isn't china the soo called surveillance, tyrant, autocracy country? how the ppls there dodge paying taxes and still alive? day after day why i keep seeing contradiction?
yea because that worked so well for a certain real estate mega corporation in china... I suggest printing money at exorbitant rates just like the united States.
There has always been a very strong cultural believe in chinese literature that heavy taxation is a prove of governance failure, heavy taxation is also a phenomenon near an end of chinese dynastic cycles. So the avoidance of heavy taxation may also have been influenced by sociocultural factors... When we are talking about humans it may not always about numbers.
In ancient China, the tax burden was generally around 7%. For example, in the Ming Dynasty, you harvested 100kg of grain, of which 4kg was handed over to the state. While other East Asian countries, such as Japan, have a tax burden of more than 50%, and later implemented the system of four citizens and six citizens, that is, 40% is turned over to the state, which is also considered a kind system.
@@mereen750 Tax is a responsibility of a citizen to help contribute funding of government programs (E. g. security, welfare, legal, basically responsibility of a government to its citizens). But if you are paying taxes and the government does not give something in return, doing their responsibility, you are right. It's theft. Politicians rarely understands this and act like its only a one sided obligation. Obligation of citizens to fund their lavish lifestyle. In China, what you said is somewhat true. Especially during the end of dynasties where authorities cannot fulfill their obligations. Warlords stealing people's produce in guis eof taxation. Lol
@@linming5610 So when the thief steals your money under the threat of violence and says he only wants to protect you and that he likes what he buys with it, it's not theft?
Years ago "The Economist" reported that you can buy accounting software in China that keeps three sets of books. One for the tax man, "See how I'm losing money!", one for the banker, "See how profitable my business is!", and a real account.
It can keeps 5 sets of books. One manager account (present real business), one for taxmen(to avoid tax), one for loan banks (to get more cash), one for minor shareholders (to justify low division) and one for owner (so they will understand can theft how much money from company without noticed by other parties.)
Sustainability should be a metric in your rankings. For example an economy over reliant on proceeds from one source scores lower than a diverse economy which collects proceeds from many very stable sources.
I would argue for sustainability as a metric but more looking at the environmental impact of the sources, f.e. if selling of your resources has a negative environmental impact long term the sustainability score should be lower
Small correction: You said the Shanghai residents were banned from leaving the house "outside of getting groceries". This is wrong. They were banned from leaving their house *even to buy groceries*. That's why the headline read "residents running out of food", because they were relying on government deliveries which were pretty unreliable.
@@sudind American's population density is much much less than China's, and there are 1 whole fkin million people died of covid. Covid's damage could be higher and lower in different countries. If China treat covid like US did, there will be easily 4-5 million people died. China cares the lives of its people, that's the simple logic. US? from government to normal people, nobody gives a fk about other's lives, especially elders'
@@alexanderchen6373 Exactly. Nobody cares about the madness. The truth is that food needs to be paid for, and there is only so much government can do without having chain effects on the nation. The gears that run the country needs to keep on running or else the economy will have more severe effects on people than COVID. The death rates spiked shortly after lock downs were lifted despite high vaccinations. Medicines will not kill this disease, and the world has accepted that. Zero tolerance for COVID is nonsense that does more harm than good. China needs to admit its loss against the war against the virus like the rest of the globe.
@@sudind "the world has accepted that" does not mean China has to. If China can do better if China can save 5 million lives why would China "admit its loss"?????? The rest of the world lost doesn't mean China has to lose too. "The economy will have more severe effects on ppl than covid" this probably holds true for the rest of the world, not China. The western countries especially US can't even educate their ppl to wear a fkin mask, of course zero tolerance won't work and harm the economy than covid in these countries. Congrats on your public education system. China is doing ok right now and able to hold it as the world's factory. If China "admit the loss against virus? 5 milion Chinese will die for that (of course YOU don't care) and this very World's Factory will stop working. And western countries can't buy cheap products any more, on top of this stupid inflation caused by US, the world will turn 10 times worse than now (including China). So stop pointing finger to China and tell what China should do, you know absolutely NOTHING about China.
That's insane. Even in NZ Auckland here with lockdowns people overseas freaked out over, I still went grocery shopping, to the pharmacy, brought art supplies and stationary etc.
I remember when I worked in China, back in 2019 the taxation bureau actually sort of begged me to pay taxes, they said it like: “maybe you should start paying some tax?”
@@baikeiast5255That's an oxymoron. If you are working in a country, you are already giving something to that society. How can one be a leach for giving?
@@user-zu5do6ri6respecially since working immigrants often don't get many public services. They don't often qualify for unemployment or disability and may not be able to use public Healthcare and they rarely qualify for things like low income housing. That's especially true for xenophobic countries like China.
FYI: Irish person here. This “dodgy” “Local Government Financing Platform” you described is almost completely identical to Irish semi state bodies like Irish Water and ESB. Because of debt rules in the EU a lot of European countries have semi state business that do the same thing
@@rajeshupadhyay5683 lookup Priscilla Dearmin-Turner, this is her name online, she's now the real investment prodigy since the crash and have help me recovered my loses
That is certainly possible, but the policy would cause a collapse in property values, severely reducing the viability of new developments and reducing revenue.
@@alanpatterson2384 Yes property values will decrease but only for properties that have less years of lease left. Say if 10 years is left then people won't buy it so it will become cheaper but the 70 year one will be costlier. So overall we can say it's going to be balanced, not completely though.
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My wife was paid a set wage plus a bonus wage. The set wage was taxed and the bonus was not and the bonus was at least twice the set wage. So effectively she was paying tax on only a third of her wage. This was normal practice for a majority of companies. When I see data on the average wage of the Chinese citizen I always laugh because it is no doubt way off the truth.
This video misses a very important aspect of the chinese tax system. China gets most of its revenue from VAT/Sales, which are relatively higher compared to countries in similar economic situations. So it's not like the government is not collecting a lot of money, but the tax revenue goes down in times of reduced consumption like now. There has been interest in reforming that system but income taxes are very very controversial among the chinese public especially due to the huge variance in quality of gov services. Before china can switch to income tax base, they need to improve public Healthcare and a much bettersocial security net before they can justify taxes
This. It's very misleading to look at tax revenue as a % of GDP in China. The macro tax burden (there are two different definitions of it) is probably a much better comparison.
With cash and private transactions some industries don't collect and or don't pay VAT. Similar to most post USSR countries. And VAT rate ranges from 0-13%, similar to most other countries.
It doesn’t really miss it. It’s not that big. For example most exports are exempt from VAT, and you can claim a refund on any VAT charges. Too many loopholes that can be exploited. They’ve been saying they will upgrade/change it for a couple of years now. 95% of all VAT is refunded so it’s not worth mentioning.
China is not just another western country. If the state wants taxes they can just make new ones. In china the state is seen as an elder and must therefore be respected.
8:35 just LOL. If the financial crisis taught me anything (and it taught me a few things) is that rating agencies are actually a total joke and “rough guide” at best.
They definitely got a few bribes and/or threats from the CCP to boost that credit rating because you don't even need to be an accountant to realize how rickety their house of cards is.
I think this explains why my college professor said that every chinese company maintains three sets of books. One set to show the government which minimizes taxes paid. Another set to show the shareholders to maximize shareholder returns. And yet another set which accurately records the true state of the company's finances but this set remains confidential to the company and does not get released.
Lol “everyone” contrary to popular belief the 1% pay 99% of taxes collected in the USA. Everytime there is a video insulting Chinese or Russia in the person immediately deflects to the west 😂😂😂 barbaric Neanderthals argue like 6 year olds. Still socially behind by 3 centuries
@@tiloalo they only don't pay federal taxes. They pay billions in sales taxes and local taxes. It just makes for a nice headline to say they pay 0 taxes but usually the article will then state that its federal income tax that is at 0%.
Sorry but that's retarded. All the government has to do is look at the second set of books. This would allow them to call 'bullshit'. I don't believe your professor's story at all. Not surprising. Professors are just thinkers, not practitioners. I guarantee he hasn't worked a real day in his life.
At least the Chinese grow in actuality with new cities and greenified deserts while America grows only nominally but in reality is decaying and on its last leg.
3:21 Ahh, actually in the US there are some towns and cities completely dependent on traffic tickets. Take Henderson, Louisiana, where fines collected made up 89% of its general revenues in 2019.
@@RichardWKeys The deliberate policy of Government, Big Business, Academia and of course the Media of dumbing down the American Sheeple has proven to be a great success. God Help our Nation!
Denial is the first stage of the 5 stages of grief, I've already been through all 5 in grieving the loss of all I've ever known in this present market. Many people will not accept the coming agendas and when it gets right down to it death will be preferable imo.
@@brandonr.navarro5896 To recover your losses , get yourself an aid (FA) because Invstin requires experience and higher knowledge. So to attain productive Invstmnt, It's important to have a solid support structure ( FA) to guide you.
Based on your economics leader board analysis at the end, one would think that China is a very good investment destination. However, your videos over the last year give a very different vibe. A seemingly over extended economy heavily reliant on real estate. How do you explain this contradiction ?
Investment opportunities are very different from economic power. The economy of China isn't going anywhere, and will probably continue to grow, the system of government limits investment markets to a very unsteady and risky asset. So while the economy and nation will survive, any investment you make won't
@@levitschetter5288 ya if your a foreigner they will just take your money . And if they don’t , they won’t let you take it out of China China is a NO NO and the ccp needs to be dissolved screw that destroyed
I have a seriously-hard time believing it deserves 6/10 on "Stability", given that individual businesses can (and regularly do) get smacked down on a whim from the central government.
Besides those leases, the 1 question I've always had is the interaction between land prices/sales/demand and an ageing population. Around 2050 when 40% of China is retired and at least some of them start selling their homes to a decreasing pool of younger investors (real estate is seen as the only really secure investment asset in China), what impact will this have on real estate demand, prices and the continued ability of local government financing companies to sell land to hungry developers?
I think demand and population size shouldn't be seen as completely linked. What I mean by this is that if the Chinese population gets individually wealthier, demand for consumer products will still rise. Obviously, this might not apply to real estate
Chinas population has already begun a long decline that will continue to the 22nd century. And because the Han population is very xenophobic to a degree I don’t see immigration helping anytime soon, house demand will drop it won’t increase
@@zenpai5998 I disagree, it's impossible to "predict" future xenophobia. In 50 years, Japan and China might finally open up to some immigration once the generation of xenophobia and cultural fears disappear.
@@J_X999 that’s extremely hard while China keeps pushing anti Japanese media, seriously do you not take accountability for the CCP? They’re hostile to everyone who isn’t China
Is this video sponsored by the Chinese government? Joke aside, as a long-time subscriber and a Chinese, I have to say EE is being so optimistic about China's economy, especially the stability. The economy has grown amazingly in the past 20 years, but I am very pessimistic about its future. The economy and society are very INstable because they are highly influenced, if not fully determined, by a few people at the top of the government. The negative consequences of breaking up with the west, as well as the aging society that has so many talented people fleeing, are going to manifest gradually in the next few years.
See, I am an Indian. Breaking up with the West is both a problem and an opportunity ( it's a challenge). Yes a lot of people are fleeing. But i believe there are millions of chinese as are millions of indians who would stay and toil for the land they were born in. If we do not stand for our family who else will. And we are lucky for we live in times of uncertainty. I am not concerned with the results. I will do my work - whatever happens will happens And yes, china has its problem but you have an opportunity to fix it. Best of luck.
Hello EE! Could you put a video on Germany and rank in the ee leaderboard. Last video on Germany was like praising its economy despite the hardest fate ever but not ranking and camparision
I believe Germany would get a super low score today, they are on the loosing end of many technology transfers with China. Chinese auto makers are replacing Germans. They have no natural resources.
As a Chinese I can confirm that all of the issues mentioned exists in China and are as serious as they are said in this video. Your video is pretty much a spot-on.
@Sumeet tanwar They pay indirect taxes in other countries too. Oil prices is only one thing, they are mostly affected by foreign influence as well, but most of the things are much cheaper in comparison to other countries.
Stability should be high, due to China's willingness to use violence to enforce it's governments wishes; it will have it's way until it lacks the ability to get it's way. Confidence I agree with you on.
Exactly like it's not stable at all. One of their largest companies literally defaulted on their debts not that long ago. Shanghai which was their economic hub, has suffered huge economic losses because of the forced lockdowns.
I am from india, and It is true here also. Very small minority approx 2.5 - 3% of the population pays the taxes because the top level earners have the means to evade tax and the lower end of the population earns well below the beginning income tax threshold. This severely limits the amount of money govt can spend in india. But surprise about 25% or a bit ore of the govt budget comes from direct taxasion. The reason for sustained supremacy of countries like USA and Europe is the fact that they have a very efficient income tax policy, allowing them to have huge amounts of money to spend.
@@AmitJoshCjPope Rasing taxes will be a very unpopular move here according to political landscape. The existing tax base consisting of private employees, govt service personnel, small and mid business owners are already unhappy by the double taxation. These guys pay tax when they earn and also when they spend. It's hurting them but they aren't organised enough to make a meaningful noise to fall into the ears of policy makers. Increase tax base will make others really unhappy and that shows in the voting patterns
@@AmitJoshCjPope Making stuff digital makes it way harder to hide income since there's less cash on hand transfers and more digital transfers. UPI should help to solve this issue.
I wouldn't be surprised if the reason everything is so vague about what happens after the land lease expires is so that they would have justification to take your land any time they want for free. Just like how they can bring anyone down for any arbitrary reason with their tax system. We need to demolish this apartment complex to build a new highway. Hey land owner, your lease expired 22 years ago, why haven't you renewed your lease? What? I was never told I need to renew my lease. No one renews anyways. I see, well if you want to keep your land you must pay for the 22 years of illegal occupation + a fee + a new 100 year lease. I can't afford that. That's too bad, but don't worry, we'll take good care of your land and your tenants. Send in the demo crew.
The lease got extended after some validation. It's just an inherited communist idea that no individual but the country own the land while China is a Capitalist power house now.
You are projecting western government of tax collection via anyway necessary including auction off your home or property for couple dollars of unpaid tax
7:06 do not misrepresent the severity of those lockdowns, during a significant part of it (and even still now in some places) people were literally sealed inside their homes, and in other cases people put up chains and walls to stop people from leaving their homes. Eventually, they let some people out to buy groceries in groups, but only gave them a few hours to do it, in those hours you had to get to the store and get through the multi block long lines as well.
This is severely under represented in the video. China can not abandon zero covid. They would have to admit that everything they have done has been pointless and that their vaccine is garbage. This is politically devastating for a country that is already dealing with so much internal turmoil.
Genuinely made me really upset to see a city I love be essentially strangled to death. I don't think Shanghai will ever be the exciting, vibrant place it used to be again.
fewer is used to refer to number among things that are counted, as in "fewer choices" and "fewer problems"; less is used to refer to quantity or amount among things that are measured, as in "less time" and "less effort."
I can't help but be surprised at how many of China's problems are simply brushed over with little to no comment. Not going to say anything about the record high unemployment? The rise of "let it rot" work ethic? The extreme demographic problems? The man-made natural disasters, such as the extreme flooding happening right now in South China? Not to mention the corruption, the bloated bureaucracy, and tofu dreg projects?
It's a bit odd, but the video itself isn't about that. I'm not sure it should rank that high though. It has unbelievable growth, but it's like building the word's largest bridge in under a month with concrete and matchsticks. Super Impressive to be sure, but there are a lot of factors that threaten to destablise that bridge. The far bigger issue with that is, if China's bridge does falter or crumble, it's taking the world down with it-just about every country is intrinsically linked to CHina's economy.
A very well explained summary - I do appreciate the effort you take to make this information, accessible, clear, comprehensive yet simple ! I do look forward to each of your presentations - thank you 😊
They should try out Georgism. Just a tax on the natural resources. And in a society where evasion is rife. Land tax cannot be dodged. And land tax actually improves economic productivity with its positive incentives.
When I arrived in China in 2010 I was sitting at my desk reading a book titled something like " Tax in China". One of the office girls walked passed and seeing the titled said "ah , tax...no need... no need pay tax" .
Economist here: Primary policy causes of inflation in the US are: 1. 4-6 years of unusually low taxes without concurrent spending cuts 2. Large short-term stimulus spending in the form of direct payments 3. Extremely low interest rates that encourage lending and spending. 4. Restrictive immigration policies that prevent the leveling of supply and demand in the workforce. 5. Last but not least, global events (COVID-19 and related shutdowns, Russian invasion of Ukraine) that have snarled supply chains
@@ben5056 I am going to preface this post by saying that while my previous post was based entirely on data and tangible research done by credible think tanks and research institutions, this one is based in large part on my experience. While it is easy to pick out drivers of inflation based on historical data and trends, it is much more difficult to pinpoint just how much of a role each factor plays. I am sure that other economists have slightly different views. I personally believe that international factors like war and disease have played a greater role in pushing inflation than the average American is willing to admit. When people begin to feel powerless about a situation, they tend to envision solutions that put them back in control. This is why in democracies the economy is such a good indictor of reelection chances for incumbents. In times of crisis, they become easy scapegoats and voters express their frustration with economic circumstances by voting them out of office. Unfortunately, the reality is that economic circumstances are determined by so much more than a single person or party. I also find the international factors to be inextricably linked to the policies they spurred. Essentially, you get into a chicken or the egg scenario. Was Covid to blame for supply disruptions or were Covid related shut downs? Was the invasion of Ukraine to blame for inflationary effects on gas and other commodities or were retaliatory sanctions? Your answer could depend on your opinion of the necessity of the reactions in both instances.
Inflation is the US was caused by supply chain issues and the low rates the federal reserve imposed for so long compounded with the more reactive reaction rather than pro active one. Um. That’s basically it.
11 minutes into the video and finally you come to the actual problem mentioned in the title. Off late a lot of your videos (or atleast most part of the video) seems to be significantly different than topic mentioned in the title.
Chinese citizen here. Chinese citizens do pay taxes, but not visibly in the form of a tax bill. The absolutely majority of taxes in China are VAT/Sales Tax levied on sellers. Prices of most goods are implied to contain this tax. (You can see this when China reduced base VAT rate for electronics from 17% to 13%, and Apple immediately reduced their sales price for iPhones in China to reflect that.) Then there are income taxes (payroll taxes etc) which is withheld before money even reaches the individual. You see payroll taxes withheld as part of your payroll, and other income taxes are automatically transferred from your bank account.
This is 100% accurate. This video does point out some flaws in the Chinese system and then rates it as though it is a first rate economy other than the complete house of cards it actually is.
How can you give a ten in industry to a country that doesn’t care about its workers or the environment, and primarily got to where it is by intellectual property theft? How can you give a near perfect score after spending the entire video showing economic problems of titanic size? Very lopsided analysis.
Here in Brazil the middle class is penalized with high income taxes, while the rich manage to evade the rules or pay little. Also, we don't have a VAT, but several different and confusing consumption taxes. We need a fairer and more simplified taxation system.
middle class is penalized everywhere. In Bulgaria we have 20%VAT + 10% flat "income tax" over your salary which totals 30%. This is w/o the other taxes for waste, buildings, car, healthcare, etc. If you own a small company, you cannot get government order - that's how the mid class is hit.
That's how everyone handles taxes. In the US our wealthy elites pay a smaller proportion of their taxes by abusing different tax deductions and the system of capital gains tax. You can defer your investment earnings from getting taxed as long as you don't sell the investment. You can, however, use the investments as collateral to get very favorable loans and then wait for a year where the market crashes to sell allowing you to write off your investment losses (it counts directly against your tax bill so you can continously offload your poor performing stocks and assets risk free as they reduce your tax burden while retaining the high performing investments). They often pay little or no taxes even as their investment portfolios go up billions of dollars.
@@Pensnmusic Except the data shows this isnt true at all. The top 1% in the US pay almost 40% of the income tax collected, while earning 20% of the total wages. Youre also ignoring the fact you have to take a loss, to use a tax loss... In what Universe does it make sense to tax a $1000 gain, if I have an offsetting $1000 loss?
@@Tttb95 Most people are talking about proportional income. When you work 50 hours a week to make $100k and then get taxed down to around $70k it feels alot worse than making $30m and getting taxed down to $15m.
You need to look up Peter Zeihan man, he has a drastically different view of the future of the Chinese economy, it's reliability and where it is going! I find it difficult to see how it could be second place in the world when the property sector is literally imploding as we speak and a large volume of foreign capital is currently fleeing the country (due both to lock-downs and other factors). That being said, I don't see how Ireland is no. 1 either and I'm an Irish man! :L :L :L anyway, despite my criticisms, keep up the good work!
China sees foreign capital as a security risk for some reason so that's why they discouraged foreign investors. China has chosen social issues over monetary benefit such as controlling the property sector by cutting off Evergrande and having a low tax rate. This will definitely have consequences in the future.
I dont remember the exact specifics but Ireland set up a sort of super business friendly zone which attracted alot of companies to have their European headquarters out of Ireland. I think they cut some of the special privileges that the companies got but they still are headquartered there out of convenience. en.wikipedia.org/wiki/Shannon_Free_Zone
I think it just depends on what you're trying to rank. For economic power they would be #2 behind the US. For industrial power they're at the top. For natural resources they're in the top few. For future prospects they'd be somewhere in the middle due to the massive growth but copious systemic issues. For income they're in the middle. For "stability/confidence" they're below average. The leaderboard in general is more about the current proven state than about the probably future state. EE tries not to speculate too much and often mentions in the ranking how the number will likely change due to various factors. I think there is a good argument to made for redoing or at least clarifying the ranking methodology. Perhaps not giving an "overall" rank would make the most sense but for TH-cam views is may not do as well.
There is another huge factor in the Chinese tax situation - a serious contraction in the number of taxpayers, due to declining reproductive rates. This will greatly exacerbate all the factors you detail in this video. Combine this with a country that, for all of its land mass is still very resource-poor, and has to import 85% of its oil and gas, and that is entirely dependent on globalization for its economy - something that many have taken for granted but may not be guaranteed in the coming years for a number of reasons that we are already starting to see. Then add in the fact that almost anyone in China who has money is trying to get it out of the country, and into globally-recognized currencies like the U.S. dollar and Euro. Bottom line - China is far more of a mess, and it's global 'power' far more tenuous, than many in the West have been led to believe.
The US is only at 20% ,in France ,it's 48% (Highest in the world) ,with Denmark in 2nd place with 46% and Belgium in 3rd with 45% . And then 65% of the spending of the French governement is public spending ,for comparison the USSR was fluctuating between 52% and 56% during it's existence .
3:00 Economics Explained definitely misunderstands how the United States works. The federal government does not delegate responsibilities to the state governments. It's the other way around. The states created the federal government and set it's powers and responsibilities.
@@robgronotte1 That's why I gave the timestamp. We he says that most of your governments use this system he showed a picture of a US state capitol building (not sure which one). It's very likely that most of his viewers are American.
@@robgronotte1 As for whether or not something is under the federal government's purview I still believe that that is up to the states. The federal government is limited to powers enumerated by the Constitution. Yes the Supreme Court interprets the Constitution but they can't arbitrarily grant powers. The court has to work with what is written in the Constitution, a document that was created by and can ultimately only be amended by voters in separate states, not a national vote. The Constitution can be amended only by a two thirds vote of both the federal Senate and the House (who are representatives of individual states) or by a constitutional convention called for by two thirds of the state legislatures (who represent the same people who selected the national politicians)
@@hans7686 for 200 years the federal government has arbitrarily increased it's area of control, without constitutional amendments, and very rarely has been blocked. When they have been blocked, it's been by the Supreme Court, also part of the federal government. What you describe is probably the way the states originally intended, and maybe even what the founding fathers intended, but it's not what ended up happening.
I hate the fact that with the country leaderboard one of the criteria you rate them on is total gdp while total gdp doesn’t really matter with how good life is in a country’s cause it is about per capita. My country (Netherlands) would have scored higher but because only 17 million people we don’t while USA would have scored less
The security and stability of your country is underwritten by US defense spending and the US empire. If Europe doesn't have to carry its weight globally your prosperity is subsidized.
It's kinda expected that size is a quality on its own. Just in case of the planet suddenly sanctions the said country (very impossible and hypothetical), how well could the country thrive economically (on the paper) at least.
Their quality of life is good for most part considering the government subsidise a lot of things for them; that makes their cost of living affordable. GDP per capita means nothing if your citizens can't afford anything; the USA is a good example of per capita income meaning nothing
How is property tax any different from selling land use (renting land)? Ok, so there's the "ownership" caveat. Otherwise, it's functionally the same: government making income off of land use. You could even argue that property tax basically invalidates private ownership, because if you don't pay your taxes, you can have your land taken from you (I think).
@@JanBruunAndersen pretty much. It sounds kinda cliche though. The important thing is that it is supposed to pay for things that an individual can't pay for, like a road or bridge. It's possible to just print money to pay for everything instead, but the free market would mess that up pretty quick. The real crime is actually how they structured the debt/financing. The private sector owns most of the government debt, so basically this taxation or "legalized theft" is actually profits going to the private sector. The government is just tax collector for the rich.
@Mekehl it's even worse than counterproductive. When the government cuts taxes and increases spending (Ronald Reagan), they finance it through the private sector, so not only is the private sector being paid by the government contracts from the increase in spending, they are also loaning the money to the government to finance the spending. So they're loaning to the government with interest, so that the government can buy their stuff at profit. It's such a scam. (Military industrial complex) They basically deliberately keep the government in debt because this is how the rich collect money from everyone: by financing the government.
@@grantmccoy6739 Tax collectors for those who own government debt, like WWII-era Liberty Bonds. The Senator in “Captain America: The First Avenger” was not wrong when he had Rogers fronting bond drive shows to pay for the war.
If say still be worried. If they do fail, like you'd want your enemy to, it'll still have knock on effects on the global economy, and therefore you too.
@@kylefawcett4810 Right but to class them as your enemy and want their downfall would be to have considered the consequences already. No nation state looks to conquer or remove another without understanding the ramifications, and hasn't done for centuries. Perhaps China (the state) is so distasteful to me that I'd suffer personal hardship to see it collapse. It's a threshold rooted in personal values, there's no absolute truth to it.
While I strongly wish for the end to the CCP's dictatorship, the damage of an economic collapse would do both to the people currently under its rule and globally still is a worrying prospect.
"Oh look an Australian Man walking the tight rope!" "Is he in danger of falling into a canyon or off the bridge?!" "No! He is exposing the chinese government!"
I have a friend with whom I did law, they are ethnic Chinese, before Hong Kong was handed back to China, they practised law in HK, then we’re appointed a Judge. When HK was handed over, they continued to be a Judge, then resigned in disgust at the blatant public corruption. They then practised as a private lawyer but retired in 3 years and retired to Australia. When talking, the examples of corruption given are mind blowing. The whole “public” service is corrupt, the corporations disregard the law entirely as it suits them.
china has a sovereign currency like america, which means they dont need to raise revenue through taxation for social spending but can create it by fiat and spend it into the economy debt-free. that's called mmt, and america does it too, but it gives most of its fiat currency creation to the military and wealthy investors rather than social spending for the people.
Except taxing is necessary to increase the purchasing power of that currency by burning it... maybe it wouldn't be necessary once some kind of self-sufficiency equilibrium is reached though, any ideas about how to reach that? :) Also MMT makes it clear that any import is a net gain for economy, because instead of paying money for nothing (printing it for social benefits), you pay it for goods of other countries in the same value. I feel like USA is doing a good job trolling them by pretending they're in a huge debt :P
In China everyone buys everything on their phone. They should lower the income tax below $100k to zero and instead have a 20% VAT. Easily enforced since everyone buys online and their government runs all that.
You will see a revolution... China isn't like most Western rich lord nations. The ppl r fking poor as fk. They earn like sht 2000 rmb or 3000 monthly and if you just ramp up their fking living costs they will just die
0:28 - 0:47 is decieving. You changed the Y-axis to make China appear way worse off with its tax revenue than it actually is. A proper comparison measures two objects by the same scale. In this case the two objects are China and the US.
The two y-axis scales are almost the same (2.5% vs 2% increments) but the x-axis zoom is different. The ten common years, 2008-2018, show 15% to 18% for the US and 9% to 10.3% for China. Ignore the visual slopes when the zooms differ but the direction still tells us something.
Wouldn’t go as low as that, but I can understand why you’d lower it. You also have to take in consideration that China has probably almost always the most advanced technology, either produced at mass or even invented in china that you couldn’t lower the stability scala
You may have a key misconception of the 70 year land lease. 1. When China initially leases the land to developers, it’s not lying empty. Usually, there are people living on the land already. They just don’t own it. 2. The new developers cannot kick people out of their existing houses or tear them down just because they brought the land rights. You can see lots of videos on TH-cam showing new developments built around a single old house, or developers threatening residents to get them to sell their houses. 3. Right! The new developers, who have already leased the land from the government, now have to buy up each old house individually before they can develop on them. 4. Likewise, at the end of the 70 year lease, the land rights revert back to the government. 5. The government will then just lease it again to another developer for another 70 years. This can be a perpetual cycle. 6. (No rent is ever paid by residents to either the government or the developer for the land use) Everybody wins. The government gets revenue without taxes, the residents get big bucks for their old houses, and the developer makes money selling new houses. The risk, as you have pointed out, is if people no longer want more, bigger, and better (more expensive) houses. But the risk of reduced demand is common to every facet of capitalism.
Heyo EE! Any chance you’d do a video and ranking of Denmark’s economy? I’m curious where we sit with our rather high tax. Being the second happiest country in the world, 40% tax isn’t too bad
Happiness reports are quite flawed, they should either be ignored or taken with a gigantic grain of salt. They basically the the off brand version of HDI.
Fair Taxation: You get what you pay for ... and you pay for what you get. 40% is also about what most middle-income US citizens pay when you add up all the different income, payroll, sales, and property taxes. On top of that is the Federal deficit which is basically a deferred tax bill which is hidden from sight and absent-mindedly not included in totals.
In France ,t's 48% (Highest in the world) ,with Denmark in 2nd place with 46% and Belgium in 3rd with 45% . And then 65% of the spending of the French governement is public spending ,for comparison the USSR was fluctuating between 52% and 56% during it's existence .
This is amazing bringing lots of insights into a foreign country is hard enough as it is but explaining in such detail.I only wish I could do such research myself being an engineering grad myself I dont understand much,but find it incredibly interesting!!!👍👍👍
I remember when working there that our MD was at a presentation from local government stating the 10-15% of foreign companies paid 60% of all taxes end pensions while employing less people and most of them not making high profits. Salaries were same as market rate, we lost 50% of people after every Chinese New year.
I run an extremely small business in China and know quite a few others who do also. Our biggest headache is hiring and retaining staff. It's an absolute nightmare that never ends. Either they're incompetent and unreliable or barely competent and unreliable. The moment you think an employee is loyal or with you long-term, they're gone. This seems to have little correlation to salary. Chinese just seem to have a different set of values in this aspect of life as in most others. They'd rather work for a huge corporation at a much lower wage then a smaller company. Very few entertain the thought that they can work long term for a smaller company and become a partner or learn about a particular business and open their own later. Most would rather be an anonymous cog in the machine who spends every waking minute trying to dodge responsibility and decisions.
@J. Joseph why don't u just double or Triple the wage? If you think your employee isn't loyal then you just aren't paying enough to get them to be loyal to you.
Huge corporations are more likely to have political connections. They are the ones that get bailed out. Perhaps Chinese employees consider that a safety for their job.
@@j.joseph5353 I agree with Ink that you are just not paying them enough. (I don't own a business.) As a worker, i will take any job if they cam make me an offer I can't refuse. I think most competent workers will seek out larger companies since there are more opportunities for advancement. There is a clear limit on how much you can earn working for a smaller firm. Where in larger firms the annual budget of one department might already surpassed the gross income of a smaller firm.
I've lived in China for six years. Please tell me how I can avoid paying taxes like you say. I'm paying 35% and I don't know anybody who is avoiding their tax.
You fall into the class mentioned in the video. You have a formal job but are not extremely wealthy. That means you pay income tax. You also likely associate with people from a similar economic class to yourself hence 'everybody' you know paying the same.
EE: piles on China. Also EE: places it 2nd on leaderboard. Love the video as always, thanks! Just wanted to say that low tax % of GDP and a land system based on leasehold are not death sentences. Consider Singapore. Its tax as % GDP has been falling since the mid-'80s to just over 13% in 2021. It has several options for leases approaching expiry, including 'topping up', en-bloc sales, and, of course government acquisition.
@@MsEverAfterings It's possible they were both inspired by Henry George and Blackstone with respect to granting decades-long leases instead of freehold.
I enjoy his videos, because it is full of interesting information if you can get past the double speak. "Low taxes are dangerous and we should think they suck" -- 😆 Or... we should realize that our Western countries could be much more successful with less taxation. And look at those awesome videos of success. I find this channel to be very China friendly if you see it as a bit of satire.
Singapore'a case is a very unique and simply will not work the same way for China. Singapore is the size of a big town at most. Most people live in government provided housing. Their tax rate may be low, but a lot of their money comes from outside their country as it operates as a relatively liberal financial hub. The same economy strategy will not work in China. The two places are just too different. The size of the population they need to support is also very different. The access to labor force is also very different.
@@porcorosso4330 Fair point that Singapore differs greatly to China in many respects. However, there are similarities, namely that landed homeowners and taxpayers have little political power. So resolving the problems of low income tax take and expiring leases, while they aren't harbingers of doom, would face less obstruction.
Years ago "The Economist" reported that Chinese could buy software that kept three sets of books: one for the tax man ("See how little I make!"), another for the banker ("See how much I'm making!") and the real thing.
This was always going to be a challenging video for you to create/produce. I know some people will focus on the scoring, but like all things in life the value is in the detail that goes into determining those scores and the overview presented beforehand.
chinas median age is around 38.4 years. thats way lower than west europe. france, one country with a higher birth rate is around 42 years and germany even 45.7
For an in depth video on China's tax system I am wondering why there is zero attention paid to the fact that the majority of taxes collected in China are not from individuals but are from companies that must register and prove every single transaction monthly in conjunction with their accountants, the local tax departments and their banking records. The system simply focuses on collecting VAT and profit taxes from companies and company owners. Any serious investigation to understand how China operates should need to look at and account for this.
9:34 Leasing land is not exclusive to China. It happens here in Amsterdam as well. What happens here is that residents pay a yearly fee to the municipality once the land lease has expired. Why is this option not explored in this video, it comes off as an all-or-nothing deal?
It comes off as an all-or-nothing deal because it seems the Chinese government is treating it as an all-or-nothing deal. Or, at least, with a healthy dose of uncertainty of how it will go.
Leaseholds are available in many countries, the difference is that in a communist country it’s the ONLY land ownership system that exists. Amsterdam and the rest of the Netherlands still have freehold property.
@@therealbuba so I suppose they will have to put a price to the landlease renewal. I imagine that won't be a popular measure if nobody there had to deal with it before. The other option would be to change the law to not automatically renew the lease and tax the residents. Yes, Amsterdam has freehold property but it adds a markup on the already hefty housing price.
@@dominicnzl they don’t have a ton of options, since citizens can’t exactly elect a new government if they don’t like the policies, the government can’t do anything that is going to cause too much dissent in the population. They are much more likely just to ignore it, like they do with income taxes, and just have another tool to go after people who speak out against the government. Re leasehold property value, yes they should be worth less, if you don’t own the land, and that ultimately means you have to pay what is effectively more taxes, the value of the property is smaller. Not to mention if you don’t own the land you can technically be kicked off of it with no compensation if the leasehold as expired
Annual land “lease” fee. Aka property taxes. I mean, you don’t need income taxes if all housing gets taxed…maybe square footage for the math? Or cube footage (meterage?) rather? The richest can show off their huge double story atriums. Lol. That’d be fairer too, if you can’t afford a place to live you can keep whatever you manage to earn, and if you’ve got mansions in the countryside…well.
How fast? Zero fast, Lol, these videos and this China theory has been going around for almost ten years. Go ahead search… for ten years AT LEAST. We kept reading China growing super fast and is on the verge of collapse. Lol. They are not. Nor will they. Fortunately china is not a country as perceived in the west. They are a group of provinces with a strong central dictatorship party, as they have been for thousands of years, China fails and splits up over and over. It will happen again. Good news for China though…. The recent polarization of USA… means we will finally turn into a china.. lol. And maybe split up… if not physically then definitely “economically and politically”.
China has been very relaxed on personal income tax, super strict on corporate.. they do it on purpose. With the technology they can certainly get it done super fast.
With many state own industries and joint ventures, I don't think personally income tax is really nessesary for their government budget. They were doing alright before implementing personal income tax. I assume they can continue to make it work without personal income tax.
@@inkbold8511 I won't say tax only the wealthy, but definitely we shouldn't make people's lives harder if they are already barely making it. I do think the wealthy probably benefits the most from public spending such as roads, public education (for workers), and other infrastructure.
As long as people are productive, stuff gets created. Unless you can convince 1 billion people to stop what they are doing, their economy wont stop. Bailing out some entities won't reduce their productive capacity.
To expand a little on the 'age demographics', the largest generation in China is entering into retirement now and in the coming decade or two. Meanwhile, the one child policy has decimated birth rates meaning the working age population is shrinking and the birth rate is miniscule. Because there are now more elderly dependents per working age adult, and because the pension system is not developed in China, the relatively few working age adults have to work even harder to earn a living and support the older generation. What do you not have time or disposable income to do if you're working hard and looking after elderly relatives? Have children of your own. So there's a downward demographic spiral which some other countries have experienced but nowhere near to this extent because most other countries aren't insane enough to have a one-child policy.
@@anglaismoyen the US's age pyramid is fking wack if you take out immigrant population, and its replacement birth rate is just as bad as european nations, so one could argue that US was looking like the beginning of the end there back in Trump days for a data scientist like myself, yet no one seems to notice. And I hear a certain someone someone might be running again in the coming election
When i live in South China i knew Chinese teachers. They assumed their tax was somewhere between 2 - 10%. They thought any tax was wrong and did not like it ( a bit like all of us ) This was in an Autonomous Region. Of course many Chinese that ran their small businesses did not pay tax or pay only very little.
A fair income tax is a way for citizens to hire other citizens to provide services that are needed. For example, a certain percentage of the population is students. Given an optimum ratio of students to educators, one can justify a certain tax rate for that purpose. Similarly, one can justify income tax rates for other services such as healthcare. However, this idea is currently being stress-tested due to demographic trends affecting the ratio of earners to pensioners.
This is actually a good thing. I don’t know about you guys but I like low taxes and low taxes are good for the people. Looks like China is managing to do more for their people on much less. They should be commended.
As he showed, it is funded by mass borrowing, but local governments are allowed to form 'private' companies to get those loans so it doesn't show up as government borrowing, but once real estate stops spiraling up in value then those companies will fold
@@Waywardpaladin borrowing from their own central bank lol. This isn’t a real debt owed to anyone. Same is true for other currencies and central banks. What matters is that they have the world’s most productive industrial base to support those central bank operations where the U.S. does not which is why the Chinese will win and we will lose. They produce, we consume. They build cities for the new century, ours are in a state of decay. Cope harder lib.
I'd be interested in your take on Peter Zeihan's prediction that globalisation is pretty much at an end (His latest book out being 'The End of the World Is Just the Beginning.' an examination of the consequences for countries in a de-globalised order) If he's right then China's economy is fragile. And if he is correct that US business is rapidly moving back onshore then.....
I am not an economist, but from manufacturing point of view indusgry does tend to go back onshore for most of western countries. US, EU, TK, even North Africas (and now RF also will be forced to) started to develop robotized means of local manufacturing. This has been trending with start of available 3dprint/cnc solutions for like 10 years now.
Globalization absolutely isn't ending, especially given the priorities of ASEAN and India. The UK must depend on it for survival, and much of Europe has to as well. It just won't include the US, basically.
Those graphs at the beginning are extremely misleading, why did you not keep the y axis consistent between both? The china graph shows a ~1.4% drop and makes it seem comparable to an almost 10% drop on the US graph. If you had a consistent y axis it would be much easier to prove your point without making it seem like you are intentionally displaying data in a manipulative way
It is funny that all video regards to very serious criticism and worry about China's future, and yet the score put it in second place. Our tendency to evaluate things as they are as opossed as where they are going is really going to bite in the behind sooner than later.
Guy, 8.2 ? You missed out on so many things. China is having significant money problems cutting teachers' and civil servants' salaries and asking teachers to return bonuses. Then asking Shanghai people to help pay for the COVID testing? Also, more banks are having problems giving out cash. And, more real estate companies have defaulted on their coupon bond. That's don't sound like a stable economy? What it sounds like a bust about happen in way of Japan and Korea but on a bigger scale. In addition, China having all these black swan natural disasters every year this will butrn a hole in China pockets
China has 3 trillion USD of US treasuries they can sell to fund liabilities. of course its not as good as america where u can print all ur woes away since china doesnt have the global reserve currency status and any debt they print the fat or inflation goes directly to their own economy. does anyone know that USA currently cannot fund half of its annual budget requirements?yes America is short of 2 trillion dollars a year....shes spending 4 trillion + a year and currently has only 2 trillion in tax revenues.......if anything i would be more worried that America is on the brink of a goddam meltdown.
Please correct me if I misunderstood it: The local government is basically raising money (through an intermediary institution and a bank) by bundling land and selling it as bonds. This money is then used to build infrastructure to make land more attractive to generate lease income. If the lease income is enough to pay back the money initially borrowed to fund the infrastructure project, the government would not default on the initial debtors...So that's all good. The problem is that if the lease is perpetuated for free that the primary income source will fade. So in order to sustain income, the government keeps selling land as mentioned before. Conclusion: 1 If private investors are not willing to lease the land anymore the money that is continuously raised to make that land attractive can not be paid back to the private debtors and the system will collapse.... 2.The real estate market needs to grow in order to sustain income. So the solution would be to at some point stop infrastructure projects and the issuance of those bonds and to develop an alternative income source. Did I comprehend it correctly?
From what I understand, it's dipping into the same "product" such as land value/sales at multiple times in an economic circuit. If at any point the value of the land drops or if the debt built on it becomes too much, the whole thing implodes. Reminds me of the game using marbles and a wet paper towel...keep going until the towel can't hold the marbles anymore. Final player is left holding the bag.
Even if they did collect income taxes, how could they ever raise significant income taxes from so many low wage jobs? So many things just don't add up with China. They have somehow managed to keep expanding and growing, even in the face of humanitarian abuses and the economies of other counties (especially the US) being so gravely affected by the ever-vanishing existence of domestic manufacturing/production. This is going to come to a head. If for no other reason than resources, but also for all the economic reasons.
China has one of the biggest populations in the world. Income tax of any means, will still raise significant revenue because of how many are taxed, even if many are low-wage. On the flip side, there is also a growing middle class.
China has been able to get so much growth partly because it's willing to push... and largely because it started off artificially low. The Maoist era government severely damaged the Chinese economy, so there was certain to be growth just from getting out of the way, and even more growth could be easily had by just doing the cheap things that the 1st & 2nd world economies had _already_ done. And to some extent, China can continue doing this, because it still has a large impoverished population. As for how well their efforts will go... well, the further they go, the fewer easy victories will remain.
Using the 2% people paying tax is extremely misleading. Because tax comes in many forms, that includes GST included in the things you buy The latest figure for people who pay Income tax in China is 6% of the total population The government does not skip on Company tax, so in a way, the workers are taxed indirectly through their company.
In the UK if you earn over about £45k you pay 40% income tax on everything above that and 20% on everything below apart from the first £12k which is tax free. Then on top of that you pay VAT (sales tax ) at 20% on many thinks you buy . On top of that you pay a local council tax based on the value of your property. A higher rate taxpayer is probably giving away in taxes 60% of everything he earns .
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Please make a video on India's all text problem. And how we can solve that 🇮🇳
can u put germany on the leaderboard/can u make a website where u can see the national leaderboard?
isn't china the soo called surveillance, tyrant, autocracy country? how the ppls there dodge paying taxes and still alive? day after day why i keep seeing contradiction?
China is literally the first largest economy in the world. This propaganda that the US is, is a farce. This is literally proven every day of the year.
Can you do a video on the impacts of restricting/outlawing abortion in the largest economy in the world?
It's ok guys, you can just sell new residential land forever, it'll be fine.
Whoa, a Perun sighting! It's a meeting of the Aussie minds!! We are in the presence of greatness! 😀😀
This man recently made a great video on myths surrounding Putin’s war. Love the analysis videos consistently providing quality insights.
In china you lease the land so you can keep selling over and over.
Yea, who would think a Communist nation doing inefficient, and un-needed make work projects to keep up appearances.
yea because that worked so well for a certain real estate mega corporation in china... I suggest printing money at exorbitant rates just like the united States.
There has always been a very strong cultural believe in chinese literature that heavy taxation is a prove of governance failure, heavy taxation is also a phenomenon near an end of chinese dynastic cycles. So the avoidance of heavy taxation may also have been influenced by sociocultural factors... When we are talking about humans it may not always about numbers.
Heavy taxation means heavy theft
In ancient China, the tax burden was generally around 7%.
For example, in the Ming Dynasty, you harvested 100kg of grain, of which 4kg was handed over to the state.
While other East Asian countries, such as Japan, have a tax burden of more than 50%, and later implemented the system of four citizens and six citizens, that is, 40% is turned over to the state, which is also considered a kind system.
@@黄沙百战穿金甲 It's called theft, not tax.
@@mereen750 Tax is a responsibility of a citizen to help contribute funding of government programs (E. g. security, welfare, legal, basically responsibility of a government to its citizens). But if you are paying taxes and the government does not give something in return, doing their responsibility, you are right. It's theft. Politicians rarely understands this and act like its only a one sided obligation. Obligation of citizens to fund their lavish lifestyle.
In China, what you said is somewhat true. Especially during the end of dynasties where authorities cannot fulfill their obligations. Warlords stealing people's produce in guis eof taxation. Lol
@@linming5610 So when the thief steals your money under the threat of violence and says he only wants to protect you and that he likes what he buys with it, it's not theft?
Years ago "The Economist" reported that you can buy accounting software in China that keeps three sets of books. One for the tax man, "See how I'm losing money!", one for the banker, "See how profitable my business is!", and a real account.
It can keeps 5 sets of books. One manager account (present real business), one for taxmen(to avoid tax), one for loan banks (to get more cash), one for minor shareholders (to justify low division) and one for owner (so they will understand can theft how much money from company without noticed by other parties.)
Sustainability should be a metric in your rankings. For example an economy over reliant on proceeds from one source scores lower than a diverse economy which collects proceeds from many very stable sources.
Does that not fall under "Stability and Confidence"?
Also freedom and taxes should be included
@@TheSkiddywinks maybe but I would have thought stability and confidence relates more to politics
@@realfrantheman Freedom would likely introduce too many variables and bias, and require to many assumptions.
I would argue for sustainability as a metric but more looking at the environmental impact of the sources, f.e. if selling of your resources has a negative environmental impact long term the sustainability score should be lower
Small correction: You said the Shanghai residents were banned from leaving the house "outside of getting groceries". This is wrong. They were banned from leaving their house *even to buy groceries*. That's why the headline read "residents running out of food", because they were relying on government deliveries which were pretty unreliable.
COVID couldn't be more overrated, can't imagine the frustration, boredom and worry those people went through.
@@sudind American's population density is much much less than China's, and there are 1 whole fkin million people died of covid. Covid's damage could be higher and lower in different countries. If China treat covid like US did, there will be easily 4-5 million people died. China cares the lives of its people, that's the simple logic. US? from government to normal people, nobody gives a fk about other's lives, especially elders'
@@alexanderchen6373 Exactly. Nobody cares about the madness. The truth is that food needs to be paid for, and there is only so much government can do without having chain effects on the nation. The gears that run the country needs to keep on running or else the economy will have more severe effects on people than COVID. The death rates spiked shortly after lock downs were lifted despite high vaccinations. Medicines will not kill this disease, and the world has accepted that. Zero tolerance for COVID is nonsense that does more harm than good. China needs to admit its loss against the war against the virus like the rest of the globe.
@@sudind "the world has accepted that" does not mean China has to. If China can do better if China can save 5 million lives why would China "admit its loss"?????? The rest of the world lost doesn't mean China has to lose too. "The economy will have more severe effects on ppl than covid" this probably holds true for the rest of the world, not China. The western countries especially US can't even educate their ppl to wear a fkin mask, of course zero tolerance won't work and harm the economy than covid in these countries. Congrats on your public education system. China is doing ok right now and able to hold it as the world's factory. If China "admit the loss against virus? 5 milion Chinese will die for that (of course YOU don't care) and this very World's Factory will stop working. And western countries can't buy cheap products any more, on top of this stupid inflation caused by US, the world will turn 10 times worse than now (including China). So stop pointing finger to China and tell what China should do, you know absolutely NOTHING about China.
That's insane. Even in NZ Auckland here with lockdowns people overseas freaked out over, I still went grocery shopping, to the pharmacy, brought art supplies and stationary etc.
I remember when I worked in China, back in 2019 the taxation bureau actually sort of begged me to pay taxes, they said it like: “maybe you should start paying some tax?”
Exactly internal revenue SERVICE
Lies again? MLS Education Income Tax
DK Works So your a leach, not contributing to a country your working but you won't dare do the samething in your country
@@baikeiast5255That's an oxymoron. If you are working in a country, you are already giving something to that society. How can one be a leach for giving?
@@user-zu5do6ri6respecially since working immigrants often don't get many public services. They don't often qualify for unemployment or disability and may not be able to use public Healthcare and they rarely qualify for things like low income housing. That's especially true for xenophobic countries like China.
FYI: Irish person here. This “dodgy” “Local Government Financing Platform” you described is almost completely identical to Irish semi state bodies like Irish Water and ESB. Because of debt rules in the EU a lot of European countries have semi state business that do the same thing
Well said! I am also here to learn more genuine ways on short term investment, any idea here?
@@rajeshupadhyay5683
lookup Priscilla Dearmin-Turner, this is her name online, she's now the real investment prodigy since the crash and have help me recovered my loses
Investment now will be wise but the truth is investing on your own will be a high risk. I think it will be best to get a professional👌
@@lezliewhicker8450Thank you, Going through her profile in her webpage, she smashed all her state certificate and accreditation🙏
I heard she always have a way of linking someone investment into something new and profitable?
After the 70 year lease or 20year lease they can start to implement year to year lease witch would basically be normal property tax.
That is certainly possible, but the policy would cause a collapse in property values, severely reducing the viability of new developments and reducing revenue.
@@alanpatterson2384 Yes property values will decrease but only for properties that have less years of lease left. Say if 10 years is left then people won't buy it so it will become cheaper but the 70 year one will be costlier. So overall we can say it's going to be balanced, not completely though.
@@hackerpro5015 Not balanced for the individual though, it would be massively unpopular.
The idea was raised a few years ago but the pushback was too much. Now they say it will be free to continue the lease after 70 years.
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My wife was paid a set wage plus a bonus wage. The set wage was taxed and the bonus was not and the bonus was at least twice the set wage. So effectively she was paying tax on only a third of her wage. This was normal practice for a majority of companies. When I see data on the average wage of the Chinese citizen I always laugh because it is no doubt way off the truth.
@@makemetallichydrogen426 lol no doubt on that, india no.1~
@@shawnz3307 oh,you must be from a great country😁
@@makemetallichydrogen426 first all, match China's GNI
@@shawnz3307 Jai Hind
@@makemetallichydrogen426 Are you sure?Is clearly the king of the universe
This video misses a very important aspect of the chinese tax system. China gets most of its revenue from VAT/Sales, which are relatively higher compared to countries in similar economic situations. So it's not like the government is not collecting a lot of money, but the tax revenue goes down in times of reduced consumption like now. There has been interest in reforming that system but income taxes are very very controversial among the chinese public especially due to the huge variance in quality of gov services. Before china can switch to income tax base, they need to improve public Healthcare and a much bettersocial security net before they can justify taxes
This. It's very misleading to look at tax revenue as a % of GDP in China. The macro tax burden (there are two different definitions of it) is probably a much better comparison.
With cash and private transactions some industries don't collect and or don't pay VAT. Similar to most post USSR countries. And VAT rate ranges from 0-13%, similar to most other countries.
It doesn’t really miss it. It’s not that big. For example most exports are exempt from VAT, and you can claim a refund on any VAT charges. Too many loopholes that can be exploited. They’ve been saying they will upgrade/change it for a couple of years now. 95% of all VAT is refunded so it’s not worth mentioning.
China is not just another western country. If the state wants taxes they can just make new ones. In china the state is seen as an elder and must therefore be respected.
@@miniaturejayhawk8702 The ccp is also interested in keeping stability. Can't tax people too much otherwise there will be protests.
8:35 just LOL. If the financial crisis taught me anything (and it taught me a few things) is that rating agencies are actually a total joke and “rough guide” at best.
Just some "ivy league" economics guys with their usual subjective projections
They definitely got a few bribes and/or threats from the CCP to boost that credit rating because you don't even need to be an accountant to realize how rickety their house of cards is.
Which financial crisis?
@@paullnetinstitute4799 not really. They are really smart people. They KNOWINGLY give false ratings
Yeah, rating agencies are in the business of closing the barn door after the horses have already left.
I think this explains why my college professor said that every chinese company maintains three sets of books. One set to show the government which minimizes taxes paid. Another set to show the shareholders to maximize shareholder returns. And yet another set which accurately records the true state of the company's finances but this set remains confidential to the company and does not get released.
Isn't it what every big company does in the west? None of them pay tax, but all do record profit...
Lol “everyone” contrary to popular belief the 1% pay 99% of taxes collected in the USA. Everytime there is a video insulting Chinese or Russia in the person immediately deflects to the west 😂😂😂 barbaric Neanderthals argue like 6 year olds. Still socially behind by 3 centuries
@@tiloalo they only don't pay federal taxes. They pay billions in sales taxes and local taxes. It just makes for a nice headline to say they pay 0 taxes but usually the article will then state that its federal income tax that is at 0%.
Sorry but that's retarded. All the government has to do is look at the second set of books. This would allow them to call 'bullshit'. I don't believe your professor's story at all. Not surprising. Professors are just thinkers, not practitioners. I guarantee he hasn't worked a real day in his life.
@@tiloalo the just use company structures to reduce taxes which is legal
Philosophy of perpetual growth, government bailout... reminds me of something.
They’ll end up like the USA. Reeling from late stage capitalism
Yeap this goes against natural growth and competition.
What Keynesian economies does to MFs.
Major Entertainment companies from the USA?
At least the Chinese grow in actuality with new cities and greenified deserts while America grows only nominally but in reality is decaying and on its last leg.
3:21 Ahh, actually in the US there are some towns and cities completely dependent on traffic tickets. Take Henderson, Louisiana, where fines collected made up 89% of its general revenues in 2019.
the severity of the condition of our economic circumstances is beyond many peoples comprehension and many continue to deny its existence.
It's like the Pinocchio film where the children are just enjoying their night of decadence until they're changed into donkeys & loaded up
@@RichardWKeys The deliberate policy of Government, Big Business, Academia and of course the Media of dumbing down the American Sheeple has proven to be a great success. God Help our Nation!
Denial is the first stage of the 5 stages of grief, I've already been through all 5 in grieving the loss of all I've ever known in this present market. Many people will not accept the coming agendas and when it gets right down to it death will be preferable imo.
@@brandonr.navarro5896 To recover your losses , get yourself an aid (FA) because Invstin requires experience and higher knowledge. So to attain productive Invstmnt, It's important to have a solid support structure ( FA) to guide you.
@@christopherberends8242 Do you use any FA? If yes, whats the progress so far
Based on your economics leader board analysis at the end, one would think that China is a very good investment destination. However, your videos over the last year give a very different vibe. A seemingly over extended economy heavily reliant on real estate. How do you explain this contradiction ?
It is not a democracy, the rules we're familiar with do not apply to it.
This shows how well China hide their problems from statistics
Investment opportunities are very different from economic power. The economy of China isn't going anywhere, and will probably continue to grow, the system of government limits investment markets to a very unsteady and risky asset. So while the economy and nation will survive, any investment you make won't
@@levitschetter5288 ya if your a foreigner they will just take your money .
And if they don’t , they won’t let you take it out of China
China is a NO NO and the ccp needs to be dissolved screw that destroyed
He's Australian. That explains everything.
I have a seriously-hard time believing it deserves 6/10 on "Stability", given that individual businesses can (and regularly do) get smacked down on a whim from the central government.
with all the shenanigans that currently happen right now , that is doubtful
For me it would be like 4/10
Well, the economy will only destabilize there if their party destabilizes. As of now, the party is as strong as it was during Mao.
I think it meant the stability of the entire economy not a particular buisness
@@ishanbhusal0177 i dunno man, during mao era people died of famine, that's not strong
Besides those leases, the 1 question I've always had is the interaction between land prices/sales/demand and an ageing population. Around 2050 when 40% of China is retired and at least some of them start selling their homes to a decreasing pool of younger investors (real estate is seen as the only really secure investment asset in China), what impact will this have on real estate demand, prices and the continued ability of local government financing companies to sell land to hungry developers?
I think demand and population size shouldn't be seen as completely linked.
What I mean by this is that if the Chinese population gets individually wealthier, demand for consumer products will still rise.
Obviously, this might not apply to real estate
Chinas population has already begun a long decline that will continue to the 22nd century. And because the Han population is very xenophobic to a degree I don’t see immigration helping anytime soon, house demand will drop it won’t increase
@@zenpai5998 I disagree, it's impossible to "predict" future xenophobia.
In 50 years, Japan and China might finally open up to some immigration once the generation of xenophobia and cultural fears disappear.
@@J_X999 that’s extremely hard while China keeps pushing anti Japanese media, seriously do you not take accountability for the CCP? They’re hostile to everyone who isn’t China
@@J_X999 also do you really think Japan is in a position to send its people to China? It’s also in decline with its population
Is this video sponsored by the Chinese government?
Joke aside, as a long-time subscriber and a Chinese, I have to say EE is being so optimistic about China's economy, especially the stability. The economy has grown amazingly in the past 20 years, but I am very pessimistic about its future. The economy and society are very INstable because they are highly influenced, if not fully determined, by a few people at the top of the government. The negative consequences of breaking up with the west, as well as the aging society that has so many talented people fleeing, are going to manifest gradually in the next few years.
See, I am an Indian.
Breaking up with the West is both a problem and an opportunity ( it's a challenge).
Yes a lot of people are fleeing. But i believe there are millions of chinese as are millions of indians who would stay and toil for the land they were born in. If we do not stand for our family who else will.
And we are lucky for we live in times of uncertainty. I am not concerned with the results. I will do my work - whatever happens will happens
And yes, china has its problem but you have an opportunity to fix it. Best of luck.
As a guy with 2 arms and 2 legs, i find all these ethno-proclamations cringey
the whole world is facing the same population challenge,not just in asia so elon musk is always urging ppl on it,plz making baby
They have the infrastructure, with infrastructure comes immigrants or visa workers.
Well, the Chinese are famously pessimistic about the state of their country. Chin up mate!
Hello EE! Could you put a video on Germany and rank in the ee leaderboard. Last video on Germany was like praising its economy despite the hardest fate ever but not ranking and camparision
agreed
Bitte
This ☝️
I believe Germany would get a super low score today, they are on the loosing end of many technology transfers with China. Chinese auto makers are replacing Germans. They have no natural resources.
pin this lad!
WOW. Not many people outside of China know that local government financing vehicle exists. Nice video and remarkable research.👍
As a Chinese I can confirm that all of the issues mentioned exists in China and are as serious as they are said in this video. Your video is pretty much a spot-on.
By the way it's India's problem too. Too many freebies and only 3 percent pay income tax. Those who pay are getting fleeced
i pay income tax ( 20% of my money (
but India's economy is formalizing at a record pace.
@@PK-tt5kk Still a lot do.
Nothing in comparison to China, also even after formalization, people find the way to avoid paying it somehow.
This is where corruption makes up the shortfall in funds.
@Sumeet tanwar They pay indirect taxes in other countries too.
Oil prices is only one thing, they are mostly affected by foreign influence as well, but most of the things are much cheaper in comparison to other countries.
Very generous on the Stability and Confidence number IMHO. I'd have said 2-3 personally
Stability should be high, due to China's willingness to use violence to enforce it's governments wishes; it will have it's way until it lacks the ability to get it's way. Confidence I agree with you on.
@@absalomdraconis who is that stable for though? Certainly not for businesses or investors
Exactly like it's not stable at all. One of their largest companies literally defaulted on their debts not that long ago. Shanghai which was their economic hub, has suffered huge economic losses because of the forced lockdowns.
He's a real economist you should believe jim
0:26 Those are much different scales, 1930 to 2020, and 2008 to 2018
I am from india, and It is true here also. Very small minority approx 2.5 - 3% of the population pays the taxes because the top level earners have the means to evade tax and the lower end of the population earns well below the beginning income tax threshold. This severely limits the amount of money govt can spend in india. But surprise about 25% or a bit ore of the govt budget comes from direct taxasion. The reason for sustained supremacy of countries like USA and Europe is the fact that they have a very efficient income tax policy, allowing them to have huge amounts of money to spend.
what can India do to raise more taxes?
@@AmitJoshCjPope Rasing taxes will be a very unpopular move here according to political landscape. The existing tax base consisting of private employees, govt service personnel, small and mid business owners are already unhappy by the double taxation. These guys pay tax when they earn and also when they spend. It's hurting them but they aren't organised enough to make a meaningful noise to fall into the ears of policy makers. Increase tax base will make others really unhappy and that shows in the voting patterns
The US also creates the money to spend out of thin air.
same like indonesia, our govt prefer to taxing corporation but forget to empowering the low income worker, our minimum wage still at tax free bracket🤣
@@AmitJoshCjPope Making stuff digital makes it way harder to hide income since there's less cash on hand transfers and more digital transfers. UPI should help to solve this issue.
I wouldn't be surprised if the reason everything is so vague about what happens after the land lease expires is so that they would have justification to take your land any time they want for free. Just like how they can bring anyone down for any arbitrary reason with their tax system.
We need to demolish this apartment complex to build a new highway. Hey land owner, your lease expired 22 years ago, why haven't you renewed your lease?
What? I was never told I need to renew my lease. No one renews anyways.
I see, well if you want to keep your land you must pay for the 22 years of illegal occupation + a fee + a new 100 year lease.
I can't afford that.
That's too bad, but don't worry, we'll take good care of your land and your tenants. Send in the demo crew.
The lease got extended after some validation. It's just an inherited communist idea that no individual but the country own the land while China is a Capitalist power house now.
That is EXACTLY how things work here.
Very true
Sounds like US government
You are projecting western government of tax collection via anyway necessary including auction off your home or property for couple dollars of unpaid tax
Many years ago, I worked my first job in a small French company in Shanghai, my boss pays all the taxes as regulated, he bankrupted 2 years later.
7:06 do not misrepresent the severity of those lockdowns, during a significant part of it (and even still now in some places) people were literally sealed inside their homes, and in other cases people put up chains and walls to stop people from leaving their homes.
Eventually, they let some people out to buy groceries in groups, but only gave them a few hours to do it, in those hours you had to get to the store and get through the multi block long lines as well.
This is severely under represented in the video. China can not abandon zero covid. They would have to admit that everything they have done has been pointless and that their vaccine is garbage. This is politically devastating for a country that is already dealing with so much internal turmoil.
Genuinely made me really upset to see a city I love be essentially strangled to death. I don't think Shanghai will ever be the exciting, vibrant place it used to be again.
I think the word youre looking for is "downplay"
EE sits on the fence too much on too many issues. Lockdowns being one of them.
@@oldskoolmusicnostalgia I'd rather that than all the blatant pandering and bias I see so much more on the internet, especially wrt China.
I'd love to hear what you think about Canada's housing market....
wealthy chinese know all about it! :) hahah
CCP has fucked it up.
It's a great way to launder money.
"Is housing in Canada a Giffen good?" would be an interesting video
@@luddity How?
fewer is used to refer to number among things that are counted, as in "fewer choices" and "fewer problems"; less is used to refer to quantity or amount among things that are measured, as in "less time" and "less effort."
I can't help but be surprised at how many of China's problems are simply brushed over with little to no comment. Not going to say anything about the record high unemployment? The rise of "let it rot" work ethic? The extreme demographic problems? The man-made natural disasters, such as the extreme flooding happening right now in South China? Not to mention the corruption, the bloated bureaucracy, and tofu dreg projects?
Australian media and government bows to CCP control so it is no wonder that he is not aware of the realities of China.
Stop watching CNN is your only solution
It's a bit odd, but the video itself isn't about that. I'm not sure it should rank that high though. It has unbelievable growth, but it's like building the word's largest bridge in under a month with concrete and matchsticks. Super Impressive to be sure, but there are a lot of factors that threaten to destablise that bridge. The far bigger issue with that is, if China's bridge does falter or crumble, it's taking the world down with it-just about every country is intrinsically linked to CHina's economy.
@dev stuff Norway, Finland, Ireland, New Zealand, Costa Rica, Taiwan
dont mess with the enemy when there destroying themselves.
A very well explained summary - I do appreciate the effort you take to make this information, accessible, clear, comprehensive yet simple ! I do look forward to each of your presentations - thank you 😊
I've read morning brew for over two years. It's a good newsletter!
I want a new ranking video if that housing bobble officially bursts.
It will and China will cease to be a major part of the world economy.
Unfortunately the ranking list doesn’t have negative numbers on it.
They should try out Georgism. Just a tax on the natural resources. And in a society where evasion is rife. Land tax cannot be dodged. And land tax actually improves economic productivity with its positive incentives.
That wouldn’t work in China the government owns all the land, they would be taxing themselves.
Land tax? would need to have someone other than the government to own the land, as it stands you can only rent the land not own it as I understand.
This is what they do, they depend on land sales.
I believe there were proposals for that but at a regional level as an experiment. Not sure if they did it though, pushing a new tax is very hard.
Exactly my thought, suprised that you think the same.
When I arrived in China in 2010 I was sitting at my desk reading a book titled something like " Tax in China". One of the office girls walked passed and seeing the titled said "ah , tax...no need... no need pay tax" .
Can you cover India please ? Can you also cover the causes of the current inflation in the US? Thanks!
India would most likely end up with a score of around 6 on the economic leaderboards using the current scoring system
Economist here: Primary policy causes of inflation in the US are:
1. 4-6 years of unusually low taxes without concurrent spending cuts
2. Large short-term stimulus spending in the form of direct payments
3. Extremely low interest rates that encourage lending and spending.
4. Restrictive immigration policies that prevent the leveling of supply and demand in the workforce.
5. Last but not least, global events (COVID-19 and related shutdowns, Russian invasion of Ukraine) that have snarled supply chains
@@jacobbwalters8133 how much of the inflation fo you think is solely due to international factors?
@@ben5056 I am going to preface this post by saying that while my previous post was based entirely on data and tangible research done by credible think tanks and research institutions, this one is based in large part on my experience. While it is easy to pick out drivers of inflation based on historical data and trends, it is much more difficult to pinpoint just how much of a role each factor plays. I am sure that other economists have slightly different views.
I personally believe that international factors like war and disease have played a greater role in pushing inflation than the average American is willing to admit. When people begin to feel powerless about a situation, they tend to envision solutions that put them back in control. This is why in democracies the economy is such a good indictor of reelection chances for incumbents. In times of crisis, they become easy scapegoats and voters express their frustration with economic circumstances by voting them out of office.
Unfortunately, the reality is that economic circumstances are determined by so much more than a single person or party. I also find the international factors to be inextricably linked to the policies they spurred. Essentially, you get into a chicken or the egg scenario. Was Covid to blame for supply disruptions or were Covid related shut downs? Was the invasion of Ukraine to blame for inflationary effects on gas and other commodities or were retaliatory sanctions? Your answer could depend on your opinion of the necessity of the reactions in both instances.
Inflation is the US was caused by supply chain issues and the low rates the federal reserve imposed for so long compounded with the more reactive reaction rather than pro active one. Um. That’s basically it.
11 minutes into the video and finally you come to the actual problem mentioned in the title. Off late a lot of your videos (or atleast most part of the video) seems to be significantly different than topic mentioned in the title.
Chinese citizen here. Chinese citizens do pay taxes, but not visibly in the form of a tax bill. The absolutely majority of taxes in China are VAT/Sales Tax levied on sellers. Prices of most goods are implied to contain this tax. (You can see this when China reduced base VAT rate for electronics from 17% to 13%, and Apple immediately reduced their sales price for iPhones in China to reflect that.) Then there are income taxes (payroll taxes etc) which is withheld before money even reaches the individual. You see payroll taxes withheld as part of your payroll, and other income taxes are automatically transferred from your bank account.
Glad to see you have a new sponsor lol
This is 100% accurate. This video does point out some flaws in the Chinese system and then rates it as though it is a first rate economy other than the complete house of cards it actually is.
How can you give a ten in industry to a country that doesn’t care about its workers or the environment, and primarily got to where it is by intellectual property theft? How can you give a near perfect score after spending the entire video showing economic problems of titanic size? Very lopsided analysis.
Similar problem in India - huge swath of the economy is made up of the informal economy. India's total tax collection is only 7-9%.
Probably less than 5%
Here in Brazil the middle class is penalized with high income taxes, while the rich manage to evade the rules or pay little. Also, we don't have a VAT, but several different and confusing consumption taxes. We need a fairer and more simplified taxation system.
middle class is penalized everywhere. In Bulgaria we have 20%VAT + 10% flat "income tax" over your salary which totals 30%. This is w/o the other taxes for waste, buildings, car, healthcare, etc. If you own a small company, you cannot get government order - that's how the mid class is hit.
That's how everyone handles taxes. In the US our wealthy elites pay a smaller proportion of their taxes by abusing different tax deductions and the system of capital gains tax. You can defer your investment earnings from getting taxed as long as you don't sell the investment. You can, however, use the investments as collateral to get very favorable loans and then wait for a year where the market crashes to sell allowing you to write off your investment losses (it counts directly against your tax bill so you can continously offload your poor performing stocks and assets risk free as they reduce your tax burden while retaining the high performing investments). They often pay little or no taxes even as their investment portfolios go up billions of dollars.
@@Pensnmusic Except the data shows this isnt true at all. The top 1% in the US pay almost 40% of the income tax collected, while earning 20% of the total wages. Youre also ignoring the fact you have to take a loss, to use a tax loss... In what Universe does it make sense to tax a $1000 gain, if I have an offsetting $1000 loss?
@@Tttb95 Most people are talking about proportional income. When you work 50 hours a week to make $100k and then get taxed down to around $70k it feels alot worse than making $30m and getting taxed down to $15m.
Can’t wait for your video on Rwanda, one of the most exciting economies as of recent
You need to look up Peter Zeihan man, he has a drastically different view of the future of the Chinese economy, it's reliability and where it is going! I find it difficult to see how it could be second place in the world when the property sector is literally imploding as we speak and a large volume of foreign capital is currently fleeing the country (due both to lock-downs and other factors). That being said, I don't see how Ireland is no. 1 either and I'm an Irish man! :L :L :L anyway, despite my criticisms, keep up the good work!
China sees foreign capital as a security risk for some reason so that's why they discouraged foreign investors. China has chosen social issues over monetary benefit such as controlling the property sector by cutting off Evergrande and having a low tax rate. This will definitely have consequences in the future.
Seen alot of him, I find alot of his predictions to be stretches. China has enormous potential, but their government is handicapping them.
I dont remember the exact specifics but Ireland set up a sort of super business friendly zone which attracted alot of companies to have their European headquarters out of Ireland. I think they cut some of the special privileges that the companies got but they still are headquartered there out of convenience.
en.wikipedia.org/wiki/Shannon_Free_Zone
Zeihan is good at explaining the west, especially America. But, he fails at properly forecasting countries in Asia
I think it just depends on what you're trying to rank. For economic power they would be #2 behind the US. For industrial power they're at the top. For natural resources they're in the top few. For future prospects they'd be somewhere in the middle due to the massive growth but copious systemic issues. For income they're in the middle. For "stability/confidence" they're below average.
The leaderboard in general is more about the current proven state than about the probably future state. EE tries not to speculate too much and often mentions in the ranking how the number will likely change due to various factors. I think there is a good argument to made for redoing or at least clarifying the ranking methodology. Perhaps not giving an "overall" rank would make the most sense but for TH-cam views is may not do as well.
Bundling loans up and selling them as investment instruments. Where have I heard that before.
Oh my! This is such a good channel!
There is another huge factor in the Chinese tax situation - a serious contraction in the number of taxpayers, due to declining reproductive rates. This will greatly exacerbate all the factors you detail in this video.
Combine this with a country that, for all of its land mass is still very resource-poor, and has to import 85% of its oil and gas, and that is entirely dependent on globalization for its economy - something that many have taken for granted but may not be guaranteed in the coming years for a number of reasons that we are already starting to see.
Then add in the fact that almost anyone in China who has money is trying to get it out of the country, and into globally-recognized currencies like the U.S. dollar and Euro.
Bottom line - China is far more of a mess, and it's global 'power' far more tenuous, than many in the West have been led to believe.
The US is only at 20% ,in France ,it's 48% (Highest in the world) ,with Denmark in 2nd place with 46% and Belgium in 3rd with 45% .
And then 65% of the spending of the French governement is public spending ,for comparison the USSR was fluctuating between 52% and 56% during it's existence .
3:00 Economics Explained definitely misunderstands how the United States works. The federal government does not delegate responsibilities to the state governments. It's the other way around. The states created the federal government and set it's powers and responsibilities.
That was how it started, but now the federal government determines whether or not something is under its purview.
Lol, just watched it. He doesn't even mention the US, just says "most countries".
Your comment didn't even deserve my first reply.
@@robgronotte1 That's why I gave the timestamp. We he says that most of your governments use this system he showed a picture of a US state capitol building (not sure which one). It's very likely that most of his viewers are American.
@@robgronotte1 As for whether or not something is under the federal government's purview I still believe that that is up to the states. The federal government is limited to powers enumerated by the Constitution. Yes the Supreme Court interprets the Constitution but they can't arbitrarily grant powers. The court has to work with what is written in the Constitution, a document that was created by and can ultimately only be amended by voters in separate states, not a national vote.
The Constitution can be amended only by a two thirds vote of both the federal Senate and the House (who are representatives of individual states) or by a constitutional convention called for by two thirds of the state legislatures (who represent the same people who selected the national politicians)
@@hans7686 for 200 years the federal government has arbitrarily increased it's area of control, without constitutional amendments, and very rarely has been blocked.
When they have been blocked, it's been by the Supreme Court, also part of the federal government.
What you describe is probably the way the states originally intended, and maybe even what the founding fathers intended, but it's not what ended up happening.
I hate the fact that with the country leaderboard one of the criteria you rate them on is total gdp while total gdp doesn’t really matter with how good life is in a country’s cause it is about per capita.
My country (Netherlands) would have scored higher but because only 17 million people we don’t while USA would have scored less
Size is a quality of its own. The Netherlands may be a pretty little fish, but it's a small fry next to China.
The security and stability of your country is underwritten by US defense spending and the US empire. If Europe doesn't have to carry its weight globally your prosperity is subsidized.
It's kinda expected that size is a quality on its own. Just in case of the planet suddenly sanctions the said country (very impossible and hypothetical), how well could the country thrive economically (on the paper) at least.
Their quality of life is good for most part considering the government subsidise a lot of things for them; that makes their cost of living affordable.
GDP per capita means nothing if your citizens can't afford anything; the USA is a good example of per capita income meaning nothing
can you upload these to a podcast feed as well? that would be very convenient
I feel like that score isn't going to age well 😅
Right? I was thinking how confidence was high in the housing market before the 08 crash too... it's high until it isn't
one way or another.
I wasn't expecting it to be so high
China proves everyone wrong bruh just look how much people thought China would collapse in the 2000s
China has a property bubble that never pops
Need a follow-up analysis a year from now to see how far it drops. Assuming that the country doesn't disintegrate.
How is property tax any different from selling land use (renting land)?
Ok, so there's the "ownership" caveat. Otherwise, it's functionally the same: government making income off of land use.
You could even argue that property tax basically invalidates private ownership, because if you don't pay your taxes, you can have your land taken from you (I think).
Taxation is legalized theft.
@@JanBruunAndersen pretty much. It sounds kinda cliche though. The important thing is that it is supposed to pay for things that an individual can't pay for, like a road or bridge.
It's possible to just print money to pay for everything instead, but the free market would mess that up pretty quick.
The real crime is actually how they structured the debt/financing. The private sector owns most of the government debt, so basically this taxation or "legalized theft" is actually profits going to the private sector. The government is just tax collector for the rich.
educated comment.
@Mekehl it's even worse than counterproductive.
When the government cuts taxes and increases spending (Ronald Reagan), they finance it through the private sector, so not only is the private sector being paid by the government contracts from the increase in spending, they are also loaning the money to the government to finance the spending.
So they're loaning to the government with interest, so that the government can buy their stuff at profit. It's such a scam. (Military industrial complex)
They basically deliberately keep the government in debt because this is how the rich collect money from everyone: by financing the government.
@@grantmccoy6739 Tax collectors for those who own government debt, like WWII-era Liberty Bonds. The Senator in “Captain America: The First Avenger” was not wrong when he had Rogers fronting bond drive shows to pay for the war.
Aren't land renewal fees considered a form of stealth tax?
"If this sounds familiar to you, then you're probably starting to feel a bit worried"
Not if I view China (the state) as an enemy.
The world will be better off if the ccp is destroyed
If say still be worried. If they do fail, like you'd want your enemy to, it'll still have knock on effects on the global economy, and therefore you too.
I told you... idk these ppl that says China number 2... for what how long? It has NOTHING and will be NOTHING!
@@kylefawcett4810 Right but to class them as your enemy and want their downfall would be to have considered the consequences already. No nation state looks to conquer or remove another without understanding the ramifications, and hasn't done for centuries.
Perhaps China (the state) is so distasteful to me that I'd suffer personal hardship to see it collapse. It's a threshold rooted in personal values, there's no absolute truth to it.
While I strongly wish for the end to the CCP's dictatorship, the damage of an economic collapse would do both to the people currently under its rule and globally still is a worrying prospect.
"Oh look an Australian Man walking the tight rope!"
"Is he in danger of falling into a canyon or off the bridge?!"
"No! He is exposing the chinese government!"
This channel deserves more subscribers!
I have a friend with whom I did law, they are ethnic Chinese, before Hong Kong was handed back to China, they practised law in HK, then we’re appointed a Judge. When HK was handed over, they continued to be a Judge, then resigned in disgust at the blatant public corruption. They then practised as a private lawyer but retired in 3 years and retired to Australia. When talking, the examples of corruption given are mind blowing. The whole “public” service is corrupt, the corporations disregard the law entirely as it suits them.
True. There are tons of favors and hush money going around. In fact, people want these “gov official jobs” just so they can get these benefits.
china has a sovereign currency like america, which means they dont need to raise revenue through taxation for social spending but can create it by fiat and spend it into the economy debt-free. that's called mmt, and america does it too, but it gives most of its fiat currency creation to the military and wealthy investors rather than social spending for the people.
Except taxing is necessary to increase the purchasing power of that currency by burning it... maybe it wouldn't be necessary once some kind of self-sufficiency equilibrium is reached though, any ideas about how to reach that? :) Also MMT makes it clear that any import is a net gain for economy, because instead of paying money for nothing (printing it for social benefits), you pay it for goods of other countries in the same value. I feel like USA is doing a good job trolling them by pretending they're in a huge debt :P
In China everyone buys everything on their phone. They should lower the income tax below $100k to zero and instead have a 20% VAT. Easily enforced since everyone buys online and their government runs all that.
That would cause an absolutely massive revolt.
People would just shift to buying in person then
You will see a revolution... China isn't like most Western rich lord nations. The ppl r fking poor as fk. They earn like sht 2000 rmb or 3000 monthly and if you just ramp up their fking living costs they will just die
0:28 - 0:47 is decieving. You changed the Y-axis to make China appear way worse off with its tax revenue than it actually is. A proper comparison measures two objects by the same scale. In this case the two objects are China and the US.
The two y-axis scales are almost the same (2.5% vs 2% increments) but the x-axis zoom is different. The ten common years, 2008-2018, show 15% to 18% for the US and 9% to 10.3% for China. Ignore the visual slopes when the zooms differ but the direction still tells us something.
Stability seems high. I would lower from 6 to 2.
Wouldn’t go as low as that, but I can understand why you’d lower it. You also have to take in consideration that China has probably almost always the most advanced technology, either produced at mass or even invented in china that you couldn’t lower the stability scala
You may have a key misconception of the 70 year land lease.
1. When China initially leases the land to developers, it’s not lying empty. Usually, there are people living on the land already. They just don’t own it.
2. The new developers cannot kick people out of their existing houses or tear them down just because they brought the land rights. You can see lots of videos on TH-cam showing new developments built around a single old house, or developers threatening residents to get them to sell their houses.
3. Right! The new developers, who have already leased the land from the government, now have to buy up each old house individually before they can develop on them.
4. Likewise, at the end of the 70 year lease, the land rights revert back to the government.
5. The government will then just lease it again to another developer for another 70 years. This can be a perpetual cycle.
6. (No rent is ever paid by residents to either the government or the developer for the land use)
Everybody wins.
The government gets revenue without taxes, the residents get big bucks for their old houses, and the developer makes money selling new houses.
The risk, as you have pointed out, is if people no longer want more, bigger, and better (more expensive) houses.
But the risk of reduced demand is common to every facet of capitalism.
Heyo EE!
Any chance you’d do a video and ranking of Denmark’s economy? I’m curious where we sit with our rather high tax. Being the second happiest country in the world, 40% tax isn’t too bad
That's just trying to get a good metric out of two bad ones.
Happiness reports are quite flawed, they should either be ignored or taken with a gigantic grain of salt. They basically the the off brand version of HDI.
Fair Taxation: You get what you pay for ... and you pay for what you get.
40% is also about what most middle-income US citizens pay when you add up all the different income, payroll, sales, and property taxes. On top of that is the Federal deficit which is basically a deferred tax bill which is hidden from sight and absent-mindedly not included in totals.
When you earn a minimal wage, you probably are happy. I doubt people who have to give up half of their earnings ot fund the system are happy.
In France ,t's 48% (Highest in the world) ,with Denmark in 2nd place with 46% and Belgium in 3rd with 45% .
And then 65% of the spending of the French governement is public spending ,for comparison the USSR was fluctuating between 52% and 56% during it's existence .
I seem to remember Kazakhstan being on the leaderboard. Where did it go?
This is amazing bringing lots of insights into a foreign country is hard enough as it is but explaining in such detail.I only wish I could do such research myself being an engineering grad myself I dont understand much,but find it incredibly interesting!!!👍👍👍
I think they put a lot of work for this
As one orange president once said: CHINA
I thought it was CHYNA
Chyner
No, it was CYNA
Cchhyna
Bing bing bing bing bing bong
I remember when working there that our MD was at a presentation from local government stating the 10-15% of foreign companies paid 60% of all taxes end pensions while employing less people and most of them not making high profits. Salaries were same as market rate, we lost 50% of people after every Chinese New year.
I run an extremely small business in China and know quite a few others who do also. Our biggest headache is hiring and retaining staff. It's an absolute nightmare that never ends. Either they're incompetent and unreliable or barely competent and unreliable. The moment you think an employee is loyal or with you long-term, they're gone. This seems to have little correlation to salary. Chinese just seem to have a different set of values in this aspect of life as in most others. They'd rather work for a huge corporation at a much lower wage then a smaller company. Very few entertain the thought that they can work long term for a smaller company and become a partner or learn about a particular business and open their own later. Most would rather be an anonymous cog in the machine who spends every waking minute trying to dodge responsibility and decisions.
@J. Joseph why don't u just double or Triple the wage? If you think your employee isn't loyal then you just aren't paying enough to get them to be loyal to you.
@@inkbold8511 I see you don't own a business. Thank you for your insight.
Huge corporations are more likely to have political connections. They are the ones that get bailed out. Perhaps Chinese employees consider that a safety for their job.
@@j.joseph5353
I agree with Ink that you are just not paying them enough.
(I don't own a business.)
As a worker, i will take any job if they cam make me an offer I can't refuse.
I think most competent workers will seek out larger companies since there are more opportunities for advancement.
There is a clear limit on how much you can earn working for a smaller firm.
Where in larger firms the annual budget of one department might already surpassed the gross income of a smaller firm.
I'm super curious to know how you research your videos? it's really impressive the amount of knowledge in your videos!
I've lived in China for six years. Please tell me how I can avoid paying taxes like you say. I'm paying 35% and I don't know anybody who is avoiding their tax.
You have to ask your mom
I guess it's just you and some foreigners you know that pay their fair share!
You know all 1.4 billion Chinese? That’s amazing!
You fall into the class mentioned in the video. You have a formal job but are not extremely wealthy. That means you pay income tax. You also likely associate with people from a similar economic class to yourself hence 'everybody' you know paying the same.
Like anyone is going to go around publicly stating they avoid paying taxes.
EE: piles on China. Also EE: places it 2nd on leaderboard. Love the video as always, thanks! Just wanted to say that low tax % of GDP and a land system based on leasehold are not death sentences. Consider Singapore. Its tax as % GDP has been falling since the mid-'80s to just over 13% in 2021. It has several options for leases approaching expiry, including 'topping up', en-bloc sales, and, of course government acquisition.
I’m pretty sure the CCP government took a lot of inspiration from Singapore!
@@MsEverAfterings It's possible they were both inspired by Henry George and Blackstone with respect to granting decades-long leases instead of freehold.
I enjoy his videos, because it is full of interesting information if you can get past the double speak. "Low taxes are dangerous and we should think they suck" -- 😆 Or... we should realize that our Western countries could be much more successful with less taxation. And look at those awesome videos of success. I find this channel to be very China friendly if you see it as a bit of satire.
Singapore'a case is a very unique and simply will not work the same way for China.
Singapore is the size of a big town at most. Most people live in government provided housing.
Their tax rate may be low, but a lot of their money comes from outside their country as it operates as a relatively liberal financial hub.
The same economy strategy will not work in China. The two places are just too different. The size of the population they need to support is also very different.
The access to labor force is also very different.
@@porcorosso4330 Fair point that Singapore differs greatly to China in many respects. However, there are similarities, namely that landed homeowners and taxpayers have little political power. So resolving the problems of low income tax take and expiring leases, while they aren't harbingers of doom, would face less obstruction.
Years ago "The Economist" reported that Chinese could buy software that kept three sets of books: one for the tax man ("See how little I make!"), another for the banker ("See how much I'm making!") and the real thing.
This was always going to be a challenging video for you to create/produce.
I know some people will focus on the scoring, but like all things in life the value is in the detail that goes into determining those scores and the overview presented beforehand.
IMO: The metric that shows the real productivity of an economy is the percentage of the GDP that is delivered to the bottom 50%.
"It's not going anywhere anytime soon" *China laughs nervously at its demographic chart*
1.44B people economy wont go anywhere soon. Even CUBA with negative economic growth is still around
chinas median age is around 38.4 years. thats way lower than west europe. france, one country with a higher birth rate is around 42 years and germany even 45.7
@@paullnetinstitute4799 Sure, but China is also one of if not the fastest aging country. They're in for a rough ride.
@@egegeggegeeg4789 germany is starting to feel its old age too. frances birth rate jumped up within 10-20 years if i remember correctly
For an in depth video on China's tax system I am wondering why there is zero attention paid to the fact that the majority of taxes collected in China are not from individuals but are from companies that must register and prove every single transaction monthly in conjunction with their accountants, the local tax departments and their banking records. The system simply focuses on collecting VAT and profit taxes from companies and company owners. Any serious investigation to understand how China operates should need to look at and account for this.
9:34 Leasing land is not exclusive to China. It happens here in Amsterdam as well. What happens here is that residents pay a yearly fee to the municipality once the land lease has expired. Why is this option not explored in this video, it comes off as an all-or-nothing deal?
It comes off as an all-or-nothing deal because it seems the Chinese government is treating it as an all-or-nothing deal. Or, at least, with a healthy dose of uncertainty of how it will go.
Leaseholds are available in many countries, the difference is that in a communist country it’s the ONLY land ownership system that exists. Amsterdam and the rest of the Netherlands still have freehold property.
@@therealbuba so I suppose they will have to put a price to the landlease renewal. I imagine that won't be a popular measure if nobody there had to deal with it before. The other option would be to change the law to not automatically renew the lease and tax the residents.
Yes, Amsterdam has freehold property but it adds a markup on the already hefty housing price.
@@dominicnzl they don’t have a ton of options, since citizens can’t exactly elect a new government if they don’t like the policies, the government can’t do anything that is going to cause too much dissent in the population. They are much more likely just to ignore it, like they do with income taxes, and just have another tool to go after people who speak out against the government.
Re leasehold property value, yes they should be worth less, if you don’t own the land, and that ultimately means you have to pay what is effectively more taxes, the value of the property is smaller. Not to mention if you don’t own the land you can technically be kicked off of it with no compensation if the leasehold as expired
Yes I current live in Chicago Illinois, and housing tax is 2.24% per year
Annual land “lease” fee. Aka property taxes. I mean, you don’t need income taxes if all housing gets taxed…maybe square footage for the math? Or cube footage (meterage?) rather? The richest can show off their huge double story atriums. Lol.
That’d be fairer too, if you can’t afford a place to live you can keep whatever you manage to earn, and if you’ve got mansions in the countryside…well.
That's just land value tax, the fairest tax.
Georgism.
Lol!!I've known for a long time that China would collapse because of tax issues! We India will rise as the king of the world! !😏😏
"China's economy is primed to crumble any time now"
"let's give them 8.2"
How far, wide, slow or fast does it crumble? The key to a strong economy is to survive crisis after crisis.
How fast? Zero fast, Lol, these videos and this China theory has been going around for almost ten years. Go ahead search… for ten years AT LEAST. We kept reading China growing super fast and is on the verge of collapse. Lol. They are not. Nor will they. Fortunately china is not a country as perceived in the west. They are a group of provinces with a strong central dictatorship party, as they have been for thousands of years, China fails and splits up over and over. It will happen again. Good news for China though…. The recent polarization of USA… means we will finally turn into a china.. lol. And maybe split up… if not physically then definitely “economically and politically”.
China has been very relaxed on personal income tax, super strict on corporate.. they do it on purpose. With the technology they can certainly get it done super fast.
As it should be, tax burden should only be on the wealthy not the low income.
@@inkbold8511 except the wealthy always get away with it.
With many state own industries and joint ventures, I don't think personally income tax is really nessesary for their government budget.
They were doing alright before implementing personal income tax. I assume they can continue to make it work without personal income tax.
@@inkbold8511
I won't say tax only the wealthy, but definitely we shouldn't make people's lives harder if they are already barely making it.
I do think the wealthy probably benefits the most from public spending such as roads, public education (for workers), and other infrastructure.
What's the rating out of 10 for its slavery and missing person list?
Thats on a different list on his alt channel Politics Explained
That's the same problem in India, only 6% of the Indian population pays income tax :-(
Just stumbled on to your channel, it makes me curious, do you have a post with your full leaderboard?
As long as people are productive, stuff gets created. Unless you can convince 1 billion people to stop what they are doing, their economy wont stop. Bailing out some entities won't reduce their productive capacity.
But a "zero covid" policy does.
Also the age demographics.
To expand a little on the 'age demographics', the largest generation in China is entering into retirement now and in the coming decade or two. Meanwhile, the one child policy has decimated birth rates meaning the working age population is shrinking and the birth rate is miniscule. Because there are now more elderly dependents per working age adult, and because the pension system is not developed in China, the relatively few working age adults have to work even harder to earn a living and support the older generation. What do you not have time or disposable income to do if you're working hard and looking after elderly relatives? Have children of your own. So there's a downward demographic spiral which some other countries have experienced but nowhere near to this extent because most other countries aren't insane enough to have a one-child policy.
@@anglaismoyen the US's age pyramid is fking wack if you take out immigrant population, and its replacement birth rate is just as bad as european nations, so one could argue that US was looking like the beginning of the end there back in Trump days for a data scientist like myself, yet no one seems to notice. And I hear a certain someone someone might be running again in the coming election
Well... Reverse time to 30 years ago and you can see it is possible to convince 1 billion people to stop what they are doing...
Jack ma: "I don't like the government"
The government: "TAX OR JAIL!?"
When i live in South China i knew Chinese teachers. They assumed their tax was somewhere between 2 - 10%. They thought any tax was wrong and did not like it ( a bit like all of us ) This was in an Autonomous Region. Of course many Chinese that ran their small businesses did not pay tax or pay only very little.
Guangxi, been living there for 15 years and you're right
A fair income tax is a way for citizens to hire other citizens to provide services that are needed. For example, a certain percentage of the population is students. Given an optimum ratio of students to educators, one can justify a certain tax rate for that purpose. Similarly, one can justify income tax rates for other services such as healthcare. However, this idea is currently being stress-tested due to demographic trends affecting the ratio of earners to pensioners.
That 6/10 stability and confidence is significantly more than I'd give them, lol
This is actually a good thing. I don’t know about you guys but I like low taxes and low taxes are good for the people. Looks like China is managing to do more for their people on much less. They should be commended.
As he showed, it is funded by mass borrowing, but local governments are allowed to form 'private' companies to get those loans so it doesn't show up as government borrowing, but once real estate stops spiraling up in value then those companies will fold
@@Waywardpaladin borrowing from their own central bank lol. This isn’t a real debt owed to anyone. Same is true for other currencies and central banks. What matters is that they have the world’s most productive industrial base to support those central bank operations where the U.S. does not which is why the Chinese will win and we will lose. They produce, we consume. They build cities for the new century, ours are in a state of decay. Cope harder lib.
“Appear cheap when you are expanding, and distract with threats against Taiwan when the economy is endangered.” ― Xi Tzu, The Art of Bankruptcy
I'd be interested in your take on Peter Zeihan's prediction that globalisation is pretty much at an end (His latest book out being 'The End of the World Is Just the Beginning.' an examination of the consequences for countries in a de-globalised order)
If he's right then China's economy is fragile. And if he is correct that US business is rapidly moving back onshore then.....
Remember history ended too once. Apparently at least.
I am not an economist, but from manufacturing point of view indusgry does tend to go back onshore for most of western countries. US, EU, TK, even North Africas (and now RF also will be forced to) started to develop robotized means of local manufacturing. This has been trending with start of available 3dprint/cnc solutions for like 10 years now.
You chose to listen to Peter Zeihan of all people 🤣🤣🤣
Us business moving onshore, meaning more inflation.
Globalization absolutely isn't ending, especially given the priorities of ASEAN and India. The UK must depend on it for survival, and much of Europe has to as well. It just won't include the US, basically.
Those graphs at the beginning are extremely misleading, why did you not keep the y axis consistent between both? The china graph shows a ~1.4% drop and makes it seem comparable to an almost 10% drop on the US graph. If you had a consistent y axis it would be much easier to prove your point without making it seem like you are intentionally displaying data in a manipulative way
It is funny that all video regards to very serious criticism and worry about China's future, and yet the score put it in second place. Our tendency to evaluate things as they are as opossed as where they are going is really going to bite in the behind sooner than later.
I’ve been living in China 14 years and I pay tax. Taxes are taken from my salary every month.
"In this world nothing can be said to be certain, except death and taxes" - Benjamin Franklin
There is no taxes in China... or at least very few of them pay taxes.
You mean, death, taxes, and House Hunters.
Guy, 8.2 ?
You missed out on so many things.
China is having significant money problems cutting teachers' and civil servants' salaries and asking teachers to return bonuses.
Then asking Shanghai people to help pay for the COVID testing?
Also, more banks are having problems giving out cash. And, more real estate companies have defaulted on their coupon bond.
That's don't sound like a stable economy? What it sounds like a bust about happen in way of Japan and Korea but on a bigger scale.
In addition, China having all these black swan natural disasters every year this will butrn a hole in China pockets
China has 3 trillion USD of US treasuries they can sell to fund liabilities.
of course its not as good as america where u can print all ur woes away since china doesnt have the global reserve currency status and any debt they print the fat or inflation goes directly to their own economy.
does anyone know that USA currently cannot fund half of its annual budget requirements?yes America is short of 2 trillion dollars a year....shes spending 4 trillion + a year and currently has only 2 trillion in tax revenues.......if anything i would be more worried that America is on the brink of a goddam meltdown.
@@jont2576 And, you were saying?
th-cam.com/video/RAovzo5cCVM/w-d-xo.html
Please correct me if I misunderstood it:
The local government is basically raising money (through an intermediary institution and a bank) by bundling land and selling it as bonds. This money is then used to build infrastructure to make land more attractive to generate lease income. If the lease income is enough to pay back the money initially borrowed to fund the infrastructure project, the government would not default on the initial debtors...So that's all good. The problem is that if the lease is perpetuated for free that the primary income source will fade. So in order to sustain income, the government keeps selling land as mentioned before.
Conclusion:
1 If private investors are not willing to lease the land anymore the money that is continuously raised to make that land attractive can not be paid back to the private debtors and the system will collapse....
2.The real estate market needs to grow in order to sustain income.
So the solution would be to at some point stop infrastructure projects and the issuance of those bonds and to develop an alternative income source.
Did I comprehend it correctly?
From what I understand, it's dipping into the same "product" such as land value/sales at multiple times in an economic circuit. If at any point the value of the land drops or if the debt built on it becomes too much, the whole thing implodes. Reminds me of the game using marbles and a wet paper towel...keep going until the towel can't hold the marbles anymore. Final player is left holding the bag.
Even if they did collect income taxes, how could they ever raise significant income taxes from so many low wage jobs? So many things just don't add up with China. They have somehow managed to keep expanding and growing, even in the face of humanitarian abuses and the economies of other counties (especially the US) being so gravely affected by the ever-vanishing existence of domestic manufacturing/production. This is going to come to a head. If for no other reason than resources, but also for all the economic reasons.
China has one of the biggest populations in the world. Income tax of any means, will still raise significant revenue because of how many are taxed, even if many are low-wage. On the flip side, there is also a growing middle class.
China has been able to get so much growth partly because it's willing to push... and largely because it started off artificially low. The Maoist era government severely damaged the Chinese economy, so there was certain to be growth just from getting out of the way, and even more growth could be easily had by just doing the cheap things that the 1st & 2nd world economies had _already_ done. And to some extent, China can continue doing this, because it still has a large impoverished population. As for how well their efforts will go... well, the further they go, the fewer easy victories will remain.
@@absalomdraconis “the further they go, the fewer easy victories will remain” well said.
Using the 2% people paying tax is extremely misleading.
Because tax comes in many forms, that includes GST included in the things you buy
The latest figure for people who pay Income tax in China is 6% of the total population
The government does not skip on Company tax, so in a way, the workers are taxed indirectly through their company.
In the UK if you earn over about £45k you pay 40% income tax on everything above that and 20% on everything below apart from the first £12k which is tax free. Then on top of that you pay VAT (sales tax ) at 20% on many thinks you buy . On top of that you pay a local council tax based on the value of your property. A higher rate taxpayer is probably giving away in taxes 60% of everything he earns .
The old Soviet/early Russian Federation joke seems to ring true here - you don't pay your taxes, you just bribe the taxman to go away