We have Galbraith to thank for this theory, and I think that far from being a theory of the past it is so apt for what is happening in this country.
I am watching the BBC programme about the super rich.
Today I have also seen on a report about people resorting to living in vans and caravans because they cannot afford anywhere else to live.
Our young are struggling.
The cuts have resulted in poorer welfare system, a struggling NHS, pot holes in the roads, and so on.
Today I visited Wells and in the Cathedral precinct there were homeless people begging -shame on the church. And don’t say the homeless have always been with us.When we were growing up we had tramps who we almost knew by sight as they were so unusual.
Food banks ?
Whilst we have just been told that the super rich wealth rose from an average of 2bn to 5bn within two years of the recession. Their wealth has continued to grow to the extent that now the top 1% own more than everyone else. Marx said that wealth will always become concentrated at the top, but for many years he seemed to be wrong, I wonder if he is so wrong now?
And no I’m not envious, just demanding fairness.
The trouble with all those calculations is that it's simply a valuation of someone's asset portfolio. If stock markets go up, for example, the 1% will move away from the 99%, simply because people with assets are likely to invest in equities. It's meaningless.
£165k is not a 'super rich' salary for London. It's enough for someone to get a mortgage on a modest 1 bed flat in Zone 1 or 2, providing they have a decent deposit.
No it isn't. They were talking about income, not assets.
Owning a house worth a few million did not come into it.
There are obviously different ways of defining the top 1%. We were looking at income, but in terms of this group moving away from the other 99%, is that this group as a whole, or just the overall effect of a massive increase in wealth of, for example, the top .01%? But Primrose is right. £165k pa is a lot of money, but most of those earning that amount will live in the south east. After paying tax and NI, and maybe paying seven figures for a decent sized semi, I doubt the family involved would be living an obviously opulent lifestyle. That’s not to say they shouldn’t pay more tax. But the thread seemed to me to be moving along the lines of “those billionaires are gross - so let’s make well paid doctors pay a lot more tax”.
I think the main issue is that undoubtedly there is greater and greater accumulation of wealth amongst a very small level of families/individuals, and far from “trickling down” this situation simply does not self correct.
It must therefore be up to governments to redistribute this wealth in order to make a fairer and more equal society.
I agree. Those whose comparative wealth has beeen the subject of a disproportionate increase should clearly expect to contribute more for the general good. But first we need to identify them a bit more accurately- I suspect the answer will be found at the very peak of wealth - people with much more than a £165k income. If we are indeed actually talking about the extremely wealthy, we then face the problem that it is very easy for them to escape tax increases, even by moving abroad if they have to. It may be that coming down hard on them will result in a smaller tax take, albeit (by effectively ejecting the very rich from the country) at the same time reducing the wealth gap. The issue is causing so much discord that I guess we have to do it whatever the consequences - but personally I doubt we will achieve any significant benefit to the average citizen.
They can't escape national insurance, can they?
At the moment there is a cap on how much people pay once earning over £860 a week. It goes down to 2% from 12%. I've never been able to understand that.
The history of the distribution of wealth is always deeply political.
Progressive taxation is in my view the only way to produce a more equitable society.
I agree Fitzy. If you're globally mobile, you have significantly more choices on residency. dj I think you're just looking at employee rates - it's better if you look at the combined employee/employer rates as there's a higher employer rate above that threshold.
It depends on what you mean by progressive I suppose. Usually, it means earn more and you pay more. With the disparity of housing costs across the UK, that could actually be a regressive move in practice, as lots of high earners live in areas with high housing costs.
primrose the sort of wealth I am talking about would never worry about the area of U.K.
I know what I was looking at, primrose.Employer pays the same whatever.
The person who earns the money is the employee, or the self-employed.
Why should an employee earning more than £860 a week pay less on whatever he or she is earning above that amount?
As I said, if they are living in this country, they can't escape NI, can they? If they don't pay NI, they can't have any of the benfits of paying NI, like a pension, NHS treatment, etc.
Lots of low earners live in areas where the houses are closed up, as in the programme showing Liverpool.
I don't see where you are going with high earners living in areas of high housing costs, primrose.
You don't really want us to feel sorry for them and ask them to pay less tax, do you?
We have progressive taxation. Of course we had a much more progressive regime in the 70s. We had more equality but to my mind we were not generally better off. Those with any significant money seemed to leave the country. Many who could have aspired to earn a lot of money didn’t bother - why would you when you could actually end up paying 102 pence tax for earning a pound? Hence the tax take was nothing special. There has to be a balance. I’m sure there is room for some increases, but not huge amounts. Then again, maybe I’m wrong. Let’s not kid ourselves that any of us really know - the professional economists with access to supercomputers seem to disagree with each other at least as much as anyone writing in here!
I agree with you Fitzy54 the very wealthy will use loopholes in the tax systems and move their money around, thus depriving the country of even more, and yes, the economists do disagree with each other!
I wonder what is happening in the BVI where lots of that offshore tax is hidden.
www.taxresearch.org.uk/Blog/2017/11/01/if-pwc-think-the-use-of-tax-havens-is-becoming-unacceptable-why-do-they-operate-in-so-many/
As an economist I do not understand the 'too much wealth invested in houses', claim. It keeps surfacing. If we do not invest in houses/flats etc, corporately or individually there will not be any houses/flats etc. We all have to live somewhere and some one has to spend money to build or acquire them.
The church is not that rich. It has large invested funds, the income from which pays the clergy and clergy pensions. What is collected in the plate each week makes only a meagre contribution to this.
In relatively recent years the C of E has invested its money very poorly and lost a lot of money so has struggled to meet it its obligations.
A bit naive for an economist, Monica.
Why do lots of foreign oligarchs invest in our housing and leave them empty? They don't need to buy them to live in.
If only we were all allowed to live somewhere. The homeless need somewhere to live, too.
Russian (and Chinese, and Middle Eastern etc etc ) oligarchs own a very small and unrepresentational proportion of the total housing stock in one very small geographical area. How much of the domestic property do they own in your neck of the woods dj?
I live in Oxfordshire and any oligarchs in this area only own very large country houses that they live in and around here they own very few of those either.
The vast majority of the homes in this country are owned by the people who live in them or UK based organisations and individuals who rent them out. Either way homes need t
Homelessness is a far more complicated problem than simply putting every homeless person in a flat and saying 'problem solved'. Many of them would very soon be homeless again because they have mental health problems, addictions and other problems that were the cause of their homelessness in the first place.
Ignore incomplete sentence in above post. pc playing up.
'A new study claims that foreign buyers are spreading from London and purchasing flats in the Midlands, the north.
In one glaring example, 93 per cent of flats in Manchester's latest housing development have been bought by either non-UK residents or companies registered overseas.
Only 17 of the 282 flats at Number One Cambridge Street were bought by British residents, with only two actually being lived in.
The rest are either empty or being rented out, with other owners hailing from 18 different countries including Azerbaijan, China, Japan and Zimbabwe.
Yet if Britons wanted to buy properties in their countries they would face severe local tax restrictions.'
so I see in todays press that Lizzie ..aka queenie has been salting off her cash into accounts in the Cayman Islands...now would that be PUBLIC money she stashing away ? Is it fair then that she asks for the cash to refurb Buck House ...and Kensington etc ,shouldn't the plundered funds be used for that?
Poor thing's hard up.
Her financial advisers will not let her get her hands on her money to pay the decorators/builders.
She only has £10 million salted away. Anyway, it's in a British tax haven.
In defence of the Queen; no, it's not public money. She has her own private wealth which is quite separate from the monies she receives from the Crown Estates to 'run' the Monarchy.
And at least she hasn't used her wealth to illegally influence voting in general elections or the referendum.
Give the woman a break. If we had an elected head of state with our present luck we could have ended up with a Trump-alike.
The fund managers are supposed to invest ethically.
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