When Is Too Much Enough?

Taxation. Now there's an easy subject that we can swiftly solve in a corner of a football club forum. It's not easy. If it was it would have been solved.

Taxation of wealth for me is problematic. Take the following example as one of many reasons why I think as such.
2 people on the same carreer path. Person A lives frugally and saves up a nice pot for their retirement. Person B wastes all their money on drink and drugs has has not one pot to piss in at retirment. Why should person A now have to subsidise person B's retirement? Wealth taxation is a disincentive to save to support oneself. It takes no account of ability to pay, how the wealth was accumulated etc.

Then again excessive taxation to control wealth generation can also cause issues. There's a fine line between what someone thinks is fair taxation and what they think is unfair. Those earning enough will take aggressive and legal measures to avoid it if they think it's too high and you end up receiving less in the end. The highest earners are generally mobile will move themeselves and their businesses to lower tax areas if they feel they need to with knock on effects to the economy
We need to tax at a level that collects enough but also rewards hard work, aspiration and progression. I'm not sure that increases in our current tax system will actually net much more.

And that's where a suggestion of a cap is also for me problematic. At no point can we suggest that it's OK just to stop and coast. An issue we have in the NHS is senior staff retiring early or switching to part time, simply becasue their pensions are maxxed out or to maintain the hours would mean little to no extra revenue.

We need a simplified tax system, more efficient to manage and more difficult to evade/avoid. We need to raise the level at which taxation starts maybe to a location weighted living wage and we need to be a damn site more careful about the money government spends.


I'll stop now as I could go on for hours about this subject.

 

I think you have the wrong target. These people (creative, athletic etc) are unique and are selling themselves and their unique talents. The ones you ought to be focussing on are the bankers, the "captains of commerce", who are earning obscene amounts because of who they know/what school they went to, all the while adding sweet FA to humanity. Glorified bookies most of them.

 

The sad reality is the popstars, actors, athletes etc. are relatively poor compared to the richest in society.

They're really not the people we should be looking at.

Wealth taxes aren't aimed at people like person A. They're aimed at those with enormous generational wealth and people who have accumulated ludicrous levels of assets.

The solution for people moving out of country are relatively simple when it comes down to it: all citizens are eligible for UK tax, regardless of where in the world they live (the US already does this). Don't like that? Renounce your citizenship (which generates a taxable event). As for businesses, all money earned in the UK should be taxed in the UK, no matter where the company is based.

We need to stop people taking the piss by "residing" overseas or moving their company HQ to a country simply because it has a lower tax rate.

 

Perhaps all the super wealthy actors, musicians, writers, athletes etc who spend so much time promoting their social awareness could give 95 per of their wealth to the poor. Maybe the rest of us could have a tax cut if they did

 

If you think investment banks/hedge funds hire based on old school ties then you're living in the 80s and probably not in a position to comment.

 

What do they do? For humanity?

 

Not a lot. I’m just correcting your comment that they get in on who they know or where they went to school. It’s just a bunch of smart people going where the money is. Banks will just hire the smartest they can and it’s very competitive. Loads of Europeans in the intakes. Dunno if Brexit will mess that up though.

 

Agreed. Certainly on the trading floor that I used to work in, the people that got on were the runners that did 14 hour days from the age of 16 worked their arses off, were handed overflow clients by their grateful traders and then cultivated their own business from that.

Not one trader that made a sucess of it was handed anything. Anyone that was silver spooned in either failed miserably and was subsequently booted out or also worked their arse off. All to a man when sober were some of the sharpest peopel I've worked with in my 30 odd year career.

 

If that's the measure by which careers are judged I suspect a lot of us would not score highly..

 

My mate pissed about on a soccer scholarship at college in America for 5 years half funded by his dad, came back to London and now earns over £100k as a money broker at... You guessed it, his dad's firm. Going to school in Brookmans Park where a lot of people were disgustingly rich I know about 15 people with similar stories.

For me that's the biggest issue. The inherited wealth of 2-3 generations ago. Those people have done absolutely nothing to deserve their wealth, but have so many advantages in their lives.

Edit: I broadly agree with Jumbo that nowadays this is rarer and it's normally the most highly educated that get those jobs, but that disproportionally includes wealthy people who have been to private school their entire lives.

 

@Keighley PVCs/PVPs?

 

Absolutely.

 

You may be correct that these companies are far more diverse these days and the competitive nature of those businesses means they have to recruit mostly on merit, but the idea that the old networks are dead is fanciful.

Parliament, for example, is dominated by Oxford, which is in turn dominated by a few public schools. Recent cabinets are alumni clubs, as are think tanks, organisations and businesses throughout commerce and the arts.

The upper class still have their own published records of lineage to indicate who is who and magazines like Tatler and Country Life to gossip about what they do together.

Those allegiances may be more or less conscious, but they are there and reinforced through the social whirl of Henley, Glynbourne etc. It would be odd to think they do all this, without it offering them and their children any advantages. That they just then play fairly.

 

Anybody who makes things, fixes things, delivers things, cleans things, drives things is worth more than these chancers.

 

And they are the only source of wealth. There is no other. There is no stock market without production and services. No private or public wealth. It is all down to the endeavours of the many.

 

The ‘freedom’ to attain wealth and the illusions of equity and opportunity that come with it are so fundamental to the national psyche it’s hard to see them being challenged, though they can be properly taxed.

As important is regulation of what wealthy people can do with their money. If someone has so much cash they can buy multiple properties, then the cost of property will escalate. Because they have greater resources, the wealthy will win those competitions and more and more people will have to rent from them at higher and higher cost. Then the wealthy have even greater resources and the problem gets worse and worse. Since the UK property market has become a sink for foreign cash, it’s become critical.

This in part is responsible for the high levels of benefits going to working people. They cannot afford ‘market rates’, so the state must.

We need to target areas like housing, water, energy where profits to landlords and shareholders should be strictly limited.

 

What would you like to limit shareholders' profits to?

 

This has been something to ponder for a long time now. It seems to me that once you get past the point where you can feed yourself and your family, the amount you earn has little real impact on the quality of your life, or how much you enjoy it. People who are able to enjoy their life will do so, provided they can fill their tummys. People who struggle to enjoy life will grumble no matter how much they have.

I don't think that footballers and TV stars enjoy their life any more than I do, and, as far as I can tell, I don't think their money makes them any more contented. This is why I do not consider myself to be a material person. The persuit, and if you are lucky attainment, of riches does not equate to happiness, and people who are not easily satisfied, tend to find that little has changed with regards to that by the time they go to sleep each night. Yes, the idea of being able to go on holiday in a beautify location at the drop of a hat seeems like a dream, but it won't necessarily make you as happy as you imagine. If you do that sort of thing all the time, it will still become a grind, if it is, in reality, boredom that makes you feel unsatisfied.

Having more than the next person, or better things, is a huge motivator, but I think that most of us often find that achieving a 'dream' does not always deliver the expected life change we hope for.

Yes, it is obscene what some people earn for the effort they put in. And their lives may seem glamorous. But it's not money that makes you happy. In fact it is impossible for money, or anything else, to make you happy if you can never be at peace with yourself. A person who can do that will make something of the money they have. And good luck to them. But if you are a miserable old git, there ain't much that will ever drag you back from your pit, and even then, it is more likely to be friends and family that do it than money.

Once your belly is full, it is all relative. I'd rather be content, which I feel I am, than mega rich, even if I do like to fantasize what I would do if I won the lottery.

 

I’d prefer the utilities nationalised, but in the situation we have, something very small indeed. Utilities are not suitable markets for customers and we should stop pretending they are.

 

If you listened to the Mail, Telegraph, Sun and Tory party, you'd think us poor Brits were taxed like nowhere else on earth rather than having one of the lowest tax burdens of advanced economies.

There would be plenty of scope to increase tax, have better public services and quality of life if the will was there. Unfortunately, it's so ingrained into our national psyche that taxes are bad that no party could ever win on a platform of even modest tax rises.

Historically the top rate of tax has been as high as 90+% but a sustained campain by the wealthiest in society has seen it steadily chipped away.

 

It's interesting that this mirrors US policies on tax (even down to the 90% tax), and coincidentally both countries also have public services/infrastructure circling the drain due to funding issues.

 

The attitude needs to be that we all pay more and it isn’t in this country.. It’s always make anyone who earns more than me needs to pay which is unrealistic.

I’m happy for pay 60% on over 100k if we are also happy to reduce the personal allowance to 2k and put VAT up to 25% like in Scandinavia. This will get us far better services. Nobody is interested in that. They just want the 60% bit so it ends up being a childish hypocritical discussion.

 

One of my in laws is a boss of a media group that he started from scratch. By age 25 he was a millionaire and he has shot music videos for some global stars. He now does online platforms linked to NFTs and art.

Talking to him about setting prices for these NFTs is mind blowing.

Something essentially worthless with the right marketing makes ££££££££££££.

Crazy crazy world we live in.

 

So you only want limit the dividends paid to shareholders in nationalised utilities? Does that include pension funds?

 

Income is taxed at source so your Person A and Person B analogy doesn't stack up. Two people on the same career path and same earnings are taxed before they choose to spend or save.

If your position is that the notional person who spends everything on drink and drugs (but why do only drink and drugs count as wanton expenditure, why not holidays, cars and other possessions?) spends all their money and then has their hands out for some Government money, then that doesn't stand up either because benefits of most kinds are also based on income. People on bigger incomes qualify for less money from the state.

If you want taxation policy that benefits the hardest-working it would be based on hours spent working rather than income.

The problem is that (many sources of) unearned income is not taxed as heavily as earned income (wages), so actually the system you're advocating – rewarding work, enterprise and ambition – would basically means lowering taxes on work and taxing far more heavily anything that just accrues wealth without work.

But, of course, the top few percent derive huge incomes simply as a result of already having piles of money. They can do nothing yet earn tremendous rewards, which is fine, as long as the system then doesn't demonise low earners who work and *still* have to have their wages topped up by the state because the table leans so heavily in one direction.

 

Isn't that what Blair did in '97?

 

I don’t know about only, but yes. It’s pointless for one set of pensioners to gain over another through the price of essentials.

Like I say, I’d prefer nationalised, but that would involve a massive payout to shareholders.

 

I’m all for a graduated burden and from a purely democratic pov, it’s much better if everyone pays some tax.

However, the reason that many are effectively out of the taxation system is that living costs have spiralled. Council owned rents used to be very low. And why not? The houses and flats councils owned were built ages ago and simply need upkeep. Monthly rents were low hundreds of pounds.

Now they are all sold off and rents (to effectively the same people) are in the thousands. It’s a mad situation where both tenants and the state lose.

And then the newspapers that represent the wealthy moan about a ‘something for nothing’ culture.

 

Just an illustration. Person A's savings could be in a pension providing them an income and there are plenty of benefits that are dependent on personal savings so I think it does stand up.

So someone that sits infront of an only fans camera for 14 hours a day gets taxed less than someone who labours on a building site for 8 hours a day? Taxation has to be based on earnings above a living wage and then at a higher rate on a perceived large salary level. It's the only fair way of doing it. Taxing according to how socially acceptible a job is or how hard someone grafts is hugely problematic.Taxing a low wage then giving back in benefits and topups is hugely costly to administer and open to abuse.

Agreed my proposal is all income earned or unearned is taxed together.

Agreed, but the earnings on these piles need to be taxed as income. We can't penalise them for building the pile as we can't determine how they were generated. The income to build those piles should have been taxed at the time according to the rules at the time (assuming not evasion). We can't go back on that morally That's akin to prosecuting someone for breaking a new law for something in the past that was legal at the time. It's also a massive demotivation for people to save for their futures.

 

https://www.bbc.co.uk/news/uk-64489147

The cost of living crisis is a manufactured lie, if it was the truth Shell would either be losing money or making £5 billion profit maximum. Also Shell and others are behind the Tufton Street think tank that told Truss and Kwateng to tank the pound so their related funds could profit. I think stuff like this has always gone on but just not to the scale they are now, which begs the question why now? and why make it so blindingly obvious?

 

This is a very good opinion piece on why applying household economic logic to the economics of the country really doesn't work.

It also shows the stupidity of broadcasters (including the BBC) when they make statements like the government has "maxed out their credit card" perpetuating the myth that running the country's finances is just like running a household budget:

https://www.theguardian.com/comment...fs-that-seal-a-miserable-fate-for-the-poorest

 

ISTR Michael Howard always used the 'analogy' of comparing managing your home finances with that of controlling to UK economy and it was normally followed by "...it's just common sense..." right up until someone (Billy Bragg?) asked him whether he was able to print money at his home...