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Economics for idiots

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7 hours ago, Numero Veinticinco said:

Name one person who wouldn’t find that appealing. 

Got me out of bed at least...

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9 hours ago, Boss said:

 

It's never been anywhere near that high. I think the highest it's ever been in the UK is 30% and it's 28% now at the highest rate. America had it at 40% at the highest rate for a very short time but for most people it was still around 20% or below.

 

Where has it been 75% anywhere in the world? Show me examples of millions of people's lives improving over decades with 75% capital gains because I can't find a single example.

CGT is a small proportion of the total tax take, so it's not going to drive massive change. That doesn't mean it's not the right thing to do. 

 

The ruling classes around the world tend to be reluctant to introduce tax laws that hit them and their rich mates hardest. That doesn't mean it's not the right thing to do. 

 

Progressive taxation, generally, matched with decent levels of public spending, improved people's lives right across Western Europe, North America, Australia, etc. 

 

Why do you think more progressive rates of CGT will fail where more progressive rates of Income Tax have so clearly succeeded?

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9 hours ago, Sixtimes Dog said:

 

I should think that's one of the reasons we have liberal democracy.

The same liberal democracy which has brought an estimated 130,000 austerity-related deaths in the UK alone?

 

Call me a snowflake, but I'd call that quite extreme. 

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9 hours ago, Boss said:

 

I don't believe in it. Someone has worked to pay off a mortgage over 25 years. They get shafted by the bank. They've already paid tax on that income. They finally own the house outright and then you tax the kids for receiving the house in the will? Disgraceful.

Yeah, I might have guessed...

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The kids don't get taxed, the estate does.  Property being passed to children has a higher IHT threshold as well, when the surviving partner of a marriage dies and leaves their property to their children, it could be up to £950,000 before IHT applies.  Any higher and that the family will probably have life insurance or will have set up a trust to provide a lump sum to avoid having to take the value from the home.  I'd assume there are mortgage products designed to use the value of the property, without having to actually sell the family home as well.

 

With an aging population, IHT makes sense.  The generation we're talking about has experienced exponential property value increases that falls into the "unearned capital" category for me, the country is also about to endure a massive care gap that will cost the country billions on an annual basis.  They absolutely should be paying back into that.

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Interestingly, when you look at data on the Internet, there is little correlation between taxation and economic prosperity or growth between nations, other than Denmark being the happiest and the most taxed place in the (developed) world.
 

UK is, as expected, mostly somewhere in the middle, but it's interesting to see it already has the above the average profit / gains tax revenues to GDP ratio. Also, overall tax-to-GDP ratio seems relatively stable and has been growing steadily over the past years. And the pre-neoliberal years don't have particularly higher levels of taxation revenue, quite the contrary.

Even when you look at public spending, the only year where it stands out (as the share of the GDP) is 1974-1976 period, even through the early Thatcher years, public spending was higher than in the most of the '60s and '70s (admittedly some if it may have gone to Falklands related "shipbuilding").

 

https://ec.europa.eu/eurostat/documents/2995521/9409920/2-28112018-AP-EN.pdf/54409e5e-6800-4019-b7c1-580797a67001

https://docs.google.com/spreadsheets/d/1IUj_AGJS5WywibuptGr4lZVP9M0QCTvkZQ0Q_Pp9CHw/edit#gid=1

https://en.wikipedia.org/wiki/List_of_countries_by_tax_revenue_to_GDP_ratio

https://www.ukpublicspending.co.uk/spending_chart_1900_2010UKp_17c1li0181664_822cs_F0t_UK_Public_Spending_As_Percent_Of_GDP

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I watched something a while back saying GDP is a completely flawed way to measure a countries success, it should only be used as one measure amongst many to paint a more complete picture of how well a country and its people are functioning.

 

It feels like the whole country can feel like it's worse off, divided with no hope of improving but GDP has gone up 1 percent so we are all full of shit as the GDP shows us otherwise. 

 

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2 hours ago, Bobby Hundreds said:

I watched something a while back saying GDP is a completely flawed way to measure a countries success, it should only be used as one measure amongst many to paint a more complete picture of how well a country and its people are functioning.

 

It feels like the whole country can feel like it's worse off, divided with no hope of improving but GDP has gone up 1 percent so we are all full of shit as the GDP shows us otherwise. 

 

Yeah, but it's a macro-reflection of a micro-issue. We don't just demand growth, we demand faster growth and so damage is often blind and exponential until it's too late. Then we all complain.

 

Happiness, Environmental impact and Education (as in how it translates to output, rather than grade curves) should be the lenses we look through, for me at least.

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2 hours ago, Bobby Hundreds said:

I watched something a while back saying GDP is a completely flawed way to measure a countries success, it should only be used as one measure amongst many to paint a more complete picture of how well a country and its people are functioning.

 

It feels like the whole country can feel like it's worse off, divided with no hope of improving but GDP has gone up 1 percent so we are all full of shit as the GDP shows us otherwise. 

 

I think the GDP is a conventional measure of economic output, not success as such and is always analyzed in context, structurally or what is it made of. I don't know in what way do you think it's "completely flawed", it's not considered perfect since everyone knows it's based on statistical reporting and set of components.

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8 hours ago, AngryofTuebrook said:

CGT is a small proportion of the total tax take, so it's not going to drive massive change. That doesn't mean it's not the right thing to do. 

 

The ruling classes around the world tend to be reluctant to introduce tax laws that hit them and their rich mates hardest. That doesn't mean it's not the right thing to do. 

 

Progressive taxation, generally, matched with decent levels of public spending, improved people's lives right across Western Europe, North America, Australia, etc. 

 

Why do you think more progressive rates of CGT will fail where more progressive rates of Income Tax have so clearly succeeded?

Well this is the crux of the issue. It's not done because the society will be more prosperous, it's done because of your reasons highlighted above. You want to hit the ruling classes the hardest out of spite because you don't like them.

 

That's no way to run an economy. You need businesses and wealthy people in your society. Alienating the richest people leads to them leaving and leads also to businesses leaving. In which case economic activity goes down. So I presume the answer to these problems is just printing money, right?

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1 minute ago, Boss said:

Well this is the crux of the issue. It's not done because the society will be more prosperous, it's done because of your reasons highlighted above. You want to hit the ruling classes the hardest out of spite because you don't like them.

That’s one way of interpreting that post I guess... yeah.

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28 minutes ago, Boss said:

Well this is the crux of the issue. It's not done because the society will be more prosperous, it's done because of your reasons highlighted above. You want to hit the ruling classes the hardest out of spite because you don't like them.

 

That's no way to run an economy. You need businesses and wealthy people in your society. Alienating the richest people leads to them leaving and leads also to businesses leaving. In which case economic activity goes down. So I presume the answer to these problems is just printing money, right?

I've missed the bit where anybody has said they wanted to raise taxes because they hate the wealthy. Perhaps you could point that part out?

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4 minutes ago, VladimirIlyich said:

I've missed the bit where anybody has said they wanted to raise taxes because they hate the wealthy. Perhaps you could point that part out?

It's the right thing to do to introduce taxes that target the rich and their rich mates hardest.

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4 hours ago, Boss said:

Well this is the crux of the issue. It's not done because the society will be more prosperous, it's done because of your reasons highlighted above. You want to hit the ruling classes the hardest out of spite because you don't like them.

 

That's no way to run an economy. You need businesses and wealthy people in your society. Alienating the richest people leads to them leaving and leads also to businesses leaving. In which case economic activity goes down. So I presume the answer to these problems is just printing money, right?

It's not spite;  it's fairness. Look at the earnings ratios between CEOs and the median earners in their companies. A few decades ago they were in the region of something like 30:1 - today it's something like 120:1. There's no justification for that. CEOs haven't become that much more productive. We've just got stuck in this "greed is good" rut. The answer is to tax the fuckers and to increase workplace democracy, by restoring trade union rights.

 

Plenty of economists - Capitalist economists - have provided mountainsof evidence that high levels of inequality lead not only to huge societal problems, but also to economic inefficiency. They also provide the evidence that progressive taxation, public spending on stuff other than bombs and strong trade unions combine to provide the best remedy.

 

Also it's a myth, straight out of Ayn Rand's fiction, that the grossly overpaid CEOs and rentiers are "wealth creators" on whom the economy depends. If any of them really want to fuck off, let them; they won't be missed.

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3 hours ago, Boss said:

It's the right thing to do to introduce taxes that target the rich and their rich mates hardest.

Because they can most easily afford it. 

 

If someone is on £30,000 a year and you tax them at (since it's everybody's favourite figure) 75%, that would leave them destitute.  But if you tax a Premier League footballer who is on £100,000 a week at 75%, he would still be extremely rich.

 

That's nothing to do with hatred or spite. Progressive taxation is just fair and efficient. 

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28 minutes ago, AngryofTuebrook said:

It's not spite;  it's fairness. Look at the earnings ratios between CEOs and the median earners in their companies. A few decades ago they were in the region of something like 30:1 - today it's something like 120:1. There's no justification for that. CEOs haven't become that much more productive. We've just got stuck in this "greed is good" rut. The answer is to tax the fuckers and to increase workplace democracy, by restoring trade union rights.

 

Plenty of economists - Capitalist economists - have provided mountains of evidence that high levels of inequality lead not only to huge societal problems, but also to economic inefficiency. They also provide the evidence that progressive taxation, public spending on stuff other than bombs and strong trade unions combine to provide the best remedy.

 

Also it's a myth, straight out of Ayn Rand's fiction, that the grossly overpaid CEOs and rentiers are "wealth creators" on whom the economy depends. If any of them really want to fuck off, let them; they won't be missed.

 

You want businesses to flourish because they create jobs and pay wages so ultimately it benefits society. You limit the ability for a businesses to succeed if you tax them too much or if interest rates are too high. Business success rate is very low in the UK. More than half of all start ups will fail within 5 years. I don't know the actual figures specifically but theres a generic trope that 90% of all start ups will fail.

 

So it's important to not judge the average business in the UK that's facing hardships just to stay solvent with the likes of Amazon and conglomerate multinationals. In the same way you can't judge every girl based off a prime Pamela Anderson. These are the anomalies, and have to be treated as such.

 

Your statistics about CEO's look nice but I doubt they are true, or they are specific to FTSE 100 companies. I don't see how an average small business in the UK could survive if the CEO is taking 120:1 salary. Then every CEO would earn a minimum of £2,049,216 a year if their median workers wage was minimum wage. That just isn't possible.

 

There's no question wages need to change, but that'd be better done with the introduction of a living wage rather than going after businesses specifically. It's already difficult enough as it is. 

 

 

 

 

 

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You seem to be struggling with the concept of progressive taxation.  High rates of tax don't fall on poorer people or on businesses that are not yet turning decent profits. 

 

Nobody is talking about "going after" businesses.  I'm talking about giving workers (back) the right to have some influence in the business and a fair share of the wealth they create. After all, employees have more of a vested interest than just about anyone in the long-term health of the business and they can bring expertise and perspectives that executives and shareholders lack.

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1 hour ago, AngryofTuebrook said:

You seem to be struggling with the concept of progressive taxation.  High rates of tax don't fall on poorer people or on businesses that are not yet turning decent profits. 

 

Nobody is talking about "going after" businesses.  I'm talking about giving workers (back) the right to have some influence in the business and a fair share of the wealth they create. After all, employees have more of a vested interest than just about anyone in the long-term health of the business and they can bring expertise and perspectives that executives and shareholders lack.

 

I'm aware what progressive means - incrementally increasing based on whatever criteria you want to apply. 

 

The division is there for a reason. The employees do their jobs. The executives deal with the business decisions and the shareholders care about the success of the business. I don't think you should have box packer #11,789 orchestrating policy decisions for Jeff Bezos. I think what you're actually endorsing (without realising it) is Margaret Thatcher's share ownership policy. 

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