Saturday, June 28, 2008
Friday, June 20, 2008
In Defense of the Snail Tower
Everybody who either lives in Tartu or spends any significant time here has an opinion on Tigutorn, the big new residential tower next to the bus terminal. These opinions are overwhelmingly negative: people find it ugly, pointless and contrived.I, however, rather like the Snail Tower. I like it because it's distinctive; and in this day and age, that is the best we can expect from modern architecture. I've been thinking about this, and I honestly cannot name a single late 20th/early 21st century building that would be intrinsically beautiful. The Gherkin in London, the Burj al Arab in Dubai, the Taipei 101 - they are all, at best, impressive. I've seen a fair share of modern highrises, and the closest that have come to beauty have been the skyscrapers of San Diego; the last great architect to create properly beautiful buildings was Gaudi. Today's architecture, liberated by high-tensile steel and pre-stressed concrete and allowed to separate structure from form, creates airy and minimalist works of flowing glass and basic shapes. That's interesting, but it's not beautiful.
Look at the new business district of Tallinn: the SEB and Swissotel towers, the City Plaza, even the Radisson - they are merely reflective boxes. They're inoffensive, but they are not special; they could just as easily fit into La Defense or Ramat Gan. The distinctive feature of the Tallinn cityscape is still the Oleviste and Niguliste spires, and maybe the Long Hermann. Every city with an identity worth a damn needs to have an architectural symbol, but most of them have quite a dull skyline. I've seen London from the top of the LDA brick and the South Bank in the sunset; it's distinguished by St. Paul's, which is a generic gray dome that could exist anywhere, and the Gherkin. I've seen Paris from the Sacre Coeur vantage point, and all it has is a single black obelisk in the middle. 
The Snail Tower fulfills the fundamental criterion of a successful distinctive building: a five-year-old can draw it, and it will be unmistakable. It is not beautiful; but then neither is the square of the Grand Arche. It is a white cylinder devoid of deep meaning, but that's what makes it a perfect symbol for Tartu: we get to build up the meaning ourselves. The Eiffel Tower has no more intrinsic semantic value than the Snail Tower; it represents the spirit of Paris because it is distinctive and memorable, and associated with the values that people love about the city. In the same way, we can make the Tigutorn a distinctive representation of the City of Good Thoughts. You can't do that with Pläsku.
Monday, June 16, 2008
Shenanigans Protracted
Had to spend two and a half hours in a doctor's office for my semi-annual labour law checkup. (A backdoor way of getting Estonians in to see the doc at least occasionally, I suppose.) Came across the Center Party leaflet inside the morning's Postimees, and gave it a pass. Apparently though today is a slow news day, so the Postimees website is bitching about it. (They have no qualms about taking Savisaar's money for distribution; and in fact, I imagine they used the deal to prepare indignant commentary once the paper edition makes the rounds.)
Savisaar's big idea this time is to a)recognize Russia as a modern, positive-thinking state so they give us the oil transit back, and b)restrict food prices, pegging the cost of groceries to the national average salary and/or creating municipal grocery stores with below-market prices.
The latter is a page directly out of Vladimir Putin's book, so blatant it's startling. Without the sort of control that the Russian government has over its businesses, and without the pile of oil cash that the Russian government is sitting upon - and even then - artificially restricting food prices will only lead to a shortage in official channels and an overpriced black market - because the producers will not sell at below cost. Besides which, this is an authoritarian move far beyond anything even Ansip has ever concocted. In a free state with a free market, it is inexcusable. For a country that prides itself on successfully disentangling itself from the monster of Soviet plan economy and undertakes to teach others, it is a suggestion whose mere utterance is shameful.
On the other hand, the paper edition did include a curious little op-ed from Keit Pentus of the Reform party (I keep wondering if she's related to Sten Pentus, the racing driver - I'm sure one of the readers knows?). She proposes to cap the income subject to social tax.
If you don't know how the Estonian tax system works, here's the point. The salary number you get in your employment contract is subject to income tax; the cash you get in hand is that number minus 21% (and dropping), and a couple of other minor deductions like the mandatory, regulated, but private pension fund. Additionally, the employer pays 33% of the contract amount in social tax. So the cost to the employer is actually a third higher than the negotiated salary. The employee gets about 57% of what the employer spends. In the spirit of E-stonian E-fficiency, here is a handy online calculator for employment costs.
For income tax, there is a deductible minimum: the first 2250 EEK you earn each month is not subject to income tax. (If your spouse does not work and you file a joint tax return as a household, his untaxable minimum can also be counted against your income.) What Miss Pentus proposes for social tax is the obverse: a deductible maximum. The employer would only pay social tax up to a maximum; let's say a contract number of 30,000 EEK. In that case the cost to the employer is 40,000 EEK, and the employee receives 23,000 EEK after all deductions. The employer pays 9900 EEK in social tax and 5600 EEK in income tax. (This is Estonia, you don't have to do your own taxes unless you're doing something uncommon.)
But if the employee then gets a raise to, say, 40,000 EEK a month, the employer keeps paying social tax up to the maximum. Only the 9900 EEK top band gets tacked onto the contract amount. The cost to the employer is 50,000 EEK. The employee gets 31,000 EEK after all deductions. The employer pays 9900 EEK in social tax and 7700 EEK in income tax. No matter how much the employee's salary is; the employer will never pay more than 33% of 30,000 EEK in social tax.
I'm not absolutely convinced that this scheme will work, but it sounds like it could. It limits the employer's costs in creating highly skilled, highly paid jobs in Estonia, which is what we want to do. It works on the same principle that has served Estonia extremely well in the past: limit the amount of money you're making from each source, and use that to get more sources. This is why McDonalds is worth more than De Beers.
Similar tax cap schemes exist in neighbouring countries. As much as it pains me to admit that the Latvians have done something right, maybe we should give this idea a try?
-----
Bonus story: Bank of Estonia says the worst is behind us, and we can now start our long slog up to prosperity.
Savisaar's big idea this time is to a)recognize Russia as a modern, positive-thinking state so they give us the oil transit back, and b)restrict food prices, pegging the cost of groceries to the national average salary and/or creating municipal grocery stores with below-market prices.
The latter is a page directly out of Vladimir Putin's book, so blatant it's startling. Without the sort of control that the Russian government has over its businesses, and without the pile of oil cash that the Russian government is sitting upon - and even then - artificially restricting food prices will only lead to a shortage in official channels and an overpriced black market - because the producers will not sell at below cost. Besides which, this is an authoritarian move far beyond anything even Ansip has ever concocted. In a free state with a free market, it is inexcusable. For a country that prides itself on successfully disentangling itself from the monster of Soviet plan economy and undertakes to teach others, it is a suggestion whose mere utterance is shameful.
On the other hand, the paper edition did include a curious little op-ed from Keit Pentus of the Reform party (I keep wondering if she's related to Sten Pentus, the racing driver - I'm sure one of the readers knows?). She proposes to cap the income subject to social tax.
If you don't know how the Estonian tax system works, here's the point. The salary number you get in your employment contract is subject to income tax; the cash you get in hand is that number minus 21% (and dropping), and a couple of other minor deductions like the mandatory, regulated, but private pension fund. Additionally, the employer pays 33% of the contract amount in social tax. So the cost to the employer is actually a third higher than the negotiated salary. The employee gets about 57% of what the employer spends. In the spirit of E-stonian E-fficiency, here is a handy online calculator for employment costs.
For income tax, there is a deductible minimum: the first 2250 EEK you earn each month is not subject to income tax. (If your spouse does not work and you file a joint tax return as a household, his untaxable minimum can also be counted against your income.) What Miss Pentus proposes for social tax is the obverse: a deductible maximum. The employer would only pay social tax up to a maximum; let's say a contract number of 30,000 EEK. In that case the cost to the employer is 40,000 EEK, and the employee receives 23,000 EEK after all deductions. The employer pays 9900 EEK in social tax and 5600 EEK in income tax. (This is Estonia, you don't have to do your own taxes unless you're doing something uncommon.)
But if the employee then gets a raise to, say, 40,000 EEK a month, the employer keeps paying social tax up to the maximum. Only the 9900 EEK top band gets tacked onto the contract amount. The cost to the employer is 50,000 EEK. The employee gets 31,000 EEK after all deductions. The employer pays 9900 EEK in social tax and 7700 EEK in income tax. No matter how much the employee's salary is; the employer will never pay more than 33% of 30,000 EEK in social tax.
I'm not absolutely convinced that this scheme will work, but it sounds like it could. It limits the employer's costs in creating highly skilled, highly paid jobs in Estonia, which is what we want to do. It works on the same principle that has served Estonia extremely well in the past: limit the amount of money you're making from each source, and use that to get more sources. This is why McDonalds is worth more than De Beers.
Similar tax cap schemes exist in neighbouring countries. As much as it pains me to admit that the Latvians have done something right, maybe we should give this idea a try?
-----
Bonus story: Bank of Estonia says the worst is behind us, and we can now start our long slog up to prosperity.
Thursday, June 12, 2008
Making a Difference
A friend found with some surprise that he had some money coming to him: a microloan that he made to someone in Equador had been repaid.
I shrugged, had a look at the website, and ended up making a loan to a blacksmith from Peru. I've read some things about the Grameen Bank and similar projects, and they've always made a lot of sense to me. I've been wrangling with Paypal today anyway to buy a case for the Mininote from eBay, so the website was a convenient way to contribute.
It's $25; the sort of money I might spent in a mediocre night out. For that sum, I get to feel good about myself: I'm making a difference, doing something unequivocally Good, and doing it in the most practical way possible.
This isn't charity, which I vaguely dislike (although I did send money to tsunami victims - because it was conveniently arranged by the Internet banking website). It's providing a loan for entrepreneurs, money they will use to buy materials and tools to improve their ability to do business and provide for themselves - and they'll pay it back after a fixed period. This is not feeding a Third World addiction - it is the bleedingly obvious upside of globalization.
This country has gone from a postsoviet wreck to a Nordic tiger in two decades, ultimately thanks to foreign capital that allowed us to earn good money for hard work. It is the moral obligation of everyone in Estonia, and everyone who has ever received help from others, to support projects like microloans.
Go to kiva.org, give someone a loan of twenty-five bucks, then come back here and sound off in the comments, so I can tell you how much you rule.
I shrugged, had a look at the website, and ended up making a loan to a blacksmith from Peru. I've read some things about the Grameen Bank and similar projects, and they've always made a lot of sense to me. I've been wrangling with Paypal today anyway to buy a case for the Mininote from eBay, so the website was a convenient way to contribute.
It's $25; the sort of money I might spent in a mediocre night out. For that sum, I get to feel good about myself: I'm making a difference, doing something unequivocally Good, and doing it in the most practical way possible.
This isn't charity, which I vaguely dislike (although I did send money to tsunami victims - because it was conveniently arranged by the Internet banking website). It's providing a loan for entrepreneurs, money they will use to buy materials and tools to improve their ability to do business and provide for themselves - and they'll pay it back after a fixed period. This is not feeding a Third World addiction - it is the bleedingly obvious upside of globalization.
This country has gone from a postsoviet wreck to a Nordic tiger in two decades, ultimately thanks to foreign capital that allowed us to earn good money for hard work. It is the moral obligation of everyone in Estonia, and everyone who has ever received help from others, to support projects like microloans.
Go to kiva.org, give someone a loan of twenty-five bucks, then come back here and sound off in the comments, so I can tell you how much you rule.
Friday, June 06, 2008
Bonus Story
Bank of Estonia says price rise largely attributed to high fuel costs.
Country goes "No shit, Sherlock!"
Country goes "No shit, Sherlock!"
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