Haves and have nots - Lorraine Kelly

A Stalinist dictatorship is definitely NOT the alternative. Democracy, and the prevention of an elite from taking control, are paramount.

Capitalism is based on individual initiative and the use of market mechanisms rather than government intervention.

Socialism is based on government planning and limitations on the private control of resources.

In reality, there are very few, if any, purely socialist countries or purely capitalist countries. Most, if not all, countries have elements of both systems.

Saudi Arabia is not a democracy but neither is it a socialist country. Even though its human rights record is appalling for both women and foreign workers, other democracies are quite happy to do business with it.

The Philippines is a democracy that works on capitalist principles but has an appalling human rights record.

Just as calling a country "socialist" does not necessarily mean it operates fairly and in the interests of all its population, neither does calling a country a capitalist democracy guarantee fair treatment.

Some countries, whilst maintaining a mixed economy, have endeavoured to create a sense of balance using taxation as a means of narrowing the gap between the very rich and the very poor, with the state retaining control over or strict regulation of vital national resources and public services.

Unfortunately capitalism in its purest form is predicated on the market being king and the laws of supply and demand being sufficient to regulate it. Competitors seek to earn the most profit by selling their goods for as much as they can while keeping costs low. On such a basis, there is little regard for whether the goods in question are necessary or ethical, how the profit is earned, by whom and who it benefits. Ultimately, without principled state intervention, I believe it will mean a global "race to the bottom" which will benefit nobody but the super rich.

In 2014 Will Hutton discussed an article in The Observer detailing an interview with Thomas Piketty. Piketty's highly acclaimed book sets out his argument that "the current level of rising wealth inequality, set to grow still further, now imperils the very future of capitalism".

An extract explaining this conclusion:

"Anyone with the capacity to own in an era when the returns exceed those of wages and output will quickly become disproportionately and progressively richer........ Our companies and our rich don't need to back frontier innovation or even invest to produce: they just need to harvest their returns and tax breaks, tax shelters and compound interest will do the rest.......

"Capitalist dynamism is undermined, but other forces join to wreck the system. ........ progressively, the proportion of the total tax burden shouldered by those on middle incomes has risen. In Britain, it may be true that the top 1% pays a third of all income tax, but income tax constitutes only 25% of all tax revenue: 45% comes from VAT, excise duties and national insurance paid by the mass of the population.

"As a result, the burden of paying for public goods,such as education, health and housing is increasingly shouldered by average taxpayers............ Wealth inequality thus becomes a recipe for slowing, innovation-averse, rentier economies, tougher working conditions and degraded public services."

www.theguardian.com/commentisfree/2014/apr/12/capitalism-isnt-working-thomas-piketty

She was quite seriously pregnant when she interviewed me on television and we went all over the shop – well away from the idiot boards. Not the best telly interview I have ever done.

Yes Lorraine Kelly has always come across as being very insincere to me.

I was amazed to see this today. I knew it was bad in the UK but didn't realise we were the worst in the world by a long shot.

www.facebook.com/photo.php?fbid=10158233813858776&set=a.10151718240813776&type=3&eid=ARDR2MmiVWerae8pbSQtKz6m3_XRaueu_Ve54h5iu7phpheRQBD1Qna0MgNPaiI3ooNreM1Q9_nZYwA0

That's terrible

Eloethan
Anyone with the capacity to own... etc.
Was the message saying that, if you work and employ but do not take any reward for your efforts, that is the better thing to do?
Only covering wages and costs? Nothing extra?
I certainly think that idea is potty.
Of course everyone wants to make as much money as possible.
That is why we invest.
I wonder what % of the UK population only cover costs and wages in their business, be it large or small.

My ex, my now OH and I all made and make as much money as possible to have the best life possible.
Working hard and investing the extra means that you will never need financial help from the government aka 'the taxpayer'.
Surely that is a good thing and what we should all be doing, so that those less fortunate due to illness or other circumstances can be cared for by the system.

Granny23 I am astonished by that chart - I would have thought that the US would have had the largest difference!

I notice that China is not listed - I wonder what the differential is there?

It’s exactly as I always thought . The rich in the UK are getting very much richer and the poor are getting so much poorer . Jeremy Vine ( and his kind) ate such a snobs , he should come up to some parts of the North East and SEE poverty for himself ! Perhaps visit the biggest food bank in the UK in Newcastle . This country is shameful.

Paying what we legally should do ( as regards tax) is important, but not so sure about what is regarded as tax dodging.If there are legal loopholes that need to be plugged then they should be, but nobody has to pay above and beyond the legal requirement.
Liking or disliking Lorraine Kelly shouldn't even come into it.

Are not ate ( the rich are not that bad yet)

If, as you say, the top 1% pay 1/3rd of all income tax and income tax is only 25% of all tax revenue, VAT Excise duty and NI making up 45% which is paid for by the rest of the population, you're leaving out the NI, Excise duty and VAT paid by the 1% of top earners.
Are they not part of the population?.
Wealthy people buy more goods and services across the board.
Many send their children to private schools alleviating the strain on State education.
Many have private healthcare alleviating the strain on the NHS and they who have businessed, employ people who would otherwise be dependent on the state.
It's come full circle. You have to have people who are leaders, entrepeneurs who make money in order to enlarge their businesses so that they can employ more people. A win win situation.

businessed businesses

I think I would trust statistics from the OECD more than a graph posted on FB from un unknown source.
As Jeremy Vine posted "I keep staring at it (ie this graph) and thinking that something is wrong".

How many on GN or their family have been or are paid cash in hand force by jobs they do or have done?
How many pay their cleaners cash in hand?
Anyone?

force for

wealthy people MAY buy more but the tax burden is higher in the poorer,VAT is the same whether you earn minimum wage (or no wage) or are a so called top earner ..wealth does not trickle down ,as much as Ms May and her ilk would like you to believe it does ..it often stays where it lands ,in the laps of folk who will put it in offshore accounts and spend it abroad .I've never seen the wealthiest in my area in our local shops and thats where the money they spend does most good .Not spent in places where it not only leaves the area but the country .

Anyone given their children money to avoid death duties or arranged their finances and assets to retain within their family, as much of their income as possible.
Before you talk about wealth and taxation, think of all the ways you yourself arrange your affairs in order to pay the least tax possible.

Wealthy people buy more than poorer people therefore pay more tax. The value of the goods they purchase is much higher therefore VAT is commensurate with price
When they travel, the tickets are usually purchased in the UK.
My OH's children go to private schools and have private healthcare but he shops here in Waitrose and Sainsbury's, eats in UK restaurants and has a normal social life as do many big earners and by that, I mean 7 figure incomes.
Their outgoings are commensurate with their lifestyle and some spend all they earn on keeping their lifestyle alive, as do most of the population, according to income.

Just a quiet word. Benedict Cumberbach has raised in excess of £20 million for various charities and does indeed give part of his salary to causes which help the poor.

Of course, I only read that online so maybe it's all lies.

Perhaps there is a difference there, though BradfordLass72
I never did really think that Benedict Cumberbatch was Sherlock Holmes but I thought that Lorraine Kelly was always Lorraine Kelly!

Lorraine Kelly is an employee of her company and as such would have paid income tax and NI contributions on her salary in the normal way. Of course, she may have only been paid a small salary. the company would have had various expenses which are allowable, such as agent's fees, travel, wardrobe (allowed as she is a performer) etc. The company would have paid corporation tax on its profits and she would have taken dividends out of those taxed profits. She is obviously a higher rate tax payer and would have paid additional tax on those dividends have the basic rate of income tax. Her company would almost certainly have paid into some sort of pension scheme for her. Those contributions would have been tax deductible in the same way as payments into a pension are for all those who are part of a scheme. NB I have been assuming that her company is UK registered and not registered elsewhere.

HMRC were treating her as an employee and calculating her liability on her gross "salary". As employment law as regards holiday and sick pay, maternity leave etc etc has strengthened many employers have forced their employees to become freelancers. It is not uncommon to hear employers, especially those who have small businesses to complain about these additional costs.

At the moment there are thousands of contractors, such as IT workers and those in the health and social services who operate through agencies, who have received demands from HMRC for income tax unpaid. Some of this goes back more than 7 years. These people were informed by the agencies that they could take some of their fees in the form of a loan (which would never be repaid). In other words they paid income tax and NIC on part of the fee with the larger part being untaxed. They were advised that the schemes were legitmate but nevertheless they entered into them with a view to reducing their tax tax liabilities. There are several who owe more than £100,000 and sadly there have been some suicides.

HMRC have been working their way through the public sector and are now turning their attention to the private sector so any of you who have small companies that have just one client, or one major client with one or two small clients need to seek advice.