Daydreaming About Inequality – A New Income Tax System

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This article reflects my personal opinion.

The taxation of income often becomes a controversial issue in election debates (given that those debates actually revolve around factual topics). However, the proposals put forth mostly concern new regulations, new special rules, exceptions and deductions and small rate hikes or cuts and often are nothing more than half-hearted gifts to certain interest groups. In the long run, this leads to a progressively complex tax system that, combined with a similarly proliferating social welfare system, results in a bureaucratic leviathan that can paralyse a society and economy and at the same time fails to mitigate inequality. What if one started from scratch and intended to create an income tax system that is simple while being comprehensive and aims to mitigate growing income inequality and was not afraid of experimenting with somewhat unfamiliar ideas? In this article, I want to briefly explore a little thought experiment and imagine a new income tax system  (I will sometimes use Germany as reference case). Continue reading “Daydreaming About Inequality – A New Income Tax System”

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You Can’t Always Get What You Want: Some Thoughts on Inequality

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This article reflects my personal opinion.

The economic article published here two weeks ago gave a short introduction to income inequality and showed that it has been on the rise again for the past decades in most developed countries. And while there is less reliable data available, the same is most likely true for wealth inequality. Inequality of opportunity has probably been stable and hence failed to work as a countermeasure. These developments have led to movements around the globe fighting for more equality and demanding a higher contribution to society from the rich and wealthy. Their voices are increasingly being heard and some of them have developed inspired, constructive propositions to reshape societies, with the recently most prominent one being the campaign of Bernie Sanders in the United States. However, at this point in history, one can assess that perfect equality is neither achievable nor desirable. While it might work in small, very homogenous communities, every time it has been tried on a larger scale it led to oppression and persecution of dissidents and the formation of a new, politically legitimised elite. So given that inequality is not inherently bad, the question arises: When does inequality become a problem that should be tackled by society? Continue reading “You Can’t Always Get What You Want: Some Thoughts on Inequality”

No Farewell to Arms: The Violence Will Continue

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This article reflects my personal opinion.

The recent events in Dallas, Minnesota and Louisiana and all the other places, where gun violence tears the American society apart on a regular basis, were likely caused by three issues. First, by a racial problem that the United States never managed to fully overcome and that once again shifted into the focus of media attention. Second, by growing inequality that increasingly disfigures the American dream. And third, the shootings fundamentally are symptoms of a problem that is rooted in the American identity, namely that the history of the United States has been to a large extent a narrative of violence, both regarding foreign affairs as well as internally. None of these issues and developments have been conclusively come to terms with by the American public and as long as this will not happen, the spiral of violence will keep on spinning. And only a miracle would allow this year’s presidential election to be the trigger for this desperately needed redefining of the American identity. Continue reading “No Farewell to Arms: The Violence Will Continue”

The Times They Are A-Changin’

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This article reflects my personal opinion.

On Friday, supporters of the Remain campaign in the United Kingdom European Union membership referendum were faced with the ruins of their beliefs. In contrast with most of the latest polls, a majority of the voters had decided for an exit of the UK out of the EU. Although the demographic analysis of the referendum has not yet been finalised, it is already rather clear where the lines between the two camps ran. Besides the obvious separation between London, Northern Ireland and Scotland as net supporters of the Remain campaign and most of the rest of England and Wales as Leave strongholds, voters divided alongside age-demographic and educational lines. Areas with many young and well-educated residents were more likely to vote “Remain” while areas with a high concentration of low-skilled workers and old residents tended to vote “Leave” (see this guardian article for a colourful demographic breakdown of Thursday’s referendum). A lot of young voters feel that their future has been sabotaged by a generation who will not be around long enough to suffer the consequences of their vote. Congruently, many academics and other high-skilled workers perceive the referendum as a blow to their economic opportunities by ill-informed protest voters. And together, Remain supporters all around the world ask themselves “How did this happen?” Continue reading “The Times They Are A-Changin’”

Welcome to The Tenth Man!

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People who know me well know that I have been entertaining the idea of writing and becoming a journalist for many years. At the same time, I have been studying Economics since 2011 and was lucky enough to find a strong interest for inequality, taxation and financial issues. This blog combines these two passions and gives me an opportunity to experiment with writing about topics that I am engaged in in economic articles and opinion pieces. It also works as an outlet so I don’t have to bother my friends with too-long-to-read Facebook comments anymore. “The Tenth Man” is a metaphor for critical thinking and always questioning common convictions:

“…it is the duty of the tenth man to disagree. No matter how improbable it may seem, the tenth man has to start digging on the assumption that the other nine are wrong.Continue reading “Welcome to The Tenth Man!”