Creating Abundance Better than Poverty Elimination

Information from a recent (3/7/2019) NYT’s column “How to Think About Taxing and Spending Like a Swede” by Monica Prasad, a professor of sociology at Northwestern, linked and  below, indicates the Concept: Create More Good, Not Just Less Bad promoted here and many other posts on this blog works.  This is the idea of paneugenesis, which is generating comprehensive benefits by creating pervasive reciprocal, selfish, selfless, synergistic interactions so everyone and everything benefits.

As noted, using tax money to make it better for improves society for all.  As she notes, “…Sweden has very low poverty and inequality, and economic mobility is significantly higher than it is in the United States; a poor Swede is much more likely to become middle class than a poor American is.”  Sweden’s program is not a Robin Hood, take from the rich and give to the poor strategy or even a way to use taxes to create programs for the poor. “… Sweden does not target much of its spending specifically to the poor.Tax revenue is spent on universal programs, like health care, which benefit most those who live longest; free college tuition takes from those who do not go to college and gives to those who do. Many aspects of welfare state spending in Sweden — as in other European countries — are linked to income, so that the more you earn, the more you receive in benefits. This is enormously effective, because it gives an incentive to Swedes to work hard and earn more.”

To me this seems like a tax policy that can facilitate progress for all.

As you know, I will work for progress by generating comprehensive improvements by creating pervasive, reciprocal, selfish, selfless, synergistic interactions so everyone and everything benefits, or by practicing paneugenesis.  I look forward to hearing about the progress you help generate.

For more information about this I encourage you to read Monica Prasad’s column below:

 

How to Think About Taxing and Spending Like a Swede

Europe has less inequality and more social mobility because its taxation schemes reach deeper into society and do more for everyone.

By Monica Prasad

Ms. Prasad is a professor of sociology at Northwestern.

George Wylesol

In the recent rush of proposals to tax the rich, Democrats have forgotten — or never really cared to learn — an important lesson: The countries that have been most successful at reducing poverty and inequality have not done it by taxing the wealthy and giving to the poor.

Take Sweden, a country often cited by progressives for its extensive social programs. Sweden has very low poverty and inequality, and economic mobility is significantly higher than it is in the United States; a poor Swede is much more likely to become middle class than a poor American is.

We can learn from Sweden, but the lesson is not what many people think. Rich Swedes do get taxed at high rates, but so does everyone else: The average American worker’s total tax burden is 31.7 percent of earnings, compared with 42.9 percent for the average Swede. The Swedes actually tax corporations less: 19.8 percent, compared with 34.2 percent in the United States in 2017, the last year for which we have comparative data — and yes, that’s after all the loopholes and deductions have been accounted for. The American rate will be lower after the 2017 tax bill, but it’s still unlikely to be as low as Sweden’s.

Estate tax? In the United States the average effective rate is 16.5 percent. In Sweden, it’s zero. Swedish national sales taxes, which fall disproportionately on the middle classes, are much higher than sales taxes in the United States. In France, another country held up as an exemplar by progressives, the economist Thomas Piketty and his collaborators found the overall tax structure was actually a bit regressive, meaning the wealthiest pay slightly lower rates of tax than the less wealthy. Throughout Europe, since World War II, the rule has been high taxes on labor and low taxes on capital.

On the spending side, Sweden does not target much of its spending specifically to the poor.Tax revenue is spent on universal programs, like health care, which benefit most those who live longest; free college tuition takes from those who do not go to college and gives to those who do. Many aspects of welfare state spending in Sweden — as in other European countries — are linked to income, so that the more you earn, the more you receive in benefits. This is enormously effective, because it gives an incentive to Swedes to work hard and earn more.

Poverty and inequality do get reduced, though not by redistribution from rich to poor, but rather by redistribution within classes — as the American sociologist Arthur Stinchcombe once put it, from the healthy to the unhealthy, from the young to the old and from the lucky to the unlucky.

These patterns go back to the early 20th century, when many European countries were trying to figure out how to compete with the rising American economic behemoth and decided that they had to nurture their capitalists to do so.

European welfare states have many origin points and many causes, but they took their modern forms around the Second World War, when in countries like France and Germany there simply wasn’t much capital to tax, because the capital stock had been destroyed by war. Higher taxes on corporations and the wealthy in the United States also have their origins in the early 20th century, when politicians representing Midwestern and Southern farmers ganged up against Northeastern industrialists.

Some scholars have drawn on this history to argue that the United States needs to give up its fixation with progressive taxation and adopt a national sales tax as every other advanced industrial country has done.

But this is too literal an interpretation of the lessons of history. It’s hard to make a case for a big new tax in America on the middle classes and the poor after decades when most of the economic benefits have flowed to the wealthy. European countries adopted their tax policies at times when economic growth was desperately needed and capital needed to be built up. Much has changed since then, and European tax systems could at this point stand a bit of reform in a more progressive direction, as the Yellow Vest protesters in France have been trying to tell us.

In Sweden, tax revenue is spent on universal programs like health care.Jonathan Nackstrand/Agence France-Presse — Getty Images

In Sweden, tax revenue is spent on universal programs like health care.Jonathan Nackstrand/Agence France-Presse — Getty Images

The real lesson to take away from Europe is that progressive social programs are most popular, most effective and most durable when they are carried out in ways that do not damage business prosperity. European social reformers didn’t just reduce poverty and inequality. They created a new reality. When conservatives come into power in European countries, they find they cannot take away the progressive policies.

European reformers managed this by embedding progressive policies in business-oriented arrangements. Low taxes on capital are just one example. We don’t need to enact exactly the same policies now — given how much wealthy Americans have benefited over the last several decades, progressive taxation still has a role to play in the United States — but we do need to learn the larger lesson that the secret of the European welfare states is that they are surprisingly business-friendly.

What would a policy that takes these lessons to heart look like in the United States today? It would look a lot like a business-oriented version of the Green New Deal. The recent proposal by Alexandria Ocasio-Cortez and Edward Markey needs a great deal of work, but it is far from a pipe dream — indeed, it’s the only proposal we have that is trying to face difficult truths.

For the plan to reduce carbon emissions, however, it has to get started now, and stay in place a long time, including through the next few conservative backlashes. The only way to do that — the only way to make it the new reality of the American economy, rather than a temporary attempt swept away by conservative populism — is to get business on board. This isn’t just because businesses will otherwise fight it, it’s because the American people will otherwise fight it.

To move from vision to reality, the Green New Deal coalition must include business groups, manufacturers, farmers and unions, and reformers need to genuinely listen to and respond to their concerns. They need to focus on solving problems such as the decline in productivity and work force participation, by using the revenue from a carbon tax to create jobs in energy efficiency and renewable energy, and by using higher taxes on capital gains to fund infrastructure, education, and research and development.

Green reformers also need to explain the enormous business opportunity that this historic shift to a zero carbon economy presents. Get businesses to make investments in renewable energy and energy efficiency, and you make your policies not only more feasible, but also irreversible.

None of this would create a European-style welfare state. But if done right, it would create something even more extraordinary: a new model of capitalism that European progressives themselves would, someday, try to imitate.

Monica Prasad, a professor of sociology and a faculty fellow in the Institute for Policy Research at Northwestern University, is the author, most recently, of “Starving the Beast: Ronald Reagan and the Tax Cut Revolution.”

Be Well’r,
Craig Becker

Be selfish, selfless, & synergistic so everyone and everything benefits!

If you want to contact me:
Email: BeWellr@gmail.com

Failure Doesn’t Exist…

Often during interviews, the interviewee will be asked about past failures.  I also got the question about weaknesses and or failures.  My perspective caused me to have trouble understanding this question.  My response was that I have many “failures” but I have always chosen to look at those occasions where I supposedly “failed” as opportunities and or steps toward my goals rather than “failures”. Doing something enabled learning, “failing” is learning.

 

Difficult occasions were frustrating, however I never saw them as problems but rather as necessary steps that offered indications and data that informed me that I needed to find a better way. From my perspective failures didn’t exist, these were the trials and tribulations of the never ending process that seeks to continually improve so we experience progress, or wellness (see Experiencing Wellness = Progress Toward Desired).

I now have learned that this perspective on failure has been and is used by many people that achieve progress.  Some even suggest it is a necessary precursor to success.  It was suggested that this perspective was necessary because it enabled people to continue to move forward and not let themselves feel they were complete failures. It is a perspective that allows people to keep some self-worth. Steve Jobs suggests passion is what helps people persevere beyond when a “sane” person would quit.

Angela Duckworth’s work describes this persevering trait as GRIT.

I am guessing this perspective and GRIT came to me during my recovery from my near fatal car accident.  It was during recovery where I developed what Angela Duckworth calls GRIT and it was what helped me develop perseverance.

Dr. Duckworth discusses GRIT in her powerful 6 minute TED Talk and in her book, GRIT: The Power of Passion and Perseverance.  She notes in her book that Pete Carrol, the successful coach of the Seattle Seahawks, was upset by her presentation because he thought she suggested it was not possible to build GRIT and he thought he was helping players build GRIT.  For more about Pete Carroll’s work with GRIT see “Pete Carroll joins Dr. Angela Duckworth for discussion of grit, coaching philosophy” and “Renowned psychologist impressed with Seahawks’ ‘culture of grit’“.

Without question it is important and valuable to build GRIT to be successful. After all success never happens overnight or without follow through after multiple trials (what some call failures but I refer to as steps in the process).

Progress requires a Growth rather than a Fixed Mindset as established in Carol Dweck’s work.  Researchers of success emphasizes the need for a Growth rather than a Fixed Mindset in the pursuit of progress. For more about Carol Dweck’s work you can see her TED Talk: The Power of Believing  That You Can Improve and or a discussion at this post:Concept: Create More Good, Not Just Less Bad.

With regard to failures, I just listened to the wonderful Freakonomics podcast that I found to be both educational and inspirational: How to Fail Like a Pro.  Their podcast captures many of these ideals – I encourage you to listen.

I look forward to hearing about your successes so we can all enjoy progress. I will work for progress by generating comprehensive improvements by creating pervasive, reciprocal, selfish, selfless, synergistic interactions so everyone and everything benefits, or by practicing paneugenesis.  I look forward to hearing about the progress you help generate.

Be Well’r,
Craig Becker

Be selfish, selfless, & synergistic so everyone and everything benefits!

If you want to contact me:
Email: BeWellr@gmail.com