The Cyprus Situation

verydeeppockets

sabretoothtigger wrote: »

Hasnt this latest budget said no income tax for earning 10k. I know 10k is a poor mans wage by far but what you said doesnt reflect that

Everytime they argue rich dont pay their share, we have to ignore that they pay a percentage not a fixed amount.
In nominal terms rich pay a heck of alot.

What's interesting about the legal side of this is Spain have just been fiddling with their laws, as previously it was illegal in Spain for a bank to nick part of the deposits. If I were Spanish, Greek, or similar (similar as in doomed) I know I'd be first in the queue at the bank counter.
Odd that they've been altering their laws only in the last week or so.

Of course, it could never happen here in the UK... we have 'cuts' don't we?

Rich and taxes - you've probably heard it already but I like this story....

Suppose that once a month, ten men go out for beer and the bill for all of them comes to £100. If they paid their bill the way we pay our taxes and claim State benefits, it would go something like this;
The first four men (the poorest) would pay nothing. The fifth would pay £1.
The sixth would pay £3.
The seventh would pay £7.
The eighth would pay £12.
The ninth would pay £18.
And the tenth man (the richest) would pay £59.
So, that's what they decided to do. The ten men drank in the bar every month and seemed quite happy with the arrangement until, one day, the owner caused them a little problem. "Since you are all such good customers," he said, "I'm going to reduce the cost of your weekly beer by £20." Drinks for the ten men would now cost just £80.
The group still wanted to pay their bill the way we pay our taxes. So the first four men were unaffected. They would still drink for free but what about the other six men; the paying customers? How could they divide the £20 windfall so that everyone would get his fair share? They realised that £20 divided by six is £3.33 but if they subtracted that from everybody's share then not only would the first four men still be drinking for free but the fifth and sixth man would each end up being paid to drink his beer.
So the bar owner suggested a different system. The fifth man, like the first four, now paid nothing.
The sixth man paid £2 instead of £3 .
The seventh paid £5 instead of £7.
The eighth paid £9 instead of £12.
The ninth paid £14 instead of £18.
And the tenth man now paid £49 instead of £59. 
Each of the last six was better off than before with the first four continuing to drink for free.
But, once outside the bar, the men began to compare their savings. "I only got £1 out of the £20 saving," declared the sixth man. He pointed to the tenth man, "but he got £10!"
"Yes, that's right," exclaimed the fifth man. "I only saved a £1 too. It's unfair that he got ten times more benefit than me!"
"That's true!" shouted the seventh man. "Why should he get £10 back, when I only got £2? The rich get all the breaks!"
"Wait a minute," yelled the first four men in unison, "we didn't get anything at all. This new tax system exploits the poor!"
So, the nine men surrounded the tenth and beat him up. Funnily enough, the next month the tenth man didn't show up for drinks, so the nine sat down and had their beers without him.
But when it came to pay for their drinks, they discovered something important – they didn't have enough money between all of them to pay for even half the bill.
That's how our tax system works. The people who already pay the highest taxes do tend to get the most benefit from tax reliefs and reductions. Tax them too much, attack them for being wealthy and they just might not show up anymore.

moneyfoolish

sabretoothtigger wrote: »

Hasnt this latest budget said no income tax for earning 10k. I know 10k is a poor mans wage by far but what you said doesnt reflect that

Everytime they argue rich dont pay their share, we have to ignore that they pay a percentage not a fixed amount.
In nominal terms rich pay a heck of alot.

Maybe they do but I'll take paying 50% of a million a year salary over what I pay on my £40,000 a year any day of the week. The fact is that the gap between the rich and the rest of society has grown alarmingly and obscene amounts of money are boing paid left, right and centre to people, in many cases, with no skills other than the ability to "talk the talk". I have a friend who has recently left a Project Management job in Local Government earning around £50,000 (and overpaid IMO because most Project Managers I've had deaings with in the IT world are glorified bean counters who know little about the business they're supposed to be managing) to move into a contract with a Central Government organisation which will pay around £75,000 for a 6 month contract. Take away the usual "settling in" period and ending with the "handing over" period and it will probable end up with £75,000 for around 4 months work! Plus a guarantee to return to the old job within a year as the contract can be taken as a "career break". The world has truly gone mad! Still, small beer compared to the obscene bonuses still being paid to higher management of banks for bringing the country to it's knees!!

verydeeppockets

And there was me half believing the current lot when they said they were fixing the decade of overspending...

londonTiger

sabretoothtigger wrote: »

Hasnt this latest budget said no income tax for earning 10k. I know 10k is a poor mans wage by far but what you said doesnt reflect that

Everytime they argue rich dont pay their share, we have to ignore that they pay a percentage not a fixed amount.
In nominal terms rich pay a heck of alot.

they are very few rich millionaires who will be getting income through PAYE. Company directors have a million and one ways to extract income through a company without runnin it through PAYE.

Personal use of business assets (not technically allowed, but it happens ALLL the frikkin time), pension, shares and other benefit in kind.

It's the middle income earners who pay 40% who pay the lions share of tax.

Glen_Clark

verydeeppockets wrote: »

The first four men (the poorest) would pay nothing.

In Britain every man pays taxes. Even the guy sleeping in a cardboard box on the street pays taxes - VAT on takeaway food, then charged to use the public toilets
But don't let the facts spoil a good story.

grey_gym_sock

verydeeppockets wrote: »

Tax them too much, attack them for being wealthy and they just might not show up anymore.

yeah, they might leave and take all their money to a tax haven .... perhaps to a nice mediterranean island

MoneySaverLog

The_Green_Man wrote: »

I don't see why there is such outrage at this. In the UK our savings are insured up to £85k or £170k in joint accounts.

In the case of a government getting it's thieving little hands on a percentage of the saved capital I doubt such a protection scheme would cover the theft though.

The_Green_Man_2

MoneySaverLog wrote: »

In the case of a government getting it's thieving little hands on a percentage of the saved capital I doubt such a protection scheme would cover the theft though.

Well, the protection scheme is covering the depositors in Cyprus, which is in a far worse financial shape than most other EU countries. All that is happening is that the government is having to stick to this deposit guarantee instead of underwriting 100% of people's savings.

Anything over the guarantee is lost. Just as you'd find if you invested your life savings in Woolworths but had the first £85k of your investment insured against the company going bust. When it does go bust, you lose your investment but the insurance money pays out £85k.

The government doesn't come into it, except to not underwrite depositors cash. Just as the government rightly didn't underwrite woolworths or any other other company that goes bust due to poor business practices and flawed business models.

JohnRo

The_Green_Man wrote: »

The government doesn't come into it, except to not underwrite depositors cash. Just as the government rightly didn't underwrite woolworths or any other other company that goes bust due to poor business practices and flawed business models.

The government does come into it, don't forget it's the unelected troika gangsters dictating terms to the Cyprus government. Make no mistake, bankers rule the world.

What you're describing is a Darwinian free market. That's not how the banks operate, instead it's a protection racket via central banks backed by government enforcers. When free markets are allowed to exist the crap companies become extinct because they go bust, get displaced or get consumed by the efficient and effective companies.

Instead we have a government (being made) to prop up and empower a slew of colossal garbage banks who've been allowed by complicit regulators to consume other efficient and effective banks, take huge risks and reduce healthy competition.

What's required is a meltdown imho, banks to go bust, the efficient banks to rise and the wall street banking crooks to go to jail and be seen to go to jail, for a long, long time. To lose all their ill gotten gains as proceeds of crime and let a healthy banking system rise.

Regulators then need to actually do the job they're paid to and prevent rapacious bankers from ever doing again what they've been allowed to do over the last 30 odd years. Of course that's fanciful.

The obstacle to anything changing for the better is that the banking crooks at the likes of goldman sachs especially are practically running the crony capitalist west and politicians are mere transitory midgets on the payroll.

Jegersmart

verydeeppockets wrote: »

What's interesting about the legal side of this is Spain have just been fiddling with their laws, as previously it was illegal in Spain for a bank to nick part of the deposits. If I were Spanish, Greek, or similar (similar as in doomed) I know I'd be first in the queue at the bank counter.
Odd that they've been altering their laws only in the last week or so.

Of course, it could never happen here in the UK... we have 'cuts' don't we?

Rich and taxes - you've probably heard it already but I like this story....

Suppose that once a month, ten men go out for beer and the bill for all of them comes to £100. If they paid their bill the way we pay our taxes and claim State benefits, it would go something like this;
The first four men (the poorest) would pay nothing. The fifth would pay £1.
The sixth would pay £3.
The seventh would pay £7.
The eighth would pay £12.
The ninth would pay £18.
And the tenth man (the richest) would pay £59.
So, that's what they decided to do. The ten men drank in the bar every month and seemed quite happy with the arrangement until, one day, the owner caused them a little problem. "Since you are all such good customers," he said, "I'm going to reduce the cost of your weekly beer by £20." Drinks for the ten men would now cost just £80.
The group still wanted to pay their bill the way we pay our taxes. So the first four men were unaffected. They would still drink for free but what about the other six men; the paying customers? How could they divide the £20 windfall so that everyone would get his fair share? They realised that £20 divided by six is £3.33 but if they subtracted that from everybody's share then not only would the first four men still be drinking for free but the fifth and sixth man would each end up being paid to drink his beer.
So the bar owner suggested a different system. The fifth man, like the first four, now paid nothing.
The sixth man paid £2 instead of £3 .
The seventh paid £5 instead of £7.
The eighth paid £9 instead of £12.
The ninth paid £14 instead of £18.
And the tenth man now paid £49 instead of £59. 
Each of the last six was better off than before with the first four continuing to drink for free.
But, once outside the bar, the men began to compare their savings. "I only got £1 out of the £20 saving," declared the sixth man. He pointed to the tenth man, "but he got £10!"
"Yes, that's right," exclaimed the fifth man. "I only saved a £1 too. It's unfair that he got ten times more benefit than me!"
"That's true!" shouted the seventh man. "Why should he get £10 back, when I only got £2? The rich get all the breaks!"
"Wait a minute," yelled the first four men in unison, "we didn't get anything at all. This new tax system exploits the poor!"
So, the nine men surrounded the tenth and beat him up. Funnily enough, the next month the tenth man didn't show up for drinks, so the nine sat down and had their beers without him.
But when it came to pay for their drinks, they discovered something important – they didn't have enough money between all of them to pay for even half the bill.
That's how our tax system works. The people who already pay the highest taxes do tend to get the most benefit from tax reliefs and reductions. Tax them too much, attack them for being wealthy and they just might not show up anymore.

http://www.heritage.org/federalbudget/top10-percent-income-earners