11-12-2025, 09:05 PM
(Continued from above)
Rather than printing ourselves into oblivion, our government gets the money it needs to fund the programs that the people demand through progressive taxation. It is progressive, because as a person earns more money, they progressively pay more nominally in taxes. Now this does not touch burden: that is the measure of the inability you posess to buy the things you need with the money you have. For the poor, the burden is much heavier than it is for the rich, and will be so until we eliminate prices from things. But: the goal of progressive taxation is to shift MORE of the burden onto the shoulders of those most able to carry it. Just like we would never ask a man with a broken arm to lift a refrigerator, we should never ask a family who struggles to meet basic needs to carry a large part of the burden of funding the entire society.
The progressive tax system works like this. First, all Kalistanis contribute something. The absolute lowest tax rate in our society is 1%--even if it is a single ruble a year. We do this because we 1) wish to provide every single person with a monetary stake in this government commensurate with their income and 2) we want to explicitly take away the argument of those who think we should not be spending money on poor relief programs from them, to deny them the opportunity to make ANY case against social welfare, and to present those arguments as inhumane and anti-social. That's it. Kalistan has never permitted the wealthy to use the poverty of the poor as a weapon against the poor. Those arguments are monstrous on their face and socially abhorrent--that a person is poor does not make it legitimate to starve him to death, and anyone who thinks that it is legitimate is advocating murder on the basis of income, regardless of why. So to step on those sorts of arguments, that the poor never contribute anything to their own succor and that the wealthy never get anything for the money they do contribute, we have required that all contribute. And by the way, we have also ended means testing, so even the wealthy get welfare in Kalistan, just to shove that hateful line of reasoning down their throats a little farther. It is the only way to tamp down calls for class warfare that so plague liberal societies, and almost always originate among the well off.
Following the absolute minimum tax that all must pay on their income, whatever the amount it happens to be, from whatever source they derive it, we have a parabolic increase in tax rate. For most of the working classes in Kalistan, the tax rate is a low (less than 15%) rate. But as you make significantly more, the 60-70-80% income deciles, you pay a significantly larger percentage of your income back into the system, until you are among the top tax rates and pay a total of 90% of your income back into the system. Bear in mind, this only applies to income, and not passive wealth (things like houses and such). But there are no loopholes to this. It is a very simple calculation: If you make a billion rubles a year, you pay 900 million of that back into the system. If you make ten rubles a year, you pay .10 cents back into the system. It's really easy. And since wages and salaries are all nationalized, nobody has to file forms, or anything: they get a receipt at the end of the year saying thank you for paying your taxes, here's how much you contributed to the maintenance of your society. You can dispute that amount in court if you find an error, but most people just move on with their day.
We also have things like Payroll taxes, which employers pay from their pre-tax earnings and which are chalked up as the expense for the privilege of doing business. The Payroll tax is the primary source of revenue for the Universal Income in Kalistan, so that program is almost completely revenue neutral. If you employ five workers, you pay the government enough to fund the basic income, and they get it whether you go under or have a great year. Anything additional you want to pay them on top of that comes out of your own business expenses through the same nationalized payroll system, but the workers will always have an income whether you are their employer, or someone else is, or nobody is.
We also require the wealthy to pay a 2% wealth tax on property and assets. What's considered wealthy is different by Duchy, but nobody would ever consider those who are levied the tax to be poor by any stretch of the imagination. The wealth tax is levied against those who do not earn income and therefore tend to just live off their wealth, but they require the use of universalized public services. Most of the wealth tax is used to fund whatever is needed in UBI that is not covered by payroll taxes. Investments are treated as income and there are no regressive property, sales, or other consumption taxes which fall heaviest on those least able to pay them.
Over all, this system allows everyone to contribute according to their ability to do so, it funds the entire system, and it creates an annual surplus of hundreds of billions of rubles, part of which enters a rainy day fund when Kalistan needs to make large capital investments, while the majority of the surplus is simply written off annually and returned to the general fund. The system does not encourage savings, it treats investments as active income, and redistributes most of the wealth from the top ten percent back to the bottom 90% annually. Yes, this is not the most investment friendly climate, but those who do earn their living on investments can still do very well in Kalistan--they are certainly not poor. But like ZPG, their wealth is just no where near as large as it would be without progressive taxes, and overall that encourages health and financial well being across the entire society, not just in a handful of savvy investors. It is a socially desirable trade off, even if it wipes out the inordinate ambitions of a mere handful of greedy Kalistani capitalists.
Kalistan's whole aim with the nationalization of the workforce, a socialist era program, was to resolve this problem for the worker. It also takes away the incentive of the boss to tie wages to the performance of the company's stock price, which has more to do with speculation than it does to do with good work often times. The first step toward workforce nationalization was to organized the National Service Program, which was initially conceived of as a public works/make work problem to combat unemployment. Early NSPers would go do things that the National and District Governments has been paying private contractors to do. Instead of paying the private sector inflated prices, because if it cost x to do a job no matter who does it, and a profit driven company requires profit y on top of cost just to stay in business, x+y of the private sector will always be greater than x in the public sector. So early NSPers were put to work paving and maintaining roads and trails, building and maintaining bridges, providing public infrastructure, etc. Not only would Kalistan save money by no longer contracting work to for profit actors in the private sector, but they could also guarantee wages for a large number of young Kalistanis, and prevent them from entering the job market and competing with established workers, ensuring higher wages for those already in the work force.
When the National Food Bank program was begun in perhaps the 4200s, NSP expanded its reach to agricultural labor, nationalizing all ag workers (but not farm owners), and creating a single primary market for all things grown in Kalistan. Now Ag work is one of the primary occupational specialties in the NSP, especially for Corps in Odufaray and Suldanor, where much of Kalistan's food stock is produced. Combined with the universalization of National Service, and the path for careering in the NSP, and Kalistan became the single largest employer in the entire nation. It was only a matter of time before the National Government passed a law nationalizing the rest of the private sector workforce, and requiring employers to pay workers' wages to the National Government in the form of payroll taxes. The only exemptions are small businesses where the owners themselves provide the majority of the work hours per week. This, ironically, is how the Royal Family avoids paying payroll taxes: House Ananto is treated as a small business where the Sovereign provides the majority of the labor hours herself, and the Director of House Ananto is not an employee, but a member of the House who volunteers, takes no salary from House Ananto, and serves as a managing operator for the Empress' schedules and interests as well as House finances. The Director does, however, draw a salary at Miramar which more than compensates her for both jobs, and Miramar does pay its required payroll taxes.
At first, employers were skeptical of the program, but they were won over by learning that this freed them of the emotional work of hiring and firing. Now an employer needs a position, and they apply to the NSP, sign up for payroll taxes, and proceed to hire their preferred candidate. the hiring part takes place in house, the wages and benefits are paid through the National Government, and if the employer needs to go out of business, their employees aren't screwed. The owners can more easily manage costs and profits without having to worry about increasing labor costs, and the workers can get fair wages for their work regardless of how their employers are doing through UBI. Their bosses can opt to pay retention bonuses based on job performance if they like, or fire the employee for cause or at will without the need to worry about how that worker is going to feed themselves or their families. Labor unionization is no longer the boss' problems, and they can meet the worker as equals rather than as adversaries, which leads to much more of a cooperative attitude between workers and employers. The system has its shortcomings, for sure: Payroll taxes are often steeper than an employer would pay if they had their choice, and paying under the table, tax free becomes impossible. But these shortcomings are more than offset by the fact that an employer no longer has to have a whole payroll department to maintain.
This system definitely works to the workers' advantage too: A skilled worker no longer has to worry about losing their job, or switching jobs, which can also produce major anxiety in liberal economies. Now a worker doesn't HAVE to work in order to eat and to take his or her kids to the doctor's. Now a worker can find a job that matches their skill sets, in an environment that commands respect for their contribution, and encourages productivity among workers. And a worker can feel confident that they too can strike out if they have a good idea and want to try it, and not go bankrupt. With a nationalized workforce, the power balance between employers and employees is leveled, because the relationship is about experience and productivity rather than seeing labor as a commodity to exploit and profit from. This also leads to better quality products at cheaper prices for the consumers, and security for all workers at a fair and just wage that contributes to a more equal standard of living, despite inequalities in pay still existing.
Kalistan's economic structure there contributes to greater equality across society. The three policies of Zero percent growth, a steeply progressive income tax system and a fully nationalized workforce means that more people can access more of the benefits of living in society than a country which is less obsessive about these sorts of things and more obsessed with the ideological precepts of liberalism. Limiting the negatives of liberalism works for us: We lose out on the highs of unlimited economic and fiscal expansion, but we also miss out on almost all the negative, social and political side effects of capitalism, and we are able to give our people a lot of security. We therefore contribute to the overall health of our entire economy and our society.
Progressive Taxation
Most governments, even those who rely on fiat currency produced, monitored and regulated by a central banking system as Kalistan does, need money to pay for things that people want them to spend money on. Our Imperial Bank could just wildly print currency and pay all our bills in a day if we wanted to. But, while we can say for certain that the money itself has no inherent value (We could say that a leaf from a tree is currency instead of the paper rubles we circulate, and it would be just as valuable in and of itself,) what we would do is undermine the public perception of what the Imperial Ruble is worth. And it is the public perception of that worth of that currency, whatever it happens to be, that drives conceptions of value in the the various aspects of society. So if we have more currency in circulation, each one of them individually would be worth less in trade for say, that gallon of milk today than yesterday. So I would have to trade MORE of that currency to get that same thing, and that is what economists call inflation. (To be fair, most inflation is driven on the supply side, and not the demand side, and actually curbing real inflation is only possible with price controls, but we can leave this discussion for a later date.)Rather than printing ourselves into oblivion, our government gets the money it needs to fund the programs that the people demand through progressive taxation. It is progressive, because as a person earns more money, they progressively pay more nominally in taxes. Now this does not touch burden: that is the measure of the inability you posess to buy the things you need with the money you have. For the poor, the burden is much heavier than it is for the rich, and will be so until we eliminate prices from things. But: the goal of progressive taxation is to shift MORE of the burden onto the shoulders of those most able to carry it. Just like we would never ask a man with a broken arm to lift a refrigerator, we should never ask a family who struggles to meet basic needs to carry a large part of the burden of funding the entire society.
The progressive tax system works like this. First, all Kalistanis contribute something. The absolute lowest tax rate in our society is 1%--even if it is a single ruble a year. We do this because we 1) wish to provide every single person with a monetary stake in this government commensurate with their income and 2) we want to explicitly take away the argument of those who think we should not be spending money on poor relief programs from them, to deny them the opportunity to make ANY case against social welfare, and to present those arguments as inhumane and anti-social. That's it. Kalistan has never permitted the wealthy to use the poverty of the poor as a weapon against the poor. Those arguments are monstrous on their face and socially abhorrent--that a person is poor does not make it legitimate to starve him to death, and anyone who thinks that it is legitimate is advocating murder on the basis of income, regardless of why. So to step on those sorts of arguments, that the poor never contribute anything to their own succor and that the wealthy never get anything for the money they do contribute, we have required that all contribute. And by the way, we have also ended means testing, so even the wealthy get welfare in Kalistan, just to shove that hateful line of reasoning down their throats a little farther. It is the only way to tamp down calls for class warfare that so plague liberal societies, and almost always originate among the well off.
Following the absolute minimum tax that all must pay on their income, whatever the amount it happens to be, from whatever source they derive it, we have a parabolic increase in tax rate. For most of the working classes in Kalistan, the tax rate is a low (less than 15%) rate. But as you make significantly more, the 60-70-80% income deciles, you pay a significantly larger percentage of your income back into the system, until you are among the top tax rates and pay a total of 90% of your income back into the system. Bear in mind, this only applies to income, and not passive wealth (things like houses and such). But there are no loopholes to this. It is a very simple calculation: If you make a billion rubles a year, you pay 900 million of that back into the system. If you make ten rubles a year, you pay .10 cents back into the system. It's really easy. And since wages and salaries are all nationalized, nobody has to file forms, or anything: they get a receipt at the end of the year saying thank you for paying your taxes, here's how much you contributed to the maintenance of your society. You can dispute that amount in court if you find an error, but most people just move on with their day.
We also have things like Payroll taxes, which employers pay from their pre-tax earnings and which are chalked up as the expense for the privilege of doing business. The Payroll tax is the primary source of revenue for the Universal Income in Kalistan, so that program is almost completely revenue neutral. If you employ five workers, you pay the government enough to fund the basic income, and they get it whether you go under or have a great year. Anything additional you want to pay them on top of that comes out of your own business expenses through the same nationalized payroll system, but the workers will always have an income whether you are their employer, or someone else is, or nobody is.
We also require the wealthy to pay a 2% wealth tax on property and assets. What's considered wealthy is different by Duchy, but nobody would ever consider those who are levied the tax to be poor by any stretch of the imagination. The wealth tax is levied against those who do not earn income and therefore tend to just live off their wealth, but they require the use of universalized public services. Most of the wealth tax is used to fund whatever is needed in UBI that is not covered by payroll taxes. Investments are treated as income and there are no regressive property, sales, or other consumption taxes which fall heaviest on those least able to pay them.
Over all, this system allows everyone to contribute according to their ability to do so, it funds the entire system, and it creates an annual surplus of hundreds of billions of rubles, part of which enters a rainy day fund when Kalistan needs to make large capital investments, while the majority of the surplus is simply written off annually and returned to the general fund. The system does not encourage savings, it treats investments as active income, and redistributes most of the wealth from the top ten percent back to the bottom 90% annually. Yes, this is not the most investment friendly climate, but those who do earn their living on investments can still do very well in Kalistan--they are certainly not poor. But like ZPG, their wealth is just no where near as large as it would be without progressive taxes, and overall that encourages health and financial well being across the entire society, not just in a handful of savvy investors. It is a socially desirable trade off, even if it wipes out the inordinate ambitions of a mere handful of greedy Kalistani capitalists.
The Nationalized Workforce
From the perspective of a worker in a liberal nation, nothing is more terrifying than losing a job. Sure you can lose a job for any number of reasons: Stealing from the boss, while understandable, is certainly a fire-able offense. But you can lose your job for a number of other reasons, like getting injured on the job, or the owners making bad financial decisions that lead to bankruptcy, or even a shift in the global financial structure that causes your firm, even if it did everything right, to suddenly lose its market, lose its profitability and close its door. The worker is rarely in control of any of this, and can certainly do nothing to stop it, and so they exist in a state of perpetual insecurity on the job that forces them to keep jobs they hate, are perhaps not qualified for, and certainly don't gain anything except starvation wages from.Kalistan's whole aim with the nationalization of the workforce, a socialist era program, was to resolve this problem for the worker. It also takes away the incentive of the boss to tie wages to the performance of the company's stock price, which has more to do with speculation than it does to do with good work often times. The first step toward workforce nationalization was to organized the National Service Program, which was initially conceived of as a public works/make work problem to combat unemployment. Early NSPers would go do things that the National and District Governments has been paying private contractors to do. Instead of paying the private sector inflated prices, because if it cost x to do a job no matter who does it, and a profit driven company requires profit y on top of cost just to stay in business, x+y of the private sector will always be greater than x in the public sector. So early NSPers were put to work paving and maintaining roads and trails, building and maintaining bridges, providing public infrastructure, etc. Not only would Kalistan save money by no longer contracting work to for profit actors in the private sector, but they could also guarantee wages for a large number of young Kalistanis, and prevent them from entering the job market and competing with established workers, ensuring higher wages for those already in the work force.
When the National Food Bank program was begun in perhaps the 4200s, NSP expanded its reach to agricultural labor, nationalizing all ag workers (but not farm owners), and creating a single primary market for all things grown in Kalistan. Now Ag work is one of the primary occupational specialties in the NSP, especially for Corps in Odufaray and Suldanor, where much of Kalistan's food stock is produced. Combined with the universalization of National Service, and the path for careering in the NSP, and Kalistan became the single largest employer in the entire nation. It was only a matter of time before the National Government passed a law nationalizing the rest of the private sector workforce, and requiring employers to pay workers' wages to the National Government in the form of payroll taxes. The only exemptions are small businesses where the owners themselves provide the majority of the work hours per week. This, ironically, is how the Royal Family avoids paying payroll taxes: House Ananto is treated as a small business where the Sovereign provides the majority of the labor hours herself, and the Director of House Ananto is not an employee, but a member of the House who volunteers, takes no salary from House Ananto, and serves as a managing operator for the Empress' schedules and interests as well as House finances. The Director does, however, draw a salary at Miramar which more than compensates her for both jobs, and Miramar does pay its required payroll taxes.
At first, employers were skeptical of the program, but they were won over by learning that this freed them of the emotional work of hiring and firing. Now an employer needs a position, and they apply to the NSP, sign up for payroll taxes, and proceed to hire their preferred candidate. the hiring part takes place in house, the wages and benefits are paid through the National Government, and if the employer needs to go out of business, their employees aren't screwed. The owners can more easily manage costs and profits without having to worry about increasing labor costs, and the workers can get fair wages for their work regardless of how their employers are doing through UBI. Their bosses can opt to pay retention bonuses based on job performance if they like, or fire the employee for cause or at will without the need to worry about how that worker is going to feed themselves or their families. Labor unionization is no longer the boss' problems, and they can meet the worker as equals rather than as adversaries, which leads to much more of a cooperative attitude between workers and employers. The system has its shortcomings, for sure: Payroll taxes are often steeper than an employer would pay if they had their choice, and paying under the table, tax free becomes impossible. But these shortcomings are more than offset by the fact that an employer no longer has to have a whole payroll department to maintain.
This system definitely works to the workers' advantage too: A skilled worker no longer has to worry about losing their job, or switching jobs, which can also produce major anxiety in liberal economies. Now a worker doesn't HAVE to work in order to eat and to take his or her kids to the doctor's. Now a worker can find a job that matches their skill sets, in an environment that commands respect for their contribution, and encourages productivity among workers. And a worker can feel confident that they too can strike out if they have a good idea and want to try it, and not go bankrupt. With a nationalized workforce, the power balance between employers and employees is leveled, because the relationship is about experience and productivity rather than seeing labor as a commodity to exploit and profit from. This also leads to better quality products at cheaper prices for the consumers, and security for all workers at a fair and just wage that contributes to a more equal standard of living, despite inequalities in pay still existing.
Conclusion
In all, we still do see massive income inequality between top earners and the rest of Kalistan's population. The standard of living in Kalistan, while in the developed/industrialized/modern camp, is certainly what ever we acknowledge as modest. We don't have a society of mass or conspicuous consumption. But we also do not have a problem with flagrant and counter productive waste and inefficiency either. We do miss most economic opportunities which other nations are in a position to fully take advantage of and get fabulously wealthy, but then again, we also do not experience most of the external economic shocks that more exposed nations experience. We don't give our owners the opportunity to get fabulously wealthy by cutting costs and stealing wages from workers, but then again, the vast majority of the workforce is well compensated and secure, and that allows them to more easily cooperate with their bosses, work harder, and not be afraid to switch jobs or try to open a place of their own.Kalistan's economic structure there contributes to greater equality across society. The three policies of Zero percent growth, a steeply progressive income tax system and a fully nationalized workforce means that more people can access more of the benefits of living in society than a country which is less obsessive about these sorts of things and more obsessed with the ideological precepts of liberalism. Limiting the negatives of liberalism works for us: We lose out on the highs of unlimited economic and fiscal expansion, but we also miss out on almost all the negative, social and political side effects of capitalism, and we are able to give our people a lot of security. We therefore contribute to the overall health of our entire economy and our society.
Primary: Institutionalist Party of Kalistan (IPoK), 5146-
Inactive:
Socialist Party of Kalistan (SPoK), 2591-
Inactive:
Socialist Party of Kalistan (SPoK), 2591-