France budget: Taxes favoured over spending cuts(76 Posts)
Great to see one country brave enough to tax the rich instead of punishing the poor.
Waving goodbye to 'the Rat-Man' (copyright Alain Badiou) was one of the few high points of 2012.
I think you'll find the austerity measures are still pretty stiff, even with some increased taxes in the mix. The article mentions 'a freeze in government spending' on pensions for example. Still, if they go after companies with higher taxes, maybe we'll be able to lure a few of them over here.
Personally I think it's great. The more they tax their rich, the more likely they are to come to the UK and spend here! Viva la France!!!
I'd be more than happy if we had similar policies here and our super-rich decamped to France or anywhere else. It would mean ordinary people could afford to buy a property in London again, thus improving the quality of life for ordinary people and making our economy much more flexible and competitive.
Yes, there isn't trickle down effect of having rich French people in London. We should tax them too.
Wasn't it on Question Time the other day, that the richest 1% of the country provide 24% of the tax take?
Not sure it's that economical to get rid of them all if that is the case.
Don't know if that figure is true but assuming it is, yoiu have to question whether taxing the super-rich more highly = getting rid of them. And even if they do all flee to lower tax regimes, you have to question whether that is really such a loss - after all, most made their money not through their own hard work, but through others' work, of whioch they have expropriated the gains. Let's take bankers - if every single one involved in high levels in the banking world flees abroad (unlikely) will we really be that worse off? Most CEO jobs could be done as well or better by others who work in the companies. Many of the super-rich eg hedge fund traders etc are just parasites - if they bugger off that's fine by me. Most of these people 'invest' in property in the UK = making it more expensive for ordinary people; they spend most of their wealth on things that don't benefit the UK at all, like yachts and exotic holiday homes and any spare cash is stashed offshore so they don't pay tax on it.The trickle-down theory has long ago been disproved. Plus high inequality in society has been shown to have very detrimental effects on everyone in that society (yes, even those at the top), in terms of societal breakdown, poor physical and mental health etc. I'd rather live somewhere with fewer super-rich or where at least the super-rich there contributed as amply as they were able to.
It's not about the trickle down theory, it's about tax take.
Not the most ideal source, but the best I have in 30 seconds searching
The highest-earning 1 per cent of Britons pay almost 30 per cent of all income taxes according to this.
So forget trickle down, forget what they're spending the money on, even forget if they're using every loophole in the book to avoid tax - the tax that they ARE paying accounts for 30% of our total income tax income. Figures in that article say they pay 47 billion. Regardless of what they should be paying, that is what they do pay.
If you got rid of them all (or even half of them) then you have a huge hole in the budget. Either everyone else has to pay more tax, or you have to find another 20 billion plus in cuts. So, in answer to your question, would we be worse off if every single person "involved in high levels in the banking world" moved abroad - yes we would. Considerably. Bonus are taxed. Pay is taxed.
I'm totally in favour of shutting down loopholes. I'm totally in favour of everyone paying their fair share. But I can't believe that paying over half of the money that you earn in tax can be fair. I believe that it's been proved that once tax rates up to a certain level, tax take actually goes down. I just think tax rates should be set with the practical purpose of getting as much money as possible, rather than ideological taxes which end up being couterproductive.
How about we turn the issue on it's head then clytaemnestra. If the 1% did not earn as much and we use a living wage of £7.90 instead of a minimum wage of £6.90 ph. Then more people would pay tax. The one percent would pay less in tax whilst the people who were paying the least now contribute more. I would be all for that.
OK, how are we going to do that? Raise the minimum wage and, what, wage capping? I don't think wage capping is any more productive than tax raising past the point of tolerance. If you could earn double/triple/more if you lived in Hong Kong, why stay in the UK? How do you handle business owners who pay themselves in dividends rather than a wage - cap that too?
Also, the jobs of those who went abroad would not disappear - I am sure we could find plenty of replacement bankers of quite possibly higher calibre to step up and take on the job - even if they got only 25% of a million quid, say, as a bonus, that would still be quite a good sum in real terms...
So we wouldn't lose the tax take in most cases. Yes, there might be some company owners who moved abroad - but i'm not convinced they all pay tax anyway eg Philip Green. And the missing taxes of those who fled would be more than made up for by the taxes of those who stayed.
I agree on the whole that 75% is higher than you need to go - but 50% definitely isn't (contrary to George Osborne). We need a policy that focuses on increasing what we bring in in taxes and not just cutting spending; in the UK I think that will be as much about closing tax loopholes esp for non-doms as it will be about rises in tax rates per se.
And why not pay capping? Nobody needs an income of a million a year.
And as to your statement about earning more elsewhere then so be it, off they jolly well go then. Hong Kong etc will become swamped with ex british taxpayers.
You seem to be arguing for the status quo apart from being unhappy about all the tax that is being paid, to which I have provided a solution. Many people have now realised the status quo is no longer what we need or want.
So do you have a plan or are you just annoyed cos the plebs pay less tax?
"Nobody needs an income of a million a year."
Nobody ever questions these kinds incomes when they are earned by footballers, film actors or 'celebs'. People who, let's face it, contribute very little to the sum total of human existence, have a very short working week and for whom the statement that their "jobs could be done as well or better by others" might have been invented. It's bizarre that the knee-jerk reaction to a CEO of a company employing thousands of people and/or generating millions in profits is to automatically assume they have zero skills, are easily replaced and are simply killing time while raking in the cash.
I would disagree about no one raising the issue of footballers and celebs, many voices have asked over many years why people like simon vowel are paid more than nurses. Or how he can create a string of "new talent" that only serves to sell the idea of money and fame being the goal for young people to aspire to.
Your other point is also somewhat off the mark, I think you will find that people are not saying the ceo's do not work. What they do and how they do it is I am sure appropriate to the industry they work in. What people are saying is that in return for that work they should not be paid massive salaries that seem to reward failure, nor should they get so much that they are being paid an unrealistic wage for basically being a manager. Ceo, of any multinational company will not be taking every decision on their own, will not be dealing with every issue by themselves, will have a huge list of people that they delegate to. So they are being paid to carry the can. Also they should pay a high proportion of tax, if high tax payers want to move and pay less tax somewhere else, then they do that. No one is stopping them. Why should the country come to a halt if Barclys move somewhere else, just because the highest paid staff members want to move the company to another place where they pay less tax?
I'm saying that I believe in pratical taxation, not utopian idealogical counterproductive taxation.
You don't think it would be a big deal if everyone who earned over 1 million left the country. And if Barclays/HSBC etc buggered off too.
I'm saying it would mean that those high earners would drop the income tax take by 47 billion. Which we'd have to find somewhere else. So, do we tax the hell out of the middle classes to make it up? Cut services? What should we do to fill the hole in business taxes which Barlcays and HSBC pay? We can't just borrow another 47 billion pounds a year and assume it's never going to be paid back.
I believe in pragmatic taxation. That if you do a graph of % of money required to be paid in tax against tax actually taken, it's not a straight line, it's a bell curve, and we should tax at the top of that curve, in order to get the most money in. Because right now, the country needs money, not to shoot itself in the foot.
Incidentally I've said nothing about "plebs", I've said nothing about the lower rates of tax at all in fact, and to wade in assuming that that is my position on things and to throw a few cheap insults at me demeans your argument.
There is a big assumption out there the big earners are all a useless waste of space screwing the country, avoiding tax and being utterly disposable.
Actually, although a few may be, the majority are extremely driven wealth creators, who bring a huge amount of business (hence tax income) to the UK, employ a lot of people, and pay millions in tax themselves. The are also very mobile as the way business works they can base themselves where ever they want. It would be political suicide to drive them out of the country.
As for house prices in London coming down if they leave - snort. Have a look at how many British resident nationals own the really big houses in London. Not many. We should be going after the non-dom non-resident overseas investors who don't pay UK tax anyway, but do buy up the property.
I earn fk all btw, so have no agenda here. I don't want the rich taxed at 75% though, I want them to stay, employ, spend, drive the recovery. We need them. If we get a few wealthy Parisians over - great. Their skills will be useful, they will bring jobs for the rest of us, spend money in our shops, pay tax on their salaries. Excellent.
So lets be pragmatic then, all the people earning over a milion will not leave the country so stop being disingenuous. A number will choose to leave and what we should have a tax policy to suit them when they are so small a percentage of the population of this country? That certainly taxes us back to feudalism.
Those that go will sell all their assets here so revinue will be raised and tax paid on profits, as well as those who purchase their assets. If they choose not to sell assets they will still be liable for some revenue even if only council tax.
Might have escaped your notice but firms like HSBC et al, are far smaller than they used to be so the number of employees reduced would be comparable to the health service cuts, or cuts in local council staff. They were seen as expendable so why not the thousands of people who are involved in nothing more than customer service, managing other peoples money, speculating on the stock market. Like nurses and ambulance techs, teaching assistants, bin men etc etc they do not actually make anything.
Pragmatically speaking any government would then have to make decisions on trident, spending on building up manufacturing, investing in sme's, stop throwing money at the banks under the guise of quantitative easing.
Pragmatically speaking this version of capitalism is bankrupt, not sustainable, dead parrot gov. So your idea of keeping things as they are to pander to the few who have the highest earnings is anything but bankrupt unless you like your society riven by poverty and need.
Earned income is already at 50% for the top 1% of earners and 40% for those on £50k-ish which represents the top 10% of earners. Capital gains tax on the sale of assets & investments is rather lower but could be harmonised. The last time we had more punitive taxes on the very wealthy - the 1970's - quite a few individuals and companies relocated to more friendly climes but that's not the point. To meet the hefty public spending targets and costs of nationalised industries at the time we also had to endure a standard rate of income tax of 30%+ and the whole country ground to an undignified halt. Even in those days 'taxing the rich' didn't generate enough revenue to stop the gap. For spending to remain high, everyone will end up paying the price.
And your point is that we should stay as we are? Or maybe even drop the higher level of taxes? Fine that will go down well with the public I am sure. I heard some whiny assed person harping on that what Milliband should do is stop the banker bashing. Not sure how any one person, never mind a politician is meant to stop the public from bashing the people that they rightly blame for crashing the economy. It was not the poor, they hardly ever get mortgages, or credit cards, or bank loans, pay in to pensions, or hold shares.
Things are not going back to the way they were, you cannot put the genie back in the bottle
Also, the jobs of those who went abroad would not disappear - I am sure we could find plenty of replacement bankers of quite possibly higher calibre to step up and take on the job
What would actually happen is those high earners would move abroad and just do their jobs from there. With modern IT being what it is today a CEO/banker could just as easily work from an office in Luxembourg, Switzerland or even Hong Kong/NYC just as easily as from London. So we'd lose those jobs and more importantly the tax revenues.
And don't forget about the lost opportunities as the multinational's pass us by and set up somewhere else instead.
Like it or not the UK does not exist in a bubble. We compete globally. If our taxes are not competitive then people will either move or not come in the first place.
A number will choose to leave and what we should have a tax policy to suit them when they are so small a percentage of the population of this country?
We need to have a tax policy which suits the country the best. And the reality is that the rich do pay the vast majority of taxes. It's fact. We don't have to like it but that's the way it is. So if you continually tax said rich person who is already paying the lion share then at some point he/she will leave. Easily done when we're in the EU and part of a global economy. The loss of one millionaire will have a big negative impact on our tax revenues. What then? The only option which remains is we then must raise taxes on everyone else to offset the loss.....or make cutbacks.
I can't be bothered.
Keep banging the drum love. I'm sure that utopia is just around the corner.
If it was the case that high-tax economies always performed poorly whilst low-tax ones were on a sure road to success, could you please explain why Scandinavia, Germany etc are doing so well whilst Ireland, say, is screwed?
Low tax rates for high earners are good for high earners,yes,but there is no evidence they are good for the economy as a whole.
The 2011-2012 tax tables (page 2) are an interesting read.
Approx 1/4 of all income tax was paid by just under 300,000 people (1% of tax payers) or just over the number of people Tesco employ directly in the UK. (I doubt they are the same people!)
33,000 people paid 10% of our income tax take. That's 0.1% or one worker in 1000, or just under half the capacity of Old Trafford football stadium.
High earners don't have the same ties to the country as most of us. If their children are at school here they are likely to be boarders. They tend to have properties elsewhere in the world and are used to travelling between them. To avoid UK income tax they simply have to make sure they don't spend 90+ nights here, which is probably a small adjustment. If only 16,500 of these people make that adjustment we have lost 0.5% of our income tax take - over 3/4 million pounds. Let's hope not too many of the rest of the 300,000 decide to join them!
This is only individual income tax. It doesn't take into account the fact that high earners spend more in restaurants, health clubs, shops, hairdressers, on taxis, on cleaners, gardeners, nannies, secretaries, lawyers, accountants etc than the rest of us.
There are also corporation taxes. Much of those tend to be paid by large companies with offices in many places. Somehow a decision has to be made regarding in which country a profit has been made, which is often a matter of paperwork, as in an international transaction it's not necessarily clear-cut. Favourable tax regimes can be a factor. (A point which has not been lost on the Irish.)
niceguy2 is right. The rich pay for us. We don't have to thank them. If we want to, we can resent them. To drive them away would be harder on the poor than it would on the rich.
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