Redistribution of wealth in the UK

I'm with M0nica.

I agree with your post yesterday at 17.19 MaizieD except that you didn't mention the workers. Without them there would be no profits to be distributed to shareholders and bonuses to directors etc.

When I was first in articles, back in the 70s the father of a young colleague had two companies involved with steel fixing and scaffolding etc. He spent some days every week on the golf course and his son used to moan about the workers. I accept that the father had the idea for the business and built it up but, without the continuing work force he would no longer have a business. That is why workers should be well remunerated for the work that they do,

As some have suggested we need to concentrate on the poorer paid. Money from the wealthy is never going to be successfully transferred into the pockets of the poor. The current unrest is due to the lack of respect and monetary reward given to those workers in this country who are essential to keeping the country running.
A Workers Rights Bill was introduced into the House of Commons in 2019 and if I remember rightly never progressed past the 1st reading.
I have come to the conclusion that the Tories and elite have taken these essential workers for granted for far too long. we currently have a proliferation of so called non jobs. Zero hours contracts, jobs with no contracts and ofcourse' with these jobs - no benefits.
Unions are not just bellyaching about pay but the work and conditions that they can see looming ahead. They are visualising staff being laid of and then re-engaged with poorer terms of employment and less security.
I would certainly like to know why the Tory government halted the Workers Rights Bill.

Really the Apex needs to be dismantled- i.e. the RF. Not a good example when talking of equality.

Try reading this, DD, from the Bank of England Quarterly bulletin 2014.

www.bankofengland.co.uk/-/media/boe/files/quarterly-bulletin/2014/money-in-the-modern-economy-an-introduction.pdf?la=en&hash=E43CDFDBB5A23D672F4D09B13DF135E6715EEDAC

I can't account for it. I genuinely don't understand.

I'm not setting out to disagree, I just don't understand why, if governments can create money, they don't all do so. Why are there poor countries and rich ones, if all the poor ones need to do is create money? And why would other countries buy from us at prices we set, when the value of money is meaningless?

Doodledog

I'm not sure why you aren't sure why I'm at a loss - I keep saying it. Do you think I'm pretending?

You say 'government spends the money' before taxation - which money?

The money it creates.

The government has always created its money. How do you account for a population that has steadily increased (e.g from 45 million in the early 1950s to 60 million+ now) and the amount of money in circulation increasing to the extent that, not only is there still enough to go round, but people have a far larger amount of it than they did 70 years ago? We haven't earned it through foreign trade, nor have we stolen it from anyone.... Nor does the Bank of England have vaults full of it...

I'm not sure why you aren't sure why I'm at a loss - I keep saying it. Do you think I'm pretending?

You say 'government spends the money' before taxation - which money?

Interestingly, income tax in Norway is relatively low - 22% across the board. VAT is relatively high and there is a wealth tax. That means that people can keep most of the money they earn, but pay more tax, the more they spend and accumulate, so it ends up being more progressive.

Why don't we look at the Scandanavian countries which have higher taxation of the rich, much lower inequality, an overall higher standard of living and much better scores on measures of happiness?

Norah

Doodledog I have always felt that fair and progressive taxation (including tax on stocks, shares and profits from other income) would ensure there would be no need for poverty or want in a country as wealthy as the UK (provided measures were taken to ensure compliance), but if taxation doesn't fund spending then I'm at a bit of a loss.

*I agree.*

Not sure why DD is at a bit of a loss about taxation funding spending. Government spends the money, taxation ensures that there is no excess money in circulation to cause inflation.

Taxation can also be used for other purposes, such as redistribution of wealth, but the government spending comes first, to put money into the economy. If it didn't it would end up with nothing to tax... especially with the rich sucking it out of the economy as fast as they can... Because one thing is certain. Few of 'the rich' put much of their money back into the economy.

GrannyGravy13

MaizieD

GrannyGravy13

There is only one way to close the rich / poor gap in any society and that is to increase the salaries of the lowest paid.

So where is the money to do that going to come from, GG13?

If there is enough money to pay shareholders bonuses, SME owners/directors dividends in the price sector, there is enough to pay their employees a decent living wage. To not do so is a false economy.

The public sector has enough money to pay a living wage to its employees, as the Government has control of the money in circulation.

You 'get it' GG13*

I would add, though, that the government issues the money in circulation.

Doodledog I have always felt that fair and progressive taxation (including tax on stocks, shares and profits from other income) would ensure there would be no need for poverty or want in a country as wealthy as the UK (provided measures were taken to ensure compliance), but if taxation doesn't fund spending then I'm at a bit of a loss.

I agree.

*price should be *private

MaizieD

GrannyGravy13

There is only one way to close the rich / poor gap in any society and that is to increase the salaries of the lowest paid.

So where is the money to do that going to come from, GG13?

If there is enough money to pay shareholders bonuses, SME owners/directors dividends in the price sector, there is enough to pay their employees a decent living wage. To not do so is a false economy.

The public sector has enough money to pay a living wage to its employees, as the Government has control of the money in circulation.

pinkquartz

When paople refer to some as "tax payers" they mean income tax payers
As we all pay taxes.
I get stung for VAT and it is a tax !

I know that *growstuff's already said it, but I find it infuriating that people seem to think that the only people who pay tax are people paying income tax.

Just about everybody who buys things pays tax! Even children pay tax on their sweets...

GrannyGravy13

There is only one way to close the rich / poor gap in any society and that is to increase the salaries of the lowest paid.

So where is the money to do that going to come from, GG13?

The problem with taxing the rich very highly is that not only are they very mobile, but there are actually not that many of them. You can get more tax in by adding 1p to income tax or VAT than you can get by adding 25p to tax rates for the highest.

I am looking at taxation as a redistributive measure, MOnica. The amount of additional tax revenue this might or might not add to the national 'income' is completely irrelevant. And you said yourself that the extra tax that high earners might contribute is 'negligible'.

There are 31 million tax payers. in the UK and the starting salary to be in the top 1%, 310,000, is a salary of £160,000 [[www.thisismoney.co.uk/money/comment/article-7357395/Who-1-Britain-one-them.html ]]. The majority of people in this group will earn under £250,000. The number of people with enormous incomes, £1 million+ is probably less than 10,000. Even if they all paid £100,000 more tax, it would only bring in £1 billion, negligible in the nation's finances.

By the time most of them have relocated to other countries, the amount would fall even further.

Firstly, I'm sceptical of the relocation argument. Are you saying that they will all nip off to other countries and be able to take equally high earning jobs there? I find that a bit unlikely.
Secondly, if they do go, they are not irreplaceable. While free market adherents might try to argue that they have special talents that deserve very high salaries there are equally those who would argue that they are not necessary to a company's performance.

Both viewpoints are represented in this article:

www.bbc.com/worklife/article/20210125-why-ceos-make-so-much-money

I did say that I liked your suggestion that executive salaries should be raised by the same percentage as that of company workers. Definitely an equable proposal.

As far as distribution is concerned, I think we really have to look at the source of people's wealth. Leaving aside inherited wealth, we have to ask where the money is coming from to pay these inflated salaries and to pay dividends to investors, who not only pay less tax on them than people pay on earned income, but who are, in the main, already wealthy.

It is pretty clear that the source of these payments is the company's profits. In which case we have to ask, what is the source of the company's profits? and the answer will be, the company's customers. Ultimately, these customers will be the general public, or the state. (tis might be somewhat indirect in the case of companies which supply to other companies, but the money they charge their customers is accounted for in the price of the customer's finished product, sold to the public or the state)

So, it is our money, either from our earnings or from public money, that is creating those profits. If these profits aren't recirculated into the economy by paying workers sufficient not only for necessities, but also for the extras, hospitality, holidays, hairdressers, hobbies etc. then it is being sucked out of the economy by the already wealthy who don't spend enough into the 'domestic' economy to sustain all these small businesses supplying goods and services to the less well paid, and which are the lifeblood of the domestic economy.

Progressive taxation isn't necessarily 'taxing the rich very highly', it is putting them on the same tax footing as the rest of the population so that they pay the same percentage of tax on their incomes, from whatever source, as does the rest of the tax paying population. Which they don't at the moment.

There is only one way to close the rich / poor gap in any society and that is to increase the salaries of the lowest paid.

So how would you ensure that the assets of the wealthiest circulated through society? I expect many of the wealthiest do pay all the taxes they have to and there are some who invest in the domestic economy, providing jobs and opportunities for others. However, many don't. They hold stocks and shares in foreign companies. They spend money on foreign-made goods. They own property, which doesn't benefit the domestic economy, often with overseas holding companies. If those people decided to move abroad to escape higher taxation, I'm not sure we'd miss them that much. Is anybody missing the Russian oligarchs?

No I don't, but I don't think that most rich Brits would leave. I wouldn't if I became rich.

I have always felt that fair and progressive taxation (including tax on stocks, shares and profits from other income) would ensure there would be no need for poverty or want in a country as wealthy as the UK (provided measures were taken to ensure compliance), but if taxation doesn't fund spending then I'm at a bit of a loss.

pinkquartz

When paople refer to some as "tax payers" they mean income tax payers
As we all pay taxes.
I get stung for VAT and it is a tax !

We all get stung for tax the moment we turn on our heating, pay council tax, buy fuel for our cars (or buy most things, for that matter).

Only about 25% of the money the Treasury raises is from Income Tax. I agree with you - it annoys me too when people talk about "taxpayers", as though they're a distinct group.

M0nica

How far back are you going? Humankind has lived in tribes since they became human, as do primates to this day. All have their leaders and pecking orders.

The Wiki quotes the Igbos of Nigeria as an example of an acephalous society for example!

Doodledog

I'm not sure that taking money from one group to give to another is the best way to achieve equality. Making decent services available to all is a better way, and leaving people to spend their surplus income as they please after that.

It would be fair if every capable adult paid tax* in return for the use of health services, education, housing, pensions and insurance against unemployment, and food was kept at affordable price levels, so everyone could afford necessities, and have equal access to opportunity. I don't think it's fair to penalise those who have more by removing access to things like free social care or to charge more for things like TV licenses, as was mooted on Jeremy Vine this morning. By all means adjust wage differentials and tax progressively (if that will contribute to making things better overall), but when money has been earned it should be up to the earner how they spend it, IMO.

*I would say that tax should increase in line with income, but if tax doesn't fund spending, as we keep being told, then maybe not. I don't know how it would be fair to tax in that case, as I do think that those who can should pay more, but what's the point if it isn't funding spending?

So how would you ensure that the assets of the wealthiest circulated through society? I expect many of the wealthiest do pay all the taxes they have to and there are some who invest in the domestic economy, providing jobs and opportunities for others. However, many don't. They hold stocks and shares in foreign companies. They spend money on foreign-made goods. They own property, which doesn't benefit the domestic economy, often with overseas holding companies. If those people decided to move abroad to escape higher taxation, I'm not sure we'd miss them that much. Is anybody missing the Russian oligarchs?

When paople refer to some as "tax payers" they mean income tax payers
As we all pay taxes.
I get stung for VAT and it is a tax !

I cannot find the evidence to say mrsnSunak is no longer non dom. Can anyone help? yes i have googled.

It is up to Mr Sunak to close the non dom loophole as he is PM.

It is not illegal for him to pass a law closing the entire business. But it does seem convenient for mr and mrs that he doesn't do so.