The Politics Thread

[thebish]

What year was it when the bakers went on strike? I wish they'd hurry up and do it again.

november 1979...

[Worthy4England]

panic buying at the pumps and Fire Brigade warns of "massive explosion risks" with gerry cans full of petrol in everyone's garage..

nice one Mr Maude...

I've got my Tupperware at the ready. I'm havin' loads of it

pumps are already dry where bobo lives...

Oh, Worthy must've filled up down there then!

Worthy is only using his bike these days, in anticipation of BWFCI charging everyone on more than him, 95% Super Tax.

[Prufrock]

Thing I don't understand with the 50% tax band is, we are always being told it doesn't actually raise that much money, and so is purely symbolic, and so should be got rid of. But, if it doesn't actually raise that much money, it still doesn't seem to be affecting people too much, and so any move to get rid of it is surely only symbolic. Somebody earning £160k per year pays an extra 1k. One. Somebody earning £200k pays an extra 5k*. I can't for the life of me see anybody 'going abroad' doing a 'brain drain' for five grand a year.

So, if having it is symbolic, and getting rid of it is symbolic, then, its symbolism isn't an argument either way. Which signal do we want to send? That while Cornish folk are paying 20% extra for pasties (one bloke reckoned that was going to cost him £200 per year, which by my maths -see *- means he is currently, pre-rise, spending twenty pounds PER WEEK on pasties) and tramps can't have special brew any more that the rich are suffering some of the burden too (even if it is largely symbolic) or, that f*ck y'all, all o' y'all, if you don't like it, trytoblowmebutyou'llnevergetthroughthegatesandtheguardsmanwillhaveyoushot?


*All figures subject to the condition my maths isn't utterly shite

Your logic is confused, if I may say so...

You can't say "it doesn't raise much, therefore it has little effect on people, therefore it's just symbolic, oh and by the way I don't actually reckon it changes people's behaviour much too...". I'm sorry, but that isn't coherent.

Now, a decent chunk of the unrealised revenue associated with this tax may well be people deliberately (and perfectly legally and even reasonably, actually) bringing forward or delaying their remuneration to avoid what was always billed as a 'temporary' tax. Lots of rich people can afford to do this to ride out a 'temporary' measure and have the control necessary to do it.

But I also do think that people underestimate how much rich people think about these things. I do believe that some individuals decide to locate themselves (or at least their money) elsewhere, work less because they are incentivised less, or come to realise that the aggressive tax avoidance that they didn't bother with before is worth it after all.

Maybe your man on £200k won't flee the country, but I do belive he'll have a good think about whether getting to £210k is worth is effort, or whether splashing out on that expensive accountant his mates on £400k use looks more like a good idea.

And above that level, people making big money in competitive worlds, often where money is way of keeping score, do not look like to be ripped off in any way at all - especially given that lots of these people will move in international circles and the Joneses they are keeping up with are the super rich in other countries and other tax regimes.

Football sometimes provides us with examples of the sort that aren't publicised in other industries: http://fourfourtwo.com/news/england/40191/default.aspx" onclick="window.open(this.href);return false; http://www.worldsoccer.com/news/arshavi ... -cover-tax" onclick="window.open(this.href);return false;

I once criticised Michael Portillo for intellectual laziness when he said that it was 'immoral' for a goverment to take away half of everything a citizen earned... as if morality can be determined a % cut-off point. However, I do think the 50% mark is psychologically significant and people will always resist and resent paying half or more to the state in the form of income tax, and this is why most western countries have settled on an idea that something in the 35-45% bracket is what is 'fair' or at least tolerable.

I was careful not to say it doesn't raise very much therefore it doesn't affect people very much (though, granted, there is a lazy, inconsequential 'if' used newsreader style, as a synonym for 'whilst'). A 100% tax rate on those earning over a million probably wouldn't raise much but would certainly affect those concerned.

What I was getting at in a hilarious stream-of-conscious manner is, regardless of what it raises, if you could close all the tax loopholes and make everyone pay the tax they are 'supposed to' is the difference between 40% and 50% that large? If you closed the loopholes available by paying yourself through a company and drawing your wage abroad would the extra you pay be enough to make you move abroad. The difference wouldn't be enough to make you move elsewhere in Europe, to learn a new language move your family, when overall tax rates between the like of us, France and Germany are broadly similar (ie what you actually keep after all tax is taken). Would you go to America? Possible, if you are young and unattached. The problem there is being a small fish in a very large pond. I just don't buy the logic that everyone would up-sticks and go. I think the 50% rate is entirely symbolic (as I say, it probably doesn't raise very much, I don't think it affects people very much, and I don't think it genuinely causes people to move abroad, I think it is an empty threat). As such the question is, is it the right symbol? I think so. You, I boldly predict, will disagree.

I'm torn on the morality of legal tax avoidance. On the one hand, if a badly drafted law, or just the sheer complexity of it all means there is a way to save money for yourself and your family, why shouldn't you take it? On the other hand if it is clear society's democratic will (and I don't often buy into that as a valid rule, but tax laws ought to be fairly objective standards) says that is what you are expected to pay, is going against the spirit of that by being 'clever' legitimate? I'm not sure.

[Prufrock]

https://apps.facebook.com/theguardian/p ... asty-video" onclick="window.open(this.href);return false;

Wow.

Seriously....wow!

This pasty uproar is embarrassing! Making Georgie look good!

[Bruce Rioja]

Worthy is only using his bike these days, in anticipation of BWFCI charging everyone on more than him, 95% Super Tax.

[mummywhycantieatcrayons]

I was careful not to say it doesn't raise very much therefore it doesn't affect people very much (though, granted, there is a lazy, inconsequential 'if' used newsreader style, as a synonym for 'whilst'). A 100% tax rate on those earning over a million probably wouldn't raise much but would certainly affect those concerned.

What I was getting at in a hilarious stream-of-conscious manner is, regardless of what it raises, if you could close all the tax loopholes and make everyone pay the tax they are 'supposed to' is the difference between 40% and 50% that large? If you closed the loopholes available by paying yourself through a company and drawing your wage abroad would the extra you pay be enough to make you move abroad. The difference wouldn't be enough to make you move elsewhere in Europe, to learn a new language move your family, when overall tax rates between the like of us, France and Germany are broadly similar (ie what you actually keep after all tax is taken). Would you go to America? Possible, if you are young and unattached. The problem there is being a small fish in a very large pond. I just don't buy the logic that everyone would up-sticks and go. I think the 50% rate is entirely symbolic (as I say, it probably doesn't raise very much, I don't think it affects people very much, and I don't think it genuinely causes people to move abroad, I think it is an empty threat). As such the question is, is it the right symbol? I think so. You, I boldly predict, will disagree.

Well you weren't careful enough...

But, if it doesn't actually raise that much money, it still doesn't seem to be affecting people too much, and so any move to get rid of it is surely only symbolic.

I know you have recanted slightly, but I'll just say again that the tax not raising much money is evidence of the tax being ineffective, not of it not having an effect on people.

For me, you're focussing too much on people upping sticks and leaving. For what it's worth, I agree that very few people indeed will relocate themselves solely because of a move in income tax from 40% to 50%. The bulk of the effect is probably more to do with people being less incentivised to work more and more incentivised to avoid tax, both of which can be underpinned by a resentment of a tax rate that seems punitive and unfair, both in its own right, given the psychological significance of 'half' that I have discussed, and in relation to other tax regimes around the world (USA, Germany, Switzerland, France, Singapore, Hong Kong).

Having said that, it doesn't take many people to leave, partially motivated by what they see as a punitive tax regime, for the costs of that to start racking up. Even if it is only a handful of very mobile people without all the ties you describe.

That's the short term.

Longer term, a punitive tax regime does affect decisions about where companies decide to be based, or whether their CEO is better based in New York or London, or whether they could get away with paying lower salaries in one country than another etc

[The Axman]

You've really got a thing about Singapore haven't you mummy.w.c.i.e.c.? Have you actually lived there?

[mummywhycantieatcrayons]

You've really got a thing about Singapore haven't you mummy.w.c.i.e.c.? Have you actually lived there?

No - first became interested in Singapore after reading about their healthcare system in the last chapter of Tim Harford's 'The Undercover Economist'. Recommended reading.

And then one of my good mates recently worked out there for Barclays for 6 months and has a lot of good things to say about the place and would quite like to move there on a more permanent basis if possible.

[Bruce Rioja]

Is it Singapore that banned chewing gum? Fair play to them if it was!

[The Axman]

You've really got a thing about Singapore haven't you mummy.w.c.i.e.c.? Have you actually lived there?

No - first became interested in Singapore after reading about their healthcare system in the last chapter of Tim Harford's 'The Undercover Economist'. Recommended reading.

And then one of good mates recently worked out there for Barclays for 6 months and has a lot of good things to say about the place and would quite like to move there on a more permanent basis if possible.

Ah-ha. Just wondered. I've passed through very briefly; too briefly to comment personally, but I have lived in the Far East (Japan), and I've got a few friends who still do. In terms of life-style choices it seems to be way down on the list of all those I know. Japan, Thailand, Mongolia, and Hong Kong are the places where my friends have settled, all of whom did not settle in Singapore (though they all there for a short while). The only person I know who went to Singapore and stayed (a friend of a friend) was a banker and did so despite the culture - he stayed three years purely for the money he was earning. In fact there is another coterie of friends of friends, all of whom are either builders or construction engineers who do similar and move out to countries they can't stand (Saudi, Oman, Libya, Congo) just for the wonga.

[The Axman]

Is it Singapore that banned chewing gum? Fair play to them if it was!

I know it's an offence to litter (which includes dropping chewing gum) punishable by jail, but I didn't know they'd banned it outright.

[Prufrock]

I know you have recanted slightly, but I'll just say again that the tax not raising much money is evidence of the tax being ineffective, not of it not having an effect on people.

For me, you're focussing too much on people upping sticks and leaving. For what it's worth, I agree that very few people indeed will relocate themselves solely because of a move in income tax from 40% to 50%. The bulk of the effect is probably more to do with people being less incentivised to work more and more incentivised to avoid tax, both of which can be underpinned by a resentment of a tax rate that seems punitive and unfair, both in its own right, given the psychological significance of 'half' that I have discussed, and in relation to other tax regimes around the world (USA, Germany, Switzerland, France, Singapore, Hong Kong).

Having said that, it doesn't take many people to leave, partially motivated by what they see as a punitive tax regime, for the costs of that to start racking up. Even if it is only a handful of very mobile people without all the ties you describe.

That's the short term.

Longer term, a punitive tax regime does affect decisions about where companies decide to be based, or whether their CEO is better based in New York or London, or whether they could get away with paying lower salaries in one country than another etc

I haven't recanted in the slightest! What I wrote may have been a poorly expressed way of saying 'whilst, on the one hand, it doesn't raise very much, on the other it isn't affecting people very much', but it certainly doesn't introduce a causative idea. There is no 'therefore', and one cannot be read into the words 'it still doesn't seem', so ner!

Anyway, the argument that always seems to crop up is the 'brain-drain' one, for which I have never seen any evidence, and believe to be a complete, and utter fallacy. German bankers are paid peanuts, comparatively, and at similar levels to other professionals. Why then, haven't all the best and most intelligent German financiers left and gone abroad, leaving the German economy knackered? It seems an empty threat. I'm not sure the risk of a very small number of mobile, admittedly intelligent and ambitious, twenty-somethings upping sticks to America is a risk we should be particularly terrified of.

I haven't done any tax law, but I know it has a reputation for being very complex; however, how hard can it be, if it were made a priority, to make it impossible to avoid paying tax without moving abroad? It can't be. Presumably they reckon taxing property to be an even easier way of doing it?

I thought the main reason the 50% bracket didn't raise very much was because there just weren't very many people in it? I agree 'half' is emotionally significant, but I'd argue 'half' is the limit, not 'beyond the limit'. If it were framed as 'doing your bit for society in austere times, and graciously paying a full half of everything you earn in order to help us all out as we are, after all, all in it together', the top bracket would be able to take the heat out of the argument about who shoulders what blame and who pays for what, without actually giving up very much.

[mummywhycantieatcrayons]

I haven't recanted in the slightest! What I wrote may have been a poorly expressed way of saying 'whilst, on the one hand, it doesn't raise very much, on the other it isn't affecting people very much', but it certainly doesn't introduce a causative idea. There is no 'therefore', and one cannot be read into the words 'it still doesn't seem', so ner!

Anyway, the argument that always seems to crop up is the 'brain-drain' one, for which I have never seen any evidence, and believe to be a complete, and utter fallacy. German bankers are paid peanuts, comparatively, and at similar levels to other professionals. Why then, haven't all the best and most intelligent German financiers left and gone abroad, leaving the German economy knackered? It seems an empty threat. I'm not sure the risk of a very small number of mobile, admittedly intelligent and ambitious, twenty-somethings upping sticks to America is a risk we should be particularly terrified of.

I haven't done any tax law, but I know it has a reputation for being very complex; however, how hard can it be, if it were made a priority, to make it impossible to avoid paying tax without moving abroad? It can't be. Presumably they reckon taxing property to be an even easier way of doing it?

I thought the main reason the 50% bracket didn't raise very much was because there just weren't very many people in it? I agree 'half' is emotionally significant, but I'd argue 'half' is the limit, not 'beyond the limit'. If it were framed as 'doing your bit for society in austere times, and graciously paying a full half of everything you earn in order to help us all out as we are, after all, all in it together', the top bracket would be able to take the heat out of the argument about who shoulders what blame and who pays for what, without actually giving up very much.

As a classicist, you'll know that 'recant' is Latin for 'have another go chirping out what you're saying', which I think is what you've done...

It's interesting that you say you see that you've seen no evidence for the theory that says higher tax means people leave, and then, without a hint of irony, go on to state your firm belief that it's an utter fallacy! I have no idea what German banking remuneration is like and why, if there's striking discrepancy with other places, their financiers have sought work elsewhere in droves. Low pay that has always been there does not seem to me to have the same 'annoyance effect' of a new, punitive tax rate, however.

It's basically impossible to say with any certainty how many rich people, be they Brits or rich foreigners who were working here, have moved abroad with the 50% tax rate as a contributing factor in that decision. Which is why I'm suggesting that you don't get bogged down with this one, unprovable bit of the debate (and restricting your thinking to banking at that). My own take is that the brain drain is probably a longer term phenomenon that likely entails businesses and people not coming here in the first place, if our headline tax looks punitive and permanent to the rest of the world.

Yes, I would say that is a simplistic view of tax law, tax policing and tax avoidance.

No, it's not really about how many people are in the bracket. The discussion is about why a tax expect to raise £3billion only raised £100 million (at HMRC's, not the Government's, best guess).

[lovethesmellofnapalm]

another 3 pages of smoke and mirrors
the rich and privileged like us going around in circles on things like this coz it deflects our attention from the basic facts that
# "Trickle down" economics is, and always was, a load of bollox. Brain drain my arse- chinless wonders couldn't cut it without the old school tie
# "Rolling back the state" = allowing the rich to keep their hands firmly in the pockets of the less rich while nobody spots them doing so
# the utter devastation of our industrial base has led to us being unable to organise our economy along mercantilist lines - we cannot balance our trade a la Germany so rely on being the centre of the financial world - a world which involves selling barrowloads of nothing to other people who buy it on the idea that it will go up in value

[Prufrock]

I'm not sure what chirping out means, but I know in English recant means withdraw, disavow, or go back on, none of which I was doing .

I'm no sure there is any irony there. My position generally is not to believe in things for which there appears to be no evidence, in particular when the people putting forward the theory are the ones who have a stake in it being believed. The idea of a brain drain doesn't seem plausible to me.

Anyway, I'd agree a more pressing concern would be businesses moving, not coming here to start with, something I can see as plausible. Why would businesses be interested in the income tax rate directly? Surely there main concerns would be corporation tax, and how much they would have to pay people to work for them (which is affected by income tax, but for which income tax is by no means the only consideration). A quick Google search (and the internet never lies) suggests that Germans pay around 50% of their income in eventual taxation, the French in the mid 40s and us the low 30s, not much higher than the US (I thought we were broadly similar to the rest of Europe). So it isn't as if the 50% rate means we aren't competitive.

[Bruce Rioja]

I'm not sure what chirping out means, but I know in English recant means withdraw, disavow, or go back on, none of which I was doing

I have it down as meaning to retract a statement.

Does PB not mean 'recount' as in to recount a tale?

[thebish]

I'm not sure what chirping out means, but I know in English recant means withdraw, disavow, or go back on, none of which I was doing

I have it down as meaning to retract a statement.

Does PB not mean 'recount' as in to recount a tale?

recant has both meanings... (that's why Mummy referenced "classical Latin") mummy's meaning is the oldest - original - but Pru's is the one in most common usage..

[Prufrock]

Looking at it I'd say in Latin it means to 'sing again', perhaps leading to PB's 'chirping'. A Classics joke flying over my head, not for the first time - there is only one good Classics joke, incidentally - Euripedes pants, I smack-a your face, Eumenides pants, I no smack-a your face.

Certainly its everyday meaning now is to retract. Crayons with some 'classic' obfuscation.

I suppose my response, then, would be an apology ?

[William the White]

another 3 pages of smoke and mirrors
the rich and privileged like us going around in circles on things like this coz it deflects our attention from the basic facts that
# "Trickle down" economics is, and always was, a load of bollox. Brain drain my arse- chinless wonders couldn't cut it without the old school tie
# "Rolling back the state" = allowing the rich to keep their hands firmly in the pockets of the less rich while nobody spots them doing so
# the utter devastation of our industrial base has led to us being unable to organise our economy along mercantilist lines - we cannot balance our trade a la Germany so rely on being the centre of the financial world - a world which involves selling barrowloads of nothing to other people who buy it on the idea that it will go up in value

Pretty much spot on as, yet again, the madness of finance capital destroys the lives of millions... And then threatens to leave us all to our darkest places if we got rid of them...

[Worthy4England]

Thing I don't understand with the 50% tax band is, we are always being told it doesn't actually raise that much money, and so is purely symbolic, and so should be got rid of. But, if it doesn't actually raise that much money, it still doesn't seem to be affecting people too much, and so any move to get rid of it is surely only symbolic. Somebody earning £160k per year pays an extra 1k. One. Somebody earning £200k pays an extra 5k*. I can't for the life of me see anybody 'going abroad' doing a 'brain drain' for five grand a year.

So, if having it is symbolic, and getting rid of it is symbolic, then, its symbolism isn't an argument either way. Which signal do we want to send? That while Cornish folk are paying 20% extra for pasties (one bloke reckoned that was going to cost him £200 per year, which by my maths -see *- means he is currently, pre-rise, spending twenty pounds PER WEEK on pasties) and tramps can't have special brew any more that the rich are suffering some of the burden too (even if it is largely symbolic) or, that f*ck y'all, all o' y'all, if you don't like it, trytoblowmebutyou'llnevergetthroughthegatesandtheguardsmanwillhaveyoushot?


*All figures subject to the condition my maths isn't utterly shite

Your logic is confused, if I may say so...

You can't say "it doesn't raise much, therefore it has little effect on people, therefore it's just symbolic, oh and by the way I don't actually reckon it changes people's behaviour much too...". I'm sorry, but that isn't coherent.

Now, a decent chunk of the unrealised revenue associated with this tax may well be people deliberately (and perfectly legally and even reasonably, actually) bringing forward or delaying their remuneration to avoid what was always billed as a 'temporary' tax. Lots of rich people can afford to do this to ride out a 'temporary' measure and have the control necessary to do it.

But I also do think that people underestimate how much rich people think about these things. I do believe that some individuals decide to locate themselves (or at least their money) elsewhere, work less because they are incentivised less, or come to realise that the aggressive tax avoidance that they didn't bother with before is worth it after all.

Maybe your man on £200k won't flee the country, but I do belive he'll have a good think about whether getting to £210k is worth is effort, or whether splashing out on that expensive accountant his mates on £400k use looks more like a good idea.

And above that level, people making big money in competitive worlds, often where money is way of keeping score, do not look like to be ripped off in any way at all - especially given that lots of these people will move in international circles and the Joneses they are keeping up with are the super rich in other countries and other tax regimes.

Football sometimes provides us with examples of the sort that aren't publicised in other industries: http://fourfourtwo.com/news/england/40191/default.aspx" onclick="window.open(this.href);return false; http://www.worldsoccer.com/news/arshavi ... -cover-tax" onclick="window.open(this.href);return false;

I once criticised Michael Portillo for intellectual laziness when he said that it was 'immoral' for a goverment to take away half of everything a citizen earned... as if morality can be determined a % cut-off point. However, I do think the 50% mark is psychologically significant and people will always resist and resent paying half or more to the state in the form of income tax, and this is why most western countries have settled on an idea that something in the 35-45% bracket is what is 'fair' or at least tolerable.

I was careful not to say it doesn't raise very much therefore it doesn't affect people very much (though, granted, there is a lazy, inconsequential 'if' used newsreader style, as a synonym for 'whilst'). A 100% tax rate on those earning over a million probably wouldn't raise much but would certainly affect those concerned.

What I was getting at in a hilarious stream-of-conscious manner is, regardless of what it raises, if you could close all the tax loopholes and make everyone pay the tax they are 'supposed to' is the difference between 40% and 50% that large? If you closed the loopholes available by paying yourself through a company and drawing your wage abroad would the extra you pay be enough to make you move abroad. The difference wouldn't be enough to make you move elsewhere in Europe, to learn a new language move your family, when overall tax rates between the like of us, France and Germany are broadly similar (ie what you actually keep after all tax is taken). Would you go to America? Possible, if you are young and unattached. The problem there is being a small fish in a very large pond. I just don't buy the logic that everyone would up-sticks and go. I think the 50% rate is entirely symbolic (as I say, it probably doesn't raise very much, I don't think it affects people very much, and I don't think it genuinely causes people to move abroad, I think it is an empty threat). As such the question is, is it the right symbol? I think so. You, I boldly predict, will disagree.

I'm torn on the morality of legal tax avoidance. On the one hand, if a badly drafted law, or just the sheer complexity of it all means there is a way to save money for yourself and your family, why shouldn't you take it? On the other hand if it is clear society's democratic will (and I don't often buy into that as a valid rule, but tax laws ought to be fairly objective standards) says that is what you are expected to pay, is going against the spirit of that by being 'clever' legitimate? I'm not sure.

Without trying to unduly interject here, could I suggest that you might be missing the point?

The people who are using legitimate tax avoidance (or illigitimate tax avoidance) aren't affected by a change in the rate from 50% to 45% or if it was to go the other way from 50% to 70%, because they're avoiding it.

So the people, that a change in the overall upper level of tax is going to hit, are those people that are currently paying at the upper tax rate and may well look at ways of avoidng it, if it changes to 70% (or something punitive as was the contention originally in this debate)

It does fook all, to capture any additional shillings in tax from those people that are avoiding it anyhow, it just dips into the pot of people that are already paying it. That's a fairly small group of people (circa 4-600,000 in the UK), who should somehow (according to BWFCI) "be morally responsible" for bailing out the UK from the shite that a load of bankers caused?

Just as an FYI, you don't pay more than 50% tax until you're somewhere between £3m and £4m per year so I think that the contention mummy makes that paying 50% of everything you earn to the state isn't quite right in the context it was given - it's on everything you earn over £150k. You pay a overall tax rate of 39% on £151,000 and about 40% on £200,000.