Global tax redistribution
The Catalans make a nice example for a topic that has been puzzling me lately. I like Catalans, but I also like Andalucians and Extremadureños. Catalonia is a relatively rich part of Spain, and now they don't want to share their wealth with Spain's other (often poorer) regions. In a way, that's surprising.
I can understand people want more inequality between rich and poor people (either because they are rich themselves, and selfish, or because they believe poor people should work harder). But a lot of people also think inequality is a bad thing, and rich people should share some of their money with poor people, through tax redistribution. Most countries implement a tax system that's at least proportional, and often even progressive (so not only the absolute amount of tax you pay goes up as you earn more, but even the percentage increases). More redistribution vs. less redistribution is of course a classic central topic in many political discussions, so nothing new there.
But I just don't see the causal link between tax redistribution and national borders.
If you talk about Catalonians wanting to be more independent from the rest of Spain, the financial part of this discussion (apart from of course discussions about topics like language in schools and flags on buildings) is not about how much of your taxes go to poor people, but to which poor people it goes. If you agree that you want to share some of your riches with poorer people, then why should you care whether these people are far away or close by?
Of course, you can argue that by only redistributing tax to poor people within Catalonia, less money is needed for the same impact on the atmosphere within Catalonia. And probably, the poor within Catalonia hope that they will receive
more support if they live in a richer country. And this would probably even happen - tax redistribution is not only based on how much poor people need, but also on how much the rich can spare. So if rich Catalans stop supporting poor Extremadureños, they will likely use some of the money they save on that to give more to the local poor than they currently do.
But why is solidarity so geographically restricted? I personally think it's nice to pay some of my income to poor people, but I would prefer to give it all to really poor people in regions of Africa, South America and Asia, than to give it to the relatively poor within the Netherlands, where I pay most of my taxes. First of all, poorer people need my help more urgently, and second, the impact of one dollar from me on their lives will be greater than the impact of that same dollar on the live of an unemployed builder in Tilburg, or an inefficient farmer in Drenthe.
I think there are at least seven reasons why most people wouldn't agree with my personal preference of where my tax redistribution money should go:
1. Impact on your own surroundings
If you habitually live in one city, and help people within that city, and the cities around it, you're likely to rid your own living environment of annoying poor people.
2. Witnessing the effect
If you regularly see people who you help, you can feel good about it.
3. Confusion with the state's role as your own insurance
Third, redistribution is tightly linked with insurance, and people will likely confuse the two. You could easily define the part of a socialist society that keeps you safe against fluctuations in your own monetary fortune as separate from the redistribution between you (over your whole lifetime) and other people.
4. Group Feeling
People feel a sort of team spirit (and therefore more solidary with people who are on the same "team") than with others who form part of a different team, that should fix their own problems. There is a feeling of "we as a group".
5. Identification with people like yourself
Apart from whether a poor person is on your team or not, it's easier for many Europeans to imagine what it's like to be an American citizen hit by hurricane Katrina, or a Danish backpacker getting raped in India, than to imagine what it's like to grow up in a desert village with high infant mortality, or to be a local girl getting raped in India. Apart from feeling that people on the other side of the world form part of a different team than you (previous point), it's also harder to imagine "it could have been me" when you see their misery.
6. Group responsibility
People are more willing to be collectively solidary than individually. They will only help the poor if other rich people within their social environment do the same. This is a funny sort of fairness feeling if you think about it. People agree that "the community" should help poor people, rather than taking their own decision about how they act individually.
7. The poor's votes stay within their democracy
A lot of redistribution solidarity is not even voluntary. If the poor people in a country all vote for receiving money from the rich people, then in a perfect democracy, where everybody votes selfishly, they would be able to confiscate the riches of a small economic elite. Poor people who vote in a different election than rich people would not have that power. In practice, of course, people rarely vote completely selfishly, many people vote a bit random, while they don't really have any political ideas to base their vote on, and others vote for the society they would like to see (which brings us back by voluntary redistribution again). I don't think tax redistribution should come from poor people using their vote to claim solidarity from rich people. I think helping a fellow human should be a responsibility, and indeed a privilege, but not the result of voting power.
In any case, even after listing all these seven reasons for making tax redistribution stop at the border, they don't convince me. But I'll take for granted that the minimum level of wealth redistribution is determined by politics in the Netherlands, through a progressive tax system. So I don't mind if the minimum amount of money I give to poor people is determined by politicians. I can always give more myself through charity (people who want to give less would have to resort to tax evasion, which is a bit trickier).
I probably pay about 50% tax (combining income tax, social security contributions, VAT, etc.) and I guess about half of that flow back to my past, current, and future self through services I used, use, and will use myself (schools, trains, hospitals). The other half is redistributed to people who need it more than me (averaging my earnings and spendings over my entire lifetime).
Apart from that 25% of my income that is given to the poor by tax redistribution, I of course work for people in my direct surroundings, and others in my direct surroundings work for me. This includes both unpaid work and households where everybody consumes, but not everybody works. But let's focus on the money that flows from me to poorer people through tax redistributions. I guess it's about 25% of my income, and from what I've heard only 0.5% of that is
spent outside the Netherlands in International Development. Let's estimate 1% if we add redistribution within the EU. The rest is distributed equally over just the Netherlands.
This is a crazy situation! I would never have chosen it that way myself. I have no different relationship with an unknown person in Maastricht than with one in Antwerp. It's all the same to me. If I wanted to help people who live geographically close to me, then I would just define some sort of declining curve based on distance. So maybe I would split my 25% into 5 equal parts of 5%, and spend each on poor people within 1km, 10km, 100km, 1.000km, and 10.000km from where I live myself. Why should there be such a huge proportion which is spent on poor people who vote for the same government as me, and such a tiny portion on poor people who vote for a different government?
I wouldn't actually want to support such a distance-based relation, because people who live more than 10,000 kilometers away from the Netherlands are generally much poorer than the ones in the first four groups.
I really don't get it, and even less so why some people even seem to want to make their tax redistribution zone even smaller than it already is.
It would be interesting to try to do a game-theoretical simulation of this, and model how geographical location, or voting for a same government, can form a focal point for targeting solidarity between rational (or altruistic) agents in such a simulation.
But since I think borders are stupid, I would prefer to see a world where this noble notion of tax redistribution is globalized across all countries and continents. Its impact in reducing inequality would be so much bigger. Who's up for that?