In Cuba the tax man cometh, slowly


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1 minute ago, Colt45 said:

$83.25 net? I think the problem is the wage, not the tax. Sign me up for 7.5%  !!

If you are an Oz resident for tax purposes, the first $18,200 of your yearly income is not taxed. 

After that you are screwed :blink:

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With an eye to the increasing inequality that was sure to come after President Raul Castro began implementing cautious market-oriented reforms and reducing the role of the state in the economy, the Communist-run island passed its first comprehensive tax code in 2012

And there you have it. Everyone who preaches economic equality should read that passage very carefully. Prosperity, wealth and a rising standard of living for the masses is unimportant for the socialists. It's all about the bizarre and incalculable concept of equality for all (except the party elite of course). You can't let the people associate these market reforms with prosperity or increased wealth, or they'll demand more of it.

The old adage by Tocqueville that the socialists would have everyone equal in servitude rather than unequal in freedom certainly applies here.

Unfortunately, few realize that the quickest and most effective way to end this ridiculous regime is to end the sanctions and trade freely with Cuba. There needs to be an ideological revolution among the people, and that can only happen with cultural exposure, education and capital.

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3 hours ago, NSXCIGAR said:

With an eye to the increasing inequality that was sure to come after President Raul Castro began implementing cautious market-oriented reforms and reducing the role of the state in the economy, the Communist-run island passed its first comprehensive tax code in 2012

And there you have it. Everyone who preaches economic equality should read that passage very carefully. Prosperity, wealth and a rising standard of living for the masses is unimportant for the socialists. It's all about the bizarre and incalculable concept of equality for all (except the party elite of course). You can't let the people associate these market reforms with prosperity or increased wealth, or they'll demand more of it.

The old adage by Tocqueville that the socialists would have everyone equal in servitude rather than unequal in freedom certainly applies here.

Unfortunately, few realize that the quickest and most effective way to end this ridiculous regime is to end the sanctions and trade freely with Cuba. There needs to be an ideological revolution among the people, and that can only happen with cultural exposure, education and capital.

That outcome is probable but not inevitable.  China and Vietnam demonstrate how one-party and notionally Socialist/Communist states can have their cake and eat it.  

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1 hour ago, gweilgi said:

That outcome is probable but not inevitable.  China and Vietnam demonstrate how one-party and notionally Socialist/Communist states can have their cake and eat it.  

I almost mentioned those two examples in my post because they both represent regimes that moved from more top-down economies to more or less redistributive-income, hampered-market or mixed, economies. I'm not really a big believer that a one-party system is inherently superior or inferior to multi-party systems in practice. More important is the ideology of the party elite. In China and Vietnam, the ideology shifted, although the Communist party remains intact. Hong Kong, one of (if not the the freest) markets in the world is ruled by the Communists for goodness sake! What a brain-buster!

The point is, modern Communist parties tolerate markets in certain cases. I'm still not convinced that China's economy will continue to become freer. There are interesting theories by some experts familiar with modern Chinese Communist Party ideology that believe that China is retrenching as Lenin did with his "New Economic Policy" in 1921. The idea is that Communism can't take root properly unless an economy is developed sufficiently (whatever that means), hence the mass starvation that occurred in largely agrarian Russia in 1917 after the initial application of Bolshevism. You don't see China teaching free market principles in school. No classical liberal ideas at all. Still socialist at heart with a deep-seated (but better hidden) disdain for the concept of individualism. But their markets are arguably more free than many non-communist regimes.

As long as this tax scheme coincides with additional market reforms, I think Cuba could be headed in the same direction as China and Vietnam. However, I really believe the Castros have other plans. I think their plan is to survive with as much top-down control as possible. These recent market reforms were, I think, absolutely necessary to prevent an uprising. The internet and loss of key international support forced Raul to concede a bit and allow some productivity to eke out. 

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2 hours ago, NSXCIGAR said:

I almost mentioned those two examples in my post because they both represent regimes that moved from more top-down economies to more or less redistributive-income, hampered-market or mixed, economies. I'm not really a big believer that a one-party system is inherently superior or inferior to multi-party systems in practice. More important is the ideology of the party elite. In China and Vietnam, the ideology shifted, although the Communist party remains intact. Hong Kong, one of (if not the the freest) markets in the world is ruled by the Communists for goodness sake! What a brain-buster!

Another example would be Singapore.  Nominally a multi-party democracy, it is de facto a one-party state.  The reason it not only survives but is spectacularly successful is that it offers clean and pragmatic administration and an efficient civil service.  Talk about a brain-buster...

 

2 hours ago, NSXCIGAR said:

The point is, modern Communist parties tolerate markets in certain cases. I'm still not convinced that China's economy will continue to become freer. There are interesting theories by some experts familiar with modern Chinese Communist Party ideology that believe that China is retrenching as Lenin did with his "New Economic Policy" in 1921. The idea is that Communism can't take root properly unless an economy is developed sufficiently (whatever that means), hence the mass starvation that occurred in largely agrarian Russia in 1917 after the initial application of Bolshevism. You don't see China teaching free market principles in school. No classical liberal ideas at all. Still socialist at heart with a deep-seated (but better hidden) disdain for the concept of individualism. But their markets are arguably more free than many non-communist regimes.

I am not sure one can describe the Chinese economy as "free".  Government is very deeply entrenched in all aspects of the economy, and its individual arms and agencies are actively involved in business (notably the armed forces).  Property rights (including intellectual property) are not legally established and enforced, and are frequently subject to meddling by the Party.  It's why I will not invest in funds that are invested in the Chinese economy.

"Individualism" is less of an issue for me.  It is very much an American preoccupation, and there are plenty of examples in the Western world to demonstrate that more social-minded or even collectivist approaches can work equally well in securing the benefits of economic growth for nations and private wealth for citizens.  

 

2 hours ago, NSXCIGAR said:

As long as this tax scheme coincides with additional market reforms, I think Cuba could be headed in the same direction as China and Vietnam. However, I really believe the Castros have other plans. I think their plan is to survive with as much top-down control as possible. These recent market reforms were, I think, absolutely necessary to prevent an uprising. The internet and loss of key international support forced Raul to concede a bit and allow some productivity to eke out. 

IMHO, one problem with Cuba is that Fidel s still around.  He is so iconic, so untouchable and unquestionable, that serious reforms are practically unthinkable as long as he (and to a lesser extent his Old Guard) is still entrenched in positions of power.  Another problem is Raul: yes, by all accounts he is more open to different approaches and reforms, but the very fact that he is Fidel's brother raises the possibility of the Cuban government going dynastic.  

 

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23 hours ago, gweilgi said:

Another example would be Singapore.  Nominally a multi-party democracy, it is de facto a one-party state.  The reason it not only survives but is spectacularly successful is that it offers clean and pragmatic administration and an efficient civil service.  Talk about a brain-buster...

 

I am not sure one can describe the Chinese economy as "free".  Government is very deeply entrenched in all aspects of the economy, and its individual arms and agencies are actively involved in business (notably the armed forces).  Property rights (including intellectual property) are not legally established and enforced, and are frequently subject to meddling by the Party.  It's why I will not invest in funds that are invested in the Chinese economy.

"Individualism" is less of an issue for me.  It is very much an American preoccupation, and there are plenty of examples in the Western world to demonstrate that more social-minded or even collectivist approaches can work equally well in securing the benefits of economic growth for nations and private wealth for citizens.  

 

IMHO, one problem with Cuba is that Fidel s still around.  He is so iconic, so untouchable and unquestionable, that serious reforms are practically unthinkable as long as he (and to a lesser extent his Old Guard) is still entrenched in positions of power.  Another problem is Raul: yes, by all accounts he is more open to different approaches and reforms, but the very fact that he is Fidel's brother raises the possibility of the Cuban government going dynastic.  

 

Yes, Singapore is a good example as well. Interesting political structure to be sure.

I certainly wouldn't characterize China's economy as free, either. It's freer than it was, and there are less free economies to be sure. My point was that it has been becoming freer, but that may be by design, and used Lenin's NEP as an analogy.

The issue with individualism is more rooted in the concept of private property. Sure, there are western countries with collectivist ideologies, but the core of the western philosophy is that individuals have an inherent right to own property and keep the fruits of their labor. Sure, taxation violates this in principle, but non-western countries are much more likely to allow the government to appropriate their property and control the economy. China could reverse course on this freer market experiment any time without too much resistance from the populace.

As far as Cuba and Fidel, I agree with you 100%. All bets are off with those two goofballs in charge. I just think that these very few reforms that have occurred are based less on principle and more on necessity to prevent unrest. Neither of these guys have given up on their idea of socialist paradise. I'm sure they would like nothing more than a dynasty.

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