We live in a society in which progressive taxation in unavoidable. So we expect and accept that higher earners should pay more tax than lower earners. Currently higher earners, who are one percent of taxpayers, pay 27 per cent of taxation. And, being relatively few in number, the personal load is very high. Interestingly this proportion has increased markedly since the bad old ‘high taxation’ days of Old Labour (which may very well become New Labour.).
So what? These high earners can afford it. And so many of them make their money through questionable activities, and tend to protect their ill-gotten gains through questionable ways.
But, when we look at the reasons for promoting higher taxation rates for the rich other questions come to mind. The majority of high earners, like most of us, are paid what they are worth. Employers are not inclined to pay over the odds gratuitously. If they are not worth the money they will be replaced by those who are. Of course this is a rough and ready principle, but by and large it preserves a balance. Like democracy it can produce odd results on occasion, but, like democracy, it is the least worst way of doing it.
No one seriously objects to taxation. By benefiting from being in a state, in effect we enter a contract to pay for the offices of the state. It is less easy to defend the state’s right to impose higher rates on the more successful people. Said plainly, the state puts its hands into the pockets of the high earners and removes what is not theirs. Perhaps we should have a single tax rate applied to all income. The rich would still pay more but it would then be proportionate and not confiscatory.
Don’t bother to tell me that this wouldn’t work, for a variety of reasons. The system we use is broadly the most practical. But, and it’s a very large but, anyone who favours the system out of envy is unjust. Those who delight at increased taxation for the successful are guilty of supporting theft. Those who live with it (rich or poor) because there is no alternative, should always regard any increase in tax rates focused on the successful as a matter of regret.
We must accept that the ability to maintain a just and fair society rests on our prosperity. And prosperity depends on a successful economy which, in turn, depends on its successful contributors. And a refusal to reward success is, as Marxist societies have shown, a sure way to impoverish all. “It’s the economy, stupid” And always will be.
An instinctive response – not thought out, so will probably have to hedge and fill later.
“For forms of government, let fools contest
What e’er is best administered is best”
We need an orderly state with the rule of law – or anarchy will prevail, and the strong will oppress the weak (worse, or more often). The state needs money – for health, defence, welfare…. whatever we decide we need. This money must be raised by taxation. From him that hath must be taken – but at what rate? Those who have more must pay more (“Why do we rob banks – because that’s where the money is!”). Some won’t mind – others will avoid paying tax – some illegally, others legally. Tax laws are far too complex – a rich man who objects to paying tax can hire expensive lawyers to reduce his bills, perhaps going near or over the rather fuzzy line that defines what is legal. Or he can take unarguably acceptable ways of reducing his tax bill – stop working, emigrate or adopt St Francis’s solution – give all his money to the poor. We want a system that is seen as adequately fair, so as to maintain a source of revenue from enough compliant taxpayers. The exact solution – you tell me! A French finance minister (I’m too pressed to look up his name) said that the art of taxation was like plucking down from a live goose – you need a method that produces the most feathers with the minimum of hissing. Justice and practicability must reconcile their differences as best they can.
Thank you for the topic, Quentin – I would say in reply – the worker is worth the money.
Your thoughts seem focused on personal taxation. The banks and multinational corporations would have to be included among the high earners in our world. And if “it is the economy stupid”, then there will need to be a lot more restructuring on this level in addition to personal income tax to give us a just society with more equitable tax demands.
The complexity of the tax system which Tim refers to, favours the company over the individual. It allows huge corporatations to exploit their workers with slave wages while allowing themselves to manipulate the tax system unjustly.
Smaller, lower-taxed businesses are of greater financial advantage than a handful of huge monopolies or duopolies. I think that he tax levied from from a small number of multinationals at an 80% tax rate would be much less than hundreds of thousands of small businesses paying around 5% or 10%.
The distributism of Leo XIII with its principles of subsidiarity to reduce complexity at every level of the economy is the way to go for tax. Firstly by restructuring economies along the lines of cooperative self-organisation and then subsequently a taxation system built on this model. That would make everyone “worth the money”.
Given the widespread disillusionment in our world, the way forward for both our democratic systems and economic structure has to become the way back home. Bringing to life the small units of living and working, and taking back the resources of power, wealth and property into the personal arena where creative living happens.
Obviously it won’t happen from the top down – but it is dawning on lots of people now that nothing does. It will come from below. Communities emerging along the lines of “distributisic” thinking will be the way to fairness, productivity and a much more healthy way of living.
Abundance without affluence.
Nicely put, galerimo.
Thank you John – the Mondragon experiment in Spain is an example of what I am talking about. It comes directly from the ideas in Rerum Novarum through the local priest Fr José María Arizmendiarrieta – and in that depressed economy there are 74,335 (2015) employees: with revenue: 12.11 billion EUR (2015). Link below.
I’m sorry. I read your remarks, firstly with astonishment, and then I read them a second time, looking for any chink of a hope that you were pulling our legs. I came away disappointed, and shaking with indignation.
“Those who delight at increased taxation for the successful are guilty of supporting theft”.
Let me clarify what all-too-often masquerades as “success” in our country. Successful people include those who have profited from the refurbishment of Grenfell tower, from the drilling of the Macondo field in the Gulf of Mexico (Deepwater Horizon), from the operation of the Texas-city oil refinery, from the lamentable BA IT system, from the collapse of brand-new school buildings, from the failure to regulate the banking system and from a litany of high-profile British cock-ups which continuously adorn the front pages of the foreign press. Make no mistake, this level of highly paid incompetence is not normal in the developed world. In our country “success” all-too-seldom refers to genuine wealth creation, and all-too-often means cleverness at wealth extraction.
Nicely put, Alasdair.
I support Alasdair’s views and would add my own.
The complexity of the tax system whereby accountants are able to run rings around it was not arrived at by accident. The loopholes have been deliberately placed there and legislated for!
Why are some MP’s paid many thousands of pounds by multi national companies and conglomerates for just a couple of days work a year ? The companies paying these vast sums will consider it is money well spent because these MP’s ensure the loopholes are created or kept open.
Time and again we read of international companies paying hardly any tax in this country despite millions being made. We have individuals who are paid vast sums and yet get into all sorts of schemes whose sole purpose is tax avoidance.
Is this not theft too but by another name?
You think tax avoidance is the same as theft? Why?
Alasdair, do keep shaking with indignation. But complete your list. You must add the unions who damage the interests of thousands in order to get more money, those who prefer to be self employed to get a better tax and National Insurance position, the myriad of small tradesmen who want you to pay in cash, those who resist immigrants because they do a better job than the lazy Brits, all those who prefer not to work but maximise their benefits.
Here’s a true story (but I can’t identify because it’s inside information) of a well known company which was much criticised for being centered overseas, allegedly for tax purposes. For quite other reasons it decided to repatriate, and is now paying higher taxes than it did before. But of course no one believes them.
Agree with Hock & Alasdair, within my very limited ponderings of taxation. Especially the internationals bribing to control legislation of governments. Same goes for the mega rich who own the ‘internationals’.
But there is a point not mentioned yet. Positions of employment vary in many ways – amounts of learning, artisan skills, responsibility, stress, clean or messy etc – but what defines the monetary value of a ‘position’? Is there a foundation for it?
Are MP’s more ‘valuable’ than Nurses? Are surgeons more ‘valuable’ than Police people? Bank managers more valuable than fire fighters? Celebrities more valuable than refuge workers?
When we consider that society by definition is a shared enterprise, and all it’s parts are needed to function adequately (none being greater than the whole) when ‘economic value’ is the ruling factor, as it is, society is awry and becomes grossly unbalanced; simply due to the greed and corruption of those with the will and deviousness to make it so.
(People and lands of Indigenous cultures have been continually exploited and desecrated by it. And it continues to this day and age. Will we ever learn?).
The system of economic rule for profit is thoroughly corrupt & destructive; the deck is stacked in favour of those that have more economic clout. Because they ‘buy influence(s)’ to enforce their way to power and wealth.
The majority of society, even when they consider it wrong, seem to accept that as the norm. (Which has always been beyond my comprehension).
Not advocating ‘same’ wages for all (although i don’t see that as unworkable) but a fairer deal is the only way society will work, by ridding itself of the over valued positions people have created for themselves.
No body NEEDS to earn vast amounts to live a decent life. But most strive for fortunes; madness.
One last point. Anarchy (True Anarchy) is not lawless or leaderless. People being responsible for each other’s welfare, altruistically, is the rule. It has nothing to do with cloaked bomb wielding oppressive dictators – like the ones we have trying to control the world now through economic power.
All of the above is ‘said’ quite calmly and sincerely – it’s not a ‘rant’ – please don’t read it as such.
(if anyone needs intellectual presentations of the above look up Noam Chomsky on U Tube).
Do you have any working examples of True Anarchy? While open to new ideas (I hope!) I confess to much scepticism about this one
There is (or was a ago) a group of communities (small villages) in South Africa or Australia …. but can’t find info on the web …. but Nos. 7 6 & 4 on this list http://listverse.com/2016/06/29/10-instances-of-anarchist-societies-that-actually-worked/ might be worth looking at.
Immigration is supported by Global companies because it keeps their wage bill down. They don’t care tuppence about the poor immigrants.
Where are all these lazy Brits? No doubt you think they all “up North”. Much of the economic problems in the past were due to both bad management and union militancy; which came first? Nissan in Sunderland is one of the most productive companies in the world with “lazy” Brits and Japanese-style management.
What is the better National Insurance position for small businessmen, that you mentioned?
Just to let you know my position, I have always been right-wing but many modern right-wing politicians haven’t a notion about life outside the South-east suburban chattering classes.
Many of the comments above demand a perfection that is beyond human nature whose aberrations are best moderated by a free press, transparent institutions, laws and a judiciary.
Extending the notion that some taxation can be seen as theft, it is the use of public debt to pay for everyday costs which is a very unfair intergenerational theft.
In my city the Council borrowed £150,000,000 in 1991 to finance the World Student Games which cost £125,000,000, and some buildings. The total of the capital and interest to be paid back over thirty years is £650,000,000, and the city is still paying £25,000,000 per year. All there is left to show for this is a swimming pool, a refurbished theatre and an arena all of which could have been built ten times over with the interest we are paying.
This is happening on the national scale with a cynical public antipathy towards those who act to exert restraint.
I don’t think this discussion is working out well – too high a ratio of righteous indignation to common sense.
What defines the monetary value of a job? Scarcity, primarily, in relation to the demand for the skills required. So skilled surgeons are well paid, but much less than top-flight professional footballers. I do not deny that avarice is a sin, but trade – driven by the search for profit – benefits society as a whole. People exchange what they have enough of for what they need more. Laws are needed to control abuses. Monopoly power – whether of large firms, cartels or trade unions – must be limited. If this is done properly, huge corporations do not have the power to exploit workers with slave wages. And I should say (having worked for a huge corporation for 35 years) that many such firms treat their workers well.
‘but trade – driven by the search for profit – benefits society as a whole’. No it doesn’t.
My common sense, when i look at the cartels and big banks that control the political/social climate, tells me it doesn’t.
When i look at the economic system that pays people to trade in stocks and shares, (creating profit from nothing as do the banks) and using peoples skills and earths ever scarcer commodities as collateral my reason tells me it’s not working.
The avarice you speak of is instilled, throughout the whole of society, by the economic search for profit. It’s an INSIDIOUS evil, most are blind to.
Most of them that do see it manipulate it for their own profit. In all walks of life.
The starving, the homeless, the refugee, the poverty stricken worker, and wars, are the results of the monopoly on wealth and power NOT being limited.
Laws are NOT being used properly to curtail it. They may be put in place to do so, but are ignored or sidestepped by those with enough wealth and power to buy the ‘skills and commodities’ to evade them. Which often entails using governments, legislation and law enforcement, all bought and paid for. When that doesn’t suffice there’s always the people, (bought and paid for) who will bully, intimidate and kill for profit.
Yes, the system works fine for them that buy into it; those that bow to the pecking order of ‘masters’.
(And that’s in ALL levels of society. We live an unconscious subversive feudalism).
Those that can’t be used for profit are being discarded & left to die. ‘Social cleansing’ comes in many forms.
But that’s OK, after all Jesus said ‘you will always have the poor with you’. But he also drove out some from the Temple when overcome with indignation.
Common sense can be justifiably indignant. Peaceably though … i have to love my enemies too ….
What a splendidly strong contribution! Of course it’s nonsense. Yes, there is plenty wrong with our society, and there are greedy cheats at every level. But your approach has only two possible outcomes: back to the Middle Ages or full blown Marxism. Which of these would you like to impose on a society which has never had a better standard of living in general than it has to today?
“your approach has only two possible outcomes: back to the Middle Ages or full blown Marxism.”
Don’t see how you get that from my post. Did you actually read it and reflect on it?
Am saying we (mostly) buy into this present society. …….. as previously stated …
‘ (And that’s in ALL levels of society. We live an unconscious subversive feudalism) ‘. ….
Which is a ‘Middle Ages’ mentality already, my life..
Communism has been tried and fails miserably for much the same reasons as the ‘profit’ based rubbish.
More and more in numbers suffer the consequences and are locked into the power/wealth struggles and wars without any out let, and are left to suffer the consequences and/or die. (Just as Medieval Feudalism). And the consequences are getting worse, affecting more and more people world wide. It’s obvious the system we have now is failing just as much as Communism does. For much the same reasons.
So more austere (and brutal) means are being gradually imposed by the ‘overlord’s’.
That too is obvious. My post explains why perfectly clearly.
Why are there so many wars world wide? … Power and resources.
As for ‘imposing’ an alternative i couldn’t not leader material; not nearly clever enough … or profit based enough.
The only way out of the mess i can see is a gentle steady Evolution to (True) Anarchy. ….. ( from G.D. says: June 16, 2017 at 10:14 am my previous post) ……….. ‘Anarchy (True Anarchy) is not lawless or leaderless. People being responsible for each other’s welfare, altruistically, is the rule. It has nothing to do with cloaked bomb wielding oppressive dictators – like the ones we have trying to control the world now through economic power.’ and wars.
It’s all about ‘loving your neighbour as yourself’ …
Not as your chattel for profit. That too is ‘an INSIDIOUS evil, most are blind to’.
“It’s the economy, stupid!” goes the saying. And it’s right. In the Middle Ages wealth was in land: you were either a grandee, or in the rich monopoly of the Church. There were no instruments through which the serfs, effectively slaves, could improve their lot either through well paid work or investing in business through shares etc. Marxism sounded much fairer — but you know how that worked out. Except for the few grandees the population was again trapped into effective slavery. The only way which has a chance of working is the mixed economy in which people can make choices, be rewarded for their successes, and invest in the potential investments of others. Of course it’s far from perfect, and often abused, but it’s much better than the alternatives.
‘The only way which has a chance of working is the mixed economy in which people can make choices’. I totally agree. (Although i would change ‘mixed economy’ for ‘mixing of values’). And add, as a rule, ‘for the well being of all’…… Which means all people are given the respect and freedom to make choices, within the support of the communities consensus.
‘rewarded for their successes’ … what counts as success, and by what criteria is that judged?
Success for a poverty stricken family is to place food on the table day by day. Nobody rewards that. Success for a refugee escaping death is to reach the shore of a foreign land, nobody rewards that. Success for a depressive is to get out of bed and get dressed, nobody rewards that.
There is no economic profit in any of them. But they are successes.
If they were to be rewarded and respected for their successes, just maybe, they could be part of the mixed ‘economy’? And those within the mixed economy would gain some kind of profit from them?
As for investing ‘in the potential investments of others’ that depends ….. on many factors.
“‘but trade – driven by the search for profit – benefits society as a whole’. No it doesn’t.”
Yes it does. Not in every instance, no doubt. But generally, on balance – strongly.
You are looking only at the evidence that favours your case (a common tendency, which I certainly share).
Consider a system that kills 15 people a day in UK, a million a year world-wide, and maims tens of millions more, at the same time polluting the environment. Sheer evil – obviously it’s not good enough to regulate it, it must be totally banned. That system is motor transport. We don’t ban it because it has benefits that (most of us judge) more than compensate. So with trade. Trade needs to be regulated – which is difficult, as both over-and under-regulation cause problems, which are often not immediately apparent. So evils result.
What has been the main cause of poverty reduction in the developing world over the last half-century? Answer: the abandonment by China of doctrinaire socialism and the command economy, combined with encouragement of private enterprise and trade, supported by the profit motive.
Nor has this been at the expense of the rest of the world – the rest of us have benefited enormously from cheap Chinese exports and competition. China’s system is obviously very far from perfect, but trade opens it at least partially to influence from the rest of the world. Most of its numerous inhabitants are much better off than those of Venezuela or even Cuba.
I’m sorry Tim, trade can still function (in fair[trade]ness for all) without the need for seeking profit. ….. I’m not saying it could happen overnight (if at all!) but it’s been studied (and adequately proven for me) there are enough resources, and means of non-polluting cheap power sources, for all peoples to live adequately comfortable lives. It’s the profit (and the power it brings) that causes the harm. It’s a needless anathema.
Has been for eons – i pray it won’t be so forevermore ….
Education about alternatives is suppressed, research and inventions for it are suppressed, the means and ways to enable it are suppressed. When communities attempt to, and have too much success, in getting out of the present system of the profit trap, they too are suppressed. By governments! Even growing your own food in some states of America is a no no.
Monsanto, an agricultural company that patents seeds (patents seeds!) and fines small farmers if self seeded plants grow on their lands …. duh! For profit and control.
We have the technology & means to make it happen, it’s the will to so that’s lacking – all for the sake of lost profits/power, and lack of control over others.
I don’t have the disclosures and studies to hand but a google search will give ample learned and legitimate publications of all the above, and more.
(If the power mongers and big cartels haven’t got them deleted yet lol).
GD, I’m grateful for your patience, but we don’t seem to inhabit the same universe – or even use words in the same way. Take ‘profits’. It seems that for you ‘profits’ means something that is intrinsically bad. Trying to make a profit is a major source of evil. Most businesses (I don’t say all) provide services which people need or at least want. To do this, they use resources: capital, labour, land, energy. A business that makes a profit is self-sustaining. If instead it loses money, it will have to be subsidised (out of the public purse) or close. And the needs it meets then remain unfulfilled. Profits are – typically – a sign that resources are being used effectively rather than being wasted. Obviously this is not to say (and I’m sure you wouldn’t accuse me of thinking!) that making profits can justify any activity – obviously not. Importing and distributing heroin can be very profitable, but that doesn’t mean it should be allowed.
I take the point about control. If a market is reasonably free, prices are set by the interplay of supply and demand. If demand for a product increases, the price tends to go up, which will encourage competing suppliers to provide more of it (to make more profit) which acts against the price rising further, perhaps sending it below what it was before. If there is only a single supplier, it can charge whatever it fancies – but if there are competing suppliers, each can only charge the minimum that will make them enough profit to stay in business. That is why we need laws against cartels and to control monopolies.
As for alternative technology being suppressed, to think that this occurs on a large scale is fantasy. I don’t say it never happens, but as someone who has spent a lifetime in a related professional area, I’m confident it’s at least extremely rare. Most innovations don’t work, aren’t popular or aren’t profitable – those that succeed are the exceptions.
Few people like Monsanto – but in fact the world owes them an enormous debt for the work they’ve done in introducing GM crops, initiating and demonstrating the power of the technology, which will help to feed the world. In terms of profits, they’ve done pretty well out of it too – and deservedly so!
‘but we don’t seem to inhabit the same universe – or even use words in the same way.’
Same universe Tim, there is only one! Different take on the meaning & way it can work is all. I agree to differ.
Here is a short video http://www.ubuntuparty.org.za/2017/06/one-small-town-can-change-world.html (expressed in a rather Utopian way i’m afraid) that i believe contain ‘seeds’ (un-patented!) of an alternative way of approaching a sustainable world. That over time, would work.
But them in power and control, that take the lions share of surplus profit for the sake of ego power and control, won’t want it too happen, and repress it ….. Which is not the same as a surplus that sustains, increases ‘produce’ & necessities, and is reimbursed for the good of all.
Think of the NHS as was and as it is becoming now – which is due to a deliberate long term plan to make profit for the share ‘owners’ of the services out of the sick! Same as with private prisons for profit, power suppliers, the facade of sustainable housing that create profit for them that own the production of them ….. All legitimised by ‘authority’ – legislation and government – for profits to line pockets of … whoever they deem is fit to have it. Mainly themselves and co-horts.
And no, no one has the right to have a patent on food (seeds) or water resources. (Or to eat & drink vast amounts while others starve. But that’s a different issue i guess).
Ummmm lol … maybe i desire to live in that ‘different universe’ you mention … it’s far better than the one i inhabit now. …. It is a POSSIBILITY.
All it would take is the will to correct the rampant corruption and immense failings in our present systems that stem from the legitimised seeking after profit for profits sake. Which is the cause of it.
Agreed G.D. and well said.
The Mondragon experiment I mentioned above is a good example of that one small town and it has been going since1956 and now has 74,335 workers with a Revenue: 12.11 billion EUR (2015).
My question after watching Tellinger is around the health and education in the town of 5,000 – how are the disabled, the sick and “the economically non productive”, cared for?
And yes you are right again and in line with the latest Science around the possibility of other universes. (The Copenhagen interpretation of Heisenberg’s Uncertainty Principle – to be blunt).
I want to be in your universe G.D. definitely – and not one with Monsanto in it!
GD – There is (as far as we know) only one universe (which you and I both inhabit) but there are many different theories about how it works. Some of these are more plausible than others. Some may be favoured above others because they fit our preconceptions better. An example is Fred Hoyle’s rejection of the Big Bang theory, at least in part because he felt it inappropriate that the universe should have a beginning in time. So our prejudices (which we all have) can let us down.