MSE News: Super-rich must give more, says Nick Clegg

Randvegeta

Well at the moment we are busy robbing our children and grand-children with debt servitude..
Logically they should all emigrate and raise two fingers to their selfish parents and overspending politicians.

Way ahead of you

antrobus

grey_gym_sock wrote: »

or they could refuse to pay the debt and stay here....

Going for default is one way of guaranteeing an immediate cut of - what would it be? - £100 billion in government spending.

grey_gym_sock wrote: »

..a) more government spending on ...

The Debt Free Wannabee forum is largely populated by people who also once thought that spending was the solution to their debt problem.

grey_gym_sock wrote: »

...(b) (getting back on topic ...) higher taxes on the rich. public sector debt and private sector wealth have risen massively at the same time; using the latter to help fix the former is a pretty obvious idea....

Except that private sector wealth hasn't increased "massively at the same time". Unless I'm missing something and the FTSE has just trebled while I had my tea.

grey_gym_sock wrote: »

..(but i mean actually raising taxes, not - like clegg - just talking about ppl paying more without raising taxes.) 1 way to do it is a 1-off windfall tax on wealth.

A one-off tax might fix the deficit this year. It's all those other years you have to worry about.

Randvegeta

A one-off tax might fix the deficit this year. It's all those other years you have to worry about.

That would ultimately hurt the UK though because if it happens even once, people will lose confidence in holding assets in the UK and after the first such occurrence, there would probably be a mass exodus of wealth.

If all of a sudden you got hit with a wealth tax, would you not consider packing YOUR bags to a 'safe' country so your hard earned savings couldn't be plundered by the government?

When oh when will the war on poor people end?

grey_gym_sock

antrobus wrote: »

Going for default is one way of guaranteeing an immediate cut of - what would it be? - £100 billion in government spending.

yes, i'm not suggesting it now. the best option is to attempt to gradually get the debt under control. i'm saying that, if that fails, default is better than everybody leaving the country. which is not saying much.

The Debt Free Wannabee forum is largely populated by people who also once thought that spending was the solution to their debt problem.

the analogy between household finances and public sector finances is very weak.

public sector finances depend on the health of the whole economy. if the economy stays in depression, tax receipts will stay low, and public sector spending will stay high. there's no plausible way out of the deficit without the economy generally picking up. and we are in a situation where both households and businesses are not prepared - for very goods reasons - to kickstart the economy. the government could make the strategic decision to do so.

i am only advocating higher public spending in areas which will help prime the economy.

Except that private sector wealth hasn't increased "massively at the same time". Unless I'm missing something and the FTSE has just trebled while I had my tea.

the wealth of the richest 1% (or pick whatever percentage you like) has risen massively in the last 10 years, at the same time that the public sector deficit has been getting out of control.

A one-off tax might fix the deficit this year. It's all those other years you have to worry about.

i was thinking of a bigger 1-off tax than the equivalent of 1 year's deficit. but you are right that it would not fix the entire problem. hence the suggestion that the economy needs to get out of the depression. it may also need public spending cuts, but only when the economy is strong enough that it won't deepen the depression.

grey_gym_sock

Randvegeta wrote: »

When oh when will the war on poor people end?

you think that taxing the rich more is an attack on poor ppl.

do you think that dismantling the welfare state and privatizing the NHS is an attack on poor ppl?

Randvegeta

you think that taxing the rich more is an attack on poor ppl.

do you think that dismantling the welfare state and privatizing the NHS is an attack on poor ppl?

Just ignore that last comment of mine. It was from an episode of 30Rock.

Jack says something about the war against poor people, but he meant the war against poverty.

It means nothing in this thread, and has no context or reference so it is to be ignored. I don't know why I wrote it. It popped in my head and I suppose it travelled down my arms, through my hands and onto the keyboard.

But, with regards to your first query, is taxing the rich attacking the poor? Yes I do actually. The more you tax the rich, the more they try and avoid taxes, or worse evade, and worse still leave.

Think about it. If rich people leave, only the poor people will be left, and they havn't got enough money to pay the national debt :-). So best attract the rich, keep them here and happy and let them bring in and spend lots of money instead of scaring them away and making some foreign country rich.

With regards to the second question. Not an attack on poor people per se. An attack on unemployed poor people perhaps? But not an attack on the poor as a whole, no. That is assuming you consider minimum wage workers poor?

i was thinking of a bigger 1-off tax than the equivalent of 1 year's deficit. but you are right that it would not fix the entire problem. hence the suggestion that the economy needs to get out of the depression. it may also need public spending cuts, but only when the economy is strong enough that it won't deepen the depression.

The problem I described above in post 64 would probably apply (unless I'm wrong?)

Another thing you need to consider, is people are mostly struggling not because they don't earn enough money, but because they are paying off loans that they really shouldn't have taken out in the first place.

If the economy can just remain flat in terms of GDP per capita, and the Government debt NOT rising, then eventually most private debt will be paid off. Once private debt is paid off, people will have more disposable income, and boom, you got spending again! And we all know what that means don't we?

Government borrowing is not that different to personal borrowing. Neither governments nor people can borrow their way out of debt!

grey_gym_sock

there is almost no truth in the idea that we should worry about the rich leaving the country. taxation is mainly of economic activity in this country. it doesn't actually matter where the richest ppl live. if they own businesses in the UK, or are landlords here, we can tax them. if they don't, we usually aren't collecting much tax from them anyway. now, in fact it's true that where very rich ppl live can affect how much tax they pay, but that is a flaw in the tax system, which should be fixed. that's why i was suggesting raising corporation tax, not income tax - so we tax businesses based in the UK, regardless of where the owners live. 24% tax on profits when the owners live abroad is too low, especially compared to income tax + national insurance.

that's for the very rich. for mere high earners (say, any 6-figure salary/profits) - i.e. ppl earning quite a lot, but without a huge amount of capital to boot - frankly, the idea that most of them will leave the country is complete nonsense. high earners are just like ppl generally, and will stay where their family and friends are, where they feel at home, etc. a few will always leave, of course, as is their right; and other wealthy / talented ppl will come here; what's the problem with ppl moving in or out?

you suggest that the welfare state & NHS are only to the advantage of the unemployed poor. that is way off the mark. the greater security they give ppl - pay a bit more in taxes (when you're earning), but get more back (when you need it), and don't have to pay health insurance premiums as well as taxes - is advantageous to ppl on average and some way above average incomes. you have to be pretty rich to find that whole safety net irrelevant.

Randvegeta, your use of language is orwellian. whenever something is to the disadvantage of the rich, you say it's to the disadvantage of the poor. (for clarity, i'm avoiding saying "attack" or "war", which i think nobody meant literally.)

Randvegeta

there is almost no truth in the idea that we should worry about the rich leaving the country

I would disagree with you here. But hey. Neither of us have come up with any statistics or evidence. Just our words.

frankly, the idea that most of them will leave the country is complete nonsense. high earners are just like ppl generally, and will stay where their family and friends are, where they feel at home, etc. a few will always leave, of course, as is their right; and other wealthy / talented ppl will come here; what's the problem with ppl moving in or out?

Well I can't speak for everyone, but I know I would leave. Heck, all the youth should at least consider leaving considering how hard it is to get a job. So it's not just about the rich leaving that's the problem. But if the rich leave, it will make it harder to pay back the national debt. That's all.

If I were living in the UK still, I'de have to pay about 1/3 of my income in for tax and national insurance. Too high for me so I left. Maybe others are okay to stay but if you are mobile then why not?

that's why i was suggesting raising corporation tax, not income tax - so we tax businesses based in the UK, regardless of where the owners live.

Say goodbye to foreign investment then. Actually there is a strong argument against certain types of foreign investment, so perhaps that is a plus? But so long as the UK adopt a free trade position, what's stopping people from setting up businesses outside of the UK and selling their products to the UK consumer, resulting in taxes being collected outside the country. Obviously some companies cannot really move outside the country, but those that can (which is alot) WILL. Companies are more likely to pick up and leave than people since companies have no 'nationality' per se.

you suggest that the welfare state & NHS are only to the advantage of the unemployed poor.

And where did I say that? I don't recall saying that. I like the NHS. I believe in free education and health care (or at least accessible healthcare and education). No idea how you came to that assumption.

grey_gym_sock

ok, sounds like i misunderstood your views on the NHS and education. dunno how you expect it to be paid for, though, if you think taxes are too high.

what level of tax is so high that a too many ppl leave? apparently, you've left already. but, given the structural deficit, we are in no position to lower taxes, which presumably we'd have to if we wanted you to come back. the discussion has been vague about what taxes might rise by how much, but i would suggest leaving the top rate of income tax at 50% but doing a huge amount to close down loopholes. the idea that huge numbers would leave as a result of that is a joke. some will leave, as always. and others will continue to move here.

many businesses (especially service businesses) can't actually move overseas. others can, but if they sell here, we can tax them. taxation of international businesses is 1 area where the tax system is completely flawed. the standard approach, "transfer pricing", just doesn't work. we need to look at the total profits of a business, and tax a proportion of them in each country, based on some formula, e.g. 1/3 based on where their sales are, 1/3 on where their employees are, 1/3 on where their assets are. so this is an issue, but there are workable solutions.

i'm not sure why we need foreign investment. the UK is a rich country, with plenty of capital of our own. i've no objection to it, though. and if we close the tax loopholes which favour overseas businesses selling to the UK over ones based in the UK, then businesses will be more likely to choose to base themselves here.

Randvegeta

ok, sounds like i misunderstood your views on the NHS and education. dunno how you expect it to be paid for, though, if you think taxes are too high.

For 1, education and NHS could be improved in terms of efficiency. Waist is the biggest problem, particularly in the area of health care. I'm not a doctor, but from what I understand, it seems there is too much bureaucracy.

I also think public sector funding should be cut given it seems that they have it much better off than the private sector. At the very least, there should be some link between public and private sector pay.

In terms of raising revenue through taxes, I am not entirely opposed to high income tax. I just dislike the way it is done. I will explain later in this post.

the discussion has been vague about what taxes might rise by how much, but i would suggest leaving the top rate of income tax at 50% but doing a huge amount to close down loopholes. the idea that huge numbers would leave as a result of that is a joke. some will leave, as always. and others will continue to move here.

I certainly won't dismiss the 50p tax rate, but it really depends on the industry/job of which the company/person works in and how mobile they are.

If you take a supermarket for example, there is really no reason you can't tax the crap out of them. Why? Because 1.) virtually 100% of their income is domestically generated. 2.) They can't pick up and leave since they rely on selling to this particular market. 3.) the majority of their customers are working and middle class, whereas the super rich would contribute only a tiny portion of their overall sales. It makes sense to tax them and redistribute their wealth back to the people that made them wealthy in the first place.

On the other hand. If you take a technology company, such as Arm Holdings (they design CPUs). Most of their income is foreign earned. This is a wealth creating industry as this is money the country would not otherwise have. And even if they were selling to a UK only market, their work does not require them to operate in the UK, hence they are successful exporters. Taxing them will certainly drive the company as a whole overseas, even if many employees remain in the UK. We need more companies that are capable of exports and the 24% tax rate is only BARELY competitive since you can set up shop in Singapore, Hong Kong, even the United States!!! and pay less. Obviously, the company has decided that 24% is low enough. But 50% may be too high for them, and I won't be surprised to see our exporting industries packing up and heading to friendlier countries.

i'm not sure why we need foreign investment. the UK is a rich country, with plenty of capital of our own. i've no objection to it, though. and if we close the tax loopholes which favour overseas businesses selling to the UK over ones based in the UK, then businesses will be more likely to choose to base themselves here.

Technically, we don't. The UK is a major investor in OTHER countries actually. But there is an economic argument against foreign investment given it gives ownership of our companies to foreigners, who ultimately take the money out of the economy instead of it being reinvested or spent.

That being said, foreign investment is great for a country if the company that is invested in fails since there is money for nothing pretty much lol.

It's a complex situation, and I haven't got the answers. But I fall into the technology industry and am extremely mobile. I'm not limited to the UK (or even the EU). My skills, qualifications, background etc. make me extremely mobile and I can work virtually anywhere. As a UK national, I (like all other UK citz) can live anywhere in the EU. But I'm also able to live in Hong Kong, China, and easily get a visa for just about every developed country in the world. So I'm extremely mobile.

95% of my income is foreign sourced (meaning only 5% comes from the UK). People like me, are wealth generating. We don't take anything form the domestic economy, but we do spend! My leaving means no more 20% VAT collected on my purchases. No more road tax, fuel, rent, insurance. And though I maintain a balance in my UK account, it will no longer be my main account so less money in the bank to finance banks, who in turn will finance businesses in the UK.

I know I am a small fish. But in all honest, it is the exporting companies, and mobile workers we need to attract. High taxes will drive THOSE away. And THOSE are the ones that generate wealth.

So, if you're going to have high taxes, and expect companies to stay, the only thing I can think of, is to raise tariffs on ALL imported goods.