The Great Art Debate

[Puskas]

Clearly she wouldn't be - she'd still have 40000GBP to live on - more than most people.

But no one's asking her to do that, anyway, so the point is a ridiculous one.

It's not a ridiculous point. I'm told that taxing her at a proportionally higher rate because she earns more is fair because paying that much tax is within her means.

But if that is the justification, and you have just said it holds good in the hypothetical situation I have described (which you have, helpfully, suggested is ridiculous), then what stops us taxing her and others in that way?

The fact that you've set a maximum cap on her income - 40000GBP.

This differentiates it from paying more, but with no maximum cap. She earns more, but pays more, and isn't limited to earning any amount.

It's not that difficult to understand.

So what you're saying is that a maximum 'cap' would be unacceptable because it would put people off earning beyond that amount?

Ok, you're right, it is an important distinction.

What stops us taxing progressively all the way up to, say, 90% then?

Nothing.

Why should there be?

[mummywhycantieatcrayons]

It's a marginal tax rate on earnings in excess of £150k per annum.

She gets taxed the same 20% as everyone else, for the first £37,400, the same 40% as everyone else, for the income between £37,400 and £150,000 and the same 50% as everyone else, for income over £150,000.

The marginal increase is 10% on everything over £150k. So you'd pay an additional £35k on half a million per annum earnings which works out at 7% or so. Hardly poverty line stuff is it?



Unless I'm reading something wrong in the original article.

Gee, thanks for explaining the numbers to me!

But if it's 'hardly poverty line stuff', then neither would an additional £70K, or £140k... would the justification still hold for taxation at that rate?

[superjohnmcginlay]

Clearly she wouldn't be - she'd still have 40000GBP to live on - more than most people.

But no one's asking her to do that, anyway, so the point is a ridiculous one.

It's not a ridiculous point. I'm told that taxing her at a proportionally higher rate because she earns more is fair because paying that much tax is within her means.

But if that is the justification, and you have just said it holds good in the hypothetical situation I have described (which you have, helpfully, suggested is ridiculous), then what stops us taxing her and others in that way?

The fact that you've set a maximum cap on her income - 40000GBP.

This differentiates it from paying more, but with no maximum cap. She earns more, but pays more, and isn't limited to earning any amount.

It's not that difficult to understand.

So what you're saying is that a maximum 'cap' would be unacceptable because it would put people off earning beyond that amount?

Ok, you're right, it is an important distinction.

What stops us taxing progressively all the way up to, say, 90% then?

Nothing.

Why should there be?

It would be a bit unfair as once you add on NI it would be over 100%.

[Puskas]

It would be a bit unfair as once you add on NI it would be over 100%.

National insurance is inherently unfair, as it's non-progressive.
Scrap it, and increase income tax - that's my solution.

[Worthy4England]

It's a marginal tax rate on earnings in excess of £150k per annum.

She gets taxed the same 20% as everyone else, for the first £37,400, the same 40% as everyone else, for the income between £37,400 and £150,000 and the same 50% as everyone else, for income over £150,000.

The marginal increase is 10% on everything over £150k. So you'd pay an additional £35k on half a million per annum earnings which works out at 7% or so. Hardly poverty line stuff is it?



Unless I'm reading something wrong in the original article.

Gee, thanks for explaining the numbers to me!

But if it's 'hardly poverty line stuff', then neither would an additional £70K, or £140k... would the justification still hold for taxation at that rate?

What do you mean, "If it's 'hardly poverty line stuff'"? It isn't poverty line stuff is it?

Conceptually we could tax what we wanted on income over £150k - or under £150k for that matter. It was certainly running at 83% in the 1970's for "higher rate" income tax.

I don't agree with taxing to that extent, because I think it's counter-productive, but when it comes down to it, we could - if we wanted to. To turn your question back upon you, what's the justification on taxing everything above £37.5k @ 40%? Surely it's all about balancing budgets?

My view is that the marginal increase at £150k doesn't really have a huge impact. You're talking having to cut back on luxuries rather than neccessities?

[Worthy4England]

It would be a bit unfair as once you add on NI it would be over 100%.

National insurance is inherently unfair, as it's non-progressive.
Scrap it, and increase income tax - that's my solution.

Noooooo - we need to bring back the Community Charge.

[mummywhycantieatcrayons]

What do you mean, "If it's 'hardly poverty line stuff'"? It isn't poverty line stuff is it?

Conceptually we could tax what we wanted on income over £150k - or under £150k for that matter. It was certainly running at 83% in the 1970's for "higher rate" income tax.

I don't agree with taxing to that extent, because I think it's counter-productive, but when it comes down to it, we could - if we wanted to. To turn your question back upon you, what's the justification on taxing everything above £37.5k @ 40%? Surely it's all about balancing budgets?

My view is that the marginal increase at £150k doesn't really have a huge impact. You're talking having to cut back on luxuries rather than neccessities?

What I mean is that it's not good enough simply to say "it's hardly poverty line stuff" - I'm suggesting that won't do as a justification. If staying away from the poverty line is a relevant consideration when taxing rich people, it doesn't exactly rule much out, does it?!

What does it mean to say that 'conceptually', we can tax what we want on any amount - of course governments can help themselves to any amount of what their citizens produce when backed up by the might of state machinery. It's precisely that corrupting temptation that I'm arguing against.

At least we have seen 'productivity' finally come up as a reason why high tax might be a bad idea! Puskas, apparently, doesn't even recognise that that should be a consideration.

What do you mean by your distinction between luxuries and necessities? What is in your 'necessitiy' category? Again, if that is your criterion, people would probbaly be cutting back on 'luxuries' rather than 'necessities' if the marginal increase were down at the £30k mark?

[Worthy4England]

What do you mean, "If it's 'hardly poverty line stuff'"? It isn't poverty line stuff is it?

Conceptually we could tax what we wanted on income over £150k - or under £150k for that matter. It was certainly running at 83% in the 1970's for "higher rate" income tax.

I don't agree with taxing to that extent, because I think it's counter-productive, but when it comes down to it, we could - if we wanted to. To turn your question back upon you, what's the justification on taxing everything above £37.5k @ 40%? Surely it's all about balancing budgets?

My view is that the marginal increase at £150k doesn't really have a huge impact. You're talking having to cut back on luxuries rather than neccessities?

What I mean is that it's not good enough simply to say "it's hardly poverty line stuff" - I'm suggesting that won't do as a justification. If staying away from the poverty line is a relevant consideration when taxing rich people, it doesn't exactly rule much out, does it?!

Good - I'll take it that we're agreed that anyone who falls into the circa 400,000 people who will come into scope of this tax aren't on the poverty line. Nothing rules out any level of taxation in any particular earning bracket, other than the ability to a) get re-elected (assuming that you couldn't change it without being in power) b) balance taxation and spending plans and c) retain enough of them in Country to actually pay the tax anyhow - although there are usually plenty of ways around it. So the justification is 1) That it's marginal 2) It probably won't pi$$ most of the electorate off any more than they already are whilst at the same time adding additional tax Revenue in (although even here, because it's so marginal, not sure it'll make much difference) and 3) Should it pi$$ someone off enough to make them up-sticks, it will only be a proportion of a fairly small group of people anyhow.

What does it mean to say that 'conceptually', we can tax what we want on any amount - of course governments can help themselves to any amount of what their citizens produce when backed up by the might of state machinery. It's precisely that corrupting temptation that I'm arguing against.

I've already had to do some maths for you, do you need me to help with English too?

I think the "corrupting temptation" you're arguing against is a product of you spending too much time in front of the Tory Party Conference on the telly. That said, I wouldn't want to see the 50% tax rate extended and I'm not overly keen on it in the first place as a means of raising Revenue as it's so marginal at a "total" level

At least we have seen 'productivity' finally come up as a reason why high tax might be a bad idea! Puskas, apparently, doesn't even recognise that that should be a consideration.

You think Ms Emin will produce less because of a 10% marginal tax hike? I think there's two separate bits to this. One is the level of personal taxation the other is how we encourage business to grow and be more productive - I thought they were separate taxation schemes?

What do you mean by your distinction between luxuries and necessities? What is in your 'necessitiy' category? Again, if that is your criterion, people would probaly be cutting back on 'luxuries' rather than 'necessities' if the marginal increase were down at the £30k mark?

We could do a big debate on this one I guess, all to little avail. Necessities by my way of thinking are things without which you couldn't subsist and that are common across the population. So food, water, shelter, lighting, heating - I'll put work (although you could argue that this isn't correct in a welfare state) Effectively "fixed" costs that in the UK we can't get away from. Everything else is "nice to have". The trick has to be striking the balance with taxation policy that balances taxation of the majority that typically have less total discretionary income with taxation of the minority that typically have large amounts of discretionary income.

[BWFC_Insane]

If you are "lucky" enough to earn over 150K per annum I don't think its too much to ask that you give a bit extra back to society.

[superjohnmcginlay]

What if its not "luck" and down to hard work?

[superjohnmcginlay]

Anyway pictures. Good arent they?

[mummywhycantieatcrayons]

You think Ms Emin will produce less because of a 10% marginal tax hike?

I meant productivity of the tax system as well as that of individuals and the economy as a whole.

Whatever Ms Emin produces, she's saying she'll producing it somewhere else and we'll collect no tax at all from her!

[Worthy4England]

You think Ms Emin will produce less because of a 10% marginal tax hike?

I meant productivity of the tax system as well as that of individuals and the economy as a whole.

Whatever Ms Emin produces, she's saying she'll producing it somewhere else and we'll collect no tax at all from her!

In that case, we should make an immediate U-Turn in taxation policy.

[BWFC_Insane]

What if its not "luck" and down to hard work?

There will be more people who work hard who earn 15K a year than there will those who earn 150K.

Of course its "hard work" and "pressure" involved in many of those highly paid jobs but they are still "lucky" to be working hard at that rather than working hard at "cleaning toilets" or whatever.

[superjohnmcginlay]

What if its not "luck" and down to hard work?

There will be more people who work hard who earn 15K a year than there will those who earn 150K.

Of course its "hard work" and "pressure" involved in many of those highly paid jobs but they are still "lucky" to be working hard at that rather than working hard at "cleaning toilets" or whatever.

Thats cos there's more people earning 15k.

Not necessarily, they may have started with f*ck all and worked their way up to £150k.

[BWFC_Insane]

What if its not "luck" and down to hard work?

There will be more people who work hard who earn 15K a year than there will those who earn 150K.

Of course its "hard work" and "pressure" involved in many of those highly paid jobs but they are still "lucky" to be working hard at that rather than working hard at "cleaning toilets" or whatever.

Thats cos there's more people earning 15k.

Not necessarily, they may have started with f*ck all and worked their way up to £150k.

Still they should be thankful to have had the opportunities they have had and be happy to give slightly more back.

They are still priviliged and if it goes tits up for them are entitled to the welfare support like anyone else.

[superjohnmcginlay]

What if its not "luck" and down to hard work?

There will be more people who work hard who earn 15K a year than there will those who earn 150K.

Of course its "hard work" and "pressure" involved in many of those highly paid jobs but they are still "lucky" to be working hard at that rather than working hard at "cleaning toilets" or whatever.

Thats cos there's more people earning 15k.

Not necessarily, they may have started with f*ck all and worked their way up to £150k.

Still they should be thankful to have had the opportunities they have had and be happy to give slightly more back.

They are still priviliged and if it goes tits up for them are entitled to the welfare support like anyone else.

Should they?

What if theyve created these opportunities through hard graft. Doing extra, working longer etc. They get taxed more for working harder? Someone who's built up a business from scratch? Makes no sense.

[BWFC_Insane]

What if its not "luck" and down to hard work?

There will be more people who work hard who earn 15K a year than there will those who earn 150K.

Of course its "hard work" and "pressure" involved in many of those highly paid jobs but they are still "lucky" to be working hard at that rather than working hard at "cleaning toilets" or whatever.

Thats cos there's more people earning 15k.

Not necessarily, they may have started with f*ck all and worked their way up to £150k.

Still they should be thankful to have had the opportunities they have had and be happy to give slightly more back.

They are still priviliged and if it goes tits up for them are entitled to the welfare support like anyone else.

Should they?

What if theyve created these opportunities through hard graft. Doing extra, working longer etc. They get taxed more for working harder? Someone who's built up a business from scratch? Makes no sense.

But there are more people who work equally as hard who don't earn that sort of money who don't get the chances or the breaks yet the still work as hard through their life.

You are also forgetting the number of people who earn obscene money and don't work hard, or graft or do extra. The bankers seemingly and footballers as two examples.

The higher earners should put that bit extra back into a society that has served them well. Simples.

[superjohnmcginlay]

Thats the problem. It isnt simple.

Im not forgetting anyone, higher earners in some instance such as the ones youve pointed out shoud pay extra.

Punishing people for working their bollocks off, sacrificing everything and seizing the opportunity when it arrives is wrong IMO.

You come accross as thinking these "opportunities" just fall in to people's laps when its simply not the case.

[mummywhycantieatcrayons]

The higher earners should put that bit extra back into a society that has served them well. Simples.

But don't they put extra back if we have a flat rate of tax?