Why we must increase tax on the rich to give to the poorest!

Wiseman Wed Jun 18, 2008 at 10:29:24 PM GMT Print-friendly version Facebook

At the moment I would like us to raise income tax on earners over £100,000 and give the money to poorer families and pensioners on earnings of less than £30000 a year in total so this can help with fuel bills.

Lets show we care!

John Wiseman
PPC Westmorland and Lonsdale





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Why we must increase tax on the rich to give to the poorest! | 43 comments (43 topical)

Re: Why we must increase tax..... (#1)

by For the Union on Wed Jun 18, 2008 at 11:32:56 PM GMT

The government should reduce the corporation tax to 10% - allow the wealth creators (COMPANIES) to make more revenue for the government; which in turn should use it to subsidise the utility industries.

Increasing tax is not always the most efficient way of raising more revenue...... 


Re: Why we must increase tax..... (#2)

by CitizenAndreas on Wed Jun 18, 2008 at 11:46:01 PM GMT

I'm not sure whether this is over disguised parody or laffer curve bull. Can you clarify?


[ Parent ]

Re: Why we must increase tax.... (#3)

by For the Union on Wed Jun 18, 2008 at 11:53:16 PM GMT

Lower corporation tax would attract more overseas investment - meaning more jobs (income tax) and more people spending (VAT) etc...

I know its not very socialist, but it makes more sense than driving away the very wealthy.  


Re: Why we must increase tax.... (#4)

by CitizenAndreas on Thu Jun 19, 2008 at 11:41:20 AM GMT

I'm afraid that use of "wealth creators" and similar phrases annoys me immensely. It's been used to defend the ever growing levels of pay inequality by suggesting that the highest paid have some kind of inherent ability to create wealth. It's fueled levels of pay that essentially amount to legalised corruption and that is why I don't like reading those words.

But all this is beside the point, foreign direct investment not always the golden goose you might think. It comes in two flavours, hreenfield and brownfield; brownfield is where a foreign company invests in an existing business such as Santander's takeover of Abbey National, greenfield is where the foreign comany invests in new facilities such as Nissan opening a new factory.

Brownfield really doesn't give much benefit, greenfield does but the majority of foreign investment is brownfield not greenfield. Encouraging greenfield investment often requires additional incentives beyond simply being tax competetive.

The UK is already reasonably competitive on Corporation tax and unemployment is low, this would indicate that there is little need to make our tax regime any more accomodating to foreign investors.



[ Parent ]

Re: Why we must increase tax.... (#5)

by Floating voter on Thu Jun 19, 2008 at 12:28:21 PM GMT

"... suggesting that the highest paid have some kind of inherent ability to create wealth"

Well, someone on the dole has considerably less chances of generating wealth for others so there must be some level of truth in it.

 

 "...levels of pay that essentially amount to legalised corruption"

There's some truth in that too! 

 

My problem with just giving more to the "poor" is twofold.

First, if you overtax people they stop being productive. I have heard people say things like "What's the point, I'll only lose it tax". Heck - I've even felt that way myself on occasion.

Secondly, the "poor" are not predictable in their repsonse. A significant proportion of people, when given extra money for heating and food, will spend it on booze and fags and will then chirp up demanding more money to cover fuel and food. I have personal experience of seeing that happen. My own mother who is on pension credits smokes £35 per week of her money and moans about the price of food and heating and she's not alone. There are lots like her.

Throwing tax money at parts of the population is not a solution. It will help some, but it will not solve the bulk of the problem. 


[ Parent ]

Re: Why we must increase tax.... (#6)

by jkitleft on Thu Jun 19, 2008 at 04:38:42 PM GMT

When End Child Poverty conducted a survey in 2005 amongst poorer mums on WFTC, they found that more money had been spent on toys, or proper carpets for the concrete floors in their flats, but no more had been spent on booze or fags. It strikes me as odd that many Tories who are ostensible small-state libertarians not only oppose devolution, but happen to believe in the worst of humanity when people are given money by the government. But if this money was given by a corporation, then of course, they could handle the money.


[ Parent ]

Re: Why we must increase tax.... (#8)

by Floating voter on Thu Jun 19, 2008 at 04:52:45 PM GMT

"When End Child Poverty conducted a survey in 2005"

Well, I'm not them and I can only speak of the cases I have come across.


"It strikes me as odd that many Tories ...."

I am not and never have been a member of any political party, nor am I affiliated in any way to the tories.

Having spent large portions of my life living in council estates and rented accommodation I have been part of "the poor" and many of my friends as well. I'm not a champagne socialist unlike most of the Labour cabinet - I've been tossed out of a house by my father, my mother was a single mum - I've been there, done that and I've got the d*mn tee-shirt.


"But if this money was given by a corporation, then of course, they could handle the money."

Don't be ridiculous. That comment is completely inane. Throw money at people who don't know how to cope and they'll waste it regardless of the source.


[ Parent ]

Re: Why we must increase tax.... (#11)

by jkitleft on Thu Jun 19, 2008 at 06:37:03 PM GMT

I wasn't referring to you as a Tory per se-just the argument.

The corporation comment was intended sarcastically.


[ Parent ]

Re: Why we must increase tax.... (#40)

by jkitleft on Tue Jun 24, 2008 at 05:29:47 PM GMT

That sounds unbelievebly snobbish. Sure some poorer people smoke, and have unhealthier diets, but your comment is far too general.

Before the smoking ban, around a quarter of people smoked. You seem to imagine that the poor only exist as a small minority. When over 1 in 4 kids are in poverty, it often doesn't include people who are neither middle-class, nor in poverty. I know tonnes of rich people who smoke.

I think there are many people who are poor, who are not being paid their due. The reason why they are poorer, is not because they don't work hard, it's because they are being paid low wages, and are by the way, working longer which kind of puts a blow to the theory that they aren't richer because they don't work hard enough.

Why is a cleaner or a cook or a carer or a nurse or a waiter etc. "undeserving"? These aren't dumd rich kids, who have become poor. Paris Hilton is far more likely to stay rich now than if she was a twenty-something in the seventies. The Tories admitted to intentionally throwing more money at comps. that had more middle-class kids in the '80's.

Your post stinked of snobbery.


[ Parent ]

Re: Why we must increase tax.... (#7)

by CitizenAndreas on Thu Jun 19, 2008 at 04:51:33 PM GMT

On overtaxation, the big problem I find is that determining the kind of level where it becomes a disincentive to hard work. I think the often mentioned idea of a 50% rate on earnings over £100K would provide not be a huge disincentive on this front. A higher earner would still keep a reasonable amount of their earnings. Plus most entepreneurs earning this kind of income are likely to be making their money from capital gains or dividends rather than salary.

Bringing the unemployed into it is moving the goalposts a tad since the original post talked about those on under £30K, which is a fair sized section of people. My own view is that the money raised from any tax increase on high earners coule be used to ensure that the changes to fix the 10p issue become permanent.

On unemployment, I'm not particularly trusting of "it's their fault" reasoning. I've known people who have had very severe opinions of the unemployed who ended up behaving in exactly the same way as the people they would criticise when it happened to them. Unemployment is a serious blow to self esteem and any attempts to combat it have to focus on that. The size of benefit payments is not all that relevant as an incentive (provided full time work remains the better option).


[ Parent ]

Re: Why we must increase tax.... (#9)

by Floating voter on Thu Jun 19, 2008 at 04:57:39 PM GMT

"the big problem I find is that determining the kind of level where it becomes a disincentive to hard work"

I agree with that.

"Bringing the unemployed into it is moving the goalposts a tad "

Actually I said "the poor" rather than the unemployed. Also I think the 30K limit is too high. I would rather see the heating bills for hardship cases paid directly so that the money never touches their hands. That way it cannot be misspent and the desired effect is achieved.

The other real problem is increasing the size of the benefit trap making a job uneconomic in comparison to benefits. Many people are in that position already and a lot of them want to work.


[ Parent ]

Re: Why we must increase tax.... (#14)

by jljb2 on Fri Jun 20, 2008 at 12:55:16 PM GMT

"Lower corporation tax would attract more overseas investment "

This doesn't seem to be true empirically, though I have no real objection to lower corporation tax if we can raise income tax on higher earners - after all, we're interested in redistributing between people. Having higher marginal tax rates, higher tax takes, and higher public spending does not negatively affect flows of FDI - on the contrary, there is some evidence that it's improved. Increased labour rights for collective bargaining etc are also associated with higher FDI inflows - in large part because stability, not cost, is the key consideration for MNCs.


[ Parent ]

Re: Why we must increase tax on the rich (#10)

by otware on Thu Jun 19, 2008 at 05:01:11 PM GMT

I think it's quite interesting that this same sort of debate can be had on youtube with exceptionally right wing Americans. They think that Obama is a 'marxist' (they don't even know what the word means) because he supports progressive taxation. But most shocking of all they think that it's the fault of the poor that they are poor. I've tried to reason with these people but they just don't get and I find it incredible that anybody could be so right wing and so 19th C. in outlook.


Re: Why we must increase tax on the rich (#12)

by jkitleft on Thu Jun 19, 2008 at 06:54:38 PM GMT

I've had these debates too. I had one with someone on Facebook whose profile picture had Obama with a Communist flag in the background. He said that liberals were unpatriotic, and spouted the far-right ideology of Ann Coulter style Republicans. Problem is, many think that the state intervening in anything in America is not only a violation of liberty, but unpatriotic. I pointed out that introducing universal healthcare is not unpatriotic if it helps 50 million Americans and doesn't harm the others. He has yet to reply.

I remember reading Johann Hari's commentary of the Republican convention in 2004 (which if you haven't read, I advise you too). I advise you to read it, mainly because of the hilarity of the idiocy of some of the arguments of the Republican supporters. Americans aren't stupid. But they have been treated for fools by the political elite.

The Democrats have sold out, and the most important issue in America should be political financing. John Edwards breached the status quo, and by shifting to the left, has forced Obama to campaign on the bread and butter issues: progressive taxation, consumers' rights, universal healthcare etc.

Many say that partisanship is harming America. They're wrong. Bipartisanship is harming America. The only differences between the Democrats and Republicans have been social issues. This has fuelled petty news and political coverage, driving American politics into a ditch whereby personal attacks are not only seen as clever, but the intelligence of debate is driven to new lows.
Why do you think we have seen shocking attitudes about gays and muslims spouting from peoples's mouths in America? By definition, they're not more right-wing, but they have been fed bile by the media, and the political elite.


[ Parent ]

Re: Why we must increase tax on the rich (#13)

by sgthowie on Thu Jun 19, 2008 at 10:12:39 PM GMT

 remember reading about how Dennis Healey increased corporation tax to 52% in 1974 and increased income tax to 83% for the super wealthy. 

When this happened the sun still fell at night and rose in the morning!!! 

What is the constant neurosis about asking the mega wealthy and large corporations to pay more?  The word 'wealth creator' also irritates me.  The people 'creating' the wealth are the people working FOR the company and not the people who OWN the company.


If Richard Branson's tens of thousands of employees decided to have a day off and watch cricket instead of working for him he would not be able to do the job of those people himself so he is not the wealth creator.  He is therefore dependant on his workforce to make him profits and therefore rich.  Higher taxation and redistribution of wealth is one way of correcting this injustice.

A Compass thinker (i.e. Old Labour Right Wing) recently said that we could raise tax to 60% on earnings over 80,000 & 70% on earnings over 140,000 and be able to help pay for an increase in the personal allowances to 15,000.  This would be an extremely popular redistribution of wealth. 

Anyway, let's go back to 1974 and the so called sluggish sick man of Europe economy we lived in.  Poverty was 13% of the population and not nearly 30% as it is now.  Benefits were linked to average earnings so unemployment benefit would be 115 pound a week and not 60 and the state pension would be 135 pounds a week and not 90.  You had real, secure jobs instead of the casualised call centre employment now.  Labour was seriously considering introducing a 35 hour working week without loss of pay if re-elected in 79 and you could also get a bloody dentist!! 

Why are things so brilliant now???


[ Parent ]

Re: Why we must increase tax on the rich (#15)

by George08 on Fri Jun 20, 2008 at 01:23:38 PM GMT

"What is the constant neurosis about asking the mega wealthy and large corporations to pay more?"

Because if you ask them to pay more they will just leave this country en masse to a jurisdiction which has a more favourable taxation regime, thereby leading to a net loss in revenue for the government. This is exactly what happened in the 1970s and is what is happening again now (see here http://business.timesonline.co.uk/tol/business/money/tax/article3953779.ece).


"The people 'creating' the wealth are the people working FOR the company and not the people who OWN the company."

Both workers and investors create wealth - in fact, almost anyone who engages in economic activity contributes towards wealth creation. Wealth creation tends to be attributable to the accumulation of capital which is comprised primarily of the reinvestment of profits in companies to enable innovation, expansion and appointing more employees. This does not necessarily mean, however, that workers of a company are more valuable economically than investors or board directors - economic worth is determined by supply and demand, so in low skilled jobs wages will be lower because there will be a far higher potential supply of workers to that particular labour market. Conversely, not many people have the capability of being world class footballers or pop stars, but they're in high demand and very short supply, and so command high salaries.

"If Richard Branson's tens of thousands of employees decided to have a day off and watch cricket instead of working for him he would not be able to do the job of those people himself so he is not the wealth creator." 

If his employees did this they would all be sacked and would then find it very difficult to find another job because they would be considered unreliable as employees. Therefore, they are as much dependent on him as he is on them. However, his employees are not the ones who took the risk or who are in control of the direction of the business. Branson started the business from scratch and has been responsible for building it up from nothing and taking overall responsibility for its strategic objectives. His employees have no such responsibilites and did not partake in the risk to begin with and so are accorded lower wages. They are, in fact, dependent on people like Branson for finding and being given employment in the first place. They are also entirely free to start up their own businesses if they wish and get rich like Branson. If they complain they're not getting paid enough they're free to leave to find a more financially rewarding position (as Branson said to them quite frankly last year, see here http://business.timesonline.co.uk/tol/business/industry_sectors/transport/article3114968.ece, where he said that "For some of you more pay than Virgin Atlantic can afford may be critical to your lifestyle and if that is the case you should consider working elsewhere").


[ Parent ]

Re: Why we must increase tax on the rich (#16)

by jkitleft on Fri Jun 20, 2008 at 02:02:58 PM GMT

I go to school in Kensington. Past the bomb proof entrance, as I am next to the Israeli embassy, and Kensington palace, lives the wealthiest man in the UK, Lakshmi Mittal. Various other members of the super-rich elite live in Kensington.

Polly Toynbee affirmed my anecdotal assertions that the super-rich wouldn't leave:

"What are they afraid of? The threat that globally mobile companies would leave these shores while non-doms decamped en masse is proving empty. Knight Frank, estate agent for top London property, says it hasn't happened: on the contrary, in Knightsbridge, Chelsea, Kensington and the like, property worth millions is rock solid - no flight. "Monaco costs more and they have to keep jetting back here to shop: London is where they want to be."



[ Parent ]

Re: Why we must increase tax on the rich (#18)

by George08 on Fri Jun 20, 2008 at 02:27:22 PM GMT

1) If this is the case then why have certain large corporations already left the UK purportedly because of the corporation tax regime here (http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2008/05/08/cntax208.xml) - to go to Ireland, and why do many more threaten to leave? (e.g. see WPP here  http://www.telegraph.co.uk/news/newstopics/politics/1912350/Advertiser-WPP-may-join-tax-exodus.html.)

2) Do you think Lakshmi Mittal would be living here if we had tax rates of the 1970s (i.e. income tax at 83%)?


[ Parent ]

Re: Why we must increase tax on the rich (#17)

by e10rifles on Fri Jun 20, 2008 at 02:21:20 PM GMT

Jesus. So much Tory nonsense in one go, I feel ill. It's like reading the Telegraph.


[ Parent ]

Re: Why we must increase tax on the rich (#19)

by George08 on Fri Jun 20, 2008 at 02:30:27 PM GMT

If you don't make any effort to engage in the argument then you have impliedly lost the argument. Why can't you respond to the points put across rather than simply dismiss them as 'Tory nonsense', which, incidentally, most New Labour Ministers also support?


[ Parent ]

Re: Why we must increase tax on the rich (#20)

by e10rifles on Fri Jun 20, 2008 at 03:29:54 PM GMT

Saying New Labour ministers agree is hardly an argument against them being Tory nonsense. Most New Labour thinking is rehashed Tory nonsense.

As for Lakshmi Mittal, I couldn't care less where he lives. But I can think of quite a few countries in northern Europe with higher tax bands that aren't suffering a crisis of capital.

I say, call their bluff. We could do with fewer rich tossers driving up property prices in my area anyway.


[ Parent ]

Re: Why we must increase tax on the rich (#21)

by jkitleft on Fri Jun 20, 2008 at 09:04:23 PM GMT

I always have several probems with the argument that the super-rich will leave:

1) Sweden has heads of major companies that live there, and they have high taxation, and this is true of most European countries.

2) We have major leverage over the tax havens. The effort must be international, but, half of the assets of the tax havens of the world are in British dependencies or territories.

3) Mostly it's just talk. Does anyone imagine that not a penny would go into the British economy if companies left? As if they would stop all business in Britain which would, oh yeah, leave them with less money.

I'm not suggesting 83 % rates. But when a company boss pays 18% on capital gains, less than the 20% of his cleaner, you know something is wrong.

We know that companies won't leave though. News International have made profits totalling £300 million in this country, in the last decade or so. They can't offshore the Sun, or the Times. Not only would it be a weak blackmail, as it makes no difference to our economy, but it would lose money and influence for Murdoch.

Mohammed Al-Fayed negotiates the amount of tax he pays with the Inland Revenue. The loss of Harrods only emphasises that tax cuts for the rich are not prudent, as it is spent on specific markets. 

There was a worldwide effort to close the tax havens of Al-Qaeda, and we can close tax havens of all, this way too.

There was a fantastic report by the TUC, entitled 'The Missing Billions'. It suggested an anti-avoidance principle: shifting taxes into your 7-year olds name? We don't care. We're taxing you anyway. We also need to stop staff cuts at HM Revenue and Customs. Not only did the civil service trade unions correctly predict there would be chaos with data, but they save money, as each staff member saves around 100x more than their wages. Germany uses their intelligence services to crack down on tax evaders.

We could bring in around £43 billion this way. To make this sound just more jaw dropping, we could treble funding on primary schools, and increase individual pensions by more than a half.

It disgusts me though that a member of the Orange Book wing of the Lib Dems, has to promote a tax band for the top 1%, and re-aligning capital gains with earnings, as well as ending tax relief on pensions for the wealthy (which I think should be used to give tax relief to pensions on a basic rate). They also make an excellent proposal to replace the council tax with a local income tax.

The rich also pay less on NI contributions, and I think they should pay more, but by folding National Insurance into the tax system.

Of course there are savings to be made. There is too much beaurcracy: quangos should be heavily downsized, or scrapped, so should ID Cards etc.

But we have a post-Thatcher hangover. It was necessary to liberalise parts of the economy, yes, but it needed to be backed up by a strong welfare state. Look at right-to-buy: it has led to a defecit of around 1,000,000 council homes not replaced, and has led to many property developers reaping the benefits. We have also been selling state land, which has only exacerbated this. If the proceeds of the Housing Act of 1980, had been used to reinvest into social housing, it would've been a fine policy.

I think we need to amend this now, and end the defecit of a million council houses, and while we're at it, we should introduce a Land Value tax. This could then, as well as the amended Hosuing Act, pay for the building of council houses. Why not add VAT to aviation fuel, and directly subsidise public transport? Why not deduct tax at the source of dividends? Why not introduce windfall taxes on water, gas, oil and electricity companies, to invest in a programme to find renewable energy, but also to provide tax cuts for the poorest during times of price rises?

These reforms should end a tax system whereby the rich profit at the expense of the poor. We should take the poorest out of the tax system. One way the government could sell tax rises, as the Fabians have consistantly suggested, is to propose direct taxes e.g. land value taxes, and proceeds from council houses being bought being reinvested in new housing, fuel taxes subsidising public transport. What is for sure though, is that if the government can tackle the super-rich, they can do almost anything they want, and can emphasise their commitment to social justice.



[ Parent ]

Re: Why we must increase tax on the rich (#22)

by George08 on Fri Jun 20, 2008 at 11:21:06 PM GMT

Thank you for your response, jkitleft. I do not have time to respond to everything you have addressed there, but I do firstly note your concern in particular regarding capital gains tax. Until recently, this was payable at an effective rate of only 10% on the capital gain when disposing of shares and other business assets which was, as you may be aware, highly controversial in relation to private equity deals last year. Thus Darling introduced the flat rate of 18%, irrespective of how long any business assets were owned for or the magnitude of any gain made, and so has been massively opposed by the CBI as a result. I think there is scope here to introduce a progressive system - I would agree that it is wrong that private equity partners who can make millions on exit can pay tax at a lower rate than the lowest paid workers in this country. However, it should not be increased to the extent that it would make the UK economy uncompetitive and unattractive to such firms as they bring in a huge amount of revenue to HMRC. It does seem strange, though, that a lower tax rate cannot be reintroduced for lower levels of gains (in absolute terms) and then progressively increase it to a top rate of up to, say, 35%.

I think the main point I was trying to make in my previous post is that if companies do not consider the UK to have a favourable tax regime in which to do business, many will leave and some have already left. The examples of The Times or The Sun are perhaps exceptions to the general rule, which would also apply to a number of other companies in the UK - it's not as if slapping a reasonable windfall tax on BA's profits would make it leave! However, certain companies are geographically mobile in nature (e.g. WPP) and so there is a real possibility that a substantial proportion would consider leaving were it not for a more competitive tax system.


[ Parent ]

Re: Why we must increase tax on the rich (#23)

by sgthowie on Sat Jun 21, 2008 at 04:21:05 AM GMT

What George08 has refused to address here is what are the outcomes of the economy we live in?  In the 80's Thatcher fed us the nonsense that we needed to go through the transition we did to make us all richer and more competitive (whatever that is).  But what actually happened to the people living in the country from the free market experiment? 

If I lived in 1979 and found myself unemployed my benefits would be around 110 a week instead of 60 because benefits were tied to earnings.  If I lived in 1979 and I was a pensioner I would receive 140 a week state pension instead of 90 because the pension was tied to earnings.  If I lived in 1979 13% of my fellow men and women would live in poverty as opposed to around 25%now.  If I lived in 1979 there was an oversupply of dentists instead of suffering pain from gum disease like I do now..  If I lived in 1979 the proportion of GDP paid out in wages was 10% higher and the average length of the working week significantly lower.  So who on earth is benefitting from this fantastic economic environment we have now?  I'm afraid George08 you are deluded and probably conditioned from the Tory media, business and advertisers. 

As for the assumption that it is investors that also contribute to the wealth....  As Thatcher (your likely hero) said no, no, no.  Investors need working people to create the wealth for their investments.  If working people chose to take control of a company e.g. as a worker co-op they could democratically decide who deserved what return from the wealth they produced.   The investors I'm afraid would acknowledged that in the long term would have contributed very little to the wealth of the company.   It is working people that create the wealth and could equally collectively gain access to capital themselves as any private 'investor'.

As for Branson (one person) sacking his workforce (tens of thousands).  Well it is nice to know you believe in the rights of the vast majority over the very tiny minority!!  Well if he did that what happen if the new people he employed chose to watch cricket also.  What if the people he sacked took claims to employment tribunal.  The point being that companies like John Lewis are in the ownership of the workforce and don't and can elect their board democratically rather that Dickie Branston who fought constantly against trade union recognition and asked his airline staff to leave the company if they thought of striking for better pay and conditions despite the Labour government making it illegal to sack staff who voted for strike action.

At the end of the day capitalism is fundamentally flawed.  The reason the Norweigian economy is so wealthy is because the oil revenues go back to the people because it is nationalised instead of private shareholders deciding it should be paid in dividends.  Chavez is mounting real social progress in Venezuala through a system of democratic public ownership and co-partnership enabling working people creating the wealth to have a stake in what they produce.  Democracy seems ok until it turns to industrial democracy and that threatens the interests of the shareholders and it must be stopped.

A fantastic debate here - lets continue it.... 




[ Parent ]

Re: Why we must increase tax on the rich (#24)

by George08 on Sat Jun 21, 2008 at 10:50:00 AM GMT

sgthwoie, I would like to continue this debate and I would like to begin by respectfully disagreeing with you that capitalism is 'fundamentally flawed'. If you wish to continue the debate, then may I request that you show more courtesy and acknowledge that I hold a point of view which may be different to yours, rather than calling me 'deluded'. That to me simply speaks of prejudice and dogmatism rather than engaging in rational argument, especially since the electorate of this country has voted for parties that support capitalism for the last seven general elections and have rejected socialism. As a caveat, I will confess now that I am actually a Tory (probably no surprise to you there), but got bored blogging on ConservativeHome and so thought I might try to get involved in some more meaningful (if somewhat more contentious) debates here, without wanting to be rude or offensive to any of the members.

You sure do paint a rosy picture of 1979! What you are omitting is the Winter of Disconent, of which I am sure you aware, chronic industrial unrest and irresponsible trade unions, deplorably high taxation, nationalised industries operating at a loss (only remaining in existence because they were propped up by the taxpayer), and terrible stagflation. As to some of your specific points - how do you define 'poverty'? Why is an oversupply of dentists good if there are too many (I am sorry to hear about your gum disease, however). Why is it a good thing if the working week was shorter? I and many others work very long working weeks without complaint. Some of these are matters of personal value, not objective assertions about what is 'good'.

As for the antidote to this - I admit I support much of what Thatcher did although I am not the sort of person to say that everything she did was fantastic or fair - e.g. I think the poll tax was a huge mistake and definitely unjust. I also support several New Labour measures, e.g. the minimum wage and working tax credits, so I am not a hardline Thatcherite just for your knowledge.

As to investors and employees again: many employees already do own parts of companies through employee share schemes. Therefore they already participate in the profits of their companies. I strongly support such schemes and is ironic that this is, in some ways, more Marxist than any socialist government has ever been, since it is the workers, not the state, who own the means of production. Ownership in socialism is simply a shift from private ownership of capital by millions of individuals to the state, which is there supposedly for the 'common good'.

Regarding Branson and his employees - this begs the question that if you think they should have a 'right' to work, why should they not also meet their obligations and responsibilities to his company? In my view, you cannot have a 'right' without first meeting an obligation. It amazed me that in the 1979 Labour Manifesto it stated that 'it is a basic human right for everyone to have a good job'. In my view a good job has to be earned - you have to first meet the obligations it entails, rather than it being a matter of right. True human rights should be more narrowly construed, limited to basic freedoms such as speech, liberty of the person and freedom from torture. If his employees were to go to an employment tribunal, which they would be fully entitled to do, they probably wouldn't get very far as it is likely that not turning up to work would be construed as a fair reason for dismissal and would in any case be a breach of their employment contracts.

What I think ultimately matters in relation to whether you think an economic system is 'flawed' or not is what your values are - whether you value equality of outcome amongst citizens of a state to be more important than freedom and personal responsibility. I am a Tory because I believe in freedom and personal autonomy (not in the leftist 'positive' sense, or 'real freedom' a la Marx), self reliance, personal responsibility and aspiration and enterprise. Though I do have some sympathy with the values of the Labour party I do not regard state imposition of economic equality as being a sensible or just objective: however, I do believe the role of the welfare state, which I strongly support, is to provide everyone with a basic level of care - a safety net if you like (but not a lifestyle choice or means of social engineering), above which everyone else should be entitled to reach as far as their aspirations and abilities take them. Therefore, in my view, socialism is ultimately flawed because  I consider it ultimately tends towards political oppression whilst also disregarding the fundamental economic forces which made this country rich in the first place.


[ Parent ]

Re: Why we must increase tax on the rich (#25)

by jkitleft on Sat Jun 21, 2008 at 07:29:38 PM GMT

I may be wrong, but I'm guessing, like me, you didn't grow up in the '70's era. You are one of Thatcher's children.

In Polly Toynbee's excellent book 'Hard Work', she mentioned that many businessmen seemed to think that you could either have capitalism or communism. The most successful countries in the world, are the Scandanavian countries which have liberalised economies but strong welfare states, and regulation of businesses, as well as strong trade unions. This seems to be the right model.


There are many types of socialism, just as there are many types of capitalism. I prefer it when they intertwine. I don't mind if a businessman makes money, but he should pay his fair due. I believe inherently, that while you can't centralise every part of someone's life, the rich do have a responsibility for the poor. In that sense, I am like many in Europe, a social democrat, and it is social democracy, which has provided the model for the most successful countries in terms of public services, and standards of living.


[ Parent ]

Re: Why we must increase tax on the rich (#28)

by sgthowie on Sun Jun 22, 2008 at 10:57:02 PM GMT

Hi George08,

Welcome to Labourhome then.  I might post on Tory home myself and see how well I go down!! 

Apologies for my slightly rude reply.  It was posted after a few too many down the local with me on a putting the world to rights frame of mind..


Back to your specific points.  Parties supporting capitalism for the last seven general elections.  Well the total humiliation of the Tories in 97 was as much to the country wanting a change of direction away from unregulated capitalism in the form it was in.  Even more so in my opinion than the fact that Labour had changed.  Thatcher also only ever got 42% of the vote.  Labour was cost dozens of seats in the 80's by the right wing of the party forming the alliance with the Liberals.  If, on top of that, you have 80% plus of the media supporting one party it can held persuade people that the current economic system is so fantastic when it clearly is not. 

As for 79, thanks first for being in solidarity with me during my period of gum disease (more painful than one could ever imagine).  You are right about the performance of the nationalised industries in some ways.  However, if Atlee had actually put them in the hands of both the people who worked for those industries and have consumer representatives on the board also they could have been an astounding success.  Instead, the board was appointed by faceless beaurocrats so they became remote from them.  Privatisation was not the solution but democracy was. 


As for poverty, there were more than half as few people in poverty according to government statistics.  There have been indicators used since the early 60's.  Dentists - well the point I was trying to make was that you could get a dentist straightaway then.  Now you often cannot get a dentist meaning you remain in pain or have to sacrifice an arm and a leg to get your teeth (or gums) sorted at a private dental practice. 


A shorter working week is a good thing.  In France, the 35 hour working week didn't preclude doing longer but overtime had to be paid.  Giving the vast majority the choice of choosing to work less and spend this precious human life with family, friends and doing other things that aren't categorised as paid employemnt is a good thing.  Not having that choice because an employer decrees so lessons a persons freedom. 


And also income tax.  Well, as we all know if you are rich and a large corporation you often don't pay tax.  The Tax Justice Network calculate that between 75 and 125 billion pounds a year is avoided by large multinationals and the mega wealthy in the UK.  Who are the real benefit claimants then?  Is it the person who frauds 100 quid a week in tax credits or the big companies and wealthy.  It is all a matter of proportionality.  But becauase the media is owned by the wealthy they attack the working class whilst letting the large companies and wealthy off!!  Understandle really.


And before we here how the creativity, innovation and investment of these corporations gives them the right to avoid tax, as I stated before, they are dependant on their workforce to create those billions of pounds of profits for them.  Unfortunately, despite employee share ownership schemes the majority of the means of production is still owned by a small minority.


As you can see here, my views are quite Bennite George08.  Interesting debate - let's keep it going.



[ Parent ]

Re: Why we must increase tax on the rich (#29)

by otware on Mon Jun 23, 2008 at 03:59:07 AM GMT

Investors do not create wealth. It's total rubbish. Say we have a hypothetical company owning a factory tham makes tin cans. It's the workers who make the cans, not the shareholders. If it wasn't for the workers there would be no wealth. If the shareholders weren't there then the company could still continue as a co-op for example. This idea that you need an elite who simply manipulate money and contribute jack shit to society is totally stupid.


[ Parent ]

Re: Why we must increase tax on the rich (#30)

by George08 on Mon Jun 23, 2008 at 05:07:48 PM GMT

And who is it then who finances the purchase of the factory and pays for the stock/raw materials (e.g. the can components) in the first place? Not the workers, but the shareholders (assuming the business entity is a company). A business needs working capital and pre-existing assets to be able to exist and function properly before the workers start working, and so the notion that the company would be able to continue without the shareholders' financial input is simply wrong. It is the shareholders who provide the initial pool of capital which the workers then process through the direction of the board and other directors. Since the shareholders take the risk with the venture, they receive proportionately greater returns (or may make a corresponding greater loss) than the workers (who take virtually zero risk, other than the risk of being made redundant in a volatile or turbulent market).

In smaller companies, however, the above analysis between workers and shareholders is probably a false dichotomy since the positions of directors, workers and shareholders are likely to be held by the same group of people.


[ Parent ]

Re: Why we must increase tax on the rich t (#26)

by CitizenAndreas on Sun Jun 22, 2008 at 05:09:17 PM GMT

There's some good debate going on here, is there any chance a coupleof people could recommend it before it drops off the bottom?


Re: Why we must increase tax on the rich t (#27)

by jkitleft on Sun Jun 22, 2008 at 05:34:16 PM GMT

Just did.

I heard Polly Toynbee talking about public services the other day. She was saying that she found it odd that people thought you could repair society's ills, namely inequality, through public services alone.

She couldn't be more right. If you tackle inequality in our society, then the public services would immedietly improve. Inequality breeds inequality in our public services, and by tackling inequality outside of services, you would end the postcode lotteries inside of the NHS and our education systems.

But to improve them further, we have to people more say in public services. If anyone has any suggestions as to how we can improve consumer's rights for council house tenants, patients, the elderly in care, parents of schoolchildren, and consumer's rights for local amenities, services, and in the utilities, I would like to hear them.


[ Parent ]

Re: Why we must increase tax on the rich t (#31)

by madasafish on Mon Jun 23, 2008 at 09:09:09 PM GMT

I lived and worked through the Dennis Healey years. Anyone who suggests in any way that Healey did anything but ruin the economy is just an unreconstructed Marxist. (and I use Marxist advisedly).

Ans we all know how successful Marxism is today: like it exists in N Korea...

Tax and spend is a failed policy: suggesting paying energy bills directly for the poor is just ignorance of human behaviour: energy conservation of course has no meaning...and giving money to people to do nothing achieves in the long term... nothing.


People are fed up with taxes: and an authoritarian approach saying the central government knows best. The only thing it is best at is wasting taxpayers money.






[ Parent ]

Re: Why we must increase tax on the rich t (#32)

by e10rifles on Mon Jun 23, 2008 at 10:58:52 PM GMT

"Anyone who suggests in any way that Healey did anything but ruin the economy is just an unreconstructed Marxist."

Top notch satire. Tea all over my keyboard. Well done.

 


[ Parent ]

Re: Why we must increase tax on the rich t (#33)

by jkitleft on Tue Jun 24, 2008 at 01:23:08 AM GMT

People like you have no idea what Marxist means. Seriously, in North Korea, the vast, vast differences between Stalinism and the original words of Marx are notable.


You also seem to believe that those who are poorer are.....well, no one likes to say it, but it's their own fault. Please tell this to the cleaners who wake up at 4 to go on a night bus, and work substantially longer hours, for the minimum wage, than the office workers who they can only dream of being.


The only piece of moral fabric that was allowing Thatcherism to hang on to it, was that lassez-faire liberalisation of the economy increases social mobility. Any charity concerned about poverty, particuarly the umbrella organisation End Child Poverty can tell you this is a lie.


Contrast this with Sweden which has combined economic freedow with a strong welfare state. Its higher taxes increase social mobility, primarily through its childcare system.


There has been a lie perpetuated by the media, that taxes are just funding the black holes of our education systems and NHS. Why is it then, that just £5 billion sent waiting lists crashing? There is a huge perception gap: polls conducted will tell you that people say that their local hospital and school have improved. The polls will say that crime is low. But ask them about the national situation, and confidence crashes.


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Re: Why we must increase tax on the rich (#36)

by e10rifles on Tue Jun 24, 2008 at 10:58:19 AM GMT

Boost prosperity? Are we not already the fifth largest economy in the world? Don't you think there's plenty to go round already?


Re: Why we must increase tax on the rich (#38)

by e10rifles on Tue Jun 24, 2008 at 02:36:05 PM GMT



Perhaps you can read my posting before responding. I did not suggest that "everything is fine" because the British economy is the fifth biggest in the world.

Try again.


[ Parent ]

Re: Why we must increase tax (#39)

by e10rifles on Tue Jun 24, 2008 at 02:38:30 PM GMT

This is the best article on the subject I have read from an MP in a while:

http://blogs.guardian.co.uk/politics/2008/06/labour_biggest_mess_since_our.html


Re: Why we must increase tax (#41)

by jkitleft on Tue Jun 24, 2008 at 05:31:07 PM GMT

It's worrying when I agree with a lot of Austin Mitchell says...


[ Parent ]

Re: Why we must increase tax (#44)

by otware on Thu Jun 26, 2008 at 03:25:43 PM GMT

Yeah, the way in which Labour politics has shifted so far to the right that a Gaitskellite is considered left wing is really shocking.


[ Parent ]

Impossible policy (#42)

by madasafish on Tue Jun 24, 2008 at 09:48:53 PM GMT

Any suggestion that this Government - or any other - can end child poverty through taxation is sheer utter lunacy. You change child poverty by empowering the poor through work.
Of course we have record numbers on state benefits and a system which actively discourages social and job mobility..as current statistics prove... and to say it is all Thatcher's fault nearly 18 years after she left power is a sign of the lack of intellectual vigour of such arguments.


You can be sure that by 2010 Child Poverty will be much worse than it is now... unemployment up, living standards down etc. (and we have "abolished Tory boom and bust"  )

And that is without extra taxation.

By all means increase taxes... who will vote for such a policy? Answer: no-one in work.

Politics is the art of the possible. A policy based on increased taxation will mean more vote losses amongst anyone who pays tax.

Another 20 year period in Oppostion? Tax the rich till the pips squeek?

Economic illiteracy...


Re: Impossible policy (#43)

by jkitleft on Wed Jun 25, 2008 at 04:18:27 PM GMT

Of course people need to work, that's why we introduced a fairly successful ALMP, rather than the 'on yer bike' approach. Most people say they want to work, so actually, yes, taxation does get alot of people into work: look at Denmark. The only way they can sustain their lassex-fair labour market regulations, is through heavy taxation to maintain low unemployment levels of 1.8%.

Work is not enough, so the Tories find other excuses for poverty. Family breakdown, drugs, and laziness. But the married builder and cleaner aren't poor because they don't work hard enough, or because they have rows, or beacuse they're taking heroin; they're poorer because of low wages. And Conservatives can find no intellectual argument to prove that it is laziness, rather than £5.52 an hour, that keeps someone poor.

Excuse me, record numers? The amount of benefit claimants has decreased by nearly a million in the last decade. The problem with your statement that Thatcher left 18 years ago, is that it underlines conservative people's love for short-term solutions. You don't seem to see how Thatcherism has effected us in the long term. Selling gold cheaply hasn't caused this economic crisis.

The city, the stockbrokers, and the banks are to blame. Most non-Ayn Rand loving economists will tell you that. They're are mini-Enron style stories about how stockbrokers are pushing up stock prices in grossly unethical manners. Northern Rock collapsed, not because of the treasury, but because we have thrown banking regulations on the bonfire. It was ran by a guy who thinks that the Food Standards Agency should be abolished.

We have also thrown consumers rights and mortgage regulations, as well as other financial regulations on the bonfire. In America, hard-right congressmen are calling for the kind of deregulation that we have here.


We do need to redistribute money to the poorer. It is far more economically literate than tax cuts for the rich. If you redistribute money to the poorer, and middle-classes, everybody wins: the poorer and middle-classes will spend the money in the local economy, which is recycled many times over, and the rich will benefit from the economic boom. If you give tax cuts to the rich, they will spend it in specific markets, such as for a particular car or boat.


Middle England is increasingly angry that they pay a 33% basic rate in tax through income and NI contributions, but that a private equity boss pays 18% on capital gains after disguising it as his income. I want to see tax hikes on the rich, not tax hikes on the middle and working classes. It is not punishing the rich, it is simply taxing them their fair due.

I want to combine a liberalised economy with a strong welfare state and social democratic ideals. Look at Denmark, they have a strong welfare policy combined with relaxed labor laws. Sweden combines aspiration, with quality services in areas like childcare, which shows how taxation will greatly increase social mobility. The problem with Thatcherism, is that it was completely unregulated. The right-to-buy was a fine policy, but it was legislated to stop the nearly 1 million council houses from being replaced (that haven't been replaced). So soon, property developers were swooping in on council houses, driving up the cost of surrounding land, and combined with the slashing of capital gains and the biggest deregulation in the world of mortgage markets, has led to many not being able to buy houses today. And my co-operative ideals tell me that the privatisations of rail, and water and other services should have been promoting alternative forms of common ownership i.e. co-operatives in telecommunications and workers' and consumers' interest companies in water, gas and electricity.


[ Parent ]

Re: Impossible policy (#45)

by fluffymike on Fri Jun 27, 2008 at 11:00:16 AM GMT

The problem I have with this is the suggestion that pensioners and families are the only ones who need help with their fuel bills.

This whole concept of lumping 'pensioners' together in one huge bracket and then discussing them as if they were an amorphous whole is most insulting.

To be giving 200 winter fuel allowance for example, or a free tv licence, to a pensioner with a miilion pound a year income due to directorship pensions or whatever is futile.

Quite simply the help should be focussed at ALL those who are struggling regardless of age or marital / children status.

The way to do this is raising the level at which income tax is paid, increasing higher rates on higher earners, and removing the cap on NI contributions.

Also, taking into public service the essential products such as fuel water and transport services to enable a proper approach to fuel pricing which is impossible under private ownership when the sole motive is to make as much money as possible and provide the minimum service levels beyond which the profit margins start to fall.


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Re: Impossible policy (#46)

by Rathfelder on Sun Jun 29, 2008 at 07:30:46 PM GMT

How is it that these arguments about incentives only apply to the rich?  For poor people, for example, people without children on modest incomes, they lose 89.7% of each extra pound they earn becuase they lose Housing benefit at the same time as having to pay tax and NI.  And these are the sort of people who do overtime to boost their income.  


[ Parent ]

Why we must increase tax on the rich to give to the poorest! | 43 comments (43 topical)