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Although this thread does not function under the same strict guidelines as the USPMT, it is still a general practice on TL to provide a source with an explanation on why it is relevant and what purpose it adds to the discussion. Failure to do so will result in a mod action. | ||
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Plansix
United States60190 Posts
On September 20 2018 00:34 RvB wrote: Any source for the claim that an unregulated market leads to monopoly? Isn’t a regulated market the only thing preventing the existence of a monopoly? The natural course of self interest in a market is to secure as much of the market as possible until the actor control all of it. I suppose death would naturally lead to the potential end of a monopoly. | ||
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Big J
Austria16289 Posts
On September 20 2018 00:48 Plansix wrote: Isn’t a regulated market the only thing preventing the existence of a monopoly? The natural course of self interest in a market is to secure as much of the market as possible until the actor control all of it. I suppose death would naturally lead to the potential end of a monopoly. Not if you assume a neutrality of property and money, which means that capital cannot be used to secure more capital. Only providing the better service can then lead to a monopoly, which is then completely justified (and cannot be abused). Edit: Basically if you take the invisible hand of Adam Smith literally and assume its (longrun) perfection. | ||
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Plansix
United States60190 Posts
On September 20 2018 00:51 Big J wrote: Not if you assume a neutrality of property and money, which means that capital cannot be used to secure more capital. Only providing the better service can then lead to a monopoly, which is then completely justified (and cannot be abused). Edit: Basically if you take the invisible hand of Adam Smith literally and assume its (longrun) perfection. If you cut human nature out of the equation an unregulated free market works great. | ||
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warding
Portugal2394 Posts
Now, the factors that lead to monopolies vary, they include: - When a company has access to natural resources that others don't; - When the amount of investment to get into a market is really big, and the market only really can afford to have one company doing that (ie. power plant on an island); - When you have intellectual property that prevents the entrant of new players into that field until that patent expires; - When you have network economies like in most social networks, where new entrants don't have any users and thus they're of no value to the users. I'd argue that monopolies don't exist in the vast majority of consumer goods and services you guys purchase every day. They don't exist because the nature of those markets is naturally competitive, not because of regulation. In fact, regulations are a tool that incumbent businesses love to use to limit competition and create their own little monopolies. That explains why in some countries you need a license to open a barber shop and that sort of thing. Most posters here are talking economics in a heavily politicised way. The vast majority of economists favor using government authority to limit monopoly power. There's no question about that. As for regulation, it should be viewed as a technical issue, not a political one anymore. Only silly people think markets should never be regulated OR that we should regulate everything that moves. Finally Plansix your take on supply side economics really doesn't portray it fairly. I'm not saying it's right, but you haven't really represented the legitimate arguments supply-siders make on the importance of looking at incentives of workers and companies when thinking about taxation - which I believe is their main claim. | ||
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Plansix
United States60190 Posts
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warding
Portugal2394 Posts
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Plansix
United States60190 Posts
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Gorsameth
Netherlands21964 Posts
On September 20 2018 02:45 warding wrote: Sure, the understanding of taxation is really going to be different between an American and, say, a Portuguese. I pay 23% sales tax. Or lets say that you get paid an annual salary of 22 834€ after tax. If a company has 1000€ extra to increase your salary, a whopping 644€ will get taxed with your net salary increasing only 356€ - an effective marginal tax rate of 64%. Hence, I'm always a bit baffled when Europeans start talking about the need to start taxing the rich. The rich tend to find ways not to pay 'their share' through the use of creative means of financial accounting. If they just earned a salary and payed the nominal rate on it there wouldn't be a call to tax them more. As Warren Buffet said. His secretary pays more in taxes then he does. | ||
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warding
Portugal2394 Posts
On September 20 2018 03:05 Gorsameth wrote: The rich tend to find ways not to pay 'their share' through the use of creative means of financial accounting. If they just earned a salary and payed the nominal rate on it there wouldn't be a call to tax them more. As Warren Buffet said. His secretary pays more in taxes then he does. The US is the US. I'd love to know these methods of escaping taxes in European countries with modern tax authorities. Disclaimer: I run a company and pay or have paid every single type of tax in the books. | ||
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Big J
Austria16289 Posts
On September 20 2018 02:45 warding wrote: Sure, the understanding of taxation is really going to be different between an American and, say, a Portuguese. I pay 23% sales tax. Or lets say that you get paid an annual salary of 22 834€ after tax. If a company has 1000€ extra to increase your salary, a whopping 644€ will get taxed with your net salary increasing only 356€ - an effective marginal tax rate of 64%. Hence, I'm always a bit baffled when Europeans start talking about the need to start taxing the rich. Tax the rich, not the high earners. A person has a personal wealth of w(t). Income is the derivative w'(t). A derivative always eliminates the level part of wealth, only the change remains. That's why income taxation is stupid. A hard working person pays more taxes than someone who is lazy but born rich. Additionally only taxing work income and not other value increases gives speculation a huge incentive over work. High income =\= being rich; we live in capitalism. What you have is what counts, nothing else. | ||
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Sent.
Poland9252 Posts
On September 20 2018 03:33 warding wrote: The US is the US. I'd love to know these methods of escaping taxes in European countries with modern tax authorities. Disclaimer: I run a company and pay or have paid every single type of tax in the books. Don't think IKEA's owners are willing to share those secrets but you can try asking them. Ikea’s association with Swedishness and Swedish values is so ironic that one would be hard pressed to know where to begin. One obvious place to start would be to note that the Swedish government is using taxpayer money to give free advertising to a corporation that left Sweden to avoid paying taxes. Ikea contributes next to nothing to Sweden in the form of corporate tax, all while making billions off of its Swedish image. In fact, the company has gone to extraordinary lengths to avoid giving anything back to the national budgets of their host nations. Ikea’s corporate structure is complicated, but the key point is that Ikea is a Netherlands-based “charity.” For many years, the vast majority of its outlets have been controlled by the Dutch company Ingka Holding, which in turn is owned by the not-for-profit Stichting Ingka Foundation, which was created in 1982 by the founder of Ikea, Ingvar Kamprad, for the purpose of ”furthering the advancement of architecture and interior design.” The Stichting Ingka Foundation is often listed as the wealthiest charitable foundation in the world, with assets in excess of $35 billion. As a result, Ikea pays a minuscule 3.5 percent nonprofit tax rate, far lower than its for-profit counterparts. In addition, recent revelations from LuxLeaks, an investigative project by the International Consortium of Investigative Journalists, show the company has made deals with the government of Luxembourg in order to pay as little tax as possible to anyone, anywhere. http://america.aljazeera.com/opinions/2014/11/ikea-swedish-furniturecompanyidentitytaxavoidance.html | ||
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Plansix
United States60190 Posts
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warding
Portugal2394 Posts
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farvacola
United States18839 Posts
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Sent.
Poland9252 Posts
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Plansix
United States60190 Posts
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warding
Portugal2394 Posts
Edit: P6 IKEA pays just over 1B in corporate tax and the Dutch GDP is 777B. I wonder what kind of nefarious policy they must impose on the Dutch. | ||
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farvacola
United States18839 Posts
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Plansix
United States60190 Posts
On September 20 2018 04:24 warding wrote: IKEA the group pays corporate tax and is in turn owned by a charity. Which means that Ikea's profits don't go to any individual's pockets, they presumably go into charitable things. Edit: P6 IKEA pays just over 1B in corporate tax and the Dutch GDP is 777B. I wonder what kind of nefarious policy they must impose on the Dutch. 35 Billion is a pretty good chunk of change for one company in a country that pulls is +700 billion total. 1 billion is taxes seems very low for a company with that sort of revenue. | ||
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Big J
Austria16289 Posts
So the NL parents only job is to own the licenses and then to collect all profits from foreign daughters as license fees. These daughters now do not pay any profit taxes in their countries, because they have no profit anymore. And the mother company makes all profits from licenses, patents etc. and pays a much lower tax on such profits, than the usual company taxation in europe. | ||
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