[[{“value”:”That is the topic of my latest Bloomberg column, here is one bit: This phenomenon is one reason that many office jobs in Nordic countries seem so pleasant. The workers have nice lunches and the use of comfortable and stylish furniture, which they are not taxed on, though of course their take-home pay may be
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That is the topic of my latest Bloomberg column, here is one bit:
This phenomenon is one reason that many office jobs in Nordic countries seem so pleasant. The workers have nice lunches and the use of comfortable and stylish furniture, which they are not taxed on, though of course their take-home pay may be less.
If you think that such workplace comforts make people happier than cash, then you may approve of such arrangements. And it is one vision for how to make society marginally less competitive.
An alternative model is that, with a proliferation of workplace perks and a diminution of earning power, workers become somewhat less ambitious on the earnings front. Peer norms may change, and the dynamism and innovation of the economy can decline accordingly. There are, in fact, signs of these problems in current-day Europe.
And this:
A recent study looked at some comparable effects in Portugal where the in-kind benefits accrue to a firm’s owners rather than its workers. When people own enough of a firm to control its behavior, they charge some of their personal consumption to the firm. Or, to put it another way: They draw more in-kind income from the firm, and take less cash. That lowers their total tax burden.
For the top quintile of the Portuguese income distribution, once those people are able to control a business, about 20% to 30% of their consumption expenditures are switched to benefits reaped within the firm. For the top 1% of earners, attaining a position of business manager is associated with an almost 18% drop in monthly expenditures. And lest there be any doubt about what’s happening here, the paper notes that “business expenditures on hotels and restaurants significantly increase by 9.8% in the birthday month of the owner-manager and by 6.1% in the birthday month of the owner-manager’s spouse.”
Worth a ponder.
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Economics, Law, Uncategorized
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