Saturday, July 12, 2014

Tennis, taxes, patriotism, and jealousy

Taxes are a form of institutionalized theft. When they get too high, subjectively or objectively, successful people start to escape – covertly or overtly – the nation that is stealing in this way. That's why Depardieu became a Russian chap.

Czech tennis players (plus some other athletes) generally employ their residence in Monaco to get rid of their Czech taxes. It is totally legal and understandable. Our best female tennis player is open and honest about it and I appreciate it. Needless to say, if I could legally save millions in this way (and if I found the amount of paperwork "doable"), I would do the same.

Yesterday, a socialist lawmaker named Stanislav Huml (formerly a politician for Public Affairs VV; during communism, he was a communist party member and a cop; in 2006, he was running for a Eurofanatical party; in 2011, he switched to Jana Bobošíková's strongly Euroskeptical party for a while – quite a record) ignited a tax haven storm; see e.g. Radio Prague or Mid Day or others in English (or hundreds of Czech media sources).

On his Facebook account, he reposted a message by a Prague communist classifying the fresh Wimbledon winner Ms Petra Kvitová as "dirt" and demanded that she would be stripped of her Czech citizenship.

Most Czechs who matter find his position to be a self-evident symptom of jealousy and attempts to impress the jealous people. I also know some people who endorse these claims but I don't want to say who they are because I believe they should be deeply ashamed of such attitudes.

(Thank God, President Zeman disagrees with Huml's thoughts and says that no one can prevent her from paying lower taxes in Monaco. That's the kind of situations because of which I have voted for Zeman.)

There are at least 10 dimensions (yes, this is a string theory blog) to explain why I find these "demands" and the propaganda surrounding them stunning.

First of all, Petra is acting in agreement with the law. If we accept the rule of law, it's really unacceptable to justify the harassment of citizens by would-be "sins" that are not sins according to the law at all.

Second of all, pretty much everyone would do the same if he or she were in a similar situation and if he or she could. In fact, Petra is much more modest and immaterial than most people; she is also honest when she reveals her thinking.

Third of all, Czechia (and most other nations) really can't afford to change the law and prohibit similar clever improvements of the residence because the Czech citizenship isn't that infinitely attractive and we could start to lose successful people en masse. It's good that different countries may choose their own tax rates. We depend on our rate's being lower than other countries' rate, too. At the end, countries compete and the country that is able to offer a lower tax rate is unsurprisingly attracting rich residents. If we got rid of Mr Huml and thousands of his copies, we could perhaps beat Monaco and attract similar people ourselves.

Fourth of all, Petra's integrated income ($15+ million or so) occurred because of her talent and her hard work, something that the Czech society doesn't really have anything to do with.
Former Prague Communist Daniel Rovný said: "Petra, you are an excellent tennis player, but as a person, you are trash. You trained at the sports facilities built from the taxes of the poor, but you avoid paying taxes as a rich person," he added.
Bullšit. Petra's journey to the top tier of the world tennis didn't really depend on things paid from taxes and surely not the taxes paid from the poor who only pay a tiny fraction of the total taxes, anyway.

Fifth of all, the money from the tournaments were mostly provided by foreigners not unsimilar to those who live in Monaco, not by the Czech Republic or Czech subjects, so it's natural if she returns a fraction of that money to similar foreigners, too.

Sixth of all, even though it was the foreigners who have paid most of her tournament money, it's really the Czech public for which Petra has done the greatest service by elevating the respectability of our nation and by bringing us exciting moments in front of TVs – with some happy ends. So the Czech people – or the Czech Republic as a country – should really pay her some extra money if things were fair.

Seventh of all, it's stunning that such claims about "dirt" are being said by folks like Huml (or his communist comrade) whose whole income completely depends on their being full-fledged parasites who are getting twice the average salary just by licking the asses of the bottom of the Czech society, the evil jealous scum that votes for left-wing parties. On the other hand, Petra has earned all her money for exceptional and hard work.

Eighth of all, stripping her of her Czech citizenship would be no good for Czechia and the Czech nation because we wouldn't get any money from that, anyway, and our image and respectability would worsen, too. When Martina Navrátilová or Ivan Lendl became U.S. citizens, they couldn't quite rewrite the history and erase their obvious links with us. But we could still "take credit" for a much smaller portion of their successes than before they emigrated.

Nineth, because it's self-evident that she has earned her money legally and she still faces a hateful backlash, it's quite powerful circumstantial evidence that other cases in which various rich people are harassed, investigated, and not nicely talked about for alleged corruption and other economic crimes is comparably indefensible – games played for the jealous šitty loser class within the Czech nation.

Tenth of all, Mr Huml is a Neanderthal who was brought here – as all children of the 1970s know very well – by Mr Mach [Makh] and Miss Šebestová [Sheh-beh-staw-vahah], two schoolkids, from the ice age.

He was sleeping with a mammoth in a hole and used to eat mammoths with dill. Check the photograph to confirm that it's him. I hope that Mach and Šebestová will bring him back to the ice age because the ice age is the ice age but our epoch, and the year 2014, takes place in an interglacial where we simply have no room for similar Neanderthals and other jealous hateful parasitic populist scum.

Aside from 4 top Czech tennis players, Novak Djokovič "lives" in Monaco, too. It's generally assumed that if someone proposed to strip him of his Serbian citizenship, such a proponent would be dead by the evening.


  1. "Taxes are a form of institutionalized theft".

    There is certainly a level of taxation beyond which the above is true, as in France where you work from January to July to fund the masses of largely useless state employees, or as in Ireland where you pay taxes but get nothing in return for it. But for the short year I worked in the Czech Republic (in Prague), I found the Czech tax system to be very fair - 15% flat income tax rate + 11% (if I remember well) for social security and health insurance does not appear excessive. You should try to work in France Lubos!

  2. Yes, I relatively like the Czech tax system, too.

    Still, it's likely that I would prefer the Monaco system if I were a top tennis player. ;-)

  3. I can't argue with that ;)

  4. Try emigrating to Greece, where due to the crisis there is also a head tax, whether you work or not you are supposed to be earning 3000 euro a year and if you have been unlucky to inherit or been gifted by a parent with an apartment which cannot even be sold now, it is evaluated at its before crisis market value (nobody buys in Athens now) and an unregistered unemployed person ends up with a fictitious added income 3000+5000=8000 euro a year! which with some tax exemption for low incomes, they end up owing 320euro tax because they are alive. Another property tax falls on the apartment of ~400 a year, gathered with the electricity bill for the apartment.

    I believe if it were not for the aged parents with their drastically cut pensions who are supporting this 30%+ young unemployed we would have had a revolution. It is just that the unemployed realize that a revolution would stop the meager pensions dead on their tracks and there would not even be the pot of beans on the stove to eat , that the left wing rhetoric does not catch.

  5. Right, Anna. The idea that people like Huml are really working to convert our country to something as fucked-up as Greece - where the government really thinks it can do anything and everything, and all people have trained themselves to suck out of this government, too - is what I is driving my anger.

  6. "Taxes are a form of institutionalized theft.'

    Well, yes and no. There is nothing "right" about the natural distribution of wealth and income (or, what really counts, consumption) in a market economy. Consider: the accumulation of capital is a process that begins in exploitation historically, and continues with a good deal of theft along the way, the proceeds of which are then managed and invested by skillful businessmen. This is almost a tautology: capital is the accumulated crime and sacrifice of generations, plus interest. What else could it be?

    Now, the reason some people earn a lot of money today is because they have a lot of capital to work with: brains, and control of physical wealth. They don't work harder than their ancestors but make a lot more money. There is nothing wrong with this -- in fact inequalities of wealth and income are a good sign. It means capital is being managed efficiently, with rational allocation by talented men (and women).

    But when it comes to consumption their is a good case that it should be taxed progressively, the proceeds then being used to subsidize the wages of ordinary labor (whose consumption should also be taxed progressively. After all, it was their forebears who were exploited, or who made good Christian sacrifices, which lie at the very base of the process of capital accumulation.

    Thus, if the purpose of a market economy is to maximize the general welfare -- produce the greatest happiness of the greatest number -- the ideal is to ignore disparities of income and wealth and tax consumption instead.

    Moreover this tax should be progressive on account of the declining utility of income, or at least it should be progressive if you assume that all men are equally able to enjoy the things that they consume. I.e., as a rule a dollar is worth more to a poor man than a rich one.

    The ideal tax, in other words, is a graduated expenditure tax (GET), which is like a graduated income tax but with savings tax exempt. The proceeds should be used to finance essential government services (defense, law enforcement, etc.) but not means tested welfare that divorces income from effort.

    In other words, the proceeds should be used to subsidize wages in a way that rewards effort.

    I've managed to design a one parameter graduated graduated expenditure tax that would be immune to political meddling and could raise any amount of revenue currently raised by other forms of taxation. The central authorities could tune this parameter -- a tiny number d on the order of ten to the minus 8 -- which defines the increase in the marginal tax rate on each dollar spent (or whatever the unit of currency might be. What you get is an arithmetic series whose sum can be very easily calculate with a formula we all learned in high school.

  7. Dear Luke, LOL, lots of Marxism over there.

    The difference between the "thefts" of collecting taxes and your "theft" of using someone's work is that in the first case, when I refuse the deal, the thieves will send police to my apartment and the police will try to limit my physical freedom or even fight with me if I try to use weapons against these intruders.

    On the other hand, if a worker doesn't like a deal that an employer is offering to him, he may just go away.

    Don't you really see the difference?


  8. This is right Lubos.
    After all we already did the experiment, didn't we ?
    In 1948 the savings and the rich were supposed to pay for everything that unhinged Gottwald and his comrades wanted.
    The result was that the savings evaporated and the rich fled away.
    And what happens in a country where there are no rich and no savings anymore?
    Only poor are left and the country itself becomes poor and underdevelopped.
    I find it pathetic that after all these experiments there are still people in 2014 (!!!) proposing the same thing.
    Admittedly they cover now this marxist garbage with buzzwords : it is called "social justice" nowadays.
    Well, personnally I say f...k "social justice" version 1948 and f...k "social justice" version 2014.
    Why is it that (some) people never learn from history ?

  9. Dear Tom, exactly... The problem with socialism is that they ultimately run of other people's money. ;-)

    The concentration and right management of the capital is clearly a necessary condition for the creation of wealth. The Marxist idea that the wealth was really produced "just" by the workers at the bottom and the guys who take the responsibility and often become rich are "not needed" is downright idiotic.

  10. WolfInSheepskingJul 12, 2014, 7:47:00 PM

    Is there a function on this blog where one can disable showing posts about politics?

  11. alejandro riveroJul 13, 2014, 3:08:00 AM

    Some of you can remember Fomenko, one of the coauthors of the textbook "Modern Geometry".

  12. "In a truly ideal world, there should be no taxes at all. . ."

    And no states either I presume?

  13. I agree with your definition of scum---when someone like Petra, who, through a combination of hard work and talent, achieves something that also reflects positively on the Czech Republic, is dissed and nit-picked by someone without those attributes, who is seethingly jealous and wanting everyone to be at his same level of mediocrity, I think he deserves to be called scum.

    As Orwell said in Animal Farm. "All animals are equal, but some animals are more equal than others"---the song of the Marxist apparacthik.
    Geez, he should be congratulating her. And these days, 15 million sort of puts one in the middle class.

    Even though I don't know anything other than Lubos' blog post, so-called humans like Huml piss me off ( of course, many things piss me off---just ask Anna :) )

  14. FWIW a graduated expenditure tax would not penalize entrepreneurial success, would make it easier to get rich, would not discourage savings and investment, would allow the abolition of inheritance taxes, and is perfectly compatible with a competitive market economy. If we are going to have trade between rich countries in the West and poor countries in the rest of the world (whose total population is several times as large, something like what I described) is the only alternative to old-fashioned protectionism, unless you just don't care about the future living standards of your fellow citizens.

  15. With a graduated expenditure tax you are only taxed on what you spend. Or as Hobbes put it, you are taxed not on what you put into the pot but for what you take out.

  16. Lubos, just a suggestion. I keep my copies of your daily LMRF newsletters for future reading and/or rereading, as I am not always able to read them on the day that they are emailed and I wondered if rather than the title of the email always being the same 'Lubos Motl's Reference Frame' it could incorporate at least the title of the first or primary subject covered in the newsletter ie 'Tennis, taxes, patriotism, and jealousy'? This would make it much easier to locate a past LMRF newsletter that one wants to read or reread in future.

  17. Hi Helen, obviously, I don't have any control over formatting of these mails that are being sent automatically by some Google robots.

    Second, I don't believe that it's hard to locate these mails. For example, they all have the same sender

    The Reference Frame

  18. I should have said 'this would make it easier to locate a past LMRF email on a particular subject that one wants to read or reread in future'. Obviously I save them all into one folder but they all have the same title duplicated so the information in that title is pretty useless. I used to be a computer programmer years ago so I would have thought it should be pretty simple for the Google robot to parse the first subject title into the email title? Anyway, it was just a suggestion, sorry if it is not a useful one.

  19. How can you continue with this "discouragement" meme, when people are shelling out 50 million dollars in encouragement? Aren't girls allowed to have their own likes and dislikes? It's also interesting that feminists always seem to go along with the assumption that male-oriented activities have higher value (other than mass-murders, I guess). Isn't that sexist?

  20. I did some research on this and found something interesting: the proportion of women in IT is falling. But so only in the West. Instead, in India, it is rising, and in Malaysia, there isn't really any gender gap at all. The West is really asking for a bloody nose here with respect to economic competitiveness, by decreasing the efficiency of allocation of competent people to appropriate jobs. Is this purely a cultural change? If so, it's a change in the driving forces of the system.

    Another way to look at it is to think of it as an chemical equilibrium. At a 30%-70% imbalance, we have dG/RT = 0.85. That means there is 85% more driving force than available "thermal energy". Wages are essentially the same in equal positions (source: google palkkaraportti 2013). Assuming a wage represents added economic value (not strictly, but let's assume), it does strongly appear that men are in fact equally or even less competent than women, but they are significantly more motivated to enter and stay in the field. So, men sort of arrange an "affirmative action" for themselves. Following this thread to the end, the IT field shouldn't try to increase the proportion of women, but decrease the number of (incompetent) men!

    This has been certainly an enlightening argument, since you were correct, but not in the simple way: men are more motivated, but that's not always good; otherwise the economy would consist solely of rock stars, astronauts, film stars and the like, plumbing be damned.

    Just for the record, I don't work in IT, and haven't involved myself in any practical gender politics.

  21. You didn't have to do "research" to find "something interesting". It would have been enough to read at least one paragraph of this very blog post, like the paragraph "One may see..."

    But obnoxious dishonest ideologues never read things they should, do they?

    There may be no gender gap in Malaysian IT but there's no Malaysian IT to notice, either, so it's still true that men produce 10+ times more IT over there than women.

  22. I missed this one.

    Back in 1967 or so we got at the center where I was a graduate-student-hired-as-a-technician we got our second computer , a CDC, and an expert came to help us in adjusting the CERN computer programs to it. I worked well with him to the point the if I had wanted I would have been supported for an IT career. At the time we used binary cards to feed the computer and I could correct the code on individual cards . The matter did not attract me, rather it bored me, so IT lost one candidate woman :).

    I also have watched children carefully while mine were growing up. I treated my son and my daughter exactly the same, and my son gravitated towards cars and mechano and lego while my daughte liked cuddly toys and doll houses etc, no matter being presented with construction toys etc., even below 5 years of age.

    There does exist though a social bias imposed by parents even at that young age. They had a little girl cousin who when visiting would make a beeline for the construction toys ignoring doll houses, and her mother gently would take her to the doll houses. This "gently" could also be happening because kids identify with the parent with the same gender, even at that young age, so the brain washing can be going on despite any efforts by the father, for example.
    "Mothers do not play with construction games, so daughters do not" may be a mime propagated down the generations.

    But as I said, I do believe there is an inherent gender anisotropy. Men and boys can focus on single issues excluding distractions much more easily, even from very young age. Girls are more aware of the environment and its impact on themselves ,from young age.

    My hypothesis is that they are hard wired on awareness because of being the first care takers of the next generation. If a man is eaten by a lion nothing happens to the reproductive rate of the race, a woman's death reduces it accordingly.

    Less focus, less patience on one task requiring total absorption, less patience more distraction.