Surely we must pay more taxes!?

M0nica

Mizie an interesting discussion of wealth in macroecconomic terms, but unfortunately irre;evant when discussion who are the walthy who should pay more tax.

HMRC to not dealin economic theory they deal in £s and p. At what income are people deemed wealthy and require to pay extra tax and, if we have a capital tax, at what level should it start and how should it grow, if at all.

It’s up to the government to determine the £s & p of what they should tax, not HMRC. Macroeconomic analysis, such as Pikety’s extensive study is there to inform them of both the appropriate targets for taxation and the sociological consequences of their tax policies.

Even without determining a ‘wealth level’, such as you are demanding, there is scope for creating a more level playing field by equalising tax rates across all sources of income, whether it is labour income or rentier income (ie income derived from assets rather than employment). Also, as growstuff notes, for making taxation truly progressive , which it isn’t at present.

It would be possible to generate more tax revenue by these means without affecting those at the lower end of the of ‘scale’ because, in the first instance, only the already wealthy, either through a large share of labour income or by having income from capital (or both) have the opportunity to to ‘manage’ their tax affairs so as to take advantage of differential taxation.

To go from Pikety’s analysis (though he does provide suggestions for effecting a more equable system) to Murphy’s more recent Taxing Wealth Report provides some numbers. It is worth noting that the two authors’ proposals are very similar.

Pikety has a very telling quote from J. Wedgewood who was writing in the 1930s about inheritance.He noted that what he termed ‘plutocracies’ (where wealth is heavily skewed to the upper percentiles of the population) and their hereditary elites had failed to stem the rise of fascism. He warned that “Political democracies that do not democratise their economic systems are inherently unstable”. In view of the current rise of far right populism in Europe and the US his warning seems as valid now as it was in the 1930s. This is the social consequence of glaringly obvious wealth inequality which I think we should be taking steps to address.

For numbers I suggest that you read some of this MOnica

taxingwealth.uk/wp-content/uploads/2024/04/Taxing-Wealth-Report-2024-Full.pdf

I would suggest a multiple of average salary but that is a crude measure that doesn’t entirely cover capital wealth.

M0nica

We do not need HS2. It is a complete white elephant channeling much needed money from being invested elsewhere in the rail network.

The money invested could hav improved the line to Birmingham in a fraction of the time, and given more trains travelling fast. It culd also have improved the East coast line and several other lines.

I agree with you about HS2.. we also don't need extra runways at Heathrow and Gatwick IMO

pascal130 I agree.

With HS2 or airport expansion I have to ask the question WHY do we NEED to travel more?.

We have electronic communication and entertainment we simply don’t, most journeys are discretionary, we WANT to make them. Many commute long distances because they want to live elsewhere, I don’t understand the economic need for HS2 very few are going to commute using it, it’s all discretionary travel producing CO2 that we should be reducing

Menopauselbitch - I suppose you know that the "money to China" is actually our funding of the British Council, Human rights work, Climate change work, GAMRIF (research into antimicrobial resistance), DFID (though this work has changed recently) and a host of other things.

We are not just handing cash over to China!
We are working for the benefit of our own people.

From each according to their ability, to each according to their need.

These are the principles of fair taxation we seem to have forgotten...

Absolutely, keepingquiet.

Labour will have an eye to their re-election but Trump changes everything and Labour will need to re-think their whole economic and fiscal strategy if re-arming is a serious goal.

keepingquiet

From each according to their ability, to each according to their need.

These are the principles of fair taxation we seem to have forgotten...

Wasn’t that a communist doctrine?

Whatever it was, we (i.e the UK) have never really subscribed to it.

The only time in our history that the wealthy have been progressively and heavily taxed was post WW2, up to 1980. After then Thatcher reversed all attempts to achieve more equable distribution of wealth.

While equity of taxation seems to be mostly approved by many people I suspect that a more equitable distribution of wealth is a more contested concept.

MaizieD

keepingquiet

From each according to their ability, to each according to their need.

These are the principles of fair taxation we seem to have forgotten...

Wasn’t that a communist doctrine?

Whatever it was, we (i.e the UK) have never really subscribed to it.

The only time in our history that the wealthy have been progressively and heavily taxed was post WW2, up to 1980. After then Thatcher reversed all attempts to achieve more equable distribution of wealth.

While equity of taxation seems to be mostly approved by many people I suspect that a more equitable distribution of wealth is a more contested concept.

We've never subscribed to that doctrine, its been instead a strong welfare state and sharing things out more equitably, taxing according to income.

‘Taxing according to income’ reached a brief heyday 1945 - 1989. It’s never really applied since then. The numbers do not lie.

Wasn’t that a communist doctrine?

Whether it is communist or not (I would say not) is neither here nor there. Economics, like most disciplines, has a range of theoretical perspectives which make it easier for academics and others to discuss them, but that is no reason why in the 'real world' there can't be a pick and mix approach, so long as it is co-ordinated.

What's the alternative? 'From each according to what they fancy contributing, and to each according to what's left after the kitty is shared between everyone, regardless of whether they have contributed or not'? As a slogan it is clumsy, but even if it tripped off the tongue it would never catch on as a sensible way to run a society if people were asked to vote for it.

Making things equitable includes things like sick pay, healthcare and education that does not depend on the ability to pay, various forms of help for the disabled etc. It is not equitable to make those who work pay 13.5% of their earned income into a scheme that has more beneficiaries than contributors, and allow those who don't work to benefit. It is absolutely fair enough to exclude those who do not have the ability to work from the obligation to contribute, but why should those who are able just be able to opt out?

Doodledog if one’s partner (whether that be male or female) is happy for them to stay at home, why on earth should the state insist that they work?

This is not China or North Korea, we have choices.

I imagine that the working partner is earning a good salary and therefore will be paying high taxes.

There is in the U.K. the option to pay stamp NI without being in paid work, it would be interesting to know the percentage of stay at home folks who do.

I really do not want to live in a country where work is compulsory.

GrannyGravy13

Doodledog if one’s partner (whether that be male or female) is happy for them to stay at home, why on earth should the state insist that they work?

This is not China or North Korea, we have choices.

I imagine that the working partner is earning a good salary and therefore will be paying high taxes.

There is in the U.K. the option to pay stamp NI without being in paid work, it would be interesting to know the percentage of stay at home folks who do.

I really do not want to live in a country where work is compulsory.

Nor do I. I don't like the idea that people can be forced to work (as I have said over and over😀). They would be vulnerable to exploitation, apart from the morality of it.

What I am saying is that if people choose not to work they should still contribute as they benefit from living in a society which is propped up by those who do. What their husband (or whoever) does is irrelevant. He will be paying his own contributions, so if he is a high earner his tax bill will be higher than if he were a low earner. That is the system. Allowing him to transfer some of his taxes to his wife, whilst not increasing the total amount, is just cutting his tax bill, not compensating for the fact that she doesn't pay.

I don't know how often I have to say this. I am asked the same questions every time, and I give the same answers. I apologise if I am not making myself clear, but I don't think it's complicated, and I don't know how else to say it.

Some people may have choices, but outside of the very rich (eg film stars) those choices are paid for by many who don't.

Nor do I. I don't like the idea that people can be forced to work (as I have said over and over😀). They would be vulnerable to exploitation, apart from the morality of it.

What I am saying is that if people choose not to work they should still contribute as they benefit from living in a society which is propped up by those who do.

I'm afraid that I find these two statements contradictory. In the first you are saying that people shouldn't be forced to work, in the second you are saying that it is unfair that some people aren't working (implying that they 'could' work if they chose to). So what do you do about them? Withhold all the services which the state supplies?

But if you continue to subscribe to the erroneous notion that the sole purpose of tax is to pay for public services (which is quite understandable as that is the story that we are told at every turn, by politicians and the media) then you will continue to be exercised by the unfairness that you perceive in some sections of society. And I doubt anyone can propose a 'solution' that you would find acceptable.

I'm afraid that 'from each according to his ability etc. is a communist trope. It had its precursors but Marx developed it as a key tenet of his theories, even though somewhat vaguely and without much detail. or, IMO, much understanding of human nature.

1000wordphilosophy.com/2023/10/21/karl-marx-slogan/

I know where the saying came from, and how it has been used to support political theories, but it’s really not the point.

I don’t see those statements as contradictory. Those who say they can afford not to work can only (on the whole) make that choice because others do work.

I’m not ‘subscribing to notions’ either. Why do people pay NI, and why is there a breakdown of where our money has gone on the YouGov website if it is not being spent on those areas? Are you saying this is a lie?

If tax is not funding the way society works, where do the government get money from, and why don’t they scrap it? They would be voted in every time.

I don’t see those statements as contradictory. Those who say they can afford not to work can only (on the whole) make that choice because others do work.

I knew that you wouldn't see it like that, but I did.

What i'm trying to say is that you won't find an answer that is acceptable to you, despite having tried many times on this forum.

I’m not ‘subscribing to notions’ either. Why do people pay NI, and why is there a breakdown of where our money has gone on the YouGov website if it is not being spent on those areas? Are you saying this is a lie?

Well, you are subscribing to the taxation comes first notion.

I'm not exactly saying that what the government publishes is a lie. It is no doubt an analysis of government accounting methods and gives a picture of what the state spends on various state provisions, but it masks the fact that government doesn't have to tax before it can spend.

I have posted on this topic (at mind numbing length) several times and the fact is that government is the sole source (apart from some foreign earnings) of our money and the way that it issues it into the economy is by spending on the public sector.

When it doesn't spend, as demonstrated post 2010 when the tory government cut public spending, there is less money circulating and greater impoverishment (numbers of people living in poverty increased during that period, (we now have a mind boggling figure of about 1 person in 5 living in poverty) and growth in the economy slowed because people had less money to spend.

Tax controls inflation caused by too much money in the economy. It can also, if the government so wills, produce a more equable distribution of wealth and discourage damaging consumer behaviours (taxes on cigarettes and fossil fuels for example).

There's never going to be agreement on what is 'fair' and what isn't about taxation and spending. How government spends is dependent on its philosophy/principles and it has many competing claims on how it should be spending to contend with. At present we have a mixed economy though with the balance tipped towards the claims of the wealthy.

But we still, just about subscribe to a universal welfare model even though the detail may not be pleasing to everyone.

Any system where you can “choose” to work is doomed to failure because why should the rest support the feckless. If the want rights they should accept the responsibility to contribute to society.

The examples of communism have been distorted in practice and only resulted in leveling down of living standards and no freedom of expression. Except for China which is not really communism because individuals can hold great wealth, provided they agree with party policy, with no freedom of expression.

Any system where you can “choose” to work is doomed to failure because why should the rest support the feckless. If the want rights they should accept the responsibility to contribute to society.

Well, there you go, David. A philosophy that any 19th C industrialist would be proud of...

Dismissing ideas because they were used in other ways at different times in history isn’t adding to the debate though. Much depends on many other factors.

Ok, I realise we have very different perspectives, but can you explain to me why it is fair that some people contribute to a societal system on a compulsory basis, whilst others get the same benefits without having to do so? I am happy to be persuaded if so.

Written in 1932, I urge people to read Bertrand Russell’s In Praise of Idleness. For those unfamiliar with this, It isn’t about idleness. It is about how we have been conditioned to live in a system where working a certain number of hours a day (and why) is considered the norm, when working fewer hours would benefit everyone bar the capitalists.

A taster:

^First of all: what is work? Work is of two kinds: first, altering the position of matter at or near the earth's surface relatively to other such matter; second, telling other people to do so. The first kind is unpleasant and ill paid; the second is pleasant and highly paid. The second kind is capable of indefinite extension: there are not only those who give orders, but those who give advice as to what orders should be given. Usually two opposite kinds of advice are given simultaneously by two organized bodies of men; this is called politics. The skill required for this kind of work is not knowledge of the subjects as to which advice is given, but knowledge of the art of persuasive
speaking and writing …^

True, isn’t it?

files.libcom.org/files/Bertrand%20Russell%20-%20In%20Praise%20of%20Idleness.pdf

I do believe that everyone, except the very old and severely disabled, is capable of some form of work, never more so than today when so much work is sedentary and some can be done without leaving home. I wonder just how many people there are who are capable of working some hours a week but don’t because employers - those who tell other people what to do - can’t or won’t organise the work in such a way that makes this possible.

Obviously, times have changed much since 1932 but the principle is the same.

Perhaps if we didn't have some people so worn down by work and some people unable or unwilling to work; if we had an economic system were everyone did some work according to their ability, then perhaps people wouldn't be so antagonistic about apparent unfairness. If people didn't see the very rich becoming ever richer due to low income taxes and capital taxes they might be more willing to contribute more to the common good.

Maisie in that case we can all give up and sponge on society and there would be nothing to tax anyway, no money to buy anything. Most of us would simply subsist from our own efforts, just like the rural population in most third world countries.
Of course your utopia isnt going to happen, if too many don’t contribute the economy will collapse, we are not at that stage yet.

Taxation is older than the hills- long before the Industrial revolution introduced the capitalist system.

keepingquiet

Taxation is older than the hills- long before the Industrial revolution introduced the capitalist system.

So?

Of course your utopia isn't going to happen,

And what 'utopia' would that be, David.

Please tell me about this utopia that I am completely unaware of.