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An interesting perspective on my views of tax and spend
Former 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 .
I was wondering what other people's thoughts on this were? No flaming plz
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 .
I was wondering what other people's thoughts on this were? No flaming plz
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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.
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.
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.
VAT, capital gains, stamp duty, corporation tax, petrol duty, excise duty?
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.
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 -
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.
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
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.
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.
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.
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:
True, that said I wouldn't have thought its insurmountable with the right legislation and incentives.
It's the former, I was being lazy
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?
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.
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).
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.