What would you like to see in the Budget next month?

Thrugelmir

How many of the top earners run their own businesses and employ other people both directly and indirectly. Not so easy to replace if at all.

GreatApe

Thrugelmir wrote: »

How many of the top earners run their own businesses and employ other people both directly and indirectly. Not so easy to replace if at all.

This is also false

There are two main types of business. Those that fill existing needs (which are the majority of businesses) and those that create new markets/needs/wants

Let's talk of the former as they greatly outnumber the latter.

If a hard working man opens a ..... small factory making....sandwiches.... And employs 100 people. If said man has never been born what would the situation be? Would unemployment be 100 higher? Would we need fewer sandwiches or food?

No clearly not. Had this person not been born and not created a business that took x resources and hired y persons then someone else would have filled that roll. The resources and y persons would be hired and utilised by the economy in some other way.

So again this high earning high tax paying sandwiches baron actually contributes less than first thought.

This holds true for all highly paid or high earning persons. Its also true on the low end. People who hold down full time low paid jobs if they disappeared would see a cascade down of others in the nation until someone filled the new refuse collection role. His net contributions all things considered is probably a net even tax payer not a net taker.

WP is clearly a very smart poster the only thing I think I differ with him is this topic. His strong belief that there are groups of large contributors and large groups of takers is mostly wrong. Most people can only claim a net zero with maybe a handful of people pushing productivity forward only truly able to claim net contributions. (And then only for a time, eg without Eisenstein there would have soon been another to discover that science)

antrobus

GreatApe wrote: »

..If a hard working man opens a ..... small factory making....sandwiches.... And employs 100 people. If said man has never been born what would the situation be? Would unemployment be 100 higher? Would we need fewer sandwiches or food?.

No clearly not. Had this person not been born and not created a business that took x resources and hired y persons then someone else would have filled that roll. The resources and y persons would be hired and utilised by the economy in some other way....

You miss the point by a country mile.

The real question would be this; is this hard working man any good at running a sandwich making factory? Free markets work on the basis that anyone can have a bash at running a sandwich making factory; consumers exercise a choice as to whose sandwiches they prefer, the good producers succeed and pocket the profits, the poor ones give up and do something else.

That's how an economy utilises its resources in the most efficient manner.

GreatApe wrote: »

...So again this high earning high tax paying sandwiches baron actually contributes less than first thought....

The reason that this 'sandwiches baron' earns so much is because he is supplying the public with the sandwiches they want. That's his contribution. That's the whole point of having an economy in the first place, to satisfy people's (largely material) needs.

The fact that someone makes a lot of money doing something is a signal they are doing something right in economic terms. And it doesn't matter whether that something is.

rtho782

westernpromise wrote: »

I'd bet dollars to the proverbial that your income makes you a net taker of tax from others.

Nope.

UK public spending per capita is £12,025. http://www.ukpublicspending.co.uk/breakdown?units=d

My annual income is about £38,000, mostly from employment but about £8k a year from self employment.

My total deductions from my salary are £6,421.80. My employment also causes my employer to pay £3,020.54 in employers NI. I then pay £1,600 tax on my self employed income, and £145.60 in Class 2 NI.

I'll apportion 50% of our council tax to myself, so another £644.49.

Of my take home income, let's say I spend half of it on things eligible for VAT, which is probably an under estimate, and I pay £2,917.71 in VAT.

We'll forget things such as Insurance Premium Tax, VED, fuel duty, etc.

My other half is on £36k, all from employment, so she probably pays slightly more in than I do.

We have no kids.

But this is simplistic anyway - as you'd expect the average (mean) person to be a net taker, as we have a deficit, and tax sources that are not attributable to individuals, such as business rates, corporation tax, etc.

The fact remains that retirement was never planned to be 20-30 years, and, if the average current 90 year old had their kids at 20 (which probably isn't far out for that day and age) their kids are retired now too.

In April 2016 the average (median) weekly earnings were £539 for full time work. That's a salary of £28,028. On that salary, Income tax, NI, and Employers NI totals £8550.17. Assuming someone starts work at 18 and works until 66, that's 48 years of work, totaling £410,408.16. If you're then retired for 30 years, you get back £186,108. This of course does not take into account inflation, which would skew the figures until you get back more than you ever paid.

We can't afford pensioners. 5 years of retirement should be the expectation. For my generation too.

antrobus

rtho782 wrote: »

...The fact remains that retirement was never planned to be 20-30 years...

The basic state pension started in 1948, when cohort life expectancy was 77.05 years for men and 81.72 years for females, and so retirement was 'planned' for 12 years and (almost) 22 years respectively.

Cohort life expectancy for men hit 85 in 1983, giving them 20 years of retirement. (For women, almost 89, that's 29 years.) That was 34 years ago.

So basically you are wrong.

rtho782 wrote: »

...and, if the average current 90 year old had their kids at 20 (which probably isn't far out for that day and age) their kids are retired now too.....

There are only 550,000 people in the over 90s. That's only 5% of the over 65s. I think you need a better understanding of demographics.:)

steampowered

antrobus wrote: »

The basic state pension started in 1948

The state pension was introduced in 1908.

At that time it was paid to people aged 70 or more and was means tested. At that time only one in four people reached the age of 70 and life expectancy at that age was about 9 years.

https://en.wikipedia.org/wiki/Old-Age_Pensions_Act_1908
http://www.web40571.clarahost.co.uk/statepensionage/SPA_history.htm

when cohort life expectancy was 77.05 years for men and 81.72 years for females, and so retirement was 'planned' for 12 years and (almost) 22 years respectively.

Life expectancy at birth in the UK in 1948 was about 66 for men and 72 for women.

Life expectancy at birth in the UK in 1983 was about 71 for men and 77 for women.

I assume cohort expectancy should be lower than that!

http://visual.ons.gov.uk/how-has-life-expectancy-changed-over-time/

Where are you getting your figures from? They are drastically different to everything that comes up when I search for the figures.

steampowered

rtho782 wrote: »

Nope.

UK public spending per capita is £12,025. http://www.ukpublicspending.co.uk/breakdown?units=d

My annual income is about £38,000, mostly from employment but about £8k a year from self employment.

You need to take into account the fact that you won't be paying much tax while you are at school or retired.

For example, let's assume you are in full time education until 21, retire at 65, and die at 80. This means you are working and paying tax for 44 years out of the 80 you are alive.

So, as the state is spending an average of £12,025 per year per person, you need to be paying an average of £21,863 a year in tax during your working life for the state to break even.

You need to be a pretty big earner to achieve that. I agree people should be expected to work much longer than they are at the moment, given that life expectancy is so much higher than they used to be.

kinger101

The correct figures to use are not life expectancy at birth, but life expectancy at 65. Though ONS data indicates this was 13(m) or 16.9 (f) years in 1982 and 18.4 (m) or 20.9 years in 2014.

mark1959

Free travel on buses and trains for the over 55s.
Free telly licence and half price council tax also. That'll do for this year. [and I still won't vote tory] :beer:

michaels

kinger101 wrote: »

The correct figures to use are not life expectancy at birth, but life expectancy at 65. Though ONS data indicates this was 13(m) or 16.9 (f) years in 1982 and 18.4 (m) or 20.9 years in 2014.

Sort of although some of those who die before pension age will nonetheless have paid into the system