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isn't a guaranteed living wage incompatible with Hartz IV?
I don't understand. Of course it is incompatible with taking the money of people, who refuse a job, away, which was indeed a principle broadened, but not introduced by the Hartz IV reforms. But is there any reason, why every aspect of the Hartz reforms has to be kept?

Before there were welfare and long-term unemployment programs, totally separated. That is, when you once have worked for a couple of years, you would never face the same hardship as somebody, who never got a job, depending on the amount of money, they had earned before. This was fused into one program by the Hartz IV, in which long-term unemployed people were equally treated as people, who never had worked. This aspect of course is not in contradiction with the basic income.

Unlike in the welfare program before, where people had the possibility to ask for specific things, Hartz IV is a fixed some of money. As well the same as with the basic income.

Then there is the enforcement of people to do work. But this works only very badly. There are few jobs you can give to unmotivated people without doing damage. It produces a mentality of thinking the gov't has to provide the work place, and if it can't you do nothing. But often there simply were no work places to place unemployed people on. This has led to extremely unproductive gov't measures, that did not help at all to bring people into the regular job market. So there is no big loss, when you give that up.

Starvid suggests to cut taxes instead. Which taxes he wants to cut? Income tax is hardly paid by poor people. VAT incentives saving over consumption and is in the income ranges between poor and middle class highly progressive, when food, clothes and rent are free of it. Extra high VAT on energy and co is a feature for the environment. So which tax he wants to cut?

The other suggestion to make public services cheaper instead, is something I disagree with mostly. There are some services, that make sense to subsidize, but is there any reason to force people to take exactly these public services? There would have to be enormous gains from compound empowerment to justify such action (as there are clearly in e.g. public transport, but only little in child care or university education). By default markets work fairly well, and there should be some explanation, why one wants disturb the market. Already those services, that were suggested in the discussion, like free education, or free childcare, are not really innovative changes compared to what already exists in some of our societies, and are not necessarily what I would like, e.g. free public child care for small children is something I really hate and see as oppression by the gov't, a little explanation here, how I think such 'Scandinavian' measures would destroy important freedoms in our societies (that are not already Scandinavian or French)

Der Amerikaner ist die Orchidee unter den Menschen
Volker Pispers

by Martin (weiser.mensch(at)googlemail.com) on Thu Oct 9th, 2008 at 12:14:47 PM EST
[ Parent ]
But is there any reason, why every aspect of the Hartz reforms has to be kept?

No, I think Hartz IV is horrible. I was just trying to extract an opinion on it from you :-)

A vivid image of what should exist acts as a surrogate for reality. Pursuit of the image then prevents pursuit of the reality -- John K. Galbraith

by Carrie (migeru at eurotrib dot com) on Thu Oct 9th, 2008 at 12:49:51 PM EST
[ Parent ]
Starvid suggests to cut taxes instead. Which taxes he wants to cut? Income tax is hardly paid by poor people. VAT incentives saving over consumption and is in the income ranges between poor and middle class highly progressive, when food, clothes and rent are free of it. Extra high VAT on energy and co is a feature for the environment. So which tax he wants to cut?

Things might be different in Germany, but in Sweden low income earners (that is, poor people) pay high income taxes.

Let's say you make 2000 euros a month before taxes. That's 24,000 a year. First about 2000 euros are tax exempt. Then you pay about 32 % on the remaining sum. That's 7040 euros a year in tax, or 29.3 %. You get to keep 16,960 euros.

On top of that you have hidden income taxes, so called "social fees". They are parts of your wage taxed away even before the money shows up on your salary. They are another 38 % on top of your wage.

This means that if you make 2000 euros a month "before" taxes you are really making 2000*1,38=2760 euros a month, or 33,120 euros a year. Of this you get to keep 16,960 euros. That means you are really paying a 49 % income tax on a pretty crappy wage.

So yes, there is a lot of space to cut taxes for poor people before stuff like basic income for all need be considered.

Peak oil is not an energy crisis. It is a liquid fuel crisis.

by Starvid on Thu Oct 9th, 2008 at 12:52:04 PM EST
[ Parent ]
Of course, the evil center-right government has cut taxes, so for the person above the official tax has fallen from 29.3 % to 24.3 % while the real tax has fallen from 49 % to 43.5 %. If the person is under 25 years old the an extra tax cut applies and the official and real taxes should be 16 % and 39 % respectively.

If I didn't screw up the calculations or misunderstood the tax system.

Peak oil is not an energy crisis. It is a liquid fuel crisis.

by Starvid on Thu Oct 9th, 2008 at 01:12:16 PM EST
[ Parent ]
Ok social insurance taxes are quite high here, too. Income tax is definitively lower for 24,000 Euro income per year. (And actually I don't consider 2000 Euro per month as pretty crappy. A net income of ~16kEuro per year is close to the median income in Germany, and considerably more than phd students typical income.)
However, e.g. the retirement social insurance afterwards pays out according to what was paid in before. So there is some reason to keep in place some of those contributions.

Der Amerikaner ist die Orchidee unter den Menschen
Volker Pispers
by Martin (weiser.mensch(at)googlemail.com) on Thu Oct 9th, 2008 at 01:22:11 PM EST
[ Parent ]
Your average Swedish metalworker will earn about 2700 euros a month while someone unqualified (only high school dimploma) working in a hospital or taking care of the elderly would make about 2000, or even a bit less. So comparatively it's pretty crappy.

Compared to university students it's great though as we get 800 a month and are supposed to repay two thirds of that, with interest. But at Sovereign(!) rates. ;)

Peak oil is not an energy crisis. It is a liquid fuel crisis.

by Starvid on Thu Oct 9th, 2008 at 01:31:16 PM EST
[ Parent ]
Huh, at least university students get a stipend of some sort.

In Spain a lot of people with higher education degrees make less than €1000. (See the Spanish wiki)

A vivid image of what should exist acts as a surrogate for reality. Pursuit of the image then prevents pursuit of the reality -- John K. Galbraith

by Carrie (migeru at eurotrib dot com) on Thu Oct 9th, 2008 at 01:35:35 PM EST
[ Parent ]
Well, normal students in Germany get only loans from the gov't, when their parents are really short of money. I spoke of phd students, who already have master degrees.

And metal workers in Germany are as well paid very well, when they are working in big companies. But most people don't work in big companies or not in well unionised sectors with mostly permanent staff, that needs specialist skills.

Der Amerikaner ist die Orchidee unter den Menschen
Volker Pispers

by Martin (weiser.mensch(at)googlemail.com) on Thu Oct 9th, 2008 at 02:00:52 PM EST
[ Parent ]
Phd students in Sweden get anything between 800 euros in some form of tax and benefits excempt stipend (humanities and slave labor insitutions - often found at medical faculties) and ~2500 euros as a proper wage (engineering phds at smaller colleges).

Sweden's finest (and perhaps only) collaborative, leftist e-newspaper Synapze.se
by A swedish kind of death on Thu Oct 9th, 2008 at 05:26:01 PM EST
[ Parent ]

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