Pravus Gaming you read my mind, I’m not a liberal, but your idea of a deductible flat tax is something I’ve thought of for years. I think the game is biased btw.
I'm new to the channel and this game. Hopefully, someone notices this. Does this game use the laffer curve? Or can someone tell me a little bit more about the game.
"I don't see how the 62% flat tax increases inequality because everyone's getting taxed the same percentage!" Except: Someone with 2 dependents who makes $30,000 taxed at 62% has $18,600 to live on, that puts them below the poverty level for the US. Someone who makes $30 Million has $18.8 million to live on for a year, which is roughly 7 times what the average American will earn in their entire lifetime. Just because the percentage is the same doesn't mean everyone can live on the leftovers, that's why it's not truly equal.
You’re too late. 2 years too late. But still, it’s not that hard to make over $15 an hour if you have 2 dependents. I don’t come from a privileged family, and I’m an immigrant myself and still make $15 an hour as a teen.
Except that in a normal tax system the person with 2 dependents would be taxed at 62% but the person who makes 30 million would be taxed at a lower 15% or so.
The problem in my opinion with a flat income tax is that the percent of income poor and wealthy people spend on basic necessities is different. A poor person might for example spend 40% of his/her income on rent, food, transportation etc., while somone higher up might only spend 25%. So a flat tax in such a case would only be more equal on paper.
Anton Fleck Yeah but If You would get 30,000 € per year and You get 30% tax If You would get a Promotion and You earn 40,000€ You would get 40% would That be fair in your mind?
Not exactly: In the example you have given you would only make 3.000€ more from that 10,000€ raise. If the tax rate in your example rose linear with income, you would lose money if you would have been given the promotion for 50.000€. Before (50,000€) you would make 25,000€, after the promotion (60,000€) you would only make 24,000€. So a rising income tax could easily lead to income stagnation, which is why most tax systems seperate income into brackets: The first 1,000€ are taxed at x%, the next 2,000€ are taxed at y% and so on. This both prevents a heavy tax burden on the poor and income stagnation.
Yeah, that would prevent activly hurting the poor. But I still think a progressive income tax is fine the way it is and I don't really see the benefits from a flat tax.
There are some issues with having a flat income tax with a threshold of $25000. For example, regional living costs. It is much more expensive to live in New York City than in a rural area, and oftentimes the poor do not have the money to move to places that are more affordable. There is also the fact that you can earn upwards of $50000 and still be living paycheque to paycheque due to health issues, children, supporting elderly parents or living in a place that has a very high cost of living.
You would need to look at where the regional costs increase and where the most people are using welfare. While there is still poor people in NYC ect you find that they are theminory of that group and there would be a number that would account for average. Maybe it's 30000 instead of 25000, but there would be a number not far off where you'd get above the poverty line untaxed.
That old chestnut huh? It's not even true. Nearly all first world governments pay significantly less per person to cover everyone, than the U.S. government does for a system that only covers some emergencies. Economics usually isn't a zero sum game.
Me: oh man I love Pravus, I forget why I was frustrated with him when I first started watching him. Pravus: *Starts a new Democracy 3 run as a liberal capitalist* Me: Oh. Right. Now I remember.
@ I have learned that way of thinking, as I have had to over the years due to my circles being filled with Conservative types who I do not necessarily agree with. I was more making the point that hearing opposing opinions can be frustrating as it challenges your beliefs, and also a lot of those conversations tend to be confrontational.
A few things about this game, it was made by a Brit so their perception of certain concepts might be skewed especially with how polarised American politics is. Secondly, I appreciate how you highlighted your views in a way that wasn't "lol libcucks want to aggressively tax you, kek!". Politically I'm a Scandinavian style Social Democrat so basically capitalism run with socialist principles. Personally, I think rich should pay more tax because their fortunes often come from using their capital advantage to undercut wages and conditions and honestly, there comes a point where wealth becomes extreme to the point where it's a high score system as opposed to a mechanism for sustaining an opulent lifestyle. Also, I find the idea that not taxing the rich because they are job creators to be factually incorrect as we've seen from the last 40 years of neo-liberal politics where as taxes decrease the poorest become even poorer. I think it also comes down to my personal experience, I grew up poor in a family run by a single mother who worked in a factory, but I also live in a country that invests in public schools and has a free college tuition system. Because of that system which is tax funded I have a salary people would consider as middle class and I don't like the idea of pulling up the ladder I used to rise up. If that makes sense and didn't come off as a huge passage of waffling.
the neo liberals raised taxes on everyone not lowered in the last year america has entered a period of economic recovery spurred on by the recent tax cuts. wages are at an all time high and unemployment is at an all time low the welfare system in america is the largest cause of our poverty im not a huge fan of 15.3% of my income going directly to some heroin addict so he can shoot up all day instead of working (not ALL people on ssi are druggies but ive never met a druggie who wasn't on ssi) especially when im scraping to get by as it is. things have been really good latley because we have started to get rid of neo lib policies and taxes
1 the middle class is growing again for the first time in ages 2 just look at the "war" on poverty the liberal government enacted several welfare programs that over time have been draining the economy and causing poverty to rise 3 15% of my income goes into social security .drug addicts are on social security. i dont see how you can somehow see these facctors and say my money doesn't go to druggies 4. im not to worried about the whole tv actor thing. there's not anything that intrinsically makes a career politician better at politics than your average person (some of them don't even seem to think about politics as often as the average youtube commenter). with how easily accesible information is formulating an effective plan for any political situation is within the grasp of anyone with high enough reading comprehension. 5 well yeah. so far i haven't seen any evidence of corruption from trump himself if that's what you are implying i just want to make things clear that im not saying every politician should be a celebrety or vice versa and i dont overvalue trump's presidency. after three bumbling bafoons from both parties someone doing a mediocre job just looks really good
We're not really in a period of economic growth though, we're in a period of economic stabilization at best. People are being payed-buy also being shunted into lower classes than their parents. While the middle class is growing, it's also depressing; more people are entering it, but the entire category is dropping. Wages are increasing, but becoming more baseline and people lack growth options; in essence, more people are making money, they have better than nothing jobs, but these better than nothing jobs have no upwards progression. People are finding their degrees irrelevant, and taking jobs they are grossly overeducated for with no advancement options and no benefits; the economic growth currently expressed is not sustainable, and while people are finding jobs they are neither good jobs, nor jobs they will be in for a significant time by any measure. And debt is growing massively and unsustainable, with the only solution an increase in taxes or a massive cut of all programs-including things that make money for the government in the long term, or which are fueling employment (like defense spending). In essence, there is no sustainable path forward for keeping these tax cuts without destroying all social programs. Now, as someone who apparently wants to destroy all social programs, that might sound dandy to you. However, even ignoring the political problems with this, consider that drug welfare programs also include drug prevention programs. Do we cut those? What about welfare programs that help people eat; if we let those people starve, then they die of illness, becoming infectious in the process, which increases medical costs for everyone in the short and long term. The elderly would die in droves if we truly took the steps needed to balance our debt via cutting welfare. The poor would both die, become sick, and become incapable of functioning due to preventable diseases, drug addiction, and other such disasters, which increases their burden on society. Furthermore, they would strain our police, firefighters, and other public servants-which we would likely need more of. Oh, and the health care system would crash entirely, unless you did this process so gradually you resigned to stripping public funding out of health care by, say, *3018*. They already treat people who cannot afford it, and are kept afloat by government programs. If you stopped those government programs and stopped preventative welfare, people would show up on deaths door, have to be treated by law, and the hospital would neither have a way to pay nor a way to receive compensation for this, if you are talking about removing all payment for hospitals from the government. It's worth noting this is already a problem; the government doesen't pay it all by a long shot-but it would be a much more severe one. Health care costs would skyrocket, and health insurence would become unaffordable, as would most drugs. Additionally, antibiotics and many drugs would *stop working*, because unless a disease is treated *entirely*, the pathogens can become immune to the effects. People who have to choose between buying antibiotics to finish their treatment or buy *food for their children* choose to take the remaining treatment and pray. They cannot afford, in all cases, to take the entire dosage. This is seen with T.B. treatments in any country without effective healthcare-I.E. completely non-socialized health care. Non-profits shoulder some of the burden, but otherwise you end up with a lot of people sick with very preventable diseases-and occasional, spotty coverage resulting in people with resistant strains, to the point we almost can't treat some T.B. strains. While people have to struggle with these decisions if they are uninsured now, they will have even more severe risks if you remove welfare systems. The supposed utopia where no welfare existed at all was not a pleasant place; it lead to the great depression, earlier horrors of industrialization, and societal collapse. To speak of the political reality, and trying not to be completely alarmist, it's not wrong to say that the breakdown of welfare strongly contributed to ww2. The lack of these policies lead to truly lassaiz-faire countries having to deal with massive communist and national socialist rebellions that eventually took over their governments, combined with war-weariness as a trigger. The result nearly collapsed the world. Part of the solution was social welfare-even the most important part of the solution-bounded by democratic principles unlike nazi and communist policies. It is *necessary* to preserve society, politically. In essence, for a variety of reasons, any policy of destroying welfare wholesale is ignorant and stupid. It would either cost more money or be undertaken with such callous disregard that you destroy society. This isn't to say you can reduce welfare without those penalties-but a true dismantling is flatly impossible. And, indeed, the most effective half measures would be the most callous-stop treating the elderly entirely. That would save welfare and have a negligible economic impact. Would also let the government steal inheritance. Finally; a small portion of your tax money goes towards druggies. If you want to be outraged about who is getting your tax money, you should be outraged over all those 80 year olds on medicare. How *dare* they have medical issues! This is ignoring that "druggies" is hardly a useful category of people; it's entirely possible that if include everyone who smokes, drinks, or uses legal drugs, you could make that claim and be right. But we're casting such a large net that it's meaningless.
@@DreamsOfLiquidSilver this is why we murder the rich and the elites and create an Libertarian Socialist Utopia, where we all smoke weed and stab capitalists.
I enjoy all of your stuff prav, but for the longest time I've liked your Democracy 3 vids the best. I really love this game and you're basically the only person on UA-cam who plays it. Thanks, love ya!
edi01 Well this is not so much of a deal... Allready in Greece give approximately 70 percent of their income for taxes and pension and healthcare insurance without a social provision worth to mention. The problem is much more intense for young freelancer profesionals and enterpreneurs.
In my australia game in noemal difficulty i have a perfectly stable australia eith 90% income tax and flat income tax also everyone is a patriotic enivorimentalist farmer the game has lasted for over 200 turn's and im constantly getting all the vote's.
18:32 Obviously this decreases "equality"... not in taxes, but in living conditions, because now the poor and middle class will suffer way more than the rich.
You know, I enjoy listening when you speak about different polices and the pros and cons of every policy. I actually learn a lot about politics this way and when I read the discussions in the comments I also learn about different political views much more than I do during a political speech.
The one problem with the "diminishing returns" argument, in my opinion, is that the point where it becomes "not worth it to produce more" is at a point when the person has already earned incredible, life-changing, amounts of wealth.
Yea sure is fair, I mean the US has one and it has lead to the middle class paying all the taxes and the rich and poor paying nothing. The 16th amendment is the worst amendment to Constitution even worse than the 18th.
I think that what is important to consider when talking about fairness in the context of rich and poor is that a rich person/organisation has more bargaining power than a poor one, and so tends to get better deals, meaning it gets even more powerful, so one could argue that taxing the rich more is just balancing the advantages granted to them by their wealth.
I'm acutally super happy I found this, I love playthroughs but I think this is the only one that fulfills my nerdiness about policy at the same time. To dialogue on the idea of "fairness" and tax, I see the progressive tax as more fair not because I think wealth comes at injustice, but because it means everyone is making a proportionate sacrifice to live in a society. I think it makes the most sense if you view it through the lens of a speeding ticket - I know people who can easily afford speeding tickets, and they've told me they've managed to rack up several in a month because the fine doesn't penalize them enough to even matter to them, whereas for people who can barely afford one speeding ticket, they're less likely to speed because if they had to pay a speeding ticket it would mean sacrificing a basic need. If you had speeding tickets that were a certain percentage of income - not enough to put people on the streets, but enough to cause significant loss, it would truly divert the disincentivized behavior (in this case, speeding) in the entire population.
I can tell you have put some thought into your view, which is why I'd like to critique some of it. There is a contradiction between your definition of justice and your 'determinism'. First: Fairness as neutrality, treating people the same regardless of their race, gender ect. We don't control who we love, which gender we identify as, what colour our skin is, what culture we come from, what religion we were raised with. At least, changing these things to suit some other groups whims weighs heavily on a person, effecting their basic human dignities. So any different treatments amounts to arbitrary discrimination. I can agree with that. Second, moral Desert: We ought to judge people on what is within their control. Moral responsibility requires at least some causal responsibility (additionally, intent and other factors such as free will may be necessary). So we should treat people different based on their actions, we give them praise and blame. We hang out with nice people and lock up thieves in prison. We aren't obligated to treat these people equally. And I agree with that. The problem is that you explicitly claim people's income levels are completely within their control. (It's quite an extreme idea and I don't agree, but let's grant it for the sake of the argument.) That means it is not unfair to treat people differently based on their income levels. Furthermore, as some other commenters have pointed out, the proportion of basic cost of living goes down as income goes up. So the further up the scale you go, the less your dignity is affected by a higher income tax. But let's take the other extreme where income is totally out of our hands. By a combination of genetics, social factors, cultural biasses, upbringing and such, we were predestined to make the amount of money we do. Maybe moral responsibility doesn't exist at all. Why, we can't help it, can we? But getting more income is then based on arbitrairy whims and conincedences of history and we all deserve the same amount of money. I don't buy either of these extremes and I don't think you do either. But there does't seem to be a point in between where it's suddenly wrong to treat people differently based on their income. Now you may object to my argument that pre-tax income is exactly just deserts based on individual actions. There is no further social value beyond this market value. So this precise accounting eliminates any further moral imbalances, so that it is truly a neutral starting point. Then It is the government that takes away from this and so any taxation would be unfair theft, in effect. I understand that this isn't your position but rather a kind of libertarian position. So if you or anybody feels like reading a well written argument against that idea (instead of a UA-cam comment), I refer you to aeon.co/essays/if-your-pay-is-not-yours-to-keep-then-neither-is-the-tax So that's the negative argument, against progressive taxes from Fairness. The positive justification for progressive taxation only then comes from whatever injustice in the system you care to observe and name. The Matthew-Effect should be a good starter, a more modern version would be Pickett's findings that revenue from capital out-grows labor without war or high progressive taxes. That is, they get richer without doing more work. If your're more of a micro level-guy, the power-dynamics of wage negotiation are systematically skewed when one person faces the total loss of income and the other is contractually obligated not to care. Finally, the Lockean proviso would dictate that any man can take as much from nature as he can manage, ONLY so long as there is enough left for everybody else. The state of nature would lead me to believe that it's high time the rich started sharing. So I don't think we have to agree about what level of inequality is just, to agree that the present level isn't. Fun videos, peace
I consider myself a liberal in social matters and a socialist in economic matters, loosely following the american definition for such matters or my understanding of them (I'm Brazilian btw). In my own view, my ideal, kinda utopic world view, would be something along the lines of anarchist communism or anarchist syndicalism. Anyway, all that to say that I disagree in many matters with you, but I rarely find someone so understanding, patient and smart to talk about such matters, specially when we find ourselves so far away in the economic spectrum. I can see by the way you talk and comment your sources and studies that you have vast knowledge about it, and even got me thinking about the whole tax question. All this to say I appreciate your work Pravus, and hope to see more great content, as usual, in the future. Have a great day and cheers from Brazil! :)
hi. youre evil. history tells us this. Please gain some empathy and keep your politics to your own life. When you die of starvation et al the rest of us benefit from not having another Trotsky or Stalin. Cheers
stop wanting to enslave and murder people. That would be high quality bait for ideologies. FFS boy go read a fucking history book then study humanity aka economics
@@TheBelrick I'm a history major in the biggest and most successful university of Latin America. Right now I'm getting my license to become a history teacher, but thanks for the tip anyway =P
Hello Pravus, I think the reason why a flat income tax is seen as increasing inequality is mostly because of two factors: 1) The basic cost of living, and 2) The ability to invest extra income. 1) Goods and services generally cost the same for the poor and the rich. While indeed a wealthier person might buy more expensive goods than a poorer person, it is unlikely that a person that is say ten times richer than me will end up spending ten times as much as me on food. Maybe twice as much, maybe even five times as much, but most likely not ten times. In this regard, you could construe "cost of living" as a sort of regressive tax imposed on us by our environment and way of life and that everyone has to pay, with the poor paying a larger % of their income and the wealthy paying a small % of theirs. This leavers wealthier individuals with more money lying around to dispose of as they see fit, which leads to point 2. 2) Investing extra income: Since wealthier individuals are left with more income after their basic necessities are paid for, this leaves them free to invest this money. Safe, sound investments will generally turn a profit, which will increase the individual's income and leave them with more money they can invest, etc. This can lead to a feedback loop where the richer you are, the richer you get, whereas if you are poor, you may not have much extra income, if any (the poor often end up getting in debt to pay for stuff like health care, car loans and such) and will be unable to improve your income through investment. Now I agree with you that it is perfectly just and fair for people who work hard and make better decisions to make more money. Unfortunately, that's not necessarily how I perceive our economy to work. As you mentioned, you are not a corporatist, so I feel you might agree with me on the point that corporations will naturally lead to a divergence from this principle, as corporations end up creating two kinds of citizens: Investors and shareholders, who own the corporation and who profit from the wealth it generates, and wage workers, who work for the corporation and whose productivity vs salary ratio is seen as an optimization problem (i.e. you want to pay the least salary for the most productivity). So in this regard, if you are wealthy you can use your extra income to become an investor or shareholder and profit from the wealth generated by a company, whereas if you are poor or even middle class, your income will mostly come from wages and you won't be left with much if any to invest after living expenses. Hell if you're rich enough, you don't even need to work at all. You can just pay people to invest your money for you and live off the profits. I really like the idea of a meritocratic capitalist society but I think this fact somewhat breaks the model. Well look at that, your rambling got me rambling as well haha.
I think Milton Friedman's Negative Income tax is just simply wonderful and necessary to help the working class without defaulting on a free market. Always been an advocate for it! 👍
I’d like to be a politician in the future. One reason why people might be opposed to a flat tax is that it can be a disincentive to entrepreneurs because they know that if they start a business, they’ll pay the same tax rate as those who don’t.
Just stumbled on this channel and watched this video. Got to say you've got a refreshing way of explaining your point of view, even though I'm struggling to agree with you. It's just nice to hear your thoughts expressed so clearly. Will definitely keep watching!
Your thoughts on the negative income tax is a great idea. The problem with the US Welfare system is that most often, for every dollar you earn by working, you receive a dollar (or more!) less in government support. This pushes people to rely on the system, rather than working their way off, because the level needed to get off of support is so prohibitively high they often give up. I think it's brilliant.
A flat income tax sounds to me like a way to increase income inequality. Not really educated on the subject but that's what it sounds like would happen.
It probably would. But that doesn't necessarily bother me, so long as it is coupled with significant economic growth. Unfortunately, I don't have enough data to know if that would actually happen, so it's all just theory.
Pravus Gaming Well that's fine for you. But I oppose any system that would increase income inequality that greatly. That system seems like it wouldn't promote a middle class. Thanks for responding. Really looking forward to this series.
Andrew, I think you're assuming that income inequality is worse than it is in Pravus's situation. He's saying that if the economy grew enough to support the poor, it wouldn't matter if the rich got richer. He's not saying that he's okay with people being poor, he's saying that he doesn't care if the rich get richer. I believe I read that correctly.
Pravus Gaming I find it enlightening to hear your viewpoints, as it shows me that someone with such different conclusions can act on the same principles. Its also a bit funny as being a left environmentalist stamps me as a dreamer, where right viewpoints are based on the premise of people acting sanely or for the better of the whole.😅 well, maybe we are not that far of from each other after all
respectfully, I can't even fathom how you don't see why the equality goes down if you pass a flat tax. If the wealthy already represent a large portion of a nations economy and the impoverish are already, well in poverty, any law that would theoretically decrease the amount of wealth the lower income have access to and increase the wealth of the wealthy obviously will further the gap between the existing 1% and the people of lower income.
Well, the ideal point for a flat income tax is a low tax rate. Along with that progressive income tax punishes people for being successful. Now, I do think that SOME progressive taxing can be good when mixed particularly for: people making poverty level income and minors. But anyway, assume the progressive tax changes at every $30000 of income. Now billy has made good choices in life and reinvested his money, thus making $150000 a year. Jack has made moderately good decisions and makes $120000 a year. Fred has gone for women’s studies as a degree in college and makes $32000 a year. Why should billy have a higher tax rate because he has done well? Along with that, based on previous decisions, billy would reinvest his money, thus helping him, corporations, and tax income through that. Also if Jill makes $149000 a year, she would then make more money than Billy because of the tax system. Also, because of the increased reinvestment, more jobs are created for those who are in poverty.
brennan gum same like programmings. Make one line of code. bug show up. Fixing the bug by creating another line. Press enter. 78 error code. *Slam the table*
About the progressive tax thing: You will never take him less than if you were paid less (in the US, I can't speak for the rest of the world). Even if you made just a single dollar past the 99% tax bracket, when your previous tax bracket was 2%. The rest of your income is taxed at 2% (and whatever lower tax brackets as well), and that dollar you earned above the 99% tax bracket is what's taxed at 99%. I worked as an accountant. I'm intimately familiar with this information, and I find the persistent myth that jumping a tax bracket affects your entire income to be extremely frustrating.
As a mathematician, my first answer to the taxation problem is that the percentage tax at a given income should be a function P(x) such that P is increasing but also x(1-P) is increasing. However I understand that people might not want to go to wolframalpha to figure out how much tax they owe. A simple way to approximate such a system is a tiered tax level similar to the one you suggested. All the following numbers are made up because I know nothing about economy, but I know this system is actually used in at least one country. Up to the first 1000 income you pay 0% tax. For all income from 1000 to 5000 you pay 10% tax For all income from 5000 to 20.000 you pay 25% tax, and so on. In this way, a person earning 10k would pay 0 for the first 1000, then 400 out of the first 4k, and then 1250 out of the last 5k. The accounting is simple since all the amounts are fixed except for the one relative to the threshhold one is in, and it does satisfy the two key properties: taxes do not decrease as income grows but also profit does not decrease as income grows. The threshholds can be adjusted easily, and a negative threshhold can even be added if welfare is to be implemented. Also, keeping the threshholds low can easily make this behave as a flat tax at medium and greater income levels, while not taxing the lower income levels as much.
I wholly agree with you on the idea of income inequality being a justice rather than an injustice, you are the only other person aside from myself and politicians that I have encountered with this view. This gives me hope.
M.Gundyr making economic sense is nice and not too long and monetary history of the united states since colonial times, also the progressive era. You will be surprised to see how many books he wrote in his lifespan.
Your ideas on deductions in combination with a flat tax rate are extremely interesting. I will definitely be looking into more real world affects of such a tax. Great idea.
Might be a bit late for this comment to get read, but there's a couple of things worth challenging in your worldview, the first is that there's a difference between "fair" and "equal", where "fair" seeks to level the playing field and "equal" seeks to be even handed. So that is why something like affirmative action could be considered "fair" while not being equal, if it is counterbalancing some systemic disadvantage. It's like giving a smaller child a box to stand on so they can see over a fence, his brother doesn't get a box but they can both see over. The other thing is your ideal world where, barring fraud etc, people who produce "things of more value" are "rewarded" more, and vice versa. The issue there is that both the concept of value and reward are heavily tied in to the values of capitalism and consumerism. To someone uninterested in big houses and new cars money isn't much of a reward, and value is mostly set by people with the most money. Additionally you have this idea that people who work hard and produce things of value will or should be paid the most, but the whole point of capitalism is that it rewards risking capital, not necessarily expending effort. I'm not saying that new business owners don't put in any effort, often the opposite, but if you're talking about directly adding value then venture capitalists should be paid very little. I'm not really getting into whether that's good or bad or right or wrong, just that it's important to look at the incentives provided by capitalism in the context of the system it creates and perpetuates.
I love your Democracy 3 gameplay series. Not only for the gameplay but also for the politics, while there are some policies you agree with that I agree with there are also some policies you agree with that I do not agree with but I love how you talk about it without trying to insult anyone who disagrees with you.
I will follow this development with great interest. Here in Bulgaria(a northern neighbour of Greece) the flat tax was implemented 10 years ago, but I don't imagine it has the same positive or negative effects compared to other countries. Still, I'm looking forward to see how the things will go on for Greece here.
This is my first time watching any one of your videos. If you were to run for president, you would have my vote good sir. Your arguments during the flat tax part were simple yet elegant and concise. Please run for president
You said that you'd willingly agree to take a smaller slice of the pie, if the pie is bigger but that wouldn't really make a difference at all. If there's more wealth (in ways of money), than prices would go up automatically because resources are still limited. I do agree with you, that more effort should be repaid with more outcome but that's already the status quo, because people get higher wages in general (that doesn't hold true for all jobs). Furthermore, if you would tax everyone equal (like for instance with a flat income tax), you would increase the gap between rich and poor, which eventually will lead to an uproar in my opininon. Keep also in mind that not all wealth is earned by effort, but is passed on to next generations through inheritance. btw: it's great to see you playing Democracy again! :)
Pravus, its kinda difficult for me to find someone else that share my political opinions, especially in regards to the economy and the role of the government in it. Nice to see that im not alone in YT.
Awesome video man! Glad to see someone who openly talks about his political view even if it isn't "mainstream". I have a similar political view as you and its nice to see I'm not alone! Keep it up!
I know I'm way late to the party on this one, but it's worth putting out there. The reason the game says equality goes down upon implementing a flat income tax lies ultimately with the definition. While you can apply whatever emotional definition onto equality that you like, when talking abotu income (in)equality, the simpliest definition is using the Gini coefficient which would undoubtedly increase (meaning more inequality) with such a tax system
I'm an Anarchist, so I fundamentally disagree with a lot of what you have said, but a lot of the points you made did make me think and I also appreciate how eloquently you explained your views.
Hi! Latvian viewer here. Just dicovering the channel and looking forward to watching the rest of your content :^) I also noticed a little false fact you stated in the video about Latvia and the flat income tax. Thanks to the tax reform of 2018 we no longer have a flat income tax rate of 23%. Starting 01/01/2018 Latvia switched to a progressive income tax. Annual income below €20k is taxed at 20%. €20k to €50k is taxed at 23% and anything above €50k is taxed at 31.4% I'm not sure of the same can be said about Lithuania and Estonia. I believe Estonia also had some sort of a tax reform but tbh I'm not sure about that. I know it's a small thing but still wanted to clear that up. Keep up the good work!
while i fundamentally disagree with some of your world views, particularly pertaining to taxation and income, its incredible how balanced and fair you are in presenting your view as well as that of those who you disagree with. in the polarized political climate we are living in this is extremely rare and should be valued. you got a new subscriber.
One issue I've found with the flat income tax is the amount that comes in. For a nation like the USA having only a flat income tax and the inverse could reduce the amount of government money by a substantial amount. I personally like to have a mix of scaling taxes that take more from corporations and people when they reach economic milestones and the the use of a universal basic income that kills off the poverty line. Then again I may be wrong, what do you people think
mineben256, I built my system to change with time as easy as I could. The brackets and milestones are able to be changed in ways that you can see who would be effected and changes can be targeted for perticuler groups instead of one large slider that could effect everyone we have levers that can effect anyone, but not effect others. The major part of your disagreement with the lower and higher end of a bracket if these are not specific or trailered to how the industry works. I see that perticuler statistics could be used for work and for multiple areas someone could be in. Someone could be at the top of one bracket while at the bottom of another. Only a few companies could be in a space of the top of all their brackets. Hope this clarifies my idea
Your commentary is excellent and while I do not always agree with your views you do make it clear that you are trying to represent the problems and benefits with different systems of taxation and governance. You make the internet a better place because of your educated, clear, and factual statements.
I think a negative income tax is a better system. I am actually glad you brought it up because I was in deep thought about this for most of the video up to that point.
The problem with a flat rate tax and minimum before paying is, in your example once you reached $24,999 with a 40% tax at $25,000 you would need a jump in earnings from $24,999 to $45,000 to make it worth having a pay rise, with the 62% you had in game would mean a pay rise of $24,999 to $65,000. With subsidies on earnings $10,000 I think you'd end up with a majority of your working people not earning enough to pay taxes and a large proportion claiming subsidies and with the rich using loopholes to not pay tax
Actually all pay raises are worth it. Only the income made above the flat number of $25,000 is taxed. So if you make $25,000 exactly you'll have just that. If you make $25,001, you'll have $25,000.60 with the 40% tax rate. So the disposable income from $45k would be: $45,000 - $25,000 = $20,000 $20,000 x .60 (inverse of .40) = $12,000 $12,000 + $25,000 = $37,000, with $8,000 taken by the gov't in taxes. :)
If you think about it this way, out of 100 people, if you started out and 0% and suddenly 1% of people would vote for you, that _is technically_ a 100% increase! Well done! :D
I totally get why people request this game from you. You are just at your best while playing this game. You're a political junkie and we adore your thoughtful diatribes, well-reasoned strategies, and your genuine desire to make the (virtual) nation they best version of itself!
I have one fundamental problem with this video. It's too short. Well, time for me to go binge your old series, now that I have seen a glimpse of the awesome mental exercise that was this video.
In Denmark, tax works like this: Depending on several factors you can earn up to a certain amount of money with a certain percent tax. If you earn more than that amount, the extra and only that has more tax. This means that there is no incentive to stay just under the next raise in tax percentage, and it also means that poor people (who need more of their income to survive) can live a decent life, whilst richer people will need to work harder if they want to live better, whilst they still have the income needed to survive.
You asked. I listened. Let's do this!
YYYYYYYYYYEEEEEEEEEEEESSSSSSSSSSSS Pravus, I was waiting for another democracy 3 series for a long time!!!!!!!!
Pravus Gaming you read my mind, I’m not a liberal, but your idea of a deductible flat tax is something I’ve thought of for years. I think the game is biased btw.
Do some rise of nations again!
Yes I love democracy 3
I love the idea about the tax plan
>Play as Greece
>Abolish all taxes
>Still have tax evasion
Can't complain about a lack of realism tbf.
Sajuek just good old Greece
its because people in greece are THAT good at evading taxes, ITS THE GREEK WAY!
I disagree with your politics, but I respect the way you portrayed them and acted with restraint while not shying away from the issues.
Same here, nice to see a point of view without attacking one another.
Jim Dear this, i like it. Different political view but don attack, discuss like civilized people
Jim Dear may I ask u why
Does that mean your a republican trump voter
s a m e
Look, my country will finally get rid of its economic crisis!
Praise Pravus!
Random Acronym
So how much longer until you guys join Venezuela?
jthedog Pretty sure things won't get that desperate. XD
Well I wouldn’t be that happy if I knew I had to pay a shit ton of taxes more
Random Acronym
Until the Europe decides to drop you that is.
Niklas Francesco Castiglioni
About 100% by the look of it. At that point I would be seeking refugee at any place that would take me.
Go facist for the justification cost.
WAIT.
Not Hoi4
kostandrea you can’t prove that
Facist take less time to justify war
I'm positively surprised the comment section isn't just one big "pay debts" meme.
Redbad of Frisia this comment section needs to pay its meme debts
Redbad of Frisia *Pay debt*
I'm new to the channel and this game. Hopefully, someone notices this. Does this game use the laffer curve? Or can someone tell me a little bit more about the game.
P A Y D E B T
Maybe most people now know Greece got unfairly fucked by the EU and not the other way around.
"I don't see how the 62% flat tax increases inequality because everyone's getting taxed the same percentage!"
Except: Someone with 2 dependents who makes $30,000 taxed at 62% has $18,600 to live on, that puts them below the poverty level for the US. Someone who makes $30 Million has $18.8 million to live on for a year, which is roughly 7 times what the average American will earn in their entire lifetime.
Just because the percentage is the same doesn't mean everyone can live on the leftovers, that's why it's not truly equal.
You’re too late. 2 years too late. But still, it’s not that hard to make over $15 an hour if you have 2 dependents. I don’t come from a privileged family, and I’m an immigrant myself and still make $15 an hour as a teen.
@@darealpoopster teen jobs aren't taxed
Armmigic They are. I’m literally 16 and I do get taxed.
@@Armmigic Yeah they fucking do bud
Except that in a normal tax system the person with 2 dependents would be taxed at 62% but the person who makes 30 million would be taxed at a lower 15% or so.
Pravus: "I believe in a low flat tax rate."
Pravus sets taxes to 60+ %
Me: lol
The problem in my opinion with a flat income tax is that the percent of income poor and wealthy people spend on basic necessities is different. A poor person might for example spend 40% of his/her income on rent, food, transportation etc., while somone higher up might only spend 25%. So a flat tax in such a case would only be more equal on paper.
That's a good argument
Anton Fleck Yeah but If You would get 30,000 € per year and You get 30% tax If You would get a Promotion and You earn 40,000€ You would get 40% would That be fair in your mind?
vlogi- ja pelivideot I don't think so. You're taking home the same amount even though you EARNED more.
Not exactly: In the example you have given you would only make 3.000€ more from that 10,000€ raise. If the tax rate in your example rose linear with income, you would lose money if you would have been given the promotion for 50.000€. Before (50,000€) you would make 25,000€, after the promotion (60,000€) you would only make 24,000€. So a rising income tax could easily lead to income stagnation, which is why most tax systems seperate income into brackets: The first 1,000€ are taxed at x%, the next 2,000€ are taxed at y% and so on. This both prevents a heavy tax burden on the poor and income stagnation.
Yeah, that would prevent activly hurting the poor. But I still think a progressive income tax is fine the way it is and I don't really see the benefits from a flat tax.
There are some issues with having a flat income tax with a threshold of $25000. For example, regional living costs. It is much more expensive to live in New York City than in a rural area, and oftentimes the poor do not have the money to move to places that are more affordable. There is also the fact that you can earn upwards of $50000 and still be living paycheque to paycheque due to health issues, children, supporting elderly parents or living in a place that has a very high cost of living.
That's certainly true, though that's already the case with federal tax deductions in our progressive system.
You would need to look at where the regional costs increase and where the most people are using welfare. While there is still poor people in NYC ect you find that they are theminory of that group and there would be a number that would account for average. Maybe it's 30000 instead of 25000, but there would be a number not far off where you'd get above the poverty line untaxed.
This is why you need a good free public healthcare system. XD
Nothing is free. Somebody foots the bill.
That old chestnut huh?
It's not even true. Nearly all first world governments pay significantly less per person to cover everyone, than the U.S. government does for a system that only covers some emergencies. Economics usually isn't a zero sum game.
Me: oh man I love Pravus, I forget why I was frustrated with him when I first started watching him.
Pravus: *Starts a new Democracy 3 run as a liberal capitalist*
Me: Oh. Right. Now I remember.
Yeah thats how i feel about people that have communist or national socialist political views
"i believe in a nice flat tax, and eventually, I'll want to eliminate income and carbon taxes."
Nope.
Grant Daily Yes
@@Reality--- tbf, everyone's entitled to their views, but it can be annoying to listen to views that I feel are flat out wrong.
@ I have learned that way of thinking, as I have had to over the years due to my circles being filled with Conservative types who I do not necessarily agree with. I was more making the point that hearing opposing opinions can be frustrating as it challenges your beliefs, and also a lot of those conversations tend to be confrontational.
"The first 25k you earn isn't taxed, everything else you make is taxed at 15%"
That's a progressive tax... you're arguing for a progressive tax
Progressive only at the very bottom. Most progressive taxes tax higher earners higher percentages
Not necessarily, it seems like taking the best of both a Progressive Tax and a Flat Tax and making a new type of income tax system.
William S Progressive taxes usually are staggered. He wants a flat tax for people who make above 25k.
exactly, it's just a veeeery simplified progressive tax. was thinking that when i heard it and tried looking for this in the comment
@@ComCommie that I guess is the perfect thing for a classical liberal then.
A few things about this game, it was made by a Brit so their perception of certain concepts might be skewed especially with how polarised American politics is.
Secondly, I appreciate how you highlighted your views in a way that wasn't "lol libcucks want to aggressively tax you, kek!". Politically I'm a Scandinavian style Social Democrat so basically capitalism run with socialist principles. Personally, I think rich should pay more tax because their fortunes often come from using their capital advantage to undercut wages and conditions and honestly, there comes a point where wealth becomes extreme to the point where it's a high score system as opposed to a mechanism for sustaining an opulent lifestyle. Also, I find the idea that not taxing the rich because they are job creators to be factually incorrect as we've seen from the last 40 years of neo-liberal politics where as taxes decrease the poorest become even poorer. I think it also comes down to my personal experience, I grew up poor in a family run by a single mother who worked in a factory, but I also live in a country that invests in public schools and has a free college tuition system. Because of that system which is tax funded I have a salary people would consider as middle class and I don't like the idea of pulling up the ladder I used to rise up. If that makes sense and didn't come off as a huge passage of waffling.
Robert Hymes Social democratic*
the neo liberals raised taxes on everyone not lowered
in the last year america has entered a period of economic recovery spurred on by the recent tax cuts. wages are at an all time high and unemployment is at an all time low
the welfare system in america is the largest cause of our poverty
im not a huge fan of 15.3% of my income going directly to some heroin addict so he can shoot up all day instead of working (not ALL people on ssi are druggies but ive never met a druggie who wasn't on ssi) especially when im scraping to get by as it is. things have been really good latley because we have started to get rid of neo lib policies and taxes
1 the middle class is growing again for the first time in ages
2 just look at the "war" on poverty the liberal government enacted several welfare programs that over time have been draining the economy and causing poverty to rise
3 15% of my income goes into social security .drug addicts are on social security. i dont see how you can somehow see these facctors and say my money doesn't go to druggies
4. im not to worried about the whole tv actor thing. there's not anything that intrinsically makes a career politician better at politics than your average person (some of them don't even seem to think about politics as often as the average youtube commenter). with how easily accesible information is formulating an effective plan for any political situation is within the grasp of anyone with high enough reading comprehension.
5 well yeah. so far i haven't seen any evidence of corruption from trump himself if that's what you are implying
i just want to make things clear that im not saying every politician should be a celebrety or vice versa and i dont overvalue trump's presidency. after three bumbling bafoons from both parties someone doing a mediocre job just looks really good
.
We're not really in a period of economic growth though, we're in a period of economic stabilization at best. People are being payed-buy also being shunted into lower classes than their parents. While the middle class is growing, it's also depressing; more people are entering it, but the entire category is dropping. Wages are increasing, but becoming more baseline and people lack growth options; in essence, more people are making money, they have better than nothing jobs, but these better than nothing jobs have no upwards progression.
People are finding their degrees irrelevant, and taking jobs they are grossly overeducated for with no advancement options and no benefits; the economic growth currently expressed is not sustainable, and while people are finding jobs they are neither good jobs, nor jobs they will be in for a significant time by any measure. And debt is growing massively and unsustainable, with the only solution an increase in taxes or a massive cut of all programs-including things that make money for the government in the long term, or which are fueling employment (like defense spending). In essence, there is no sustainable path forward for keeping these tax cuts without destroying all social programs.
Now, as someone who apparently wants to destroy all social programs, that might sound dandy to you. However, even ignoring the political problems with this, consider that drug welfare programs also include drug prevention programs. Do we cut those? What about welfare programs that help people eat; if we let those people starve, then they die of illness, becoming infectious in the process, which increases medical costs for everyone in the short and long term. The elderly would die in droves if we truly took the steps needed to balance our debt via cutting welfare. The poor would both die, become sick, and become incapable of functioning due to preventable diseases, drug addiction, and other such disasters, which increases their burden on society. Furthermore, they would strain our police, firefighters, and other public servants-which we would likely need more of.
Oh, and the health care system would crash entirely, unless you did this process so gradually you resigned to stripping public funding out of health care by, say, *3018*. They already treat people who cannot afford it, and are kept afloat by government programs. If you stopped those government programs and stopped preventative welfare, people would show up on deaths door, have to be treated by law, and the hospital would neither have a way to pay nor a way to receive compensation for this, if you are talking about removing all payment for hospitals from the government. It's worth noting this is already a problem; the government doesen't pay it all by a long shot-but it would be a much more severe one. Health care costs would skyrocket, and health insurence would become unaffordable, as would most drugs.
Additionally, antibiotics and many drugs would *stop working*, because unless a disease is treated *entirely*, the pathogens can become immune to the effects. People who have to choose between buying antibiotics to finish their treatment or buy *food for their children* choose to take the remaining treatment and pray. They cannot afford, in all cases, to take the entire dosage. This is seen with T.B. treatments in any country without effective healthcare-I.E. completely non-socialized health care. Non-profits shoulder some of the burden, but otherwise you end up with a lot of people sick with very preventable diseases-and occasional, spotty coverage resulting in people with resistant strains, to the point we almost can't treat some T.B. strains. While people have to struggle with these decisions if they are uninsured now, they will have even more severe risks if you remove welfare systems.
The supposed utopia where no welfare existed at all was not a pleasant place; it lead to the great depression, earlier horrors of industrialization, and societal collapse. To speak of the political reality, and trying not to be completely alarmist, it's not wrong to say that the breakdown of welfare strongly contributed to ww2. The lack of these policies lead to truly lassaiz-faire countries having to deal with massive communist and national socialist rebellions that eventually took over their governments, combined with war-weariness as a trigger. The result nearly collapsed the world. Part of the solution was social welfare-even the most important part of the solution-bounded by democratic principles unlike nazi and communist policies. It is *necessary* to preserve society, politically.
In essence, for a variety of reasons, any policy of destroying welfare wholesale is ignorant and stupid. It would either cost more money or be undertaken with such callous disregard that you destroy society. This isn't to say you can reduce welfare without those penalties-but a true dismantling is flatly impossible. And, indeed, the most effective half measures would be the most callous-stop treating the elderly entirely. That would save welfare and have a negligible economic impact. Would also let the government steal inheritance.
Finally; a small portion of your tax money goes towards druggies. If you want to be outraged about who is getting your tax money, you should be outraged over all those 80 year olds on medicare. How *dare* they have medical issues! This is ignoring that "druggies" is hardly a useful category of people; it's entirely possible that if include everyone who smokes, drinks, or uses legal drugs, you could make that claim and be right. But we're casting such a large net that it's meaningless.
"Flat income tax" Me: Yay "Everyone is gonna get taxed 70%" Me: Excuse me WTF
Oh nice, my favorite series! I like getting triggered by your political commentary
i tried to play as a libertarian... no such mechanics. uninstalled. thank goodness for PB
Bel Rick yeah democracy 3 is pretty statist
@@DreamsOfLiquidSilver
this is why we murder the rich and the elites and create an Libertarian Socialist Utopia, where we all smoke weed and stab capitalists.
@@ibnbattuta7031 TRU
@@ibnbattuta7031 Hello, your profile is from Extra Credits
*Inserts obligatory Grease joke and reference*
Save my country Pravus! You're the only one who can 😂
I enjoy all of your stuff prav, but for the longest time I've liked your Democracy 3 vids the best. I really love this game and you're basically the only person on UA-cam who plays it. Thanks, love ya!
Thanks Pravus for once there's a competent politian leading my country
Praise Lord Pravus
I dont think you would be saying the same thing if you were living in the game world. He is taxing everyone 62% to be fair😂
edi01 Well this is not so much of a deal... Allready in Greece give approximately 70 percent of their income for taxes and pension and healthcare insurance without a social provision worth to mention. The problem is much more intense for young freelancer profesionals and enterpreneurs.
@@edi0157 when the people of Greece don't have money anyway, I dont think a higher tax rate would be much of a concern.
"I'm going for a Nationalist Socialist country"
Hmm where have I seen this in a struggling country in Europe before?
In my australia game in noemal difficulty i have a perfectly stable australia eith 90% income tax and flat income tax also everyone is a patriotic enivorimentalist farmer the game has lasted for over 200 turn's and im constantly getting all the vote's.
That's video games for you.
Are you sure you don't have the middle ages mod on?
I dont.
All of australia are also liberal capitalist's.
I'd love to be a patriotic environmentalist farmer
I love your rambling dude
It's really adds a twist of reality to your playthroughs
Praise Pravus! He will show the world a blueprint to a better Greece!
18:32 Obviously this decreases "equality"... not in taxes, but in living conditions, because now the poor and middle class will suffer way more than the rich.
You know, I enjoy listening when you speak about different polices and the pros and cons of every policy. I actually learn a lot about politics this way and when I read the discussions in the comments I also learn about different political views much more than I do during a political speech.
Is it possible to create a country where everyone is self-employed,but unemployment exist? (in democracy 3)
It is possible to break the game in many, many ways. That is indeed one of them.
Greece's unemployment is BAD !!! How is the poverty not really bad ???
Unemployment doesn't neccecarially mean poverty, it's generally a huge part of it though.
Admiral Obvious Exactly
Welfare.
Yes its back for one last time I missed the good old pravus talks that lasts from the start of the video until the end this is gonna be a good series.
Oh god I can’t wait for Pravus to talk about evolution again
Jakob Waters
What happened last time?
The one problem with the "diminishing returns" argument, in my opinion, is that the point where it becomes "not worth it to produce more" is at a point when the person has already earned incredible, life-changing, amounts of wealth.
Progressive tax imo is fairer because lower income people need more of a percentage of their income to survive
StalinWasBallin then tax the people who arent in abject poverty at the same rate
Luke Morrell what exactly would that accomplish?
StalinWasBallin ideally the extremely poor wouldn’t pay any income tax (like they do now). And only middle class and the rich pay taxes
Yea sure is fair, I mean the US has one and it has lead to the middle class paying all the taxes and the rich and poor paying nothing. The 16th amendment is the worst amendment to Constitution even worse than the 18th.
I kinda agree ,but only if the difference is with 1-3% ,because more is not good in my opinion
I think that what is important to consider when talking about fairness in the context of rich and poor is that a rich person/organisation has more bargaining power than a poor one, and so tends to get better deals, meaning it gets even more powerful, so one could argue that taxing the rich more is just balancing the advantages granted to them by their wealth.
Finally my country is doing something important.
Hey look buddy, I'm a engineer that means I solve problems...
...Not problems like, What is beauty...
...because that would fall within the purview of your conundrums of philosophy...
I solve..... practical problems.
*sips a cold one* For instance...
...How am I going to stop some mean mother-Turkard from tearing me a structurally superfluous bright future?
Mr. President why is our economy so bad? Pravus: " We are producing diddly freaking squat."
I'm acutally super happy I found this, I love playthroughs but I think this is the only one that fulfills my nerdiness about policy at the same time. To dialogue on the idea of "fairness" and tax, I see the progressive tax as more fair not because I think wealth comes at injustice, but because it means everyone is making a proportionate sacrifice to live in a society. I think it makes the most sense if you view it through the lens of a speeding ticket - I know people who can easily afford speeding tickets, and they've told me they've managed to rack up several in a month because the fine doesn't penalize them enough to even matter to them, whereas for people who can barely afford one speeding ticket, they're less likely to speed because if they had to pay a speeding ticket it would mean sacrificing a basic need. If you had speeding tickets that were a certain percentage of income - not enough to put people on the streets, but enough to cause significant loss, it would truly divert the disincentivized behavior (in this case, speeding) in the entire population.
I can tell you have put some thought into your view, which is why I'd like to critique some of it.
There is a contradiction between your definition of justice and your 'determinism'. First: Fairness as neutrality, treating people the same regardless of their race, gender ect. We don't control who we love, which gender we identify as, what colour our skin is, what culture we come from, what religion we were raised with. At least, changing these things to suit some other groups whims weighs heavily on a person, effecting their basic human dignities. So any different treatments amounts to arbitrary discrimination. I can agree with that.
Second, moral Desert: We ought to judge people on what is within their control. Moral responsibility requires at least some causal responsibility (additionally, intent and other factors such as free will may be necessary). So we should treat people different based on their actions, we give them praise and blame. We hang out with nice people and lock up thieves in prison. We aren't obligated to treat these people equally. And I agree with that.
The problem is that you explicitly claim people's income levels are completely within their control. (It's quite an extreme idea and I don't agree, but let's grant it for the sake of the argument.) That means it is not unfair to treat people differently based on their income levels.
Furthermore, as some other commenters have pointed out, the proportion of basic cost of living goes down as income goes up. So the further up the scale you go, the less your dignity is affected by a higher income tax.
But let's take the other extreme where income is totally out of our hands. By a combination of genetics, social factors, cultural biasses, upbringing and such, we were predestined to make the amount of money we do. Maybe moral responsibility doesn't exist at all. Why, we can't help it, can we? But getting more income is then based on arbitrairy whims and conincedences of history and we all deserve the same amount of money.
I don't buy either of these extremes and I don't think you do either. But there does't seem to be a point in between where it's suddenly wrong to treat people differently based on their income.
Now you may object to my argument that pre-tax income is exactly just deserts based on individual actions. There is no further social value beyond this market value. So this precise accounting eliminates any further moral imbalances, so that it is truly a neutral starting point. Then It is the government that takes away from this and so any taxation would be unfair theft, in effect. I understand that this isn't your position but rather a kind of libertarian position. So if you or anybody feels like reading a well written argument against that idea (instead of a UA-cam comment), I refer you to aeon.co/essays/if-your-pay-is-not-yours-to-keep-then-neither-is-the-tax
So that's the negative argument, against progressive taxes from Fairness. The positive justification for progressive taxation only then comes from whatever injustice in the system you care to observe and name.
The Matthew-Effect should be a good starter, a more modern version would be Pickett's findings that revenue from capital out-grows labor without war or high progressive taxes. That is, they get richer without doing more work.
If your're more of a micro level-guy, the power-dynamics of wage negotiation are systematically skewed when one person faces the total loss of income and the other is contractually obligated not to care.
Finally, the Lockean proviso would dictate that any man can take as much from nature as he can manage, ONLY so long as there is enough left for everybody else. The state of nature would lead me to believe that it's high time the rich started sharing.
So I don't think we have to agree about what level of inequality is just, to agree that the present level isn't.
Fun videos, peace
YAY!! Not only a return to the most awsome series,you are also playing as my country! HYPED!
I consider myself a liberal in social matters and a socialist in economic matters, loosely following the american definition for such matters or my understanding of them (I'm Brazilian btw). In my own view, my ideal, kinda utopic world view, would be something along the lines of anarchist communism or anarchist syndicalism. Anyway, all that to say that I disagree in many matters with you, but I rarely find someone so understanding, patient and smart to talk about such matters, specially when we find ourselves so far away in the economic spectrum. I can see by the way you talk and comment your sources and studies that you have vast knowledge about it, and even got me thinking about the whole tax question. All this to say I appreciate your work Pravus, and hope to see more great content, as usual, in the future. Have a great day and cheers from Brazil! :)
hi. youre evil. history tells us this. Please gain some empathy and keep your politics to your own life. When you die of starvation et al the rest of us benefit from not having another Trotsky or Stalin. Cheers
Bel Rick low quality bait
stop wanting to enslave and murder people. That would be high quality bait for ideologies. FFS boy go read a fucking history book then study humanity aka economics
@@TheBelrick I'm a history major in the biggest and most successful university of Latin America. Right now I'm getting my license to become a history teacher, but thanks for the tip anyway =P
Hello Pravus,
I think the reason why a flat income tax is seen as increasing inequality is mostly because of two factors: 1) The basic cost of living, and 2) The ability to invest extra income.
1) Goods and services generally cost the same for the poor and the rich. While indeed a wealthier person might buy more expensive goods than a poorer person, it is unlikely that a person that is say ten times richer than me will end up spending ten times as much as me on food. Maybe twice as much, maybe even five times as much, but most likely not ten times. In this regard, you could construe "cost of living" as a sort of regressive tax imposed on us by our environment and way of life and that everyone has to pay, with the poor paying a larger % of their income and the wealthy paying a small % of theirs. This leavers wealthier individuals with more money lying around to dispose of as they see fit, which leads to point 2.
2) Investing extra income: Since wealthier individuals are left with more income after their basic necessities are paid for, this leaves them free to invest this money. Safe, sound investments will generally turn a profit, which will increase the individual's income and leave them with more money they can invest, etc. This can lead to a feedback loop where the richer you are, the richer you get, whereas if you are poor, you may not have much extra income, if any (the poor often end up getting in debt to pay for stuff like health care, car loans and such) and will be unable to improve your income through investment.
Now I agree with you that it is perfectly just and fair for people who work hard and make better decisions to make more money. Unfortunately, that's not necessarily how I perceive our economy to work. As you mentioned, you are not a corporatist, so I feel you might agree with me on the point that corporations will naturally lead to a divergence from this principle, as corporations end up creating two kinds of citizens: Investors and shareholders, who own the corporation and who profit from the wealth it generates, and wage workers, who work for the corporation and whose productivity vs salary ratio is seen as an optimization problem (i.e. you want to pay the least salary for the most productivity).
So in this regard, if you are wealthy you can use your extra income to become an investor or shareholder and profit from the wealth generated by a company, whereas if you are poor or even middle class, your income will mostly come from wages and you won't be left with much if any to invest after living expenses.
Hell if you're rich enough, you don't even need to work at all. You can just pay people to invest your money for you and live off the profits. I really like the idea of a meritocratic capitalist society but I think this fact somewhat breaks the model.
Well look at that, your rambling got me rambling as well haha.
what will happend to the series of Heart of Iron IV Reviving the Holy Empire???
KUYA DL that happen on the second video he will upload
oohhh I thought that his not going to upload that series
Awesome! Glad you brought it back!
I think taxing the richer more makes sense. They require more of the overall production of a country in order to earn their wealth.
Yes finally my country. Better not fu.. thinks up Pravus I have high hopes for you
YEEESSS! It's back! It's what made me find your channel and you are so good at talking through this game and entertaining as well
Lol, I suppose Greece is max difficulty in of itself.
I think Milton Friedman's Negative Income tax is just simply wonderful and necessary to help the working class without defaulting on a free market.
Always been an advocate for it! 👍
I’d like to be a politician in the future. One reason why people might be opposed to a flat tax is that it can be a disincentive to entrepreneurs because they know that if they start a business, they’ll pay the same tax rate as those who don’t.
Graham Turner ... what? That doesn’t make sense, as the entrepreneur might end up making more money then average
You're ideas about the taxation system is brilliant
ayyyyy you play with my country
παμε ελλαδα
Just stumbled on this channel and watched this video. Got to say you've got a refreshing way of explaining your point of view, even though I'm struggling to agree with you. It's just nice to hear your thoughts expressed so clearly. Will definitely keep watching!
Who wants to start a cult around Pravus
Daniel Kalpakidis im in :D
There's already one in his Discord.
Wants to start a cult? HA! The puny mortal has not perceived of the great cult of pravus
I love your ideals from what I’m hearing so far. Your idea on taxes are great.
Classical liberal? We are looking at a rare breed my friends.
remember u doing this back when u only had 10k subs the growth is real
Oh wow! I just happened to play Democracy today since I got in the mood! Shocker!
Your thoughts on the negative income tax is a great idea. The problem with the US Welfare system is that most often, for every dollar you earn by working, you receive a dollar (or more!) less in government support. This pushes people to rely on the system, rather than working their way off, because the level needed to get off of support is so prohibitively high they often give up.
I think it's brilliant.
A flat income tax sounds to me like a way to increase income inequality. Not really educated on the subject but that's what it sounds like would happen.
It probably would. But that doesn't necessarily bother me, so long as it is coupled with significant economic growth. Unfortunately, I don't have enough data to know if that would actually happen, so it's all just theory.
Pravus Gaming Well that's fine for you. But I oppose any system that would increase income inequality that greatly. That system seems like it wouldn't promote a middle class. Thanks for responding. Really looking forward to this series.
Andrew, I think you're assuming that income inequality is worse than it is in Pravus's situation. He's saying that if the economy grew enough to support the poor, it wouldn't matter if the rich got richer. He's not saying that he's okay with people being poor, he's saying that he doesn't care if the rich get richer. I believe I read that correctly.
Pravus Gaming I find it enlightening to hear your viewpoints, as it shows me that someone with such different conclusions can act on the same principles. Its also a bit funny as being a left environmentalist stamps me as a dreamer, where right viewpoints are based on the premise of people acting sanely or for the better of the whole.😅 well, maybe we are not that far of from each other after all
if you're even slightly observant, you'd see that it said "income inequality" increases
Great episode. A long time passed since the last Democracy3 series. Thanks
respectfully, I can't even fathom how you don't see why the equality goes down if you pass a flat tax. If the wealthy already represent a large portion of a nations economy and the impoverish are already, well in poverty, any law that would theoretically decrease the amount of wealth the lower income have access to and increase the wealth of the wealthy obviously will further the gap between the existing 1% and the people of lower income.
Well, the ideal point for a flat income tax is a low tax rate. Along with that progressive income tax punishes people for being successful. Now, I do think that SOME progressive taxing can be good when mixed particularly for: people making poverty level income and minors. But anyway, assume the progressive tax changes at every $30000 of income. Now billy has made good choices in life and reinvested his money, thus making $150000 a year. Jack has made moderately good decisions and makes $120000 a year. Fred has gone for women’s studies as a degree in college and makes $32000 a year. Why should billy have a higher tax rate because he has done well? Along with that, based on previous decisions, billy would reinvest his money, thus helping him, corporations, and tax income through that. Also if Jill makes $149000 a year, she would then make more money than Billy because of the tax system. Also, because of the increased reinvestment, more jobs are created for those who are in poverty.
Waited for your new Democracy sooo long! :)
If your an engineer do you solve problems like, what is beauty?
whats funny is engineers often create the problems they have to solve lol
brennan gum same like programmings.
Make one line of code.
bug show up.
Fixing the bug by creating another line.
Press enter.
78 error code.
*Slam the table*
About the progressive tax thing:
You will never take him less than if you were paid less (in the US, I can't speak for the rest of the world).
Even if you made just a single dollar past the 99% tax bracket, when your previous tax bracket was 2%. The rest of your income is taxed at 2% (and whatever lower tax brackets as well), and that dollar you earned above the 99% tax bracket is what's taxed at 99%.
I worked as an accountant. I'm intimately familiar with this information, and I find the persistent myth that jumping a tax bracket affects your entire income to be extremely frustrating.
Where do geeks put their trash?
The economy
Rubbish bin😁
Best joke ever lol.
As a mathematician, my first answer to the taxation problem is that the percentage tax at a given income should be a function P(x) such that P is increasing but also x(1-P) is increasing. However I understand that people might not want to go to wolframalpha to figure out how much tax they owe.
A simple way to approximate such a system is a tiered tax level similar to the one you suggested. All the following numbers are made up because I know nothing about economy, but I know this system is actually used in at least one country.
Up to the first 1000 income you pay 0% tax.
For all income from 1000 to 5000 you pay 10% tax
For all income from 5000 to 20.000 you pay 25% tax, and so on.
In this way, a person earning 10k would pay 0 for the first 1000, then 400 out of the first 4k, and then 1250 out of the last 5k. The accounting is simple since all the amounts are fixed except for the one relative to the threshhold one is in, and it does satisfy the two key properties: taxes do not decrease as income grows but also profit does not decrease as income grows.
The threshholds can be adjusted easily, and a negative threshhold can even be added if welfare is to be implemented. Also, keeping the threshholds low can easily make this behave as a flat tax at medium and greater income levels, while not taxing the lower income levels as much.
*insert something undisciplined here*
I wholly agree with you on the idea of income inequality being a justice rather than an injustice, you are the only other person aside from myself and politicians that I have encountered with this view. This gives me hope.
Hayek > Keynes
Your opinion, Pravus ?
M.Gundyr Hayek all the way, Keynes theory was absolute crap.
Keynes
Rothbard>hayek, have you read a rothbard book, i think its because mises and hayek were minarchists while rotbard is ancap
claudia santana no, never read him ; what book from him do you recommend?
M.Gundyr making economic sense is nice and not too long and monetary history of the united states since colonial times, also the progressive era. You will be surprised to see how many books he wrote in his lifespan.
Your ideas on deductions in combination with a flat tax rate are extremely interesting. I will definitely be looking into more real world affects of such a tax. Great idea.
MNYESSSSSSSSSSSSS ANOTHER DEMOCRACY VIDEO OOORRAAAAAAAAAAHHHH
Might be a bit late for this comment to get read, but there's a couple of things worth challenging in your worldview, the first is that there's a difference between "fair" and "equal", where "fair" seeks to level the playing field and "equal" seeks to be even handed. So that is why something like affirmative action could be considered "fair" while not being equal, if it is counterbalancing some systemic disadvantage. It's like giving a smaller child a box to stand on so they can see over a fence, his brother doesn't get a box but they can both see over.
The other thing is your ideal world where, barring fraud etc, people who produce "things of more value" are "rewarded" more, and vice versa. The issue there is that both the concept of value and reward are heavily tied in to the values of capitalism and consumerism. To someone uninterested in big houses and new cars money isn't much of a reward, and value is mostly set by people with the most money.
Additionally you have this idea that people who work hard and produce things of value will or should be paid the most, but the whole point of capitalism is that it rewards risking capital, not necessarily expending effort. I'm not saying that new business owners don't put in any effort, often the opposite, but if you're talking about directly adding value then venture capitalists should be paid very little.
I'm not really getting into whether that's good or bad or right or wrong, just that it's important to look at the incentives provided by capitalism in the context of the system it creates and perpetuates.
It's it really a good game?
Yes! Another episode I was just binge watching your older democracy 3 vids :D
Is there a option to leave the eu if so that would help
Tommy M didn’t the eu bail Greece out?
@@DreamsOfLiquidSilver Greece also fucked itself to get into the EU
You can make me like every game you play, that's why you are my favorite channel!!
provus 2020
User_name_101 it would be 2020 for political office in the USA
I love your Democracy 3 gameplay series. Not only for the gameplay but also for the politics, while there are some policies you agree with that I agree with there are also some policies you agree with that I do not agree with but I love how you talk about it without trying to insult anyone who disagrees with you.
5th view
Thank you for being reasonable and expressing your opinions while playing this game in a respectful manner
I will follow this development with great interest. Here in Bulgaria(a northern neighbour of Greece) the flat tax was implemented 10 years ago, but I don't imagine it has the same positive or negative effects compared to other countries. Still, I'm looking forward to see how the things will go on for Greece here.
This is my first time watching any one of your videos. If you were to run for president, you would have my vote good sir. Your arguments during the flat tax part were simple yet elegant and concise. Please run for president
You said that you'd willingly agree to take a smaller slice of the pie, if the pie is bigger but that wouldn't really make a difference at all. If there's more wealth (in ways of money), than prices would go up automatically because resources are still limited. I do agree with you, that more effort should be repaid with more outcome but that's already the status quo, because people get higher wages in general (that doesn't hold true for all jobs). Furthermore, if you would tax everyone equal (like for instance with a flat income tax), you would increase the gap between rich and poor, which eventually will lead to an uproar in my opininon. Keep also in mind that not all wealth is earned by effort, but is passed on to next generations through inheritance.
btw: it's great to see you playing Democracy again! :)
Pravus, its kinda difficult for me to find someone else that share my political opinions, especially in regards to the economy and the role of the government in it. Nice to see that im not alone in YT.
Awesome video man! Glad to see someone who openly talks about his political view even if it isn't "mainstream". I have a similar political view as you and its nice to see I'm not alone! Keep it up!
I know I'm way late to the party on this one, but it's worth putting out there. The reason the game says equality goes down upon implementing a flat income tax lies ultimately with the definition. While you can apply whatever emotional definition onto equality that you like, when talking abotu income (in)equality, the simpliest definition is using the Gini coefficient which would undoubtedly increase (meaning more inequality) with such a tax system
I'm an Anarchist, so I fundamentally disagree with a lot of what you have said, but a lot of the points you made did make me think and I also appreciate how eloquently you explained your views.
Hi!
Latvian viewer here.
Just dicovering the channel and looking forward to watching the rest of your content :^)
I also noticed a little false fact you stated in the video about Latvia and the flat income tax. Thanks to the tax reform of 2018 we no longer have a flat income tax rate of 23%.
Starting 01/01/2018 Latvia switched to a progressive income tax. Annual income below €20k is taxed at 20%. €20k to €50k is taxed at 23% and anything above €50k is taxed at 31.4%
I'm not sure of the same can be said about Lithuania and Estonia. I believe Estonia also had some sort of a tax reform but tbh I'm not sure about that.
I know it's a small thing but still wanted to clear that up.
Keep up the good work!
while i fundamentally disagree with some of your world views, particularly pertaining to taxation and income, its incredible how balanced and fair you are in presenting your view as well as that of those who you disagree with. in the polarized political climate we are living in this is extremely rare and should be valued. you got a new subscriber.
I have never encountered someone playing a game and reference my favorite economist. and thus i subbed.
One issue I've found with the flat income tax is the amount that comes in. For a nation like the USA having only a flat income tax and the inverse could reduce the amount of government money by a substantial amount. I personally like to have a mix of scaling taxes that take more from corporations and people when they reach economic milestones and the the use of a universal basic income that kills off the poverty line. Then again I may be wrong, what do you people think
mineben256, I built my system to change with time as easy as I could. The brackets and milestones are able to be changed in ways that you can see who would be effected and changes can be targeted for perticuler groups instead of one large slider that could effect everyone we have levers that can effect anyone, but not effect others. The major part of your disagreement with the lower and higher end of a bracket if these are not specific or trailered to how the industry works. I see that perticuler statistics could be used for work and for multiple areas someone could be in. Someone could be at the top of one bracket while at the bottom of another. Only a few companies could be in a space of the top of all their brackets. Hope this clarifies my idea
that's the first time a gameplay about politics/economy it's supported by good points about both, great job : )
Your commentary is excellent and while I do not always agree with your views you do make it clear that you are trying to represent the problems and benefits with different systems of taxation and governance. You make the internet a better place because of your educated, clear, and factual statements.
I think a negative income tax is a better system. I am actually glad you brought it up because I was in deep thought about this for most of the video up to that point.
The problem with a flat rate tax and minimum before paying is, in your example once you reached $24,999 with a 40% tax at $25,000 you would need a jump in earnings from $24,999 to $45,000 to make it worth having a pay rise, with the 62% you had in game would mean a pay rise of $24,999 to $65,000. With subsidies on earnings $10,000 I think you'd end up with a majority of your working people not earning enough to pay taxes and a large proportion claiming subsidies and with the rich using loopholes to not pay tax
Actually all pay raises are worth it. Only the income made above the flat number of $25,000 is taxed. So if you make $25,000 exactly you'll have just that. If you make $25,001, you'll have $25,000.60 with the 40% tax rate. So the disposable income from $45k would be:
$45,000 - $25,000 = $20,000
$20,000 x .60 (inverse of .40) = $12,000
$12,000 + $25,000 = $37,000,
with $8,000 taken by the gov't in taxes.
:)
If you think about it this way, out of 100 people, if you started out and 0% and suddenly 1% of people would vote for you, that _is technically_ a 100% increase! Well done! :D
I totally get why people request this game from you. You are just at your best while playing this game. You're a political junkie and we adore your thoughtful diatribes, well-reasoned strategies, and your genuine desire to make the (virtual) nation they best version of itself!
I have one fundamental problem with this video.
It's too short. Well, time for me to go binge your old series, now that I have seen a glimpse of the awesome mental exercise that was this video.
In Denmark, tax works like this:
Depending on several factors you can earn up to a certain amount of money with a certain percent tax.
If you earn more than that amount, the extra and only that has more tax.
This means that there is no incentive to stay just under the next raise in tax percentage, and it also means that poor people (who need more of their income to survive) can live a decent life, whilst richer people will need to work harder if they want to live better, whilst they still have the income needed to survive.
Democracy 4 is in alpha, if you want to check it out. They are looking for input for balancing, bug testing, e.t.c.
To be fair, I love that I can learn politics and other stuff that you dont really learn at school.