Extra: Five Specific Issues

Specific Issues

Your Highness Yukari Denka

I have mentioned in my previous letter that I am not capable of designing large frameworks for nation-building, though I do have in my mind specific issues that I ponder with relative clarity.

One. The Tax Rate

There are countries in my world that charge a very high tax rate. When I was in Sweden, it even made the news that a children’s book author was charged a combined tax rate of 101% by accident. The rate was later corrected, but tax rates as high as 75% are not rare in that part of the world. A common complaint from other countries is that they pay half of the tax rate compared to those countries, but don’t get half of the service. I do not endorse either side of the argument, but I am wondering if there are gaps in public education.

For example, a person who brings home one million dollars a month (after tax and deductions) can reasonably save $900,000 toward investments. That would be a 90% saving rate. Can we expect a person who brings home $1000 a month to save 90% of that toward investments? By no means. That person would be lucky to make ends meet without falling victim to pay-day-loans.

For the same reason, a country with a very high tax rate can provide services well above the imagination of a country with low tax rates. The costs of maintaining government, national defense, foreign diplomacy, et.c., are not going to decrease with a lower tax rate, just like living cost hits a bare minimum and would not decrease further past $1000 a month. (Purely for the sake of an example. Not from official statistical studies.) I found public education lacking in fostering basic understanding of governmental expenditure.

Two. Economic Trends.

The schools here teach globalization as if this particular trend in the world economy is going to stay. We have no way of confirming that hypothesis. Globalization received a major push in the 1980’s, with massive manufacturing jobs shifting to Asia and Latin America. The textbooks were written around 2010. This economic trend has been continuing for thirty years. We do not know whether it would escalate, stabilize, hit a plateau, slowly decrease, or rapidly deteriorate. Steel mills in Birmingham were prosperous for 350 years. What’s left today? Nothing. The textile industry in Lancashire was prosperous for 200 years. What’s left of it today? Not a trace. When schools teach students Social Studies without taking into consideration the transience of this world, they give a false sense of control and stability when there is no stability in economics. Students grow up and think the world is rapidly falling apart, when the world has always been chaotic. The educational curriculum is not helping students mature, whether in logic or in feelings.

Three. Postal service.

The postal service is talking about another strike. Again. The postal service is a vital part of the state. It is an indispensable part of government. It guarantees a level of access to reach the citizens that no other branch of government does.

With fewer letters these days, the postal service is having a difficult time competing with private courier companies for delivering packages. The private courier companies only quote a fraction of the actual cost upfront, which gives the seller a false impression of cost effectiveness. Then, these companies charge the buyer “handling fees” and “custom related charges”, the latter of which also give the buyer a false impression that the government is charging it. In fact, when buying things less than $100 dollars, I have never been charged tax and customs from the border services when it is shipped via regular postal services. This is a scandal, and thoroughly unethical competition, and I have to add misrepresentation on top. The private courier companies should be taken to court and pay damages to the postal service as well as to customs.

For having a stable budget to plan postal operation, I imagine a postal access tax would be worth considering. It can be charged directly through municipal property tax, and can be adjusted for remote areas. With hopefully the bulk of its operational costs covered by this tax, the postal rate can be drastically lowered, and it would be competitive again, which will increase the mail volume as well, further alleviating the current problem.

Four. Public Transit.

Many cities are experiencing urban sprawl, and public transit is having a tough time adjusting. These neighborhoods are less dense in population, and can have a younger demographic. Transit usage is almost entirely during the rush hours, and the roads are almost empty for the rest of the day. The streets are often long and windy, with few intersections. This makes route planning difficult. Seniors sometimes have to walk long distances to get to a road with bus service. Cities often remedy this by having reduced service during the middle of the day, and an early end of service as well. This means every family must have a car to take care of situations where taking the bus is simply unmanageable.

I wonder if the city governments can reduce bus service to reach only the transit centres in the suburban neighborhoods, and endorse neighborhood taxis that would shuttle people from their doorsteps to the transit centres. The city can concentrate on reliable, frequent, express public transit to serve the suburban neighborhoods, and people who need extra cash can have an extra source of income. Currently, in trying to balance both accessibility and feasibility, there are too many routes, too few serviced streets, not enough paved sidewalks, too low in frequency, and too expensive paying all the bus drivers when half of all buses are driving on empty quiet streets. If we do not design a public transit system that aims to completely replace private vehicles, people will always need private vehicles as the transit network is insufficient to cover people’s needs. Since placing a bus route on every road is unrealistic, I wonder if the hybrid model -- of rapid, frequent, reliable bus from transit centres, combined with affordable neighborhood taxis that can bring people to and from their doorstep -- might be worth exploring.

Five. Defense Budget.

My country is under tremendous pressure to increase the defense budget to be 2% of the entire size of the economy. One of the factors for this pressure is that my country would spend the budget buying weapons from oversea sellers.

I wonder if my country could just take the weasel way out by increasing the budget but not spending on oversea weapons.

First, my country is prone to natural disasters of all kinds. By spending the extra defense budget on maintaining a larger trained force, the government can finally have enough emergency personnel to provide disaster relief.

Second, my country often needs to evacuate residents into makeshift shelters. By spending the extra budget on building more structures that can become makeshift shelters, we will not have to cancel school as much, since currently schools are often used as makeshift shelters.

Third, much of our current technological world has its source in research and experiments done in military-led labs eighty years ago. From plastic to synthetic rubber, from internet to satellite communication, military research eventually benefited everyday life decades later. My country is already feeling the pressure as her previous lead in science and technology is disappearing fast, with other countries catching up and surpassing at an alarming speed. Why not dedicate more of the defence budget toward scientific and technological research? If my country buys foreign weapons, we will have to pay for years of over-sea maintenance and parts. If we invest more into research, we might increase our sales for the years to come. Since foreign pressure only asked for “increase defence budget” without explicitly demanding “buy oversea weapons”, why not pay foreign pressure lip service and serve our own country’s needs instead?

Your Highness, many thanks again for the time in reading my letter.

Forever at Your Highness’s service,

Hitomi