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An interesting perspective on my views of tax and spend

Former MemberFormer Member Posts: 1,876,323 The Mix Honorary Guru
Well, I think it's no secret on here that I am somewhat of a socialist - I believe if left to it's own devices, our economic system under-provides for the poor and over-provides for the rich. Someone would be able to work 70 hour weeks and not even afford basic healthcare if it were not for the government stepping in.

But, I was watching of all things a youtube video the other day (I have lost the URL for now, but it's largely irrelevent) and it was by an American who was saying how taxation actually works in the opposite way. This is because, it takes money from the young workforce, who might be earning £30-£40k, maybe with families and so on, and gives it back in benefits and kind to elderly people who also might have a pot full of spendings, a couple of homes owned out-right, and all their dependents have left home and have life of their owns.

Effectively, it's taking money from those that work and giving it to those who are actually more wealthy. This has pretty much blown some of my pre-formed nice simple assumptions about the market 'needing' correction out of the water, as obviously we can correct it wrongly if we're not careful :p.

I was wondering what other people's thoughts on this were? No flaming plz :(

Comments

  • Former MemberFormer Member Posts: 1,876,323 The Mix Honorary Guru
    Last time I looked most of my tax went to national insurance. Income tax pays for EVERYTHING else. Now if I'm paying to look after other people then so be it. I don't mind because I know if I need it other people will be paying to look after me.

    Have you ever seen Sicko by Michael Moore? Really interesting film if you haven't and one that makes me extremely grateful for our system, however flawed it might be.
  • Former MemberFormer Member Posts: 1,876,323 The Mix Honorary Guru
    Have you ever seen Sicko by Michael Moore? Really interesting film if you haven't and one that makes me extremely grateful for our system, however flawed it might be.

    Seconded. As of 2005 getting ill was the leading cause of personal bankrupcy in America.
    Last time I looked most of my tax went to national insurance. Income tax pays for EVERYTHING else. Now if I'm paying to look after other people then so be it. I don't mind because I know if I need it other people will be paying to look after me.

    I wish more people thought like that. Recent opinion polls suggest a hardening of views towards (for example) benefit claimants across the board - even those who have worked for years and through no fault of their own lost their jobs.

    There's a bit of a latant perception that Income Support isn't a social security safety net that we all pay into, but just a sponger's breakfast.

    There are spongers - but they aren't now and never have been in the majority.
  • Former MemberFormer Member Posts: 1,876,323 The Mix Honorary Guru
    I agree, it was the way the argument was worded, basically old people already have worked and built up nice nest eggs for themselves, they're growing in number, yet still demand a state pension even if they have a second, third home etc. and it's essentially bleeding the working classes / middle classes dry. At least, that was his line of argument.

    The reason it made me think was that it wasn't your typical 'the state is just giving it to migrants' or whatever, it was actually considered. The reason this may allegedly be the case is because seniors are one of the biggest voting groups. So they 'bully' the government (apparently again) into making sure they are well provided for, even if they are well off enough themselves, meaning someone in the middle earning bracket might be paying a huge wedge of cash in tax yet still has to make big rental payments (to the older classes likely), living expenses etc. which are less of a worry to those of retirement age.

    IDK though, from personal experience my grandma was pretty down and out when she retired, but she had lived hand-to-mouth virtually her whole life (people were a lot poorer then) so never had the opportunity to build up any kind of nest egg.
  • Former MemberFormer Member Posts: 1,876,323 The Mix Honorary Guru
    Whowhere wrote: »
    Last time I looked most of my tax went to national insurance. Income tax pays for EVERYTHING else. Now if I'm paying to look after other people then so be it. I don't mind because I know if I need it other people will be paying to look after me.

    VAT, capital gains, stamp duty, corporation tax, petrol duty, excise duty?

    Have you ever seen Sicko by Michael Moore? Really interesting film if you haven't and one that makes me extremely grateful for our system, however flawed it might be

    The US health system is flawed, but the Federal Govt actually pays in more per person than the UK (or Canadian), so the problem isn't to do with taxation.
  • Former MemberFormer Member Posts: 1,876,323 The Mix Honorary Guru
    The US health system is flawed, but the Federal Govt actually pays in more per person than the UK (or Canadian), so the problem isn't to do with taxation.

    If I remember correctly the central problem highlighted with the US system was the growth of the HMO's and the way they control access to medical care and the pricing arrangements of care. So not surprising to find out the Govt. is putting in a huge amount of money per citizen for a smaller return.
  • Former MemberFormer Member Posts: 1,876,323 The Mix Honorary Guru
    I'm not too bothered about the money I earn going to the older generation through taxes but I don't like the thought of it going to people my age (18) from council houses (don't think I'm being a snob, I'm really not) who have gotten into the mindset that they need their own council house because for some reason living with their parents is too challenging for them and do stuff like have unwanted children to achieve that. I don't like the idea of the government perpetuating the unsustainable lifestyles that people demand. I've not got a lot of faith in the UK tax system mainly because of the sheer stupidity of stuff like taxing diesel so highly that it is more expensive than petrol even though it is more enviromentally friendly.
  • Former MemberFormer Member Posts: 1,876,323 The Mix Honorary Guru
    You know it's interesting this has just come up since I'm currently, amongst a couple of other things, working my way through the Beveridge Report -

    On a personal level I think it's always easy to look at others circumstances and make prejudgments based on misconception, maybe even envy and certain it's easy to be influenced by media reports that twist facts.

    However it was interesting reading what you've written Tango in the context of Beveridge's second and third principals of the final report -
    'The second principle is that organisation of social insurance should be treated as one part only of a comprehensive policy of social progress. Social insurance fully developed may provide income security; it is an attack upon Want. But Want is one only of five giants on the road of reconstruction and in some ways the easiest to attack. The others are Disease, Ignorance, Squalor and Idleness.

    The third principle is that social security must be achieved by co-operation between the State and the individual. The State should offer security for service and contribution. The State in organising security should not stifle incentive, opportunity, responsibility ; in establishing a national minimum, it should leave room and encouragement for voluntary action by each individual to provide more than that minimum for himself and his family.'

    So my question would be - does the government do enough to challenge possible 'idleness', as Beveridge puts it, and does the government leave enough room and provide enough encouragement to support people trying to change their own circumstances?

    As to the original point - whilst a system of universal care does provide support for all it's worth noting two things. There are a huge number of elderly people living in desperate poverty without any way of making more money and secondly, the elderly, in the UK, are required to make large contibutions towards their own care, beyond a relatively low level of savings.
  • Former MemberFormer Member Posts: 1,876,323 The Mix Honorary Guru
    Jim V wrote: »
    If I remember correctly the central problem highlighted with the US system was the growth of the HMO's and the way they control access to medical care and the pricing arrangements of care. So not surprising to find out the Govt. is putting in a huge amount of money per citizen for a smaller return.

    The argument basically goes that the US Federal Govt pays for the poor and the old (and children if I remember), so basically the poorest people, and actually despite the myths pays a lot into them. However in working out who should get free healthcare and who pays it has to put an awful lot of funding into the back-office systems (according to tim Harford in the Undercover Economist about $1000 per person compared to $307 for Canada

    As a secondary issue, is the pay of staff which perhaps isn't suprising as the U has a per cpaita income of $47,000 (2008 est.) compared to the UK's $36,600 (2008 est.)*. So, assuming that in the Uk and US doctors and nurses are paid a roughly equivalent proportion of the GDP, in the US they're having to pay roughly 20% more in real terms (and my understanding is that due to the private health care system nurses at least are actually paid a higher proportion of the per capita income than in the UK)


    *both form CIA World factbook
  • Former MemberFormer Member Posts: 1,876,323 The Mix Honorary Guru
    Jim V wrote: »
    As to the original point - whilst a system of universal care does provide support for all it's worth noting two things. There are a huge number of elderly people living in desperate poverty without any way of making more money and secondly, the elderly, in the UK, are required to make large contibutions towards their own care, beyond a relatively low level of savings.

    True and without seeing the original video the argument seems to be flawed, as even people who are are comfortable in terms of wealth are also more likely to suffer from ailments, which it's too expensive for them to treat from their own resources.

    In a perfect world you would design a tax system which means that the wealthy wouldn't get state pensions and child benefit, but those in desperate need would get more. It's politically difficult to do.
  • Former MemberFormer Member Posts: 1,876,323 The Mix Honorary Guru
    Mind you it's also always worth remembering one fundamental reason why child benefit is provided universally.

    In household where, for example, a mother isn't working and a father is there isn't any automatic guarantee that money would be provided to support the child. In an ideal world, obviously the breadwinner would provide the money they should - but not always.

    By providing universal child benefit there is a guaranteed income provided to support a child, paid directly to the person primarily responsible for their care.

    However it's a unique case since the benefit is provided for those particularly unable to make their voice heard if they weren't being properly provided for. And of course, the system does fall apart on those rare, but terrible occasions when everyone responsible for the welfare of a child doesn't uphold their responsibilities.
  • Former MemberFormer Member Posts: 1,876,323 The Mix Honorary Guru
    Well like I say I still believe in giving out to others especially those in need, it was just an interesting take on it. Got Sicko on the download, and will try and find the video though not sure where it has fallen to now.
  • Former MemberFormer Member Posts: 1,876,323 The Mix Honorary Guru
    As a secondary issue, is the pay of staff which perhaps isn't suprising as the U has a per cpaita income of $47,000 (2008 est.) compared to the UK's $36,600 (2008 est.)*. So, assuming that in the Uk and US doctors and nurses are paid a roughly equivalent proportion of the GDP, in the US they're having to pay roughly 20% more in real terms (and my understanding is that due to the private health care system nurses at least are actually paid a higher proportion of the per capita income than in the UK)


    *both form CIA World factbook

    Just out of interest, this seems to be the statistics that you're going off there. Do you know whether that or this is more reflective of comparisons between countries on this issue? Wikipedia says that the latter doesn't take into account differences between the cost of living, and as such is just money in absolute terms, whereas the former is purchasing power, and so it's altered to reflect cost of living. So presumably if we're comparing the absolute amounts paid out of medical staff, it would be the non-adjusted figures that would be more accurate? But presumably neither are reflective of average salary, because I doubt the average worker in Qatar earns over $140k a year.
  • Former MemberFormer Member Posts: 1,876,323 The Mix Honorary Guru
    I don't agree with the argument in the OP. Firstly, the term "might" isn't especially useful when referring to things that cover the whole of society. A sick person getting an operation on the NHS might be able to afford to pay for it out of their pocket. A rich parent might be able to afford private schooling. But they've still paid into the system (usually more than most other people), and so have as much right as anyone else to take out of it when they need it. You can't operate a system where the rich have to constantly put money in, and have no right to take out when they're entitled to. Imagine if you bought car insurance, and the insurer turned around to you after an accident and said, "actually, I think you've got enough in your bank account to get the work done yourself." I don't see any problem with the idea that if you're unable to work (either through disability or being past retirement age), you are given a basic living allowance no matter what your circumstances. If you're rich, you'll still be paying tax on the interest of whatever's in your account, and will have presumably paid a lot of money prior to that. If you own a company, you will still be paying tax on anything you are earning from that. If you own houses, you will still pay inheritance tax when you die. Whatever the situation, I don't see a massive issue.

    As for means testing, I think the whole thing is a load of shit, that exists purely for political reasons. Firstly, it would involved sacking a hell of a lot of people involved in the overblown administration that comes with any means testing. And secondly, it allows you the apparent level of tax lower.

    But we already have a system of means testing. It's called taxation. You put more in the more you earn. Why have another system at the other end trying to figure out all of the same things that has already been done during taxation? And it's pretty simple why they do it. It allows governments to give "help" to "hard working families" while at the same time appearing not to be putting up taxes. It's a big con. Just be honest about it, whack up the basic rate of tax, and let everyone claim. It would reduce waste massively. It would also encourage people to try and earn more, because they wouldn't be under the impression that if they do work hard and are finally financially secure, all of their money would be taken away again if they had the misfortune to require permenant care in their old age (and incidentally, I have no issue with high rates of inheritance tax, either).

    Obviously, the current financial climate isn't exactly the best time to be making this argument, but I think long-term, it would be the best solution. I think it would combine the safety net of a socialist system with the incentive to succeed of a capitalist one. But as a single, working man, I'd probably end up out of pocket. :grump:
  • Former MemberFormer Member Posts: 1,876,323 The Mix Honorary Guru
    Jim V wrote: »
    Mind you it's also always worth remembering one fundamental reason why child benefit is provided universally.

    In household where, for example, a mother isn't working and a father is there isn't any automatic guarantee that money would be provided to support the child. In an ideal world, obviously the breadwinner would provide the money they should - but not always.

    By providing universal child benefit there is a guaranteed income provided to support a child, paid directly to the person primarily responsible for their care.

    However it's a unique case since the benefit is provided for those particularly unable to make their voice heard if they weren't being properly provided for. And of course, the system does fall apart on those rare, but terrible occasions when everyone responsible for the welfare of a child doesn't uphold their responsibilities.

    True, that said I wouldn't have thought its insurmountable with the right legislation and incentives.
  • Former MemberFormer Member Posts: 1,876,323 The Mix Honorary Guru
    Just out of interest, this seems to be the statistics that you're going off there. Do you know whether that or this is more reflective of comparisons between countries on this issue? Wikipedia says that the latter doesn't take into account differences between the cost of living, and as such is just money in absolute terms, whereas the former is purchasing power, and so it's altered to reflect cost of living. So presumably if we're comparing the absolute amounts paid out of medical staff, it would be the non-adjusted figures that would be more accurate? But presumably neither are reflective of average salary, because I doubt the average worker in Qatar earns over $140k a year.

    It's the former, I was being lazy :D
  • Former MemberFormer Member Posts: 1,876,323 The Mix Honorary Guru
    Socialism is basically the practice of taking my money and giving it to the two extremes in society - lazy scroungers who refuse to work and the rich bastards at the top. We've seen it during this credit crunch. Instead of allowing the inefficient over-stretched banking system to fail, what did we do? Yes, we gave them a load of money and hoped this would somehow sort everything out. Yeah, like that's worked. In order to avoid this happening again, a system should be introduced where if a bank faced a run and wasn't able to pay back all its depositors, the entire board of that bank would face criminal charges. Under that system, the people at the top who gave us the credit crunch would now be facing jail. That might stop wankers from pissing money up against a wall on dodgy mortgages.

    On the other extreme, the amount we're spending on social welfare (i.e. benefits) is now higher than the entire income tax revenue of the country. Labour tells lies about how this is simply because of the recession, but this excuse doesn't hold any water. Labour has practically made its own client state, giving everything they need to the lazy and feckless whilst taxing everyone else an absolute fucking fortune. There is no incentive for the poorest in society to work when they have to hand over a disgusting 31% of their income to the state - or anyone else, come to that.

    It's no wonder I'm increasingly becoming more and more libertarian by the day. When will socialists understand that the state is not your friend?
  • Former MemberFormer Member Posts: 1,876,323 The Mix Honorary Guru
    ShyBoy, I feel that until you actually start paying tax, you're not entitled to an opinion on how it's used :D Bloody students!

    Only kidding. Seriously though, interesting that someone mentioned Sicko as I think it's Moore's best film by a long way though sadly didn't receive the attention that the previous two did.

    I'm just annoyed that a third of my salary is taken in tax, half of any bonuses I make, and the only things I take from it are the basics, like police, ambulance, fire, NHS, schools (none of which I've ever used) and highways which is probably the one thing I will ever use. Will certainly fight tooth and nail never to use the state education system if I can possibly help it. Though I guess this is what being part of a society is. I just wish that the money I do pay in tax is spent a little better.

    Oh well, will just have to bide my time until I become the supreme overlord of the world.
  • Former MemberFormer Member Posts: 1,876,323 The Mix Honorary Guru
    stargalaxy wrote: »
    It's no wonder I'm increasingly becoming more and more libertarian by the day. When will socialists understand that the state is not your friend?

    I just base my opinion on looking at how the best countries in the world operate. The same countries constantly come near the top of all of the measures of a good society (health, education, productivity, etc), and the bottom of all the measures of a bad society (crime, teen pregnancies, drug addiction, etc). They're not perfect, obviously, but are generally more successful all round. And non of them do so by operating a libertarian system. The closest to that in the western world is America, which comes off worst in pretty much every measure of a successful society. Just because our government can't use its money properly, doesn't mean the system itself is the problem (which isn't socialist, it's a combination of socialist and capitalist that almost all countries operate).
  • Former MemberFormer Member Posts: 1,876,323 The Mix Honorary Guru
    Downloaded sicko so will probably watch it tonight, I could not find the youtube video in my history unfortunately, so sorry about that. Stargalaxy - you might be right but isn't that overlooking the issue of the needy in society? We used to look after them through charity - most people would go to church and donate in the tray which would then be used to run homeless hostels, charity hospitals, that kind of thing. These days the state does that mostly. It's easy to say "i don't care about the suffering of others, I don't want to be taxed" but don't we have a moral duty to look out for those less fortunate than ourselves?

    I'm not sure the state always gets it right though, I mean just look at their genius invention of the workhouses to cure homelessness and joblessness in one fell swoop.

    Thunderstruck - you might be right but I end up having opinions by accident. I used to be fairly pro-communism as an idealist system, but realised there were fundamental flaws (human greed for starters). So I've become much more moderate, but still believe in the concepts (proved over time) that if society is unmoderated some people tend towards exploiters and some tend towards exploited. I thought tax was a good way of fixing this but obviously there are serious questions around that, if some people are exploiting the tax system themselves so it's actually creating further inequality.
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