This is objectively false. Portugal ranks about middle in total taxation, against the rest of the EU. Taxes are about 34% of GDP, which is pretty average in Europe.
You have all the data here, with the most interesting summary in the "Tax Main Aggregates" document:
https://ec.europa.eu/taxation_customs/business/economic-anal...
We pay middle but earn way less than middle, meaning cost of goods and services are pretty much the same within some margin, but income is a order of magnitude off.
The country provides free health services, with quality levels that are worldwide references.
Everyone has access to free high school education and next to free university access. You can earn a medical degree for less than 10k€ in school fees.
Police, although understaffed, are effective, resulting in top world ranks in citizen security.
The only real black spot, in State services is justice. It works, but is slow as molasses.
All of these services must be paid. You draw a correlation between GDP, disposable income, and taxation level that is erroneous. The link is between State service level and taxation level. In Portugal these look OK.
Still silly, but not insane.
In all countries I know of, tax withholding is not a perfect match to final tax bill, and that could amount to a no-interest loan to government like you say. Not sure if in practice that loan is unusually large in Portugal, could be.
With the exception of a few notable oil economy countries that have sovereign wealth funds, federal governments most certaily do not invest tax revenue in the market. Taxes are used to finance the running of the country. If governments are lucky something is left over paying its' bills and the government runs a surplus.
Please provide a citation that Portugal invest its' citizen's tax revenues in the financial markets and makes a profit from those.
>"If they did it the other way they'd have to raise the tax rates to compensate, which wouldn't go down for the politicians doing it, even if the net result is the same."
Umm no if they did it the other way around the government could additionally tax people's gains from investments, and people could save for things like their retirement at the same time.
What "they" said was:
>"that is money the government is investing and earning a return on."
"Investing money and earning a return on it" is universally understood to mean putting your money to work in the financial markets. Your comment is disingenuous at best.
Further governments don't earn a "return" when they spend money on a stoplight or a bridge. Infrastructure requires upkeep, maintenance and eventual replacement.
It's a coast center not a profit center. If it was the latter governments would be building infrastructure like crazy and running a budget surplus. And that clearly isn't the case is it?
You have the right to your opinion, but changing words meaning is taking it a bit far.
In the context of a government or any other large institution this is most certainly understood to mean the financial markets. That is not "opinion" but rather common understanding in English language business parlance.
You have resorted to cherry picking words and trying to play semantic games. You have added exactly nothing to the conversation. In fact it's worse as resorting to "that's just your opinion" type remarks just degrades the level discourse. It's just slightly above name calling.
However, in order to minimize the amount due in August, the government captures an estimate of your income tax every month (before you get paid).
It is this estimate that is designed to be simple, and applies deductibles to the whole salary. There's no harm: If it happens to capture too much, you'll see your money back next August.
Under the progressive system, there are no surprises or delays, what I paid that month is exactly what I owe.
Like another poster said, effectively an interest free loan to the government from taxpayers.
What am I missing?
Simplicity and personal data protection. In order to capture tax in advance with perfect estimates, employers would need to know your total income and deductible expenses. With the simplistic system, they just need to know how much they're paying you.
If so, that seems literally insane to me. Why wouldn't Portugal fix this?
Health system is completely broken the public Hospitals don't have enough resources or money to threat the patients with dignity, people still live with very low salaries and high prices of goods, The industry is still very weak unlike its mentioned in the article etc.. etc...
Honestly seeing these articles makes me really sad.
No need to be so dramatic. Compared with countries with a similar economy, our system is objectively very good. Independent reports will back me up.
Austerity can involve tax increases, spending cuts, or combinations of the two. It’s not limited simply to spending cuts.
That said, it very much matters what “kind” of austerity one engages in, as research indicates that tax increases and spending cuts have different respective effects on an economy.
In reality Austerity is defined by tax breaks for the very rich, combined with spending cuts and privatisation - i.e. economic enclosure, debt peonage, and asset sweating - for everyone else. Sometimes that includes tax increases, but if som it usually means indirect taxation.
Austerity is purely ideological. Even the IMF acknowledges that recent Austerity regimes have underperformed expectations while examples of stimulus spending have had the opposite effect.
This is objectively false, and a poor atempt at forcing a particular spin on a very objective definition.
Looking at Portugal, the bailout program enforced tax increases exclusively on the middle and upper class, along with publix sector workers who are by far more priviledged than private sector workers. For example, the bailout program saw the introduction of a new tax bracket for the richest taxpayers which forced a 53% income tax rate.
And also privatizations are implemented to avoid additional austerity pushes by providing the government with one-off sources of free cash thus avoiding further spending cuts or tax increases. Therefore, they are in fact an alternative to austerity, not a consequence.
> Austerity is purely ideological.
This statement is so mind-numbingly wrong that it boggles the mind how anyone in this point in time could be so disingenuous or clueless to keep parroting this silliness.
Let's look at Portugal, who doubled its sovereign debt fron 60% of the nation's GDP to over 120% in about 5 years prior to any mention of austerity, and did so by piling a string of yearly deficits of over 10% including a structural deficit of around 3%.
If your state is so dependent on overspending that it needs loans after loans to keep working and pay up salaries, who in their right mind will argue that they don't desperately need to cut spending and/or raise taxes to avoid going bankrupt or even to keep functioning?
If austerity was actually "purely ideological", how exactly would it be possible for Portugal to keep their 10% spending deficits?
https://en.wikipedia.org/wiki/Austerity
Those who favor austerity will say that the austerity laid groundwork for Portugal's success, those who have opposing view say that it only helped.
As far as I'm concerned if a government spent and loaned recklessly for decades and the only solution is to make temporary cuts so the government can go right back to spending (ie, no long term changes to government culture, risk management, and fiscal responsibility were made) then while it's still "austerity", it's not necessarily a very useful one.
Additionally, despite all of the FUD about "austerity" measures the average nation state across the entire western world (and in Asia too, minus Singapore) have exploded in size over the last few decades.
Most of these "austerity" programs are a tiny, temporary, sliver relative to the massive growth in scale of the administrative state.
Nor can you point to some half-hearted "austerity" where there was no change in the gov culture which brought about the unsustainable spending, nor factoring in the complete scale on which the previous government spent recklessly for which austerity is required in some countries vs others (and size of GDP, dependency on public investment/social programs, etc).
Even HN isn't immune to political flamewars.
When has that ever happend?
People do not run successful campaigns on the basis of displacing hundreds of San Francisco families, for example, regardless of whether or not those families are rightfully entitled to their housing or not. Once people have come to rely on something, it will upend their livelihood to remove it, and that is not something most people are comfortable voting for.
If you've ever worked in a government job, you can compare the state of the bureaucracy now to previous versions of the texts, and see that they only ever grow and compound on themselves.
It's not a very good argument, to defend a reduction of welfare payments to discourage immigrants from coming. Immigrants are much more attracted to high salaries (which implies obviously that they want to work) than by high welfare payments.
Secondly, the example you give is typical of news coverage about terrorism. Flooding the news with stories about the attack and the perpetrator, with which you can gain exactly 0 useful information since it's essentially an anecdote. You're much more wise to look at large-scale data than single events, examined to exhaustion.
Even beside all that, you're clearly trying desperately to shoehorn your anti-immigration opinions into a discussion about an unrelated topic. That, also, is frowned upon.
Direct link to the map: https://i.imgur.com/lBvUjTM.png
"It's not a very good argument, to defend a reduction of welfare payments to discourage immigrants from coming." I can't think of a better one. Or to speak with Milton Friedman: You can have open borders or you can have a welfare state. You can not have both. May I assume you are against a welfare state?
"Immigrants are much more attracted to high salaries (which implies obviously that they want to work)" Most immigrants that I am talking about can hardly read in their own language. I can track down the statistic for you.
" than by high welfare payments." Have you ever heard the word "welfare shopping"? They chose the country in Europe with the biggest payouts.
"Even beside all that, you're clearly trying desperately to shoehorn your anti-immigration opinions into a discussion about an unrelated topic."
I don't like that you give the impression I am against immigration. I am an immigrant myself and countries SHOULD attract immigrants. But it is a serious point of consideration that Portugal seems to avoid a specific kind of immigrant.
That's not saying that it's okay to "defend a reduction of welfare payments to discourage immigrants from coming." It's saying that if you don't reduce your welfare payments, you will eventually be discouraging immigrants from coming, probably by closing your borders. It's pretty much a political necessity. So Friedman's argument is actually the opposite, "let's reduce welfare so we can afford to have more immigrants here!" Or perhaps "you can have your generous welfare but be careful, this will eventually lead to discouraging immigration to the point of having de-facto closed borders, with all the unwanted side-effects of that."
No, this is YOUR interpretation of this statement. First, the statement is neutral. Knowing Friedmans background it is clear that he was not a big fan of a welfare state (yet the idea of basic income is from him).
"..we can afford to have more immigrants here!" No, the immigrants I was talking about would just not come anymore.
https://www.liberation.fr/checknews/2018/12/20/non-le-pere-d...
In Portugal the income tax rate for a €100k gross salary is around 50%.
Then of course there are other forms of taxation, such as a gas tax of over 100%, a rent tax of around 30% and of course a 23% VAT.
VAT in Norway is 25%, petrol yesterday was €1.6/L (and we're a major oil producing nation). A car here is probably 1.8x of same model sold in Portugal, purely due to the taxes. About 35% of my (unremarkable) paycheck effectively goes towards income tax, after all tax breaks are factored in. If you are in top tax bracket, you'd be easily paying 45% effective income tax, with nominal over 50%.
Do we get fair return for the money? Most people here seem to think so. Can smaller tax on over smaller base income be felt disproportionately? You have a point there. However Portugal is a first world nation, and this level of civics, infrastructure, education and healthcare does require substantial money for upkeep. There is no good way around this, but hopefully you get a better deal on that due to economies of scale than if you had to provide all that for yourself on your own.
Norway is an outlier even among rich countries. Having lower taxes than Norway does not mean taxes are low.
The economy is growing, yes, mainly thanks to tourism. However, austerity is still much in place and taxes have only gone up since 2008 for middle and higher class (for low class people the conditions are much better of course). In order for a country to have a "revival", it needs to be growing in multiple industries but Portugal is evermore dependent on tourism which doesn't scale that well. Entrepreneurship is very limited to due to insane levels of bureucracy, high taxes, difficulty in firing people and most talent leaving to the UK/Germany/Switzerland in search of better salaries and better "value for money" taxation.