Economic system.

I've always stood by the notion that business will regulate itself, and the government should keep the hell out of it. Although it seems the whole socialism/capitalism debate is a never ending/back to back debate that never comes to a final conclusion.
Saving the more in depth details for later on in the replies, what system do you follow and why? Is there another system you think would serve the world best?
(Please answer with reasoning)

 

I'm unsure what an ideal economic system would be. I live in Belgium which is a country with high taxes and an established social security system which I'm happy with especially looking at health care because it seems to be very expensive in a place like the US while here virtually anyone can afford it.

Then again looking at the refugee crisis going on it seems to be common knowledge by now that a significant amount of these refugees are actually economic refugees looking for a better life (our social security system). Even worse, some of these people simply come here for benefits and send back money to their own countries so consumption in the country they're actually getting their money stays low. So I think if the government doesn't keep a good eye on how a social security system is being used problems can occur.

Looking at the prime example of capitalism; the US, I can see an obvious benefit of lower taxes: more startups. Seems like Americans are more entrepreneurial than Europeans, I specifically remember reading an article about how Germans tend to prefer traditional careers working for an already established country as opposed to starting up their own business.

Capitalism has benefits like a slighly increased overall prosperity of the population and more opportunities for indivuals to become very wealthy but also disadvantages like exploitation of people in poorer countries by companies in order to maximize profits.

Socialism has obvious advantages as in everyone, rich or poor, has easy access to basic rights such as health care and a minimum wage but when people become too tolerant of people exploiting it, the system cannot keep up in the long run.

As usual the truth lies in the middle and I think we should take elements from both systems in order to create an optimal system and I would say Europe is doing a slighly better job at it than the US at the moment, but I'd say it's far from perfect in its current state.

 

One thing to keep in mind is that the US no longer has a free market. There's so many regulations and guidelines that a company is forced to follow. One of the main reasons big employers go overseas is because these regulations have made it insanely expensive to employ even low wage staff. Now that we've taken on Obamacare out healthcare costs have skyrocketed. In addition to our healthcare costs it's hard to compare us to the rest of the world. For example Japan has very low healthcare spending, and a very healthy population. This doesn't mean they're system is better, as here in the US our diets are horrendous. Prevention is always better than cure. If we ate like asian countries, our obesity rates and healthcare costs would plummet.
Another thing I've noticed is that all of the happiest and healthiest countries are also the most expensive to live in, to the point where poor people can't even afford to live there. No joke, look up happiest and then healthiest countries, then look up a top ten list of the most expensive countries and it's nearly the same 10 places. There also still seems to be a huge gap between rich and poor in both systems. We also have a Social Security system in which you pay into, and collect monthly based on that amount when you retire. Our welfare system is a joke and people come here to milk us. Personally I feel that you can either choose the economic system that rewards the hardworking, or the system that rewards the lazy. Until/unless we eventually reach a point where a very small fraction of the population has any need to work and robots do everything for us.

 

I would say the countries at the top of the World Happiness Report are there because of their solid social security systems which they can provide because of their strong economies. Also I don't agree that a choice between rewarding the hardworking or the lazy has to be made. There's always a possiblity of a capitalist society with a social security safety net as a foundation. There's also the experimental basic income, which provides a stronger safety net for every citizen that we've seen so far but rewards those who want to work.

 

If you pay a higher tax rate so you don't have to worry about "paying" for healthcare, doesn't becoming one of the most expensive countries to live counteract that?
There's the moral incentive to make sure everybody can get by, but is it morally correct if you're essentially stealing from people who earned their money in order to do so?
There's also a trend of the more socialist an economy becomes (initially there is an economic positive boom), the more likely collapse happens. For example let's say the US just up and decided we're going to do it. We have some of the largest and richest companies in the world here in the USA. Once they start getting hit with these insane taxes, they'll do what any business owner would. They're going to back their bags and relocate to Saudi Arabia or somewhere similar. Now with the main payers of our taxes gone, we're fucked. It's different when a country has always been socialist and the companies were aware of these tax requirements but if we were to try and switch things wouldn't work out.
Belgium has a MINIMUM tax of 30%, and going up to 50% income tax right off the bat, not including investment/capital gains tax or sales tax. Your sales tax is 21%.
Let's take the average personal income of 23,040 euros. After income taxes you're left with an annual income of €17,328.30. Now assuming you plan on spending any of this money you're left with €13,700 to yourself a year, in one of the most expensive countries in the world. Am I calculating this wrong?

 

I don't disagree with you, that's why I pointed at entrepreneurship being more prevalent in the US (more startups). And you're right, taxes are very high here especially if you want to start your own business (Belgium is known for tax evasion for a reason).

I think socialism is great if the country applies a strict immigration policy. European countries are far too lenient in that regard. You talked about health care spending in Japan, isn't that also because Japan has so little immigrants? It's very hard to actually become a citizen there. Immigrants are always overrepresented in their usage of the social security system, I think if that changed taxes could be lower. You also call it stealing, well that just depends on perspective, if you agree with socialism you'll see it as sharing if not you'll see it as stealing.

 

This is exactly why I despise the left/democratic side of American politics. They push so hard to have an extremely easy immigration policy while simultaneously pushing for increased wages and socialism. They want free healthcare as well as school. If you disagree with them or point out the flaws in their arguments you're labeled as a white privileged Nazi.
But wow I never actually looked that in depth into taxes in such countries. You're basically working for 49% of your income at best? I know this is going off-topic but do families usually stay together in one household? How does the average working class cope?

 

Well 49% is pushing it. You have a taxable part of your income, and then we work with a progressive tax system divided in 5 tax brackets. It starts at 25% tax for lowest earners to 50%. Living here is not that expensive honestly, tax bracket 5 is for people that earn €38 000+ per year for example, which I assume doesn't sound like a lot for people in the US. Most people (middle class) live very comfortably. I don't think families are seperating because they struggle financially, we do have a 60%+ divorce rate for some reason though, but I don't think that's because of economic reasons.

Taxes are more concerning for startups as taxes on employees (payroll taxes I think it's called) are really high on top of the high income taxes that come with a social security system.

 

I said 49% because you have the (when I google it, it tells me 25 is the minimum, but I'm going with 30% as that's where your average person is), so you're left with 70% of your income. But the moment you spend that, you have your 21% sales tax. So effectively you only get to keep 49% of your income.
Strange though, as the average household income there is lower than here. You'd expect is to be higher if it's really more expensive there.

 

Interesting topic... Things are different here in the uk lmao

 

Historically, business has rarely regulated itself, and when it does, it usually only does so under threat of more severe government intervention.

Has laissez-faire capitalism ever worked in the past?