[Nextgrid]

Yes, that's my problem with high taxation, as someone who got burnt by it by virtue of living and paying taxes in the UK.

I don't mind paying my fair share of tax if it means I get good value out of it, but the state of our healthcare here means that in practice the public healthcare system is no longer fit for purpose, so we are being forced to pay for a system that doesn't work and end up having to go private (and thus pay again) when we do need timely healthcare.

I am generally in favor of fair, progressive taxation to ensure everyone has a good social safety net, but the taxation should be fair (it's no longer the case in the UK, since tax brackets haven't been adjusted for inflation) and the services paid for by those taxes should provide good value.

The danger with services funded by taxes as opposed to a private enterprise operating in a free market is that private enterprises are bound by competitive pressure - if they are delivering terrible service and stuffing their pockets with the money, you are free not to do business with them and a potential competitor (that stuffs their pockets a little less) can come along and get your business instead.

With tax-funded services, this pressure doesn't exist, so there's no incentive for politicians (and everyone else in the value chain) to deliver good service, since people generally can't opt out of taxes. This means that even if a service is currently good, there's no guarantee it will remain so since the pressure for it to remain isn't there. Thus, when you see high taxation, it's reasonable to be worried whether the service provided by those taxes is any good and whether it will remain so in the future.

[graemep]

The UK tax system (like many others) is not as fair or progressive as it is presented to be.

1. NI means that the real standard rate on earned income is substantially higher than the "income tax" rate. it is also not fair that unearned income is exempt from it. 2. Lots of purchase taxes, which are disproportionately paid by people with moderate incomes. People on low incomes spend a higher proportion in necessities which are (rightly) subject to lower levels. The more money you have (beyond a certain point) the less you spend on things subject to these taxes. 3. Too many loopholes.

> so we are being forced to pay for a system that doesn't work and end up having to go private (and thus pay again) when we do need timely healthcare.

Some of the NHS is good. NHS dentists can be very hard to find and waiting lists are long. Waiting times can be long too. Reform is prevented by the fear of a US type system and I think many people think that is the only alternative (and seem not to realise how things operate in most other developed countries).

[Nextgrid]

> seem not to realise how things operate in most other developed countries

Genuine question, what do other countries do differently? The way I see it (and described in my original comment) is that the underlying factors behind the decline of government services (no accountability, no incentive to use tax money efficiently) are common across many countries.

Some countries may get away with it for now because they're still "early", but if there is no pressure to do well it's just a matter of time before they too suffer the same fate?

[cycomanic]

I'd argue that the decline in quality of services as been a phenomenon across many western countries and to significant degree been caused by a economic idiology and a deliberate campaign with a goal of privatisation of many public goods, started in the 1980s.

Essentially funding to services are being reduced to pay for tax reductions, until at some point the quality declines significantly, which is taken as the argument that private enterprise would deliver a much better service at lower cost. Services/infrastructure are then sold and a low price and after a short while costs for services go up, but because they are now private enterprises raising prices it is "the market".

The reason why the UK is worse I believe it's due to the political system which results in essentially 2 dominant parties with very little differences.

[graemep]

Look at most continental European systems, or developed Asia - some form of government backed insurance is usual:

https://en.wikipedia.org/wiki/National_health_insurance

Singapore has an individual fund system if I understand it correctly, and that provides extremely good value for money.

One big difference is that these systems are less centralised and therefore less bureaucratic, less prone to political tinkering, and they reduce the problems of lack of accountability and incentives for efficiency.

[mint2]

Except there’s a lot of services that are unsuited to being delivered by competitive markets as it’s nearly impossible to prevent monopolization.

[Nextgrid]

Agreed, although this can be addressed by appropriate regulation. However, the ultimate issue is that the government should do its job well, and whether it's the task of adequately regulating a market vs providing the service itself, the problem that there's no pressure it to do it well still remains.

[261582335426158]

The key point to add is that (at least) 2 points must be true for this positive side of market to show:

1) There should be "forces" counterbalancing the move toward monopolies

2) It should be okay for the service to fail/die and/or it should degrade gracefully.

For example book publishing is a wonderful field that can gain from free market dynamics while prison management is a terrible field for free market dynamics.

While a dying publishing enterprise might print less books at a lower quality with deceptive marketing (and that is sorta okay) a dying prison management enterprise will squeeze every ounce of dignity/health/safety out of its wards.

Market dynamics for the economy are analogous to natural selection for evolution: both can produce wonderful things but they will require many more to die horribly.

This is not a statement against markets but I am calling for this tradeoff to be considered along with many other.

[Nextgrid]

The same factor that makes private prisons problematic also makes taxation problematic - in both cases you've got a captive market that can't opt out thus no pressure to provide a good, efficient service. In a hypothetical world where inmates could choose whether to remain in prison and which one to be in, private prisons would be competing for service quality. Actually we've got that, they're just called "hotels".

I wonder if the solution there would be to force politicians and everyone involved to exclusively use government-provided services - so as a condition of going into politics, you can't use private healthcare, your kids can't go to private schools, and you need to spend a day every year in a random prison and so on. Then it would mean the decision-makers got at least some incentive to make sure these services are functional and fit for purpose.

[autoexec]

> The same factor that makes private prisons problematic also makes taxation problematic - in both cases you've got a captive market that can't opt out thus no pressure to provide a good, efficient service.

What you should have are companies that offer their best prices/services to the government out of fear that they'll be passed over and those highly valuable contracts will be awarded to their competitors who do better. Governments are incentivized to select the best companies to award those contracts to because they risk being voted out if people are unhappy with the level of service they're getting for their tax dollars.

Prisoners can't kick politicians out of office when they're unhappy about the state of the prisons so that's a huge issue with prisons in general, but private prisons have another issue which is profit. Whatever it costs to keep dangerous people locked up, private prisons need all of that money plus they must extract a bunch of extra money from the public just to stuff their pockets with. If private prisons want to keep prices low to the public but also want to keep filling their pockets with money they need to provide substandard care to the people they are responsible for. A non-private prison needs only what it costs to do the job and nothing more.

[Nextgrid]

> What you should have are companies that offer their best prices/services to the government out of fear that they'll be passed over and those highly valuable contracts will be awarded to their competitors who do better.

This requires a functional quality control system. It seems like it's cheaper to undermine/bribe (or just let decay whatever there is) the quality control system than to actually do better.

> because they risk being voted out if people are unhappy with the level of service

Votes only work if people are properly represented and have good alternatives to vote for, which doesn't seem to be the case in most countries despite them being considered democracies. Keep in mind that the leader of the DPRK is also "elected".

[ScoobleDoodle]

Somehow in the USA these theoretical competitors that lower the profit margin and provide better service seem not to materialize. We end up with whole industries all of whose participants are funneling money to the executives and investors at the expense of customers and society. It’s such a broad issue that half of inflation is attributed to this corporate greed which is not being mitigated by the invisible hand of capitalist competition.

Without proper regulation and enforcement capitalism devolves to monopolies and oligopolies and eliminate competition and subdue market forces.

[mathgradthrow]

private enterprise is not "bound by competitive pressure". Companies only compete by virtue of the government forcing them to. Are you arguing that humans, inventors of civilization, are too stupid to figure out how to cooperate?

[Nextgrid]

I disagree that companies only compete thanks to regulation. Companies competing is the default - regulation sometimes (either as an unintended oversight or malicious intent thanks to lobbying/corruption) prevents it though.

There are many valid scenarios where competition is lacking, but generally speaking the reason it’s lacking is due to regulation/law making it impossible.

Telecoms for example is impossible because the incumbents have exclusive control of the physical infrastructure (poles/ducts under the street) or spectrum auctions where the price makes it impossible for a new entrant to enter.

Tech network effects are maintained by copyright law being abused to prevent adversarial interoperability.

[graemep]

> Companies competing is the default

If you had no regulation, they would simply form cartels or merge to create a monopoly.

[Nextgrid]

Merging and forming cartels is still technically a choice. A company could decide not to do that and compete. It may require a near-infinite amount of money, but it's still technically possible.

[A1kmm]

In the absence of any regulation, if a company's objective is to maximise profits, and it acts as a rational actor solely focused on achieving that objective, joining cartels, and creating barriers for entry is the end state of the market for nearly all starting conditions.