Great Graphic: European Taxes and the Division of the Social Pie

This Great Graphic was posted by Sober Look from Goldman Sachs.  It provides a good overview corporate and sales tax (VAT) in several European countries. 

Portugal is the only one that has raised corporate taxes, but five of the seven countries included here raised their VAT.

We have argued that productivity gains are distributed between wages and profits is not simply market-determined.  It is also a function of politics, which is to say power.  Power relationships have become more acute rather than diminish through the crisis.  That is partly what it means to have such meager returns to labor in terms of wages, employment and security, while profits are at record levels.   Profits were protected by absorbing more of the productivity gains.  

We are not talking about the distribution of gains now, but of pain.  How should the costs of the economic adjustment, which undoubtedly lies ahead, for the core and periphery alike, be distributed within and between countries.   

Between countries a macabre dance continues to be play out between creditor and debtors and it is not always clear who is leading whom.  Within countries, creditor regions and sectors are tightening their grip.   Both forces threaten to weaken, if not dissolve, the bonds that bind.  It underscores for us a key issue going forward:  there is no clear driver for an increase in aggregate demand.