So Nick Clegg is talking rubbish again.

[Slam62]

Don't remember a demand for cyclone based bag-less vacuum cleaners either, until someone created it. You can hardly buy the old fashioned sort now. Dyson would seem to be an entrepreneur to me too, and he created a market, and the demand in it.

So what happened to the demand for none cyclone bagged vacuums?

The big question though is how that demand has been funded.

 

[Woden]

So what happened to the demand for none cyclone bagged vacuums?

The big question though is how that demand has been funded.

It wasn't. The Dysons were magically created in surplus and the consumer somehow just had the money for it magically appear to pay for it. Thats how it works, right?

 

[estebanrey]

Don't remember a demand for cyclone based bag-less vacuum cleaners either, until someone created it. You can hardly buy the old fashioned sort now. Dyson would seem to be an entrepreneur to me too, and he created a market, and the demand in it.

But there was already a demand for vacuum cleaners, of course if you improve the design you will sell more, that's obvious but I wouldn't call that 'creating demand', I'd say it was taking more of an existing market by creating a better product. Now if the demand for vaccum cleaners in general went up because of Dyson you'd have a point.

By definition any new invention, the first TV set that went on sale, the first car, the first home computer etc could have been argued to 'create' demand as they genuinely created a new market (as opposed to manipulating an existing one like Apple or Dyson) but even then a hell of a lot of market research and testing has to be done to prove to your financial backers that your new invention will ultimately result in sales.

 

[kwerk]

Except when watching jeremy kyle you create extra demand for jeremy kyle thus boosting the ratings for the show, which then leads to the show being able to pay its producers and staff and also creates demand for the advertising slots inbetween the show as the ratings and people viewing the show are higher.

Growing apples dosent create demand it creates SUPPLY almost the opposite of demand as with excess supply prices fall and with excess demand prices rise due to the excess of want for a limited product inflation isn't a stealth tax because it affects everything the money isnt going to the government because of inflation the cost of providing state services also rises in equivalant factor thats what inflation is its an average measure of the rise or fall in price of the goods and services of a current economy.

Kwerk your economics is so poor it is not even worth considering any kind of debate.

So basically in this case the Jeremy Kyle show is a government make-work program. They might as well go down the park and dig holes and fill them back in again for all they add to the economy. There is no wealth being produced, if anything they are burning coal imports to make the electricity required to broadcast it. A net loss.

Where did I ever say there was excess supply with the apples? I said their was a surplus above what the farmer requires to live (food in the most basic scenario). The very definition of WEALTH. If everyone else in the town grew their own apples then we could talk about excess supplies, but let's assume there is one farmer in a town of hungry people.

That wealth gives the farmer PURCHASING POWER so he can exercise DEMAND. Without the wealth, something you can trade, there can be no demand. You can trade your labour picking apples. The farmer could demand labour and you would supply it. Supply meets the demand AFTER the wealth has been created. The farmer picks 100 apples and says he will pay you them if you pick the rest of the orchard. See how it works?

Then the farmer has those other apples to trade. In this case there is a 1 person market that demands horse shoes, paintings and blow jobs. Entrepreneurs recognize unexploited wealth (markets) and start businesses to meet the demands there.

Then competition comes in and we begin to discover the prices in that market. THAT is when we can talk about excess supply.

Those entrepreneurs earn wealth and new markets and jobs arise to meet their demands and so on.

 

[Irish_Tom]

I doubt accurate stats of that nature exist, however, as has earlier been stated a gross per annum income of £149,000 is enough to get you into the 1% club (as of the 07/08 tax year).

If you go on the basis that everybody in the 1% club is now in the 50% tax band (soon to be 45%) at that income level, it's likely that most of the people at that income level do not have the wherewithal to significantly offset their income tax unless they are small business owners, in which case there are a number of ways of offsetting your tax (for example, LLPs get a fair few benefits).

That being said, by that point, you're already losing your personal allowance anyway and have next to zero tax-free income.

Sure, there will be outliers - billionaires that skew the numbers - but I'd wager that the vast majority of people in that 1% are paying their fair share, not necessarily that the vast majority of the money in that particular bracket is going to HMRC (if that makes sense?). By way of an example, it's allegedly a commonplace practice for professional footballers to have their incomes paid to a holding company so that they offset significant tax liability. Depending on the structure of this company, they can then take the income as a loan (so zero tax, zero interest) which they never have to repay as they own the company and there are no shareholders to lose out. It's not as grossly simple as that, but it is the general gist of it.

I see what you're saying, but that's not quite what I was getting at.

I've found some figures on Wiki from 2004/05 (so quite out of date, but will hopefully explain my point a bit better):

Now it's a bit tricky comparing wealth figures with annual income figures, but it suggests that the top 50% of the population owns 93% of the wealth in the country — compare that to the top 50% of tax payers providing 89.2% of the tax revenue and it sounds a lot 'fairer'.

Equally, the top 1% of the population owns 21% of the wealth and the top 1% of tax payers provide 24.2% of the tax revenue.

Even if these figures are out dated or inaccurate, this is the kind of context that I feel is missing from the diagram posted by King Damager.

 

[Slam62]

this sort of data is all irrelevant, as we have a rapidly changing tax situation. (I'm not trying to be rude, you do say the specific data is out of date).

My point is that even current data may be out of date as soon as it is gathered.
The other point is does any data such as that above include ex pats in tax havens etc? The situation is way more complex than who has what and who pays what.

I will say it again, tax is being globalised, as this progresses tax take will shrink, I suspect that eventually most employees may end up paying less tax. This will allow firms to pay them less with out affecting their take home pay.

Is there a reason for instance that a firm cannot off shore it's entire wage bill?

This has already happened in part by off shoring labour.

 

[estebanrey]

Even if these figures are out dated or inaccurate, this is the kind of context that I feel is missing from the diagram posted by King Damager.

Yes, his diagram is a bit misleading. It is well known (if not exactly accurate) that the top 10% own 90% of the wealth so why we are surprised they also pay circa 90% of the income tax too, that is fairness in a nutshell.

this sort of data is all irrelevant

Someone posted a diagram earlier that showed the richest 10% paid the majority of all tax income with the implication being that the well off are already being hammered for tax and are already paying over the odds. Panzerbjorn is correctly showing that if you own the majority of wealth, then taking on the majority of the tax burden is fair and they are not paying more than anyone else relative to what they can afford.

 

[Slam62]

Yes, his diagram is a bit misleading. It is well known (if not exactly accurate) that the top 10% own 90% of the wealth so why we are surprised they also pay circa 90% of the income tax too, that is fairness in a nutshell.

presumably the bottom 8% pay next to nothing as they are unemployed.

 

[Katsumoto]

Rich people pay more tax. The richest 5% make up something like 1/4 of our tax revenue already. The rich do pay their fair share.

What really needs to be done is to stop benefits funding smoking, drinking and other bad habits. They need to be given coupons with limited purchasing power. Ie, can only buy necessities such as food, toilet roll or pay bills etc. How many lazy turds (and you know there are enough of them out there that if they got of their arse and worked, the economy would save billions) are claiming massive benefits for doing nothing. How many of them might try and work if they could not fund a single hobby, only live, on those benefits? The point of benefits is to help people get back on their feet, not to give them effectively a life-long pension fund without ever having earnt it.

The benefits system also needs reformed to be based on need rather than entitlement. If you cannot get by without benefits and need help to get on your feet, fine. Have benefits. If you are absolutely fine but would like a little extra money because you can't afford your ski trip to the alps, bugger off.

 

[kitch9]

The banks should be our main distributor of wealth, not the government but the problem is they are hoarding money to pay for all the fines and law suits that they are getting hit with.

In a fluid banking system where you have a society with savers and spenders the banks should be re-distributing the savers money to the spenders in the form of loans for business, mortgages etc etc whilst taking a profit which can be further re-invested in those that need it.

That's simply not happening and the wheels of the machine are running far too slow.

 

[estebanrey]

Rich people pay more tax. The richest 5% make up something like 1/4 of our tax revenue already. The rich do pay their fair share.

As shown in the other thread they only pay more tax because they own more of the wealth. If you earned a hundred grand a week and paid a £1000 in tax you would be paying 'more' tax as a number than someone earning £100 a week who pays a tenner, but in real terms you would be paying much less tax than them relative your earnings (you are paying 1% in tax they are paying 10%) you would be paying .

So whilst in pure numerical figures the richest 25% pay a higher number in tax than than the other 75% combined, they are also earning more by the same amount, ergo relatively they are not paying more tax than anyone else

 

[Katsumoto]

As shown in the other thread they only pay more tax because they own more of the wealth. If you earned a hundred grand a week and paid a £1000 in tax you would be paying 'more' tax as a number than someone earning £100 a week who pays a tenner, but in real terms you would be paying much less tax than them relative your earnings (you are paying 1% in tax they are paying 10%) you would be paying .

So whilst in pure numerical figures the richest 25% pay a higher number in tax than than the other 75% combined, they are also earning more by the same amount, ergo relatively they are not paying more tax than anyone else

Duh? You've just said that 1% income tax is less than 10% income tax relative to your income. Well done.

However rich people pay both a higher %age and higher amounts in raw numerical figures.

Don't want a bloody communist country.

*Oh not to mention. The poor people that pay X amount in tax have Y amount taken off of it too. As the poor people-lower middle class all get varying amounts of benefits. Rich people do not take out of the government coffers. So the real gap is even bigger than what the graph displays.

 

[Theophany]

I see what you're saying, but that's not quite what I was getting at.

I've found some figures on Wiki from 2004/05 (so quite out of date, but will hopefully explain my point a bit better):

snip[img]

Now it's a bit tricky comparing wealth figures with annual income figures, but it suggests that the top 50% of the population owns 93% of the wealth in the country — compare that to the top 50% of tax payers providing 89.2% of the tax revenue and it sounds a lot 'fairer'.

Equally, the top 1% of the population owns 21% of the wealth and the top 1% of tax payers provide 24.2% of the tax revenue.

Even if these figures are out dated or inaccurate, this is the kind of context that I feel is missing from the diagram posted by King Damager.[/QUOTE]

That's some primo info, nice find. The age of the figures may not be perfect, but it's a legitimate comparison and adds some very good context to the argument. :)

 

[robgmun]

The banks should be our main distributor of wealth, not the government but the problem is they are hoarding money to pay for all the fines and law suits that they are getting hit with.

In a fluid banking system where you have a society with savers and spenders the banks should be re-distributing the savers money to the spenders in the form of loans for business, mortgages etc etc whilst taking a profit which can be further re-invested in those that need it.

That's simply not happening and the wheels of the machine are running far too slow.

Isn't consistant borrowing is what got us into this ****** up mess in the first place?

 

[Woden]

Isn't consistant borrowing is what got us into this ****** up mess in the first place?

No, it was irrisponsible lending, Mainly in the US and banks from the UK bought the debts.

 

[realBabelfish]

Isn't consistant borrowing is what got us into this ****** up mess in the first place?

for a right winger im surprised you dont know its maggie T that got the UK to buy into buy now pay later...

 

[Mercenary Keyboard Warrior]

Income and wealth however are completely different. There is often a good correlation but not always.
Compare a 50 year old "normal" worker, has paid off his mortgage and owns outright his £250k house (he bought it cheap 25 years ago). He earns £25k a year. Pays a low amount of tax on his £25k income, and a very low % if you consider his wealth (ie £250k asset of his house)
The other guy is a superstar recently graduate banker, has just started earning £200k a year in the city. Hes paying off his student loan, and also a lot of tax on his "high" income. Hes got no wealth, hes renting a flat and spending the vast majority of what he takes home right now as hes been used to living on nothing and is living the hig life. His % tax to assets is absurd.

Our current system basically is the above, for individuals the vast majority of tax take is based on income not assets (or wealth). If your assets do not generate income then they are just about tax free, say your house goes up in value by £25k in a year (like happened to a lot a few years back) your wealth has gone up, but you have paid no tax. Theoretically you could have sold the house and pocketed £25k (lets ignore the somewhere to live element).
Over a medium term period you do get typically a very good correlation between income and wealth but it takes time, not only for people to convert income into wealth, but also for some assets to increase in value (property/land etc).

For me the biggest and most fundamental issue is do we want a rebalancing to take place on income vs wealth as a general population. Associated issues then spring up, high wealth is not a guarantee of ability to pay. If your only asset was a £500k family home which you own outright but a retired and just scraping by on your pension and the system suddenly changed to make you owe £10k tax per year due to your wealth how would they pay it? Would it be fair they may have already paid loads in income tax.

The simplest way to collect tax is on earnings, by the very fact you have just earn't it, deducting a chunk at source means you must have the ability to pay it.

If you did move to a wealth based system then lets assume you have to fill in a form, list all property, shares, savings, vehicles(?), company shares or value of own sole trader(?), then those assets could be assessed for tax. How would you police it, how would you value the items without a quick simple market price? Lots of work = significant people to do the work (tax men)

What about when markets crash, everyones wealth declines = less tax, or possibly no tax depending if you tax wealth increase or wealth as an absolute.

The same issue with wealth will happen as with income tax, the richest are those most likely to be able to afford to manipulate the tax by structuring to avoid. Eg if its a personal wealth tax then setup a company to own your mansion and pay a peanuts rent. When completing the form you own no property wealth to be taxed. Company wouldnt earn any profits so this is where you would have to again be taxed on shares owned or you could simply avoid the wealth tax this way.

 

[Mercenary Keyboard Warrior]

To my mind we have a simple problem but the solution is almost impossible to resolve and hence no party has or probably ever will tackle it.

We are too expensive as we have too high a minimum stardard of life. We have built that standard based on exploitation of our own but also other countries workers over a very long time. Yypically but not soley, left wing governments have raised and raised our expectations of minimum standards.

Now we cannot afford them.

As soon as you consider things such as you have to have somewhere to live, you have to have an education, you have to have enough food to survive, you have to have a police/security force to almost guarantee a safe existance your in trouble. Don't get me wrong I am not proposing to scrap them all, but compare that list to most countries in the globe and you won't find that many that you would say apply that to their citizens.

It would take all the countries who could offer that or near that to work the same way to start to be able to genuinely extract a lot of cash from the true rich. I mean take a company such as Amazon basing themselves in Luxembourg, they may think twice if they had to base themselves in Syria or Afganistan to save loads on tax. The true rich are the same, have a property in a few major safe countries put your wealth into another safe country, sorted. If they had to put that wealth into Somalia to ring fence it from tax they may decide tax is the better idea.
(I am ignoring whether its right to take more tax here I am just pointing out the issues in taxing the rich, they have too many options to stop it being effective right now)

 

[robgmun]

No, it was irrisponsible lending, Mainly in the US and banks from the UK bought the debts.

for a right winger im surprised you dont know its maggie T that got the UK to buy into buy now pay later...

Yeah i forgot, us the 99% have been forced to take out crippling loans and maxed out our credit cards at gun point by evil greedy bankers

Personal responsibility died the day Labour went to power in 97 IMO

 

[Irish_Tom]

Yeah i forgot, us the 99% have been forced to take out crippling loans and maxed out our credit cards at gun point by evil greedy bankers

Personal responsibility died the day New Labour went to power in 97 IMO

Personal responsibility died long before 1997 — It was Thatcher and Reagan that set the precedence. New Labour just continued the trend of less regulation and more lending/borrowing.