Thursday, April 23, 2009

tax the rich

there's some serious lies going on to protect the rich - during the budget analysis yesterday, several people wih unstated but obvious vested interested said that there's no point in taxing the rich as you don't get much money, and you should raise the base rate of tax as that way you get much more.

are they completely stupid?

do these people actually believe that we can't look at graphs of wealth and see quite plainly that most of the wealth in the country is concentrated in a small number of hands (famously 7:84 is a ratio that has hardly changed in centuries)

the fact is that if you want more tax revenue, then you can get more of it without causing tax avoidance by taxing the great unwashed PAYE public, but the potential revenue is in the rich

what is more, during a world-wide recession, they have nowhere to run, especially with Obama et al closing down the havens.

no - i am sick of this - Labour?Darling did right to raise the tax tier to 50% above 150k - but as the liberals pointed out (especially the increasingly useful Vince Cable) he could haev done more (e.g. progressibvely higher tax on unearned income and earned income rising to (say) 90% at 1M per annum.

some people say this gets rid of incentives. well if people only do a good job because of money that is sad but there are two big errors in this statement anyhow
1. the highest paid people (directors, bankers) didn't do a good job, so its wrong
2. professionals (doctors, teachers, farmers, carers) do a good job despite not having great pay, so its wrong.

no, it's wrong and its a lie.
taxing the rich is fair and works - we just havnt tried it often and long enough.

(as per other postings, more level socieities are better for everyone anyway.)

I'm not sure about being a Leveller, but I'm sure starting to head that way.

update:- the nice thing about being a blog owner is I can change it. SO lets look at the evidence that increasing taxes reduces the wealth of the nation shall we. Ok, so tax burdens in much of europe over the last 100 years went from 0 for the poor to on the order of 20% and from 0 or close to for the rich to in the range 40-90% depending where you look. Did wealth decrease? did it?

so in the countries where state provision of services is high (lets say scandinavia)
how do they fare in average quality of life? how well does that correlate.

Maybe we need to ignore the USA as a pathologically weird part of the world. perhaps we need to ignore the frightened squeals of people who are wrong.
oh, no, wait, the US - now quality of life in Mass or Cal?

let me re-cite
the spirit level
which contains a wealth of evidence.
instead of ranting in a datafree way.

The history of tax might give some intersting indications about whether increasing the steepeness on the slope of progressive taxation (whether on income or on property or on goods and services) actually makes people move wealth elsewhere - it is fairly clear also that things have changed a LOT in the last 100 years - see the
HMRC's brief history in the uk
for a light read. US has similar figures - indeed, it seems to reflect the social moves from agricultural based population to an urban/industry or post-industry based one.

Certainly, raising a shed load of money purely by increasing slope of progressive tax on "earned" income is limited - but note there are many sources of income and repositories of wealth (and of unfairness) - Countries have redistributed wealth in lots of ways and I don't see a correlation with the sum total evaporating - of course you can get it wrong - that is irrelevant - we're arguing from a standpoint that the market model is bogus (always was - it just got lucky for a short time - gambler's streak) and its proponents are intellectually, morally, and probably sometimes economically bankrupt:)

lets move on...


WellingtonBoot said...

One would ordinarily assume at least a base level of economic competence even from a layman, yet you have managed to destroy any such notion.

Your barely concealed hatred of the rich arises from your fundamental nature: a public purse supported bureaucrat.

While the concentration of debt in the hands of the rich is indisputable, the effects of punitive 90% taxation upon the rich are more worrying. If a rich man's income is taken away, how can he afford to spend more, or employ more, or invest more?

The spread of wealth is most efficient by market means as opposed to government bureaucracy. When a rich man employs a cleaner, he directly supports the livelyhood of that person. When the government confiscates the income, it squanders it on quangos and public servants.

The punitive taxation of high income will not result in a lack of incentive. Rich men cannot simply wind down their operations, as they would have to build them back up in the future. Instead what will occur is a mass exodus to tax havens such as Switzerland and Dubai. Your starry-eyed notion that Obama will somehow destroy tax havens in-toto is misguided at best, and infantile fanboy behaviour at worst.

What Darling has done then, is hammer the final nail into the coffin of prosperity in the UK. From now on, this country will be a hollow shell devoid of entrepreneurs, and full of incompetents upon the dole.

What is really needed is a return to the spirit of Thatcher... a brutal and almost sociopathic attitude towards public spending. Expenditure without examination of its effects is rife stupidity- and is the behaviour that Labour have wantonly engaged in for the past decade.

Tax the rich? Heavens... Cambridge clearly isn't what it used to be.

clog said...

wellingtonboot seems to be unaware that keynes was in cambridge.

i'd quite like to comment about competence but in the area of economics it is clear that some deluded people beliee that
"economic competence" isn't an oxymoron.

the reality is that the impoverished intellectual stuff asseerted by economists as "models" have no predictive value, so I am afraid your comment will be consigned to the dustbin of history, along with Thatcher (and Blair).

and finally, why are you
a) so afraid
b) so insulting
if you are
i) confident
that you are
ii) right?

eh? :-) :-) :-)

WellingtonBoot said...

Let's recap what I said:

"Cambridge clearly isn't what it used to be."

Now, the key inference here is that the quality of academics at Cambridge has diminished. Inexplicable, you respond by mentioning a Cambridge academic from... the past.
Need I juxtapose Keynes cf Crowcroft? ;)

If we do not utilize economic models or theories to study the field, then how can it be analysed? How can policy be written?

Your contemptuous attitude towards the subject of economics shows what informs your political beliefs: random guesswork and gut feelings.

You are by no means alone. Random guesswork and intuition is the manner in which most of the electoral roll make their decisions... and this is what I fear.

The undercurrent of fear in my voice is because I am a soon to be persecuted minority : the capitalist.

I'm confident that I'm right, but I'm equally confident that the majority of the general public, including you, will disregard it. If my comment is destined for the rubbish bin, then the future of this country will soon follow suit.

As for the insulting nature of the rhetoric I deploy... well, there's no logical reason for it. I just enjoy showing lefties the same amount of civility they show me every month under the Income Tax Deduction column of my salary slip.

As for you Mr Crowcroft, perhaps you ought to stick to pocket switched networks. If your economic policy were utilized all we would be left with is change in our pockets.

clog said...

this is a lovely discussion - but perhaps you are confused - I didn't write down a model - i could - there are some very nice behavoural economic models - unlike classic chicago economics (or keynes too by the wa) they actually fit reality, but they are, unfortunately, not so hot at predicting things except in a very general way - but they do predict thing that classical models fail to predict - there is a wealth of literature on this and the fine models that it produces but I cant be bothered to go write it down since it was already written down by many fine people -

if you (sir welliington boot) want to have a technical discussion, then please explain which particular market model you are referring to and to which government bureaucracy you are comparing it since there are many. Such handwavy generalisations smack of rank amateurism, which I enjoy. it is, after all, the lifeblood of blogs, as opposed to serious corridors of academie, which you seem to have mixed this up with...

by the way, you have some rather large emotional problems - words like "punitive", "hatred" "spirit" etc don't like someone who has a rational grasp of the essential game theory you seem to subscribe to (that so dismally actually fails completely to explain or predict market behaviours outside of the narrow non-free models run in semi-protectionist systems you seem to aspire to of the past.

I wonder what a chip n your shoulder you have about cambridge too - this is weird - i have a natsci degree from cambridge, but all my research work that i care about before the cute pocket switched net stuff (which is mostly james scott and christope diot and augustine chaintreau) was done at UCL by PhD students I happened to like to work with - UCL has some quite good economists too and statisticians

none of whom sunk to "proof by assertion" = perhaps you need
assertion therapy:)

what we need is a nash equilibirum at dawn.