot.com/2010/01/paul-krugman-extols-euro... The only reason France isn't described as being in a recession is because it's always been this way, so they are used to it.
- rayiner 14y ago
  France, like Arkansas and Idaho, has a high percentage of the country engaged in agriculture. A sensible comparison would be PPP GDP per capita growth rate.
- cdavid 14y ago
  France is not (much) different from other comparable countries in Europe on the quoted measure (i.e. Germany, UK and Italy are equally "as poor" as Arkansas and Idaho, using GDP-PPP/inhabitant). So it most likely doesn't have much to do with the original statement, given that Germany has e.g. a much lower unemployment. I am not sure per-state comparison of GDP-PPP per capita are really that meaningful: you would most likely need to adjust parity within the US. This is a weak argument, but I can't really see how France would be significantly poorer than Louisiana. Describing France as perpetually in recession is rather nonsensical: I can't see any measure by which it would not be true for nearly every country if true for France.
  - guylhem 14y ago
    Start with a very rich country - a former superpower that fought with its rival for world domination. I'm not talking about USA and USSR but France and England. The #1 spots comes with lot of advantages like accumulated wealth, educated workforce, etc. Now start to introduce socialist reforms - little by little, and watch the country bleed itself out while its voters supports this self destructive streak being proud of the equality they are achieving. This "equality" makes me think of thermodynamics. Yes they are increasing entropy, destroying the country. It can be achieved in a small amount of time (Zimbabwe managed to turn itself from very rich to very poor in a record amount of time!) or a long time - as France is showing. At the moment, France can only take advantage of the size of its economy as a refuge in the eurozone for those who don't want to put all their eggs in Germany If France keep destroying its economy that way (or if say the UK gets in the eurozone) the end of the ride is near. [I wonder if it will need food help to fight famine, like Zimbabwe, after after being a net food exporter]
    - cdavid 14y ago
      What makes you think France is destroying its economy ? And what makes you think UK or Germany is that much better ? When you scratch behind the superficial discourses around european economy, some underlying issues are systemic and shared across all big European economies. One of them is the very weak capitalization of banks, and high asset/gdp of the private banking system [1]. This by itself explains a large part of the current European policies (for example, those countries don't/can't recognize that they will need to re-capitalize their banks at taxpayer-expense). This is much, much more critical than changes in taxes which effects are at best very disputed, and mostly explained by political biases of each side. [1] (asset / gdp is > 6x GDP for switzerland, > 3x GDP for UK and France, to compare to 0.6 x GDP for the US: http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2012/03/20120322_eu1.png http://www.zerohedge.com/sites/default/files/images/user3303...)
- rguillebert 14y ago
  "That is generally the case. Unemployment rates in the 8-12 neighborhood are considered a disaster in the US. In France they are normal." Except that the way the unemployment rate is calculated is different in both countries, economists say that you should add 3 or 4% to the American unemployment rate to have comparable numbers.
  - yummyfajitas 14y ago
    According to a quick look at Wikipedia, the only apparent difference is that Eurostat requires an unemployed person to be able to start work in the next two weeks, while the US BLS requires an unemployed person to have been able to start work last week. Is it your belief that the difference between "are you able to start work in the next two weeks" and "if a job were offered, could you have started work last week" is 3-4%?
    - rguillebert 14y ago
      You have to work less hours in the US to be considered employed, you are considered employed if you work 15 hours a week (my source is Jacques Sapir)
      - yummyfajitas 14y ago
        That is incorrect. All of Europe defines unemployment in accordance with the ILO, and the ILO counts a person who has performed any work as "employed". http://stats.oecd.org/glossary/detail.asp?id=778 http://stats.oecd.org/glossary/detail.asp?id=778
hnwh 14y ago
Which country is that?

by xyzzyz 14y ago

yummyfajitas 14y ago

Hearing all that, one could imagine that in countries like France, with >30% corporate tax and high employment cost, no business can take place at all, and it must have fallen in a deep economic depression a long time ago. That is generally the case. Unemployment rates in the 8-12 neighborhood are considered a disaster in the US. In France they are normal. France is as poor as Arkansas and Idaho, two of the poorest US states. If the US in general fell to this level, we'd definitely be calling it a deep depression. http://mjperry.blogspot.com/2010/01/paul-krugman-extols-europes-economic.html http://mjperry.blogspot.com/2010/01/paul-krugman-extols-euro... The only reason France isn't described as being in a recession is because it's always been this way, so they are used to it.

rayiner 14y ago
France, like Arkansas and Idaho, has a high percentage of the country engaged in agriculture. A sensible comparison would be PPP GDP per capita growth rate.
cdavid 14y ago
France is not (much) different from other comparable countries in Europe on the quoted measure (i.e. Germany, UK and Italy are equally "as poor" as Arkansas and Idaho, using GDP-PPP/inhabitant). So it most likely doesn't have much to do with the original statement, given that Germany has e.g. a much lower unemployment. I am not sure per-state comparison of GDP-PPP per capita are really that meaningful: you would most likely need to adjust parity within the US. This is a weak argument, but I can't really see how France would be significantly poorer than Louisiana. Describing France as perpetually in recession is rather nonsensical: I can't see any measure by which it would not be true for nearly every country if true for France.
- guylhem 14y ago
  Start with a very rich country - a former superpower that fought with its rival for world domination. I'm not talking about USA and USSR but France and England. The #1 spots comes with lot of advantages like accumulated wealth, educated workforce, etc. Now start to introduce socialist reforms - little by little, and watch the country bleed itself out while its voters supports this self destructive streak being proud of the equality they are achieving. This "equality" makes me think of thermodynamics. Yes they are increasing entropy, destroying the country. It can be achieved in a small amount of time (Zimbabwe managed to turn itself from very rich to very poor in a record amount of time!) or a long time - as France is showing. At the moment, France can only take advantage of the size of its economy as a refuge in the eurozone for those who don't want to put all their eggs in Germany If France keep destroying its economy that way (or if say the UK gets in the eurozone) the end of the ride is near. [I wonder if it will need food help to fight famine, like Zimbabwe, after after being a net food exporter]
  - cdavid 14y ago
    What makes you think France is destroying its economy ? And what makes you think UK or Germany is that much better ? When you scratch behind the superficial discourses around european economy, some underlying issues are systemic and shared across all big European economies. One of them is the very weak capitalization of banks, and high asset/gdp of the private banking system [1]. This by itself explains a large part of the current European policies (for example, those countries don't/can't recognize that they will need to re-capitalize their banks at taxpayer-expense). This is much, much more critical than changes in taxes which effects are at best very disputed, and mostly explained by political biases of each side. [1] (asset / gdp is > 6x GDP for switzerland, > 3x GDP for UK and France, to compare to 0.6 x GDP for the US: http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2012/03/20120322_eu1.png http://www.zerohedge.com/sites/default/files/images/user3303...)
rguillebert 14y ago
"That is generally the case. Unemployment rates in the 8-12 neighborhood are considered a disaster in the US. In France they are normal." Except that the way the unemployment rate is calculated is different in both countries, economists say that you should add 3 or 4% to the American unemployment rate to have comparable numbers.
- yummyfajitas 14y ago
  According to a quick look at Wikipedia, the only apparent difference is that Eurostat requires an unemployed person to be able to start work in the next two weeks, while the US BLS requires an unemployed person to have been able to start work last week. Is it your belief that the difference between "are you able to start work in the next two weeks" and "if a job were offered, could you have started work last week" is 3-4%?
  - rguillebert 14y ago
    You have to work less hours in the US to be considered employed, you are considered employed if you work 15 hours a week (my source is Jacques Sapir)
    - yummyfajitas 14y ago
      That is incorrect. All of Europe defines unemployment in accordance with the ILO, and the ILO counts a person who has performed any work as "employed". http://stats.oecd.org/glossary/detail.asp?id=778 http://stats.oecd.org/glossary/detail.asp?id=778

hnwh 14y ago

Which country is that?