terça-feira, 14 de abril de 2020

How inequalities are consolidated over time

The inequalities and impoverishment in 1995/2018 are evident and are shown differently among the countries on the Mediterranean coast more or less scrutinized and intervened by the institutions of European/global capitalism; mainly ECB, Eurogroup, European Commission and, IMF 


1 - How to manage an aviary

2 - Important indicators of social regression

3 - Comparison between the victims of the Troika 

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1 - How to manage an aviary

The monopoly of state control by the political class is an instrument for the reproduction of the political class itself, of continued support to companies - especially the largest ones - and also, a factor of segmentation and social stratification. The fragmentation of the fiscal punishment - pointed out, as a rule, as just - even when regressive - burdens, above all, the lowest income; sometimes the costs of collection and control of tax evasion exceed those of potential collection, which the political class classifies as a policy of… tax justice.

While income from work is scrutinized by the State, within the framework of its osmosis with the financial system, income from capital is the subject of various and creative instruments for tax reduction, for non-declaration of potentially taxable income, for the use of offshores, of accounting as business costs for elements of private-use - vehicles, travel ... 

Social segmentation and the use of regressive policies for the realization of fiscal plunder are open doors for the widening of inequalities. Note, for example, the use of the maximum VAT rate (23%) in the consumption of electricity, imposed by the Troika and which continues to calmly burden all households, even though about six years have passed over the ostensible presence EU / IMF zealots. On the other hand, Law 12/2008 of 2/26 abolished meter rental fees; but, shortly after, the chambers and the water and electricity suppliers invented other names to maintain a juicy recipe that, in the case of electricity, is called "power rate". How much does it cost for public hospitals to be underfunded and poorly managed so that private ones, in the context of celebrated partnerships, have more and more users?

Thus, the fiscal punishment is masked in the form of taxes stripped of class-based, neutral prejudices, presented as shaped by technical aspects that mask all machinery aimed at guaranteeing and expanding capital accumulation to the detriment of the common population, especially those who live. of work. To this aim, it is necessary to make precarious, unstable, reduce the purchasing power of those who work and make this mass of people competitive, just as it happens with chickens, which are struggling, whenever the time comes for the distribution of the feed. The feed is carefully measured so that the chickens produce a volume of meat, increasing per unit of time or, produce a maximum yield (meat) per unit of feed; as in an aviary, workers have no name and still lesser rights.

This harsh reality is defined by the think-tanks hired by the transnational corporations and by the financial system and, presented for publicity and commercialization by the political classes, by the managers of the State apparatus, with a greater or lesser show to (a) regret, after the formals have passed. routines of social concerts. 

2 - Important indicators of social regression

In capitalism, it is intended, naturally, that the function of work, of those possessing the ability to generate wealth, should include assistance in forwarding this additional wealth to the owners of the means of production (the capitalists) and to the State, which, in turn, will be in charge of using this surplus in a manner appropriate to the perpetuation of the capitalist system; now, benefiting the accumulation of wealth in the holders of the means of production, satisfying the multitude of non-capitalists, to maintain or buy their passivity, essential for the system's perpetuity. Of course, it should be thought that partition this surcharge in more general terms, it is necessary to pay due attention to the demands of non-national capitalists, the global financial system, the indigenous political class, etc; a partition that depends on the degree of subservience of governance, the softness of and opposition, which is deeper in the case of geographical areas which are mere s runners crossed the logistics networks of multinational and where there is efficient service laundry money.

Taking statistical elements (Eurostat) for the 1995/2018 period, for the various European countries, it is interesting to compare the evolution observed in that period, for four major financial flows: central government expenditure, VAT revenue, revenue taxes on income and property and the remuneration of employees.

Governments and political classes collaborate in collecting the tax burden from the general population, taking into account the non-penalization of companies and so-called entrepreneurs, because they are the ones who create jobs and wealth… bla, bla, bla; and they will contemplate… the enormous and well-known humanitarian concerns, always attentive to the turning towards “green” since that don’t affect the accumulation of capital. Obviously ... 

Thus, public expenditure - here, restricted to that of the central administration of nation-states - must necessarily increase, as is the prerogative of economism, focused and dependent on growth; or rather, a diffuse interweaving of mutually feeding variables (GDP, profits, taxes, investments, consumption, income, sales ...) which is, consequently, also valid for municipal administrations or, of specific devices, such as Social Security.

The public expenditure includes the need to support and encourage investment, to maintain a mild or tolerable tax burden for companies, subsidies, benevolent legislation so that the capital will be attracted or, do not move to where the risk and the tax burden is lower or even, null. Conversely, for competitiveness to remain and for foreign investments to enter a country, labor legislation penalizing those who work, low wages (competitive, as they say) and appropriate qualifications are required. In short, all the advantages for the capital, all the burdens for the work, having as express, formal and synthetic objective, the growth of the enigmatic GDP.

State expenditure is fueled, essentially by taxes and the use of debt. It is known that the former is extracted from the population without any defined consideration - it is an exception - and the use of debt immediately generates the obligation to pay interest and, in the long term, a repayment. It is not difficult to see that the exaction is much more favorable for governments than the use of debt. All state machinery or, better, a real artillery - tax apparatus, executions, seizures, fines, retentions and immense data crossings that search the lives of the least favored population are imposed on those forced to pay taxes. However, governments are tolerant of capital movements abroad or through intramural tax benefits, either by building formulas that do not prevent capital transfers to offshores or, creative formulas to dissipate the traces of fraud and the perpetration of financial crimes. or the laundering of mafia activities and their interpreters.

At the outset, it is not easy for a nation-state to cancel a debt it has incurred without the creditor's consent. Similarly, nation-states incur debt, interact with the global financial system for that purpose, without giving any information to taxpayers about the application of the borrowed capital; but, taking for granted that the population will bear the cost of this new debt, without questioning and, above all, without even having a sense of what happens.

The proceeds of the loans are placed in a bottomless pit or diluted in the immense machinery that constitutes the state apparatus. Governments act towards the bulk of the population, like despots, without obligations to their subjects.

The graph below shows the evolution (1995 = 100) of salaried wages compared to VAT revenue, income and property taxes and central government expenditure. For the assessment of policy makers for the situation, we have added below a table with the dating of governments during the aforementioned 25-year period.

            The division of responsibilities by the various government gangs

1995 / Apr 2002
Jun 2011 / Oct 2015
Apr 2002 / Mar 2005
Durão / Santana
Oct 2015/2018…
Mar 2005 / Jun 2011

                          Despesa da Adm. Central - Central Administration Expenditure            Receita IVA - VAT revenue

                         Receita - impostos rendimento e propriedade    Revenue - taxes on income and property

                         Remuneração assalariados - wages of salaried workers

In more detail, it can be seen that:

·       In Portugal, the anti-social policy of all governments in the period 1995/2018 is clear: VAT revenue doubles in 1995/2004 -05, there is an identical doubling for total income and property taxes (1995 / 2006 -07 ) and State expenditure (1995/2007 -08 ). However, the total wage earners have only doubled their income after more than twenty years (1995/2017);

·       The total wages of salaried workers grew steadily until 2008, in the middle of the Socrates consulate, stagnated until 2010, falling the following year, when the famous “engineer” left (temporarily) the scene;

·       Passos welcomed the Troika intending to go beyond the Troika itself; and starred in wage cuts, freezes, redundancies, increased tax burden and, other rascals, flattening the ground in 2015 for Costa to enter the scene, ahead of the fabulous contraption;

·       It should be noted that the volume of salaried employees only in 2017 reached the level of 2010; and that in 2012 it was at the same level as 2005;

·       The VAT revenue is the bone structure of tax revenue because it is almost neutral for businesses and brutally burdens the working population, with a high portion of income applied in consumption, which is extensive and severely burdened by VAT; which reveals the role of the state apparatus in the plundering of the product of labor. VAT grows regularly over the government s Durão / Santana with a rise of 17% to 19% in June 2002; it has increased from 19% to 21% four months after the beginning of the Socrates consulate in March 2005; and, finally, it stands at 23% on the first day of 2011, still under the baton of Socrates and his minister Teixeira dos Santos; what Passo s e Costa, conveniently kept iv and were contented with, quibbling miserably about the reduction of some crumbs in the rate that affects electricity consumption - and that in the end, even that didn't happen;

·       However, even in the time of Socrates, VAT revenue stagnates in 2008 and undergoes great variations, presenting in 2011 values ​​not very distant from the collection of 2007/8. In 2011, raising the rate to 23% does not prevent a visible fall in state revenue from the tax, taking into account the period of falling income and consumption, following the application of the dictates of the Troika;

·       As of 2014, VAT revenue evolved very significantly, allowing Costa and Centeno's financial brightness, tripling in 2019, its value compared to 1995. And, as can be easily seen, widening the differentiation of the evolution of the revenue of the VAT and labor income;

·       Following the previous point, it is revealing of the antisocial nature of the regime that VAT revenue triples in a period almost equal to that in which labor revenue has only doubled. The antisocial character of the post-fascist regime, in all its splendor, is consistent with the reactionary nature of the dominant part of the political class and the conservatism and ineffectiveness of union institutions or so-called left parties, objective accomplices of the punitive character of politics established decades ago;

·       In the section of taxes on income and property remains a more marked growth than the remuneration of employees exception of the years 2003/2005, a period that fits all, practically, within Durão / Santana governments;

·      Since 2006, the evolution of this group of taxes has strong growth, with some parallelism  face to registered for VAT and, in the dynamic more detached than the checks of with labor income; 

·     The Troika and its dual houseboys Passos/Portas promote, in 2013, a huge increase over the previous year (about € 4,100 M, 29.3% up compared to 2012). 2013 revenue remained at the same level until 2017 and, already in the Costa era, there was a reasonable increase in 2018, which was more moderately replicated in 2019/20;

·       As observed for VAT, taxes on income and property consolidate in the post- Troika growth markedly higher than the evolution of wage income. Clearly, in the wake of the 2008 financial crisis and the intervention of Troika - with the subservient obedience of the Portuguese political class as well as the stagnant union structures - a social environment was created leading to a greater precariousness in the lives of those who do not belong to the political oligarchies and economic - workers, unemployed, retired, young people ...

·       The central government expenditure accompanying the march of labor remuneration to 2002, surpassing the whole of last thereafter, especially after 2009. It follows for the rest of the period, one increases evident cycle at the end of Socrates consulate (200 9 /2010), followed by an increase Another significant co m monitoring the Troika steps of operation (2012- 2014), with the intermediate break that placed 2012 expenditure at the level of four years earlier. There follows, in the Costa management, a period tending to reduce the bumps that strongly characterized the previous period; however, despite the “excellence” of the magician Centeno, state spending in 2018 is at the level of nine years earlier. 

·       As is evident, so much restraint, there was nothing virtuous about it. It reflected the imposition of salary stagnation in the civil service; the degradation of the NHS - along with the growing delegation to the private sector, especially the well-known public-private partnerships; the mess of teacher teaching placements; unlike what happens with the armed forces, at the service of NATO although, without the capacity to defend the territory, if it were to be attacked; a perfectly useless presidency of the republic, which shone one ignorant till 2015, has been succeeded by an issuer of frequent vacuities, such Marcelo Rodrigues Thomas or Américo Rebelo de Sousa, who understand the differences between the former fascist regime and the post-fascist of nowadays; social security more geared to forgiving corporate debts, financing patronage as clever as ignorant, than to improve the lives of pensioners; a judicial apparatus where everything is jammed up, waiting for a prescription, especially when it stumbles with great figures of the kleptocratic regime.

3 - Comparison between the victims of the Troika

We include in the designation “victims of the Troika” countries like Greece and Portugal where in fact, the formal intervention took place and with rigor; countries, such as Spain and Italy, where this intervention was less formal or invasive, taking into account the political, demographic and economic dimensions of these countries; and, excluding Ireland, where its financial difficulties resulted only from the rescue of Anglo- Irish Bank, whose losses were quickly incorporated by the Irish State.

Behind, we incorporated a graph that, for the period after 1995, shows the evolution of global elements for the Portuguese economy - state expenditure, VAT revenue, revenue from income and property taxes and also, for the global volume of remunerations of work. Then, we will observe, for the five countries mentioned above, the comparative evolution for each of the aforementioned economic quantities.

Relating to government spending, Cyprus stands out from the beginning, with a unique and uncontrolled growth in the context of a depositary country of enormous mobsters capital or, if you prefer, a laundry. 

For the rest, the regularity of the evolution of Italian public expenditure stands out (it grew only 56% in 1995/2018), in contrast to that of other countries; Italy was far from reflecting the failures of the financial system in public management, which are visible in the rest - Greece, Portugal and, Spain. In the latter, it is worth noting the great growth in public expenditure until the emergence of the financial crisis, but less explosively in the case of Spain, which is followed by a period of strong deceleration which, in the last year considered, shows not only the irregularity of the level public expenditure, such as the fact that it is below the levels reached before the peak of the crisis. The social and financial costs resulting from the growth in debt are known and, above all, felt.

In the case of Greece, the state's expenditure is, in 2018, at the level recorded in 2003, which shows the huge flow of cuts, as well as the drop in the standard of living of the Greeks. In Portugal, the level of 2018 approaches that of 2009, which is not yet observed in the case of Spain.              

                           State Expenditure

In general terms, Cypriot state expenditure has grown 3.7 times since 1995, followed by Portugal 2.2 times, Spain 1.9 times, Greece with an increase of 70% and Italy, just over 50%.

We continue with a similar approach for VAT and the same countries. Again, Cyprus appears with values ​​that are gradually different from the rest of the countries included in the graph, from the beginning of the century. Thus, VAT revenues, in the Cypriot case, in 2018, were 6.4 times higher than in the standard initial year (1995), against 3.3 times in the case of Spain, 2.9 times for Portugal and 2.5 or 2.4 times, respectively for Greece and Italy.

After regular and similar growth until the beginning of the century, with growing revenue, particularly in the Spanish and Greek cases, VAT revenue is placed (2007) at values ​​close to 2.7 times that recorded in 1995. In that period, Portugal has less dynamism and Italy demonstrates its relative regularity also in the growth of VAT revenue.

In the graph, in 2007/09, the negative impact on VAT revenue, in all countries, is evident, with particular highlights for Spain and Portugal, in the latter case, the contraction induced by the Troika is evident; as of 2012/13 VAT revenue is rising, with a more pronounced and parallel tendency for Iberian countries. In 2013, Greece places VAT revenue at the level of 2004 and, even in 2018, the amount is still close to that of 2006. Spain and Portugal successively achieve the highest volumes ever, from 2014 and 2015, respectively.

                      Value Added Tax (VAT)

In the chapter on income and property taxes, the relative regularity of their evolution in Italy is underlined, which was only changed between 2006/2008 and 2017 through more notorious additions; all of this in a plan to double revenue in 2018, compared to 1995.

All the other countries considered show abrupt and violent changes in the levels of revenue from income and property taxes. 

Cyprus shows a huge increase, almost a doubling of revenue between 2004 and 2008, following a notable drop between 2002 and 2004; although with sudden and significant variations, Cyprus presents the highest level of progression of these taxes, among the countries considered.

The revenue growth shown by Greece is very marked, tripling its value in 2009 or 2012 compared to 1995; and that the Troika's performance will certainly not be strange. As of 2015, the level of these tax revenues stabilizes at around 2.5 / 2.75 times the level of 1995, with Portugal as the company that reached this level in 2013, during the supervision of the Troika, with increases in the last two years.

Finally, Spain has one of the lowest rates of progression until reaching, in 2007, the value of 2.5 times compared to 1995, followed by a sharp drop until 2009. At the end of the period, Spain shows itself as the country, of this set, with the lowest rate of growth of the set of taxes on income and property (75% more than in 1995); it should be noted that Spain resumed in 2009 the level reached in 2004 after reaching an intermediate peak of growth.

                               Taxes on income and property

Labor wages evolved in parallel until 2001, with the difference between then being the great rise in Cyprus for a decade and other increases, less marked in the cases of Greece and Spain, situations that involute, respectively, in 2010 and 2009.

                           Labor wages

The breaks that followed are very uneven. In Cyprus, the volume of wages at work goes from 3.1 times the 1995 level in 2011 to 2.6 times three years later, in the aftermath of the financial crisis; from then on, the volume of remunerations rose significantly, reaching a level slightly lower than in 2012.

Greece has the biggest drop in total wages for work; these corresponded, in 2009, to 2.75 times the value of 1995 and, only 1.9 times in 2016, the indicator growing again, since then, which has not happened since 2009.

In Portugal and Spain, the moments of the beginning of the decrease in the totality of work remunerations took place, respectively, in 2011 and 2009; the period of decrease in the mass of remuneration in Spain was four years (2009/2013), against only two for Portugal (2011 and 2012). It should be noted that there is perfect parallelism in the evolution of the total wages of the two Iberian countries, from 2010 as it had been happening until 2002.

Italy, with a steady evolution until 2011, stabilizes at this level until 2016, after which there is a growth in the wage bill, placing itself with a dynamic similar to that observed for Greece and, slightly below that registered for Portugal.

(to be continued)

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