State shares in Europe are growing..
"Socialism begins at a state share of 50%." - Helmut Kohl
- A high state share means:
Higher taxes (on income, profits, additional labor costs).
- More regulation and bureaucracy.
- Less flexibility for small businesses because the state has a stronger influence on economic activities.
-If a country has a high state share (e.g. 51%), more than half of the total economic output passes through the hands of the state.
-With a low state share (e.g. 30%), most of the economy remains privately organized.
The state share measures the ratio of government expenditures to GDP and indicates the size of the public sector and the degree of state influence. Higher values carry risks such as crowding out private investment.
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