An in-depth study of the factors of inequality of opportunity in Poland would show that tales of being the blacksmith of one's own fate are utter nonsense, as success is overwhelmingly influenced by parental education, household wealth or place of birth.
This text has been auto-translated from Polish.
On October 15 at 6 p.m. at the Faktyczny Dom Kultury with the authors of Nequality in Polish - Jakub Sawulski, Michał Brzeziński and Paweł Bukowski - will be discussed by Agnieszka Lichnerowicz. We invite you toa meeting around the launch of the first comprehensive monograph on inequality in Poland..
At the Sejm's committee on infrastructure, during which housing policy was discussed, the social side was represented by Ms. Iwona Sroka, a member of the board of directors of Murapol, one of Poland's largest developers. Ms. Sroka strongly supported the launch of the government's housing policy, including the Credit to Start, which she said, unlike the Secure Credit of 2%, will not lead to an increase in housing prices, as the economic situation is different now than it was a year ago. Besides, housing construction is the flywheel of the Polish economy.
Ms. Sroka wouldn't be able to tell all these pro-developer theories, or at least it would be a bit more difficult for her if we had accurate data on the impact of loan subsidies on the real estate market. If the Polish government had preceded the creation of further demand-support programs with the preparation or commissioning of a detailed report summarizing the effects of all previous housing programs, we would not be defenseless against the lobbyists' propaganda.
This, by the way, is true of all economic and social policy programs that have been introduced blindly or under the influence of lobbying operations in Poland for decades. Of course, the best example was the launch of the Open Pension Funds, which were prompted to Poland by the financial markets. It was only when the consequences of draining the Social Insurance Institution of some of its contributions, from which fund operators took lavish commissions for themselves, became clear, that successive governments began to back away from it with a crawl - first Tusk, then Morawiecki (as you can see, sometimes policy continuity works in Poland).
Who is really suffering, and who is pulling the wool over our eyes?
As a result of huge white gaps in knowledge of the socio-economic situation, a plethora of blatantly unjust solutions are maintained, thanks mainly to the active lobbying of interest groups and their manipulated supporters, who are convinced that they themselves will one day join these groups (some may even succeed).
The authors of the just-published book Polish Inequality by Krytyka Polityczna, Pawel Bukowski, Michal Brzezinski and Jakub Sawulski, list raising the quality of statistical data among their "10 ideas for more equal public policies." Directly, this will not translate into better redistribution, indirectly, it definitely will. Getting to know the truth about Polish inequalities, distribution of income and wealth, and financial situation of various professional groups and industries will allow not only for better design of subsequent social programs and tax reforms, but above all for unmasking of various myths circulating in the Polish public debate.
One example of such unfairness, which interest group lobbyists and their supporters constantly care about maintaining, is the tax and contribution privileges of sole proprietorships. Now the lobbyists of Poland 2050 are trying to extend these privileges even further by calling for the abolition of the proportional health premium. Their arguments are well known. Micro-entrepreneurs, like developers, are supposedly the flywheel of the Polish economy. Unfortunately, these darting businessmen suffer terribly from taxes and premiums, even though they pay less than full-time employees.
Lobbyists for one-person entrepreneurs may be winding noodles over our ears, since we actually have little accurate data on the latter's income. And it is a wonder that this supposed engine of Polish development is so poorly researched. We have to rely on residual information, such as the Ministry of Finance's PIT settlement data, which, however, does not capture the exact distribution of income, but at most the average for entire groups (such as linemen). The CSO doesn't do this either, as it bases most of its income publications on salary data for full-timers and still from companies with more than nine employees. At most, we can learn from CSO publications about the amount of average disposable income per head in the household of a statistical entrepreneur.
Regular (e.g., annual) and detailed reports on the financial situation of sole proprietorships would show us who is really in distress and who is pulling the wool over our eyes, struggling to get even more. The public would see in black and white that entrepreneurs on the flat rate drastically outperform other professional groups in terms of income, so spicing them up with more privileges is idiotic. Knowledge of the exact distribution of incomes could also help identify small entrepreneurs who are actually having a hard time - there are some, although they are in the vast minority - so they could be helped more effectively. And above all, we would finally see that stories about the flywheel of the Polish economy are mere mockery - JDG is a flywheel of tax optimization at best. This is not to say that everyone on JDG is cheating - I am, and I am not cheating (or at least I try to).
Accumulation of wealth and inequality of opportunity
The CSO should also give an accurate distribution of income for the entire population and its sources - covering full-time workers, entrepreneurs, annuitants, pensioners and those living on benefits. That way we would know the true class distribution in Poland, and people in the upper class would not be able to pretend to be middle class by demanding more privileges. We would also learn whether welfare recipients really do have a Madrid-like life, as interest group lobbyists and their supporters theorize, or whether they are nonetheless cowering in poverty from which they cannot escape. Currently, the most detailed income distribution is provided by the publication Wage Structure by Occupation, which covers only full-time workers and is issued every two years.
Also missing is data on wealth inequality, which is one big white spot on the knowledge map in Poland. The authors of Polish Inequality remind us of the very successfulsurvey of the NBP Household Wealth in Poland, which is no longer being continued under Adam Glapinski. Only two rounds of the survey were conducted - in 2014 and 2016. Meanwhile, learning about the distribution of wealth in Polish households would show the true scale of economic inequality in the country and help create a better tax law regarding inheritances and gifts. Currently, wealth can be transferred within the immediate family without any taxation, which translates into wealth accumulation and inequality of opportunity.
The latter are also unexplored. Perhaps the best study was the two rounds of IBE research Determinants of Educational Decisions, which illustrated the difficulty of getting an education among people from households with low cultural capital and those living in the periphery. And it also showed how high parental cultural capital helps educational success. However, this is a 2014 study, meanwhile, much has changed since then.
An in-depth examination of the factors of inequality of opportunity in Poland would show that tales of being the blacksmith of one's own fate are utter nonsense, as success is overwhelmingly influenced by parental education, household wealth or place of birth. As a result, various well-known people who have lived in Warsaw for generations would not be free to talk about pulling themselves out of poverty because their dad worked in a factory and their mom in a store - living in the capital for generations is one of the factors that most facilitate professional and property success.
One aggressively optimizes taxes, the other takes care of employees
It is also popular in public opinion that foreign corporations avoid CIT. According to some commentators and lobbyists, the supposedly voluntary CIT should therefore be abolished and a revenue (turnover) tax introduced in its place. Thus, the Ministry of Finance could publish an accurate report every year on the settlement of CIT by industry, nationality of capital and a detailed analysis of the cost structure. This would allow us to see who is actually aggressively optimizing taxes, and who has high costs because they pay their employees well or operate costly businesses. We could also learn about the true effects of a sales tax, which would likely take down the most cost-intensive - that is, also the most advanced - industries, but help some businesses where costs play a much smaller role.
A structured and in-depth knowledge of the economic and social situation in Poland would help the state and the social side - the real one, not the representatives of developers - protect themselves from the harmful influence of lobbyists and their errant supporters. Without it, we will continue to be a state entertained by interest groups, where the preponderance of power and position prominently helps them come out on top.
