Income Inequality Falling under the Tories

angrypirate

Contrary to popular belief, under the Tories / Lib Dem coalition, income inequality is falling and the Gini coefficient (for disposable income) is lower than any point since 1986. This will upset the Labourites who have been claiming the rich are getting richer whilst the poor getting poorer

http://www.ons.gov.uk/ons/dcp171778_317365.pdf

Or link to article

http://www.bbc.co.uk/news/business-23253092
(BBC article hidden in the business section)

http://blogs.telegraph.co.uk/news/tobyyoung/100225852/sorry-owen-jones-income-inequality-is-falling-under-this-government-not-rising/

antrobus

angrypirate wrote: »

Contrary to popular belief, under the Tories / Lib Dem coalition, income inequality is falling and the Gini coefficient (for disposable income) is lower than any point since 1986. This will upset the Labourites who have been claiming the rich are getting richer whilst the poor getting poorer

http://www.ons.gov.uk/ons/dcp171778_317365.pdf

Or link to article

http://www.bbc.co.uk/news/business-23253092
(BBC article hidden in the business section)

http://blogs.telegraph.co.uk/news/tobyyoung/100225852/sorry-owen-jones-income-inequality-is-falling-under-this-government-not-rising/

So inequality has fallen again?

This time last year the IFS were reporting;

Income inequality in the UK fell sharply in 2010–11. The widely-used Gini coefficient fell from 0.36 to 0.34. This is the largest one-year fall since at least 1962, returning the Gini coefficient to below its level in 1997–98.

http://www.ifs.org.uk/comms/comm124.pdf

michaels

I love the BBC piece you can almost feel the writer gritting their teeth as they write it along with the picture of someone writing in an income figure of 175,000 as a picture for the additional info 'side column' fact that the top 40% of earners pay in more than they take out.

the_flying_pig

angrypirate wrote: »

Contrary to popular belief, under the Tories / Lib Dem coalition, income inequality is falling.../QUOTE]

steady on.

this article is about disposable income after tax & benefits.

so i would assume that there was a really chunky fall in 'disposable income inequality' when the 50p tax rate came in at April 2010 [i.e. a couple of weeks before the tories came in].

this ONS data is for 2011/12 so doesn't reflect the march 2012 axing of the 50% rate. i can only think that this move will have led to an increase in disposable income inequality, but this will show up in 2012/13 figures, obviously.

antrobus

the_flying_pig wrote: »

....this article is about disposable income after tax & benefits.

Well yes, that's how you measure income inequality. You look at what incomes people have to spend. Not much point in measuring anything else.

angrypirate

the_flying_pig wrote: »

angrypirate wrote: »

Contrary to popular belief, under the Tories / Lib Dem coalition, income inequality is falling.../QUOTE]

steady on.

this article is about disposable income after tax & benefits.

so i would assume that there was a really chunky fall in 'disposable income inequality' when the 50p tax rate came in at April 2010 [i.e. a couple of weeks before the tories came in].

this ONS data is for 2011/12 so doesn't reflect the march 2012 axing of the 50% rate. i can only think that this move will have led to an increase in disposable income inequality, but this will show up in 2012/13 figures, obviously.

Well, correct me if im wrong but if you look at the telegraph article you will see a nice little table for figures in 09-10 under labour and 12-13 under the Tories. So your 12/13 figures are already there.

What did happen with the 50p in the pound tax rate is that it pushed us down the wrong side of the Laffer curve. Rich people, instead of owning up and paying taxes chose to hide their money instead - the tax rate meant it was worth their time and money to invest in these tax avoidance schemes. At 45pm in the pound it isnt worth it and they pay their taxes.

I understand these figures must be terribly upsetting for the left...

the_flying_pig

angrypirate wrote: »

the_flying_pig wrote: »

Well, correct me if im wrong but if you look at the telegraph article you will see a nice little table for figures in 09-10 under labour and 12-13 under the Tories. So your 12/13 figures are already there...

give me strength. re: the telegraph table:

(a) 09/10 is obviously before the 50p tax rate came in;
(b) it shows the rich's total share of tax paid going up. it does NOT show the rich's share of disposable income going down. for obvious reasons these are two very, very different things. most obviously, if the rich's income went up loads but the poor's stayed exactly the same, and tax rates stayed the same, then the rich's share of tax paid would go up loads, but this would obviously not imply that things were becoming more equal. The guy has 'cleverly' used sleight of hand to attribute the changes brought about by Labour's tax hike to imply, well, I don't know what he's implying. Probably that we should sack all teachers and replace them with volunteers or something.
(c) the 12/13 top tax rate is indeed higher than the 09/10 top tax rate, but lower than 11/12 or 10/11.
(d) it's almost certain that the rich's share of disposable income increased between 11/12 and 12/13.

angrypirate wrote: »

...
What did happen with the 50p in the pound tax rate is that it pushed us down the wrong side of the Laffer curve. Rich people, instead of owning up and paying taxes chose to hide their money instead ...

not true. obviously some people evaded, but the tory government's own figures showed that the 50p rate raised money, just not as much as had previously been hoped [e.g. see http://www.bbc.co.uk/news/business-17465733].

more generally - i'm very much a centrist in my political/economic views, neither right nor left, but all of us of all political stripes need to be big enough to admit that both the left & right wing press have been substantially captured by certain interest groups [e.g. in the torygraph's case the interests of the very rich] with no real integrity or deeper economic rationale whatsoever behind them, just advocacy, spin, agenda pushing, trying to make the most favourable case possible. the guardian does it all the time too only i suppose in their case the underlying cause is a bit nobler, a bit more on groudns of principle rather than wanting a bigger slice of the pie.

the_flying_pig

So I suppose an obvious question is whether the torygraph blogger is wrong, whether he's talking rubbish, I'm afraid it's a big 'yes' on both counts.but it's not worth leaving a comment to this effect - the guy is obviously a lickspittle for the rich and is preaching to the converted on that site, almost all of which is fast propaganda that's not worth commenting on.

Masomnia

the_flying_pig wrote: »

So I suppose an obvious question is whether the torygraph blogger is wrong, whether he's talking rubbish, I'm afraid it's a big 'yes' on both counts.but it's not worth leaving a comment to this effect - the guy is obviously a lickspittle for the rich and is preaching to the converted on that site, almost all of which is fast propaganda that's not worth commenting on.

Based on what statistics?

antrobus

the_flying_pig wrote: »

....[e.g. in the torygraph's case the interests of the very rich] ...

Don't be silly. The Telegraph is middle class. The very rich read the Financial Times. Or at least they pay someone else to read it and tell them what it says.:)

grizzly1911

angrypirate wrote: »

At 45pm in the pound it isnt worth it and they pay their taxes.

I am not convinced that +/- 5% is the make or break between avoiding or not. Had the 50% rate been left in place longer I am sure there would have been a run off in people trying to beat it.


I am sure most people in that bracket already minimise their tax payable already.