[Politics] Gary's Economics

[Hugo Rune]

There is undeniably a need for wealth distribution.
in 1977 the average employee earnt approximately 4% of the wage of a CEO, today it is closer to 0.5%.

A pedant would suggest that if the average FTSE 100 CEO salary is £4.2m and the FTE (full time equivalent) of the living wage is £23,492 gross, that’s 0.56%.

But the £4.2m is not a reasonable average of CEO salaries (median or mode would be better than the mean) in the UK. Similar to the lowest FTE living wage not being a reasonable average for employees in UK. Of course, many people are in part time employment which I think skews the figures

That said, I think your point still stands. The gap between the rich and poor has grown massively since 1977.

 

[Simster]

My post was more about (and I didn't explain it very well) why there seems to be a suggestion that we shouldn't complain about wage stagnation and the cost of living as we can just become entrepreneurs. This idea seems to be quite prominent among those criticising Gary's ideas.

So my question was why have we created a system that rewards entrepreneurs more than other groups of people? What about those of us who don't want to be entrepreneurs? Shouldn't we be able to live a comfortable life, own a home, go on holiday occasionally, help our kids buy a house, etc., by working hard at our preferred jobs and doing our preferred things?

To be clear I was in no way saying that we shouldn't reward entrepreneurs, they are brilliant people who drive us forward and create employment for others. I just noticed that in this discussion the only answer to the question: How can I achieve a decent life style? Is hustle hustle and become an entrepreneur.

I suggest their should be more avenues open.

Well said BadFish, although your original post didn't need explaining to most of us - the gist of what you were saying was quite clear.

You have to remember that ds-burnley is a red wall gammony Brexit-apologist, so when he says things like employer's NICs is a daft idea, please realise that he is at the same time still seemingly perfectly OK with the 3-4% annual economic stagnation caused by Brexit.

 

[Uh_huh_him]

A pendant would suggest that if the average FTSE 100 CEO salary is £4.2m and the FTE (full time equivalent) of the living wage is £23,492 gross, that’s 0.56%.

But the £4.2m is not a reasonable average of CEO salaries (median or mode would be better than the mean) in the UK. Similar to the lowest FTE living wage not being a reasonable average for employees in UK. Of course, many people are in part time employment which I think skews the figures

That said, I think your point still stands. The gap between the rich and poor has grown massively since 1977.

Thanks

GS is shining a light on the fact that after a certain point, the only thing that the super rich can spend their money on is assets, which just increases their wealth.
My understanding is that any income declared from these assets will be taxed at 19%.
Whereas income from wages would be taxed at 28% - 47%.

With the current model, the government is getting less revenue than it needs.
I don't know what that mechanism is to smooth this out, but it needs to be addressed.

 

[peterward]

The simplest way to stop entrepreneurs getting so very, very rich would be to tax employment. If there was some way to ensure that no-one was allowed to gain from the employment of perhaps 10 other people, then no-one could get rich. By and large, people get rich via employment of many, many people.

That's a simplistic and naive view imho.

This country and a lot of our taxation is built in small business entrepreneurialism. Are you really suggesting someone starts a business, takes all the risk of cashflow/bankruptcy etc but is insta curtailed from any upside to that considerable risk?

Or if said businessman has a good product/market and ability to expand, they shouldn't because of a punitive tax on creating jobs and growing business?

I'd argue the minimum wage could be increased, wealth taxes for the very well off etc, but you don't want to stifle the average guy/girl on the street creating good local business's that employ local people and generate tax take.

 

[beorhthelm]

Thanks

GS is shining a light on the fact that after a certain point, the only thing that the super rich can spend their money on is assets, which just increases their wealth.
My understanding is that any income declared from these assets will be taxed at 19%.
Whereas income from wages would be taxed at 28% - 47%.

With the current model, the government is getting less revenue than it needs.
I don't know what that mechanism is to smooth this out, but it needs to be addressed.

again to correct this error, all income is taxed the same as wages. you're probably refering to capital gains, which was 19% now 24%, tax applied when selling assets. no sale no taxes. Gary wants to increase the income taxes and tax asset values without a sale.

 

[dsr-burnley]

Well said BadFish, although your original post didn't need explaining to most of us - the gist of what you were saying was quite clear.

You have to remember that ds-burnley is a red wall Brexit-apologist, so when he says things like employer's NICs is a daft idea, please realise that he is at the same time still seemingly perfectly OK with the 3-4% annual economic stagnation caused by Brexit.

No, he is using the reductio ad absurdam argument that perhaps was a little too subtle.

Yes, I understand that if we had remained in the EU we would now be 20% richer than we now are and would be absolutely streaking ahead, financially, of all the EU member states. And I am happy with it, if only because it clearly isn't true.

The biggest issue I have with employer's NIC is that it's a tax only on private companies and hence on people who work in the private sector. Governments don't pay it, or at least, they pay it to themselves, hence the rise in rates last week affects only the wealth creators, not government employees. It skews the market. Perhaps it might be better to lump NIC and income tax together (which would also make it payable on pensions and interest and dividends) and make it more transparent how much of your income the government is taking?

 

[dsr-burnley]

That's a simplistic and naive view imho.

This country and a lot of our taxation is built in small business entrepreneurialism. Are you really suggesting someone starts a business, takes all the risk of cashflow/bankruptcy etc but is insta curtailed from any upside to that considerable risk?

Or if said businessman has a good product/market and ability to expand, they shouldn't because of a punitive tax on creating jobs and growing business?

I'd argue the minimum wage could be increased, wealth taxes for the very well off etc, but you don't want to stifle the average guy/girl on the street creating good local business's that employ local people and generate tax take.

No, I was trying (and evidently failing) to say something obviously nonsensical to draw attention to what I believed was a flaw in someone else's argument. For the record, I do not like employer's NIC at all because it is a tax aimed at stopping companies from employing people.

 

[BadFish]

No, he is using the reductio ad absurdam argument that perhaps was a little too subtle.

No, no I wasn't. I have explained the point I was making twice now and you seemingly have failed to grasp it.

Keep digging if you like but don't attribute your nonsense to my post. Unless of course you can answer in a way that demonstrates an acknowledgement and understanding of my point.

fwiw I can see how you can have been confused by my first post on this subject but to continue after I have clarified my position is disengenuous.

 

[Uh_huh_him]

again to correct this error, all income is taxed the same as wages. you're probably refering to capital gains, which was 19% now 24%, tax applied when selling assets. no sale no taxes. Gary wants to increase the income taxes and tax asset values without a sale.

I believe that in truth Dividends attract a slightly lower tax rate than wages do, and there is no NIC attributable to them either.
There doesn't seem to be any logical reason for that, as it is income.

I can see that a wealth tax is much more complicated than it appears at the outset.
However there is a need to address the imbalance.
Every other sector has been bled dry over the past 20 years and the gap between rich and poor has increased significantly.

The focus needs to be on generating revenue from those that can afford it the most.

 

[Uh_huh_him]

No, I was trying (and evidently failing) to say something obviously nonsensical to draw attention to what I believed was a flaw in someone else's argument. For the record, I do not like employer's NIC at all because it is a tax aimed at stopping companies from employing people.

Well that's just silly, isn't it?

I agree that the recent rate increases are absurd, but employers paying insurance for their employees is a sensible thing to do.
As is pension contributions.

 

[Uh_huh_him]

No, he is using the reductio ad absurdam argument that perhaps was a little too subtle.

Yes, I understand that if we had remained in the EU we would now be 20% richer than we now are and would be absolutely streaking ahead, financially, of all the EU member states. And I am happy with it, if only because it clearly isn't true.

The biggest issue I have with employer's NIC is that it's a tax only on private companies and hence on people who work in the private sector. Governments don't pay it, or at least, they pay it to themselves, hence the rise in rates last week affects only the wealth creators, not government employees. It skews the market. Perhaps it might be better to lump NIC and income tax together (which would also make it payable on pensions and interest and dividends) and make it more transparent how much of your income the government is taking?

It really doesn't work that way though does it?
Government departments will be tasked with reducing their budgets, which will have increased because of NIC.

The real impact will be to consumers, who will see a sharp rise in prices as private companies are "forced" to maintain their margins.

 

[dsr-burnley]

No, no I wasn't. I have explained the point I was making twice now and you seemingly have failed to grasp it.

Keep digging if you like but don't attribute your nonsense to my post. Unless of course you can answer in a way that demonstrates an acknowledgement and understanding of my point.

fwiw I can see how you can have been confused by my first post on this subject but to continue after I have clarified my position is disengenuous.

None of that particular post was directed at you. It just shows how difficult it is to pick up nuances of meaning on t'internet. The point was that Simster said "he is ..." before going on to a pointless minor insult about what he considers to be my political views, and I was saying "no, he is .." referring to myself. I apologise that you took the "he" to be you, because it wasn't.

 

[Simster]

No, he is using the reductio ad absurdam argument that perhaps was a little too subtle.

Yes, I understand that if we had remained in the EU we would now be 20% richer than we now are and would be absolutely streaking ahead, financially, of all the EU member states. And I am happy with it, if only because it clearly isn't true.

The biggest issue I have with employer's NIC is that it's a tax only on private companies and hence on people who work in the private sector. Governments don't pay it, or at least, they pay it to themselves, hence the rise in rates last week affects only the wealth creators, not government employees. It skews the market. Perhaps it might be better to lump NIC and income tax together (which would also make it payable on pensions and interest and dividends) and make it more transparent how much of your income the government is taking?

Well, that puts you at odds with the UK government's Office of Budget Responsibility in 2021, which calculated that Brexit would cost 4% of GDP per annum over the long term. Maybe you'd accept the research from the Campaign for European Reform, which found that UK goods trade was 11.2% lower in September 2021 than had been forecast in March 2016 before the vote. Either way, it's needlessly cost a fortune and your blank refusal to acknowledge that only serves to undermine your opinion on other economic matters - in this case, your frankly daft assertion that Employers NIC is silly.

 

[BadFish]

We have an election here soon and I am so pleased to hear someone talking about taxing the billionaires and the super rich.

Tax Big Corporations & Billionaires | The Australian Greens

greens.org.au

 

[chickens]

I caught up with this video today, successfully and irrefutably debunking the “you can’t tax the rich, they’ll move away” nonsense.

You simply move from a residence based tax system to an asset ownership based tax system. Simples.

 

[Rambo]

Just finished his trading game book. I cant help but feel that he is a bit of a bell end.

 

[beorhthelm]

I caught up with this video today, successfully and irrefutably debunking the “you can’t tax the rich, they’ll move away” nonsense.

You simply move from a residence based tax system to an asset ownership based tax system. Simples.

he's good and confusing and fooling you into thinking who owns assets, mixes wealth and income, keeps on saying individuals own everything and we pay them, makes an emotive call to arms. this ignores the largest group of ownership is ultimately owned by pensions and investment funds, which the middle classes own. yes there are individual with large asset ownership too, they are a minority. also ignores the revenue from assets is taxed. so does he propose taxing the value of the assets held by those investment funds? not really, doesn't mention the value, because of the focus on individuals and incomes. did he suggest how to apply tax on individuals? no, because it's difficult.

 

[Doc Lynam]

he's good and confusing and fooling you into thinking who owns assets, mixes wealth and income, keeps on saying individuals own everything and we pay them, makes an emotive call to arms. this ignores the largest group of ownership is ultimately owned by pensions and investment funds, which the middle classes own. yes there are individual with large asset ownership too, they are a minority. also ignores the revenue from assets is taxed. so does he propose taxing the value of the assets held by those investment funds? not really, doesn't mention the value, because of the focus on individuals and incomes. did he suggest how to apply tax on individuals? no, because it's difficult.

But they own a disproportionate amount, that’s the issue.

 

[Machiavelli]

But they own a disproportionate amount, that’s the issue.

Not according to @beorhthelm who likes the neoliberal financialised globalisation that we've been subjected to over the past 45 years, and will either deny the scale of inequalities (and poverty) opened up or will place obstacles in front of any attempt to tackle it (not that all proposed solutions are optimal).
I take a different view.

 

[beorhthelm]

But they own a disproportionate amount, that’s the issue.

possibly. what is the issue, that there is too much wealth, or that it's concentrated, or who owns it? because in my view it doesn't really matter who owns the assets, i'll still have to pay the electricity bill who ever owns the powerplant and grid infrastrucutre, i'll still use the restaurant or pub regardless who owns the building or makes some profit from that business. Stevenson is continuously equats all wealth and assets to "the rich", which is false. if his argument is based on false premise, how can the solution deliver a meaningful change?