Re:BioNTech alone could lift German economy by 0.5% this year
by imtringued on Tuesday August 10, 2021 @02:55PM
(#28132723)
I'm not sure how to express this economic problem but I personally am no longer surprised that companies with government funding are highly profitable. You may call it tax Seigniorage (I honestly don't know if it already has a name) but it's a more general concept.
Income taxes compound based on distance to government spending.
A receives money from the government directly and pays 20% tax, A spends all his money. B gets 80% of the initial government money, B spends all his money on C who gets 64%. At a distance of 10 only 10% of the original money is left in the economy. You essentially have to work 10x as hard for the same wage.
The fundamental problem is that everyone has a distance of 0 to the government when it comes to tax collection but only A has a distance of 0 when it comes to government spending.
So, the fact that BioNTech has a big share of the economy isn't surprising. It's simply that much easier to earn money directly from the government than from the rest of the private economy.
What is the solution to this problem? Well, an approximation would be welfare. Consumers now have a distance of 0 to government spending. Of course it's just a hack. A better solution would be to create a "tax coupon" i.e. you pay 3000€ in taxes. Rather than straight up 3000€ the government gets a coupon worth 3000€ of your time. The coupon will have your name written on it. This forces the government to buy your products directly which reduces the distance to the government to 0. Alternatively the government could deposit the coupon at a bank and the coupon money would pass through the economy untaxed. In either case you would always receive your full wage rather than a wage that was diminished by tax compounding the further away you are from government spending.
This doesn't apply to governments exclusively. A payment processor gets to charge a fee with a distance of 0 on every transaction meanwhile when the revenue is spent the fees get to compound until they have reached you, meaning it is much easier to earn money off the payment processor than from the rest of the economy.
Does the tech/advertising industry perpetuate the same form of inequality? It definitively has a distance of 0 to every single individual and it centralizes the profits but does it extract a fee out of every individual? Is advertising a hidden tax on every purchase?
This might be true of everything that is either a basic need (food, shelter) or forced upon every member of society without their consent (i.e. car dependence as a hidden tax on everything).
By the way I am not questioning that the governments or companies in question don't produce value. They certainly do. The problem isn't the individuals, it's about the unintended consequences of supposedly simple concepts on a societal scale. Individuals may feel that the rules are fair on an individual level but what if they are thoroughly unjust on a societal scale?
If relative poverty is certain then isn't it just the logical consequence of the system we have built?
Income taxes compound based on distance to government spending.
A receives money from the government directly and pays 20% tax, A spends all his money. B gets 80% of the initial government money, B spends all his money on C who gets 64%. At a distance of 10 only 10% of the original money is left in the economy. You essentially have to work 10x as hard for the same wage.
The fundamental problem is that everyone has a distance of 0 to the government when it comes to tax collection but only A has a distance of 0 when it comes to government spending.
So, the fact that BioNTech has a big share of the economy isn't surprising. It's simply that much easier to earn money directly from the government than from the rest of the private economy.
What is the solution to this problem? Well, an approximation would be welfare. Consumers now have a distance of 0 to government spending. Of course it's just a hack. A better solution would be to create a "tax coupon" i.e. you pay 3000€ in taxes. Rather than straight up 3000€ the government gets a coupon worth 3000€ of your time. The coupon will have your name written on it. This forces the government to buy your products directly which reduces the distance to the government to 0. Alternatively the government could deposit the coupon at a bank and the coupon money would pass through the economy untaxed. In either case you would always receive your full wage rather than a wage that was diminished by tax compounding the further away you are from government spending.
This doesn't apply to governments exclusively. A payment processor gets to charge a fee with a distance of 0 on every transaction meanwhile when the revenue is spent the fees get to compound until they have reached you, meaning it is much easier to earn money off the payment processor than from the rest of the economy.
Does the tech/advertising industry perpetuate the same form of inequality? It definitively has a distance of 0 to every single individual and it centralizes the profits but does it extract a fee out of every individual? Is advertising a hidden tax on every purchase?
This might be true of everything that is either a basic need (food, shelter) or forced upon every member of society without their consent (i.e. car dependence as a hidden tax on everything).
By the way I am not questioning that the governments or companies in question don't produce value. They certainly do. The problem isn't the individuals, it's about the unintended consequences of supposedly simple concepts on a societal scale. Individuals may feel that the rules are fair on an individual level but what if they are thoroughly unjust on a societal scale?
If relative poverty is certain then isn't it just the logical consequence of the system we have built?