On inequality Latvia is still Nr.1!
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Komentāri (24)
OlegsLatisevs 11.01.2011. 00.16
This all fuss about income equality actually looses an important point which is that not the mathematical division is significant but minimum life standard guaranteed for the population. This is needed in order as many as possible people can enjoy proper quality of living – not live in dumpsters, receive good education and grow up without childhood traumas and mental disabilities. This is needed to increase quality of human capital (which is only asset we got in here); so people can compete freely without taking into account how much money daddy has and best ones got the best success.
This leads to a bit backward conclusions – poorer countries should target smaller GINI index than rich ones.
To illustrate, if we suppose some poor country average citizen is making 100 lats of GDP per month and some other one rich countries same (average one) citizen makes 1000 lats of GPD per month and lets assume that in order to sustain a minimum commendable life standard citizen of either of those two countries would need lets say 50 lats. This would mean that in order to achieve minimum first country should leave at hands of average citizen a half of its neto income while other one could do same by leaving only 1/20.
Trivial illustration but guess it shows what I mean.
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Māris Diņģelis 10.01.2011. 23.56
I hope that all the reduced rates will eventually go but of course combined with alternative support for low incomes.
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My comment will be rather focused or narrow, call it any way, but reduced rates or even 0 rates of VAT for press is widespread in EU and I certainly hope that they will remain so also in Latvia, at least while Gini index is so outrageous high.
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anita_meistere 10.01.2011. 09.47
its extremely pity to talk about society equality in context of income (money. its only defining criteria??? all those stupid indexes are useless as long as we forget about elementary human relations, do not take in account region specific. what is worth low Gini coefficient in Scandinavia, as neighbors do not know each other..total unconcernes!!!
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Dace Buile 09.01.2011. 12.32
diez manas draugs no Krievijas ar varetu krievu valoda paust savu viedokli un viņu liktu pirmaja lapā….
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lelde_rafelde 08.01.2011. 11.46
You don’t need the Gini index to see the income inequality here, just drive for 30 km in pretty much any direction and you will see the real Latvia, not the Riga facade (just a few blocks of it anyway, since nobody visits Imanta or Maskačka).
Transferring this data to our population numbers, it’s clear that we’re not so far from Sierra Leone. There are a few rich people and everybody else can either work for a couple of hundred euros or leave for a better life somewhere else.
Personally it kinda sucks that we’re even worse off than Romania and Bulgaria.
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pandapattz > lelde_rafelde 09.01.2011. 21.20
agreed. imanta isn’t exactly amongst the hot spots in tourist guides.
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zaigapriede 08.01.2011. 09.59
Especially interesting in this context is the fact that the gini coefficient grew considerably during the so called fat years when the unemployment was low and the economy was booming, more about this here http://www.lolitacigane.com/2010/12/viens-tumsa-meza.html
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UgisB > zaigapriede 08.01.2011. 23.45
What you are writing about solidarity is extremely important. I think everyone who has an advanced society experience should share it, even if there will always be just some few individuals who would be open-minded enough to accept it as an inspiration or a good idea. How else can we in Latvia learn? Solidarity as such is generally unknown in Latvia where most of us seem to be as primitive as only applying it to Soviet hypocrisy.
You are in power now. What are you and your party going to suggest with regard to reducing this shocking level of inequality?
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ArmL > zaigapriede 09.01.2011. 08.33
Yet more “interesting” is dynamics of debt service as a % of exports of goods and services.
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janisholsteins 08.01.2011. 03.00
Data show obvious heteroscedasticity. Therefore, we still can imply that moderate inequality is related to higher income.
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Pastniece > janisholsteins 08.01.2011. 06.16
Vai varat, lūdzu, savu spriedumu paskaidrot izsmeļošāk? Es nespēju iedomāties, kā var nonākt pie šāda secinājuma, pat ja datiem piemīt heteroscedascitāte.
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UgisB 08.01.2011. 01.42
“The Spirit Level” by Richard Wilkinson and Kate Pickett offers an extremely good overview as to how the level of inequality impacts social practices. They do find a close link between the national income level and the level of inequality.
Your observation about Latvia being completely uninterested in emulating the Nordic model is entirely accurate. The issue of introducing progressive income tax was debated during the election campaign. Yes, Vienotiba that won did not promise this reform, but I’m sure not because they don’t find this a good idea. I guess we all understand that for administering a progressive income tax, we first of all need to combat tax evasion. First things first. If you’d ask me how well they advance on that, I wouldn’t be sure. Cutting VID budget does not exactly promise a huge success any soon.
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Dzintars > UgisB 08.01.2011. 18.28
I don’t personally think a progressve tax is the best for Latvia. The country is very anti-tax and many find, sometimes correctly, that their tax money is wasted. some time in the future, perhaps.
I would rather see measures such as a higher non-taxed minimum, perhaps some day even so high that several low-income earners don’t pay income tax. It would also work to reduce inequality quite a bit. More tax on property would also work in this direction.
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UgisB > UgisB 08.01.2011. 22.24
Latvia being anti-tax? Can’t disagree more. Saying that you’re back at your absurdistan theory. Do you really think Latvia is that backward? You must know Latvia better than that. Sorry, I don’t mean to criticise your views.
That’s right, many share a popular belief the state is a jerk squandering our taxes. Following the mainstream, I believe the state administration in Latvia leaves huge room for improvement that is still to come. Unlike the majority, I do believe that recent cuts revealed the state really can count. There is a hope the state can become more efficient. It grows wiser and more accountable with us.
Agree with you on a bigger minimum. Add tax incentives on education, health care and healthy life, etc. I think we should have some cool incentives to take care of ourselves and to report our incomes. A zero tax may be too tempting to stay in the shadow. So everyone should pay some tax, I believe.
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Dzintars > UgisB 10.01.2011. 16.35
I am dead certain that if a progressive tax started at, say, incomes higher than 500 LVL per month, suddenly a lot of “official” salaries would be 495 LVL…
From the politicians’ side I still recall Mareks Seglins, at the time Justice Minister for the People’s Party referring to a progressive tax as “an absurd ideology”.
Haven’t much seen either political parties pursuing higher taxes in general or that many people demanding them to reduce inequality.
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UgisB > UgisB 10.01.2011. 22.35
Yup, but ideology is one thing, inabilty to administer ir something completely different. I wouldn’t expect Mr Seglins just like most anyone else in the current elite to have an articulated opinion on any tax whatsoever.
Hence, there’s no one to offer a clever policy. The society is just as unexperienced. Still, as I wrote the progressive tax was debated during the election campaign in the media.
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pandapattz > UgisB 11.01.2011. 09.08
Just a recommendation, read Paul Krugman’s “Reclaiming America from the right”.
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melniite 07.01.2011. 22.06
The income inequality in Latvia could be overstated, due to the Gini coefficient not taking into account all the illegal income, which in Latvia’s case has a substantial impact.
The arguments put forward by the media are indeed not well thought through, but it is a well recognized tendency in local media and nothing to be surprised about.
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Jānis Dreimanis 07.01.2011. 20.55
Well, you cannot really call a correlation of -0.50 nonexistant. OK, I agree, “not a very strong” one, yet quite relevant.
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Una Grinberga 07.01.2011. 17.31
Morten, good point! Income equality should be one of the key determinants to assess different government budget initiatives, and, of course, it should not be like in some Western countries that high efforts/income consequently leads to high taxes. However, this should be taken into account during budget cutting – those who live better could contribute more than those who doesn’t.
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az 07.01.2011. 17.17
I didn’t get the last point – in PIGS I thought I stands for Ireland
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@Una Grinberga > az 07.01.2011. 17.26
These countries also do have relatively high Gini index!
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Dzintars > az 08.01.2011. 18.23
It started out being Portugal, Italy, Greece and Spain (also often referred to (and with as little respect…) as “Club Med”. Now, with Ireland, it is often PIIGS – but Ireland does not fit my story so well here… :-)
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