We get people like Sunny Hundal puffing in disgust because someone on £250,000 a year might be paying LESS than 40% in tax.
40% is £100,000 in tax. One hundred THOUSAND pounds in tax from one individual. Every year! That is four times the entire pre-tax wage of those on average incomes. It is TWENTY times that paid in tax by those same people. One person paying twenty times that of another.
Why? Because they are outnumbered, for a start.
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Although the end will be terrible, at least it will be the end.
The Welfare State has now grown to such a size that if all rich people had ALL their income confiscated (indeed the organs from their bodies sold for spare parts) and it still would not keep the Welfare State going much longer – indeed such confiscation would bring down the Welfare State even faster (by collapsing the economy).
“That is why we should CUT tax rates Paul – that will save the situation by raising government revenue, just as it has done several times in the past”.
In normal times yes. But these are not normal times – I do not believe that people really understand just how unnormal things now are.
MOST people a MAJORITY now either work for the governmnent (or government backed organizations) or get government payments (so called “tax credits” and so on).
Please think about that – it is MOST people, the MAJORITY. Who either work for the government or get payments from it.
There is no way that is sustainable – put taxes up, leave them as they are, cut them….. in the end it will make no difference.
The health, education and welfare (all payments) budget is now vastly larger than it was in 1978-9 (even as a percentage of the economy) – so much from the “turn away from Social Democracy” that the media and the education system claimed happened after Mrs Thatcher became Prime Minister.
And it is vastly bigger than it was in 1990 (when Mrs Thatcher was betrayed by members of her own party, over the small reforms she had tried to put in place for the present and the future).
How can a system this far gone be reformed?
I do not think it can – I think a system this far gone is bound to head to bankruptcy.
Final note – to the “libertarian left”.
Ending overseas wars would make bugger all difference – indeed abolishing what is left of the armed forces would not save the “public finances”.
As for an end to “corporate welfare”.
I agree that the Bank of England should be abolished (right now – today), but that would not save the economy.
On the contrary the entire financial system would collapse if the Bank of England was abolished – as the banks and so on have become addicted to the funny money from the Bank of England (and the European Central Bank and the Federal Reserve, oh yes British banks accept its “loans” also, and the Bank of Japan, and the Swiss Central Bank and…..).
The old idea of fiancial services – that people in the industry take REAL SAVINGS (money that has been earned but people have chosen NOT to consume) and invest it in productive industry, is no longer the central part of the finanial industry.
Today the central part (not all of it – but the central part) of the financial industry is to get credit-money (money created from NOTHING) and use it to fund CONSUMPTION.
Private consumption (such as people buying houses they can not really afford) but also (and more importantly) GOVERNMENT consumption – the Welfare State.
Yes – governments create money (via Central Banks) lend it out to private banks (at sweetheart interest rates), and then borrow the money back (at a higher rate of interest) to finance the Welfare State.
“Well everyone benefits from this Paul – the rich benefit from working in the various financial services industries, and the poor benefit by having the Welfare State financed”.
This is one of the few places on the internet where I do not have to explain why this “argument” is insane.
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Oh – a minor matter I missed.
Taking all tax changes into account, the recent budget in Britain greatly INCREASED taxation on the wealthy (mostly via property taxation – but in other ways to). Even if one takes into account the promised cut in the top rate of income tax from 50% to 40% in April 2013.
A reduction in the top rate that will not happen anyway – as the “emergency” economic conditions of April 2013 will mean the promised cut in the top rate will be withdrawn.
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This issue is interesting, because it’s one of the places classical liberalism went wrong.
This from Adam Smith:
“It is not very unreasonable that the rich should contribute to the public expense, not only in proportion to their revenue, but something more than in that proportion.”
Most people don’t find this particularly outrageous, but we are now dealing with the consequences of long-term progressive taxation, that is, the public believe (correctly, at least on the face of it) that when taxes go up it means they get more and the wealthy get less, so they wind-up in FAVOUR of tax in general. Consequently being anti-government in-of-itself looks like a right-wing position (in the sense of favouring the wealthy), the subtle underhand privileges gained by the wealthy are not so obvious and impossible to quantify. This makes libertarianism a hard sell.
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