Is wealth inequality causing the big issues of our day?

Of course the ‘how’ and the surrounding debate is important, - a debate that has been aired many times on this site, but for me, given the current situation, I think the ‘why’ is more interesting.

But I am really at present more interested in how one ensures equality before the law and how we ensure that the wealthy pay the same rate of tax as a %of their wealth as the poor or the rest of us do.

DaisyAnneReturns

rowyn

Interesting................. why does White wave mark assume that GNs - or some of them at least - are not in the wealth bracket she/he is describing?

Do you get the impression there are excessively rich people on here?

There are plenty

Possibly, or even probably David49 but as another poster mentioned, perhaps they don’t flaunt their wealth beyond mentioning second homes, holiday homes and expensive holidays.
Although DH suggested that the very wealthy wouldn’t choose chatting on GN as a daily activity.

"Coal, gas, electricity, trains, buses, canals, GPO, millions of council houses, telecoms. A lot if farm land."

Farmland wasn't nationalized in WW2, it was commandeered by the Government and directed in the national interest. Because much of the food was imported. Much of even lowland UK farmland in the 1930s was derelict or grassland, that had to be ploughed up to grow wheat. There was very little farm machinery so it all had to be imported from the US to enable our own food to be grown. Every acre had to be as productive as possible
Each county had its own committee (WarAg) to direct Labour and resources to enable this to be done. The workforce changed with many women taking on farm work, many POWs particularly Italian also worked on farms.

Farm land was heavily regulated and subsidised, by the U.K. government , so it was certainly not a free market - so the production was controlled by the U.K. government.

Whitewavemark2

Farm land was heavily regulated and subsidised, by the U.K. government , so it was certainly not a free market - so the production was controlled by the U.K. government.

Have you enough faith in any of the current cohort of MPs whatever political party they are in, to hand over more and more of our daily lives for them to control?

I know I haven’t.

The U.K. needs independent business owners and entrepreneurs, they are far more consistent than the politicians.

This is one of the reasons I am concerned regarding any wealth tax Some of my questions are what level of wealth would be targeted, what constitutes wealth (property, savings, investments and/or pensions)

So research has shown that the average person in the western world pays up to 50% of her income in overall tax. The ultra- wealthy on average pay 25%. Some pay no tax at all and apparently Bezos managed to get a refund from the revenue😀😀.

In 1989 the top 1% owned 5% of the U.K. GdP - the latest figures show that the top 1% now own 25% of our GDP.

I find those figures extraordinary.

Whitewavemark2

So research has shown that the average person in the western world pays up to 50% of her income in overall tax. The ultra- wealthy on average pay 25%. Some pay no tax at all and apparently Bezos managed to get a refund from the revenue😀😀.

In 1989 the top 1% owned 5% of the U.K. GdP - the latest figures show that the top 1% now own 25% of our GDP.

I find those figures extraordinary.

Personally the starting point for me is (and always has been) to tax the big corporations who trade in the U.K. on all profits made in the UK.

There should be some tax breaks for start ups and research facilities.

Like I said in my previous post, there needs to be clarity on what constitutes taxable income without penalising those who are moderately wealthy who have endeavoured to future proof their old age via savings and pension schemes.

So looking at wealth tax

Zukman - a social scientist/economist who has studied inequality intensively for a number of years suggests that a wealth tax should be introduced initially at say 2% pa to those owning wealth over 100 billion The reason it is initially set at such a level is because research has shown that this cohort of ultra wealthy pose the greatest threat to our democracy.

The argument that they would leave the country is he thinks overstated, but in any case the U.K. could follow the USA who continues to tax people even though they have left the country.

I have as yet no opinion about this I am just reiterating some academic thoughts on the subject.

Whitewavemark2

The whole issue of vast wealth and the ability to accumulate and influence needs reform as a matter of urgency, as it is running away from us at a huge pace

Whenever the idea of a wealth tax is floated there's always a faction who argue against, saying that rich will just upsticks and moved their money abroad - great! Let 'em go, but they forfeit British Citizenship. For good.

Zukman - a social scientist/economist who has studied inequality intensively for a number of years suggests that a wealth tax should be introduced initially at say 2% pa to those owning wealth over 100 billion

The problem with this is the same problem which exists with land taxes and mansion taxes. it is extremely difficult, and so, costly, to establish ownership and value of the asset to be taxed.

Our ‘discussions constantly bring to mind the ‘upstream parable’; the story of the river into which so many people fell at a certain point that a facility was developed downstream of that point to recover the fallers from the water and to provide any necessary medical aid. It all seemed like a very satisfactory solution until it was pointed out that a suitable fence at the place where they fell in would prevent them falling in the first place.

The analogy being that it would be much easier
to prevent the accumulation of wealth than to remove any of whatever has already been accumulated. Much of the prevention could be executed by tightening up existing tax structures.

As percentage of their income the wealthy generally do pay less tax than, astonishingly, the poorest 10%. Equalising this percentage would be a big improvement.

But, essential to reducing wealth inequality is the need to change the current economic model. Because it is that which is the root of the problem.

Indeed MaizieD. Our Neoliberal economic model is designed to create wealth inequality, and whilst it continues and “the markets” rule, we do not live in a democracy. I can only see it worsen as AI takes over and deeply unsavoury wealthy people take control.

Farzanah

Indeed MaizieD. Our Neoliberal economic model is designed to create wealth inequality, and whilst it continues and “the markets” rule, we do not live in a democracy. I can only see it worsen as AI takes over and deeply unsavoury wealthy people take control.

Your Neoliberal Economic model.
It can't work in a democracy because voters will always want more than the economy can produce, mostly states have reached the limit that can be borrowed at sensible interest rates. Only those that are exploiting natural resources and have small populations can hope to prosper.
That is happening in the UK now government spending has been more than revenue for 50 yrs plus.

MaizieD

But, essential to reducing wealth inequality is the need to change the current economic model. Because it is that which is the root of the problem.

Not necessarily - it may be desirable to those who support this particular model, but the post war settlement operated by all governments up until thatcher was one broadly of Keynesian demand management and agreement on things like welfare, public housing etc. every government was in agreement about aggressive tax for the rich, so the result was a period of much lower inequality and the working classes benefited from a higher standard of living, better health outcomes etc.

Of course the economy is very different now and it may be much more difficult to achieve the same result, but the movement for tackling the disgraceful level of inequality is growing, particularly over the past year or so, because the rise of political parties like Farage who have zero intention of tackling the issue but are very convincing to those communities whose standard of living has not improved for decades.

MaizieD

But, essential to reducing wealth inequality is the need to change the current economic model. Because it is that which is the root of the problem.

No economic model is going to reduce the inequality that is perceived unless it increases growth and we become more productive as a nation.
The Keynes theories work if you borrow/create money to expand the productivity of the economy, clearly they don't in a service economy they is importing a lot of its needs and selling off assets to foreigners.

The problem with that theory is that to reduce inequality, you need to grow the economy quicker than the wealthy can hoover up the assets, and that has not happened for ever as far as I can see.

Whitewavemark2

MaizieD

But, essential to reducing wealth inequality is the need to change the current economic model. Because it is that which is the root of the problem.

Not necessarily - it may be desirable to those who support this particular model, but the post war settlement operated by all governments up until thatcher was one broadly of Keynesian demand management and agreement on things like welfare, public housing etc. every government was in agreement about aggressive tax for the rich, so the result was a period of much lower inequality and the working classes benefited from a higher standard of living, better health outcomes etc.

Of course the economy is very different now and it may be much more difficult to achieve the same result, but the movement for tackling the disgraceful level of inequality is growing, particularly over the past year or so, because the rise of political parties like Farage who have zero intention of tackling the issue but are very convincing to those communities whose standard of living has not improved for decades.

I do not understand your response at all.

I have no idea which ‘model’ you refer to initially. Why are you explaining Keynesianism to me when I’ve referred to it over and over again.?

What ‘difference’ do you see in today’s economy? Why is Keynesianism not possible? Do we just persist with the neoliberalism that is destroying our economy and our society?

I’m baffled…

I’m not saying that Keynesian is not possible, I am saying that I do still have issues with MMT which I’d assumed is what you are suggesting, when you talk about a new economic model.

Keynes model isn’t new, but applying MMT would be new, and I am not absolutely convinced at this stage.

The very basics that all money comes from government I find real difficulty with, as I simply don’t think that, that is how money evolved.

I can’t fit bitcoin into that theory neither can I fit other stuff that works like money because it gains a value , but sits outside of government control.

I sort of don’t really want to air all these issues again, as god knows we’ve been over and over them for what seems like centuries, but I am interested in how to achieve less inequality and a higher standard of living for the vast majority of our population, which if not checked will imo lead to a disastrous society.

And my iPad needs charging😊

LizzieDrip

The words of Aneurin Bevan ring loud in our ears today:

“How can wealth persuade poverty to use its political power to keep wealth in power? Here lies the whole art of Conservative politics in the twentieth Century.”

Of course, the wealthy will threaten to ‘up sticks’ if they fear some of their vast wealth might be distributed a bit more fairly.

... which is how the status quo is maintained.

A 'report'/analysis - which I've never been able to find again since first reading it some time ago now - looked into the reality of the mutterings and threats of the super wealthy threatening to 'up sticks'. It concluded that the corporeality turned out to be a little different. A number of those making these threats did not, and had had no intention to, move to another country to protect their wealth... they were constrained by, among other things, family-ties, a social habitat that suited their lifestyles, 'good' schools, and a cultural environment that they preferred,

... but it's a useful knife to sharpen in order to rein in a troublesome government and convince the electorate that they absolutely need these wealth' creators...

If the threats appear not to be effective, then obviously the next tool in the drawer is the one that carves out a scapegoat.

However, tinkering around the edges of the issue of wealth inequality will do very little to address the matter of it. The solution is to change the status quo - but good luck to any government attempting that!

Not all of the super wealthy are “wealth creators” but many are wealth hoarders. You are right about wealthy people threatening to leave the country but very few do for the reasons you’ve outlined Dickens. Many U.K. tax exiles were quick to flee back here from the Middle East when the bombing started….
I think you are also right that it will take a lot for any government to change the status quo.

There are wealth hoarders but most are offering products that we all buy, through advertising they convince us that we need their product. Whether it is cars, clothes or electrical devices, advertising comes to us on our devices continually.
It's irresistible to most.

David49

There are wealth hoarders but most are offering products that we all buy, through advertising they convince us that we need their product. Whether it is cars, clothes or electrical devices, advertising comes to us on our devices continually.
It's irresistible to most.

I get few adverts on my computer. I have an ad blocker. I also spend very little time on social media. GN and Facebook, sum up my use of social media.

To me a computer is and will always be - a tool - to be used when reuired, but otherwise not. When I shop online, as soon as the follow up emails start, I unsubscribe.

It is up to peole to make command of the technology in their lives, not let technology control their lives.

Donald Trump sued the Inland Revenue Dept $10 billion.

Trump has just landed an agreement. The revenue will not pay $10 billion, but instead they will never audit either trumps affairs or that of his family FOR EVER!!

The power of the billionaire right before our eyes.