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Posts Tagged ‘Netherlands’

Let’s take a break from depressing posts about Obama’s fixation on class-warfare tax policy and the failure of Washington to enact genuine entitlement reform.

It’s time for another edition of “You Be the Judge.” I periodically come across stories that cause me internal conflict. Often my heart gives one answer and my head disagrees. Or I’m genuinely unsure of the right approach.

Previous editions of the game include:

Lots of fun stories, as you can see.

Our latest example is about the Dutch are dealing with the “scum” of society. Here’s some of the story from the UK-based Telegraph.

A potential name for the new Dutch community?

Hollands’s capital already has a special hit squad of municipal officials to identify the worst offenders for a compulsory six month course in how to behave. Social housing problem families or tenants who do not show an improvement or refuse to go to the special units face eviction and homelessness. Eberhard van der Laan, Amsterdam’s Labour mayor, has tabled the £810,000 plan to tackle 13,000 complaints of anti-social behaviour every year. He complained that long-term harassment often leads to law abiding tenants, rather than their nuisance neighbours, being driven out. “This is the world turned upside down,” the mayor said at the weekend. …The new punishment housing camps have been dubbed “scum villages” because the plan echoes a proposal from Geert Wilders, the leader of a populist Dutch Right-wing party, for special units to deal with persistent troublemakers. “Repeat offenders should be forcibly removed from their neighbourhood and sent to a village for scum,” he suggested last year. “Put all the trash together.” …The tough approach taken by Mr van der Laan appears to jar with Amsterdam’s famous tolerance for prostitution and soft drugs but reflects hardening attitudes to routine anti-social behaviour that falls short of criminality. There are already several small-scale trial projects in the Netherlands, including in Amsterdam, where 10 shipping container homes have been set aside for persistent offenders, living under 24-hour supervision from social workers and police.

Part of me thinks this is a good approach. Not the part about expensive social workers, to be sure, but I’m sympathetic to the notion that there are “bad apples” that cause trouble and can ruin neighborhoods.

Why not put them all together and let them stew in their own juices?

On the other hand, this soft version of prison seems inappropriate if people haven’t been convicted of a crime. Surely the government could trump up some sort of charge, and even do it in a semi-legitimate fashion. These sound like the sort of people who could be nailed for all sorts of things, such as disorderly conduct, assault and battery, urinating in public, and so on.

But swinging back in the other direction, it sounds as if the “scum” are inhabitants of public housing. And while I think public housing shouldn’t exist, I have no problem with the government enforcing standards of behavior as a condition of living in one of these Moochervilles. So all that’s really happening is that the riff-raff of society is being shifted from one form of government-provided housing to another.

What do you think?

P.S. The Netherlands is a typical European welfare state in many ways, but it has a good school choice system and a very competitive corporate tax system (as shown in the second video in this post). But those few good policies won’t be enough since the nation’s long-run fiscal outlook is as bad as Greece and worse than Spain and Italy. And if the burden of government spending gets too high, it swamps any good policies in other areas.

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By every possible metric, one would expect corporate tax rates to be higher in Europe. The burden of government spending is higher across the Atlantic, so that presumably would lead to pressure for a higher corporate tax rate. The affinity for class warfare and anti-business policies is more pronounced in Europe, so that should mean more punitive policies in the Old World.

Yet the corporate tax rate is Europe has now dropped, on average, to less than 25 percent, and the American corporate tax remains at more than 39 percent (including the average of state tax burdens). The latest development in Europe, according to Tax-news.com, is that the Netherlands is reducing its rate to 25 percent.

Dutch Finance Minister Jan Kees de Jager has unveiled key details of the country’s 2011 tax plan, containing a number of fiscal measures designed to encourage entrepreneurship and innovation… The 2011 tax plan includes plans to reduce corporation tax in 2011 to 25%. The government also plans to make permanent the reduced rate 20% corporate tax rate on the first EUR200,000 in profit, announced last year and retroactive to 2008. In addition, companies will significantly benefit from the extension by one year of the temporary three-year loss carry-back facility (previously losses could be carried back for just one year) as well as the extension of the temporary accelerated depreciation scheme, which allows certain capital assets to be depreciated at 50% per year, to investments made in 2011 as well as those made in 2009 and 2010.

So why is Europe moving in the right direction on this issue and America lagging? The simple (and accurate) answer is tax competition. Governments are lowering tax rates because politicians think that is their only option if they want to attract jobs and investment. Europe’s economies are so interconnected and cross-border mobility of jobs and investment is so large that politicians are being forced to do the right thing, even though all their normal impulses are the opposite. This video explains, followed by a video showing why corporate tax rates should be lower.

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I was vaguely aware the there was a school choice system in the Netherlands, but I had no idea how good it was. Nearly three-fourths of all schools are privately controlled. Not surprisingly, the Dutch score very highly compared to other nations. Here’s some of the data from a recent study:

One of the key features of the Dutch education system is freedom of education—freedom to establish schools and organize teaching. Almost 70 percent of schools in the Netherlands are administered by private school boards… it is shown that the Dutch system promotes academic performance. The instrumental variables results show that private school attendance is associated with higher test scores. …a significant part of the high achievement of Dutch students in international achievement tests is due to the institutional features associated with school choice. …Money follows students and each school receives for each student enrolled a sum equivalent to the per capita cost of public schooling. …achievement levels are high, while relative costs are low. …Private school size effects in math, reading and science achievement are 0.17, 0.28 and 0.18, all significant. Given PISA’s scaling, this is close to 0.2 of a standard deviation in the case of math and science, and almost 0.3 of a standard deviation in reading. In other words, these are large effect size effects, indicating that school choice contributes to achievement in Netherlands.

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