Wealth doesn't trickle down – it just floods offshore, new research reveals

I suspect they'd deny because it's not true. The welfare state is still there, it's just been scaled back a bit because we cant afford it.

As for trust. I agree trust is the fundamental ingredient in any economy. And on that note history shows that I can't trust the government to spend my money better than I can.

Solo Trust me on this; the Tories won't be dismantling the welfare state any time soon. Similarly, healthcare will still be free at the point of use for the foreseeable future.

The Tories are in an unenviable position. What they are accused of doing is beyond the pail of the left, whilst what they are actually doing isn't cutting it with the right of their own party either - hence the frequent and vocal calls from UKIP.

Ah, MrJP, we agree on some things then. Yes, elected/unelected profiteers, both bad - totally take your point. But at least the elected profiteers should be more likely to use the money for the common good, and they are also subject to the law. The unelected ones just leave when things get too hot.

And yes, this state is financially incompetent.

Why would they deny it, Niceguy? Nothing that I wrote is anything to be ashamed of imo. It's a perfectly valid, coherent political philosophy.

I just don't think it is working for enough people. I would like to try something more humane and more likely to benefit more people.

In fact I used to be a bit of an idealist, thinking that human nature was basically good. I really don't want to let go of that belief, but when you see the bankers being given so much rope that they hang themselves and huge companies profiteering at the expense of us humbler folk, I feel I need to revise my views.

For capitalism to function at all, it requires trust, doesn't it? If we can't trust the bankers etc, we'll have to regulate them.

I'm infinitely more scared of a powerful state than a powerful populace and I fail to draw a distinction between unelected profiteers and elected ones, except to say that un-elected profiteers don't hold the power of imprisonment over me should I choose to withhold my money from them.

Whilst I share your opinion that the government should always maximise value for money, in practice it seldom does - a brief read of the excellent Lewis Page (a defence correspondent who's book 'Lions, Donkeys and Dinosaurs' should be enough to convince even the most ardent socialist that the state is financially incompetent) or a visit to the Burning Our Money section of the Taxpayers Alliance should soon cure you of your optimism.

I think you'd find the Tories would completely deny it. Not that you'd believe them anyway. There are plenty of people who wouldn't believe a word they say regardless of what the content actually is.

In principle I fully support less govt intervention, more individual freedom to succeed (or fail). The only proviso is that I expect the state to provide a minimum safety net. Emphasis on 'minimum'.

What are you most scared of, MrJP? A powerful state or powerful populace? Are you really happy to hand over control of your finances to un-elected profiteers?

Because as I see it, it's the state's role to protect the people and give them value for money when they pay their taxes. Without this protection, they might well descend into revolution, and they certainly won't pay their taxes then.

Solopower "It's not scaremongering, Niceguy, that the welfare state is being dismantled. I don't think the Tories would deny it, either."

Despite the fact that I see no evidence either, I bet the Tories would deny it most strongly if they were accused of dismantling the welfare state.

"It's all part of their philosophy: people should be independent of the State, they want less govt intervention in people's lives,"

Do you mean that the Tories want us to take responsibility for ourselves and for our own lives? That sounds beautiful.

"more freedom for the individual to steal from the public purse,"

Is a rich person legally minimising their tax liability any more morally reprehensible than a poor person maximising their benefit claims?

"survival of the fittest, the weakest to the wall, etc."

Will families be prevented from looking after their own in this Tory hell? Why would private care systems be forbidden? This sounds to me like you can't imagine any delivery system other than a government monopoly provision of services.

"So they privatise hospitals and schools and help huge multinationals because if a large company finances a hospital that's one less that the taxpayers have to pay towards."

Those multinational bastards eh? Building new schools and hospitals!

"And they want to reduce taxes because they want people to vote for them. Entirely consistent with everything they have done since coming to office."

I'm still waiting on a tax cut other than the token 50p to 45p higher rate income tax one - but still, if it fits the Guardian's narrative eh?

Come on Solopower revolution is in the air, people are pissed off, sooner or later anyone with a couple of quid in the bank and plummy vowels will be doing a flying tap-dance from the nearest lamp post. Our country's survival depends upon people like you knowing these answers. If we are going to smash the system, let?s work out what the system looks like and what it is you rail against.

1. How much is far too much? - What level of relative income disparity is too much? 100 x average wage, 50x, 10x, 2x?
2. Who gets to decide how much is too much? ? Is it you, me, the homeless or a representative of Premiership Footballers?
3. How much wealth are you prepared to take of someone who is rich? 50% is the current upper rate of Income Tax, are you going to raise it as high as, say, 98%? What about share dividends, how much are you going to take from them?
4. When do the arbiters & enforcers become the ruling class? ? This is always a problem with sprawling bureaucracies that are backed up with almost limitless force no matter how well intentioned they start. How do you intend to prevent this?
5. How do you ?prevail? on someone without using the state? ? This isn?t a response to communism; it?s a response to your statement. You wrote ?those that have far too much could be prevailed upon to share?. I?m asking you how that would work without the threat of violence or the state stepping in to force that redistribution?
6. Does confiscation of wealth lead to a ban on wealth? ? This is a corollary of question 3.
7. Has this been done elsewhere and did it end up in a big pile of dead bodies? ? This is not in itself a function of communism, it is, however, a function of an over powerful state.*

* A quick body count puts the Commies well in the lead at being murderous bastards although Fascism (which I consider to be, along with communism, opposite ends of the same turd called socialism) and religion take silver and bronze respectively. An honourable mention should be given to feudalism too I think, if only for the innovative approaches of certain absolute monarchs such as Vlad Tepes. In all cases, the mechanism which allowed these leaders to create such carnage was a powerful state and a weak populace.

It's not scaremongering, Niceguy, that the welfare state is being dismantled. I don't think the Tories would deny it, either. It's all part of their philosophy: people should be independent of the State, they want less govt intervention in people's lives, more freedom for the individual to steal from the public purse, survival of the fittest, the weakest to the wall, etc.

So they privatise hospitals and schools and help huge multinationals because if a large company finances a hospital that's one less that the taxpayers have to pay towards. And they want to reduce taxes because they want people to vote for them. Entirely consistent with everything they have done since coming to office.

Ironic isn't it that the Guardian is so het up on this given how much tax they paid last year. (Less than my husband who works part-time on near minimum wage since you ask.)

The welfare state is being dismantled

Absolute cr*p. The welfare state is FAR from being dismantled. It's had a haircut to try and bring expenditure back to a more affordable footing and as part of that some tough choices have had to be made as to whom can be supported.

Such scaremongering helps noone. Neither in the long run does spending money we don't have on benefits.

OK.

1 Dunno.
2 Not the point.
3 No. (What plan?)
4, 5, 6, 7 I think I detect a certain (not unnatural) fear of communism as we know it, ie what happened in Russia and China in the first part of the 20th century.

I'm not talking about anything we (as a human race) have done before, to my knowledge, although maybe somewhere long ago and far away ...

I'm happier to leave the finer points to the experts. All I'm saying is that the situation now is unfair and dangerous and that we need to do something about it before people get angry and feel they have nothing to lose.

Revolutions are chaotic and their outcomes are unpredictable. Civil war is the scariest thing I can conceive of. I don't want either.

I just want the people who have been stealing away huge amounts of money and land that could be used to make life better for so many more of us to share it. If they won't do it voluntarily, then we need to vote in a govt that will make them. There aren't that many of them, btw, they are just incredibly wealthy.

"But no government seems to be quite that daring"

It's not a question of daring. It's the practicality. And that's what I mean by a blunt instrument. Overtax like we did in the seventies and we end up with Caribbean Islands full of exiled billionaires, well outside UK jurisdiction and millions of regular people working hard for nothing in their back pocket. It's been a long time since Mick Jagger contributed to the British economy, for example.

And I don't think encouraging a more philanthropic society automatically means the state steps back from its responsibilities and hands them over to 'Lady Bountiful'. That's far too simplistic.

"Who would want to ban wealth? ... those that have far too much could be prevailed upon to share."

I often see such contradictions posted on these boards. It always makes me want to ask the following questions.

1. How much is 'far too much'?
2. Who gets to decide who ?those that have far too much? are?
3. Is the plan to reduce those who have 'far too much' to the level of those that simply have 'too much', 'more than most' or 'doing about average really'?
4. How long before the arbitrators and enforcers become the ruling class?
5. How would you 'prevail' upon someone other than by using the force of the state to confiscate part of their wealth?
6. Does the confiscation of wealth become a de-facto ban on wealth?
7. Does what you are trying to do have a historical precedent and did it end well?

I think it's a change of mindset that is needed. Rather than survival of the fittest (capitalism) we need to aim for everyone surviving.

But that involves a redistribution of wealth that could only be effected by govt stepping in. It might also mean the huge multinational corporations go elsewhere (though I really don't think so, and maybe we should just call their bluff. The UK would still be a highly desirable and profitable place for them to operate in).

You know it doesn't have to be from the sublime to the ridiculous, all or nothing, Niceguy ('a state run economy where being rich is not allowed'). Who would want to ban wealth? It's something we all want more of, isn't it? So those that have far too much could be prevailed upon to share, don't you think?

We need to show the govt the way to go (since they are incapable of deciding what is best for all of us). Let them know that enough of us would vote for higher taxes, that we are interested in living in a fairer society, where everyone can be a winner.

Yeah, I'm concerned that this government wants to go back to the days when the poor had to rely on there being some Lady Bountiful around. Who would only help those she considered the 'deserving poor'. And definitions of deserving differ between individuals.

The welfare state is being dismantled - the NHS is being slowly privatised. The Health Act enables this. And it's why the govt. are attacking doctors' pensions - because private companies demand lesser pensions before they will take over hospitals and employ doctors. The govt. knows there will be little public sympathy for doctors as high earners so they can get away with this. Just as they are hiding the rest of the privatisation agenda from the public - who would never vote and have never voted to privatise the NHS.

"Tax is a punitive blunt instrument" - no it isn't, it's a practical and accepted way to to pay for services in a complex society. What generates resentment and avoidance of this system is people's perceptions that the taxes are raised unfairly or not used properly, along with greed. Making "generosity a cultural imperative" would equally have to tackle such resentments and greed.

"We need to get philanthropists back at the forefront." No we don't, as this would futher place services for less well-off citizens in the category of "it would be nice to give them a share of the wealth but not essential if it doesn't come off" - which was the position in Victorian times when, despite the huge efforts and genrosity of some philanthropists, the vast majority of the population were malnourished and uneducated, as was discovered when huge numbers of them were found not fit for military service when they volunteered to fight in the First World War.

Instead of encouraging the superrich to be philanthropists, we should simply make them pay tax. But no government seems to be quite that daring. However, should any lowly, feckless, scrounging poor person dare to claim a little bit of benefit that they are not entitled to - let the wrath of the Daily Mail fall upon them and may the government go after them with all the powers at its disposal.

Well like I've said before, I'd rather be poor in a western style trickle down economy than a state run economy where being rich is not allowed.

All this article tells me is that if you tax rich people too much they move their resources offshore. I don't see why this isn't obvious. We implement taxes all the time to 'encourage' certain behaviours. Taxes on cigarettes & green taxes we are told are there to encourage us to be healthy and environmentally friendly. So we accept taxes can make people do certain things. Yet somehow we feign surprise and indignation when people choose schemes to avoid paying large amounts of tax?

That's not the same thing, Cogito. Ordinary people spend in their local economy. The rich aren't actually shopping in Asda in Stockport - and even if one rich person does, it doesn't make much difference.

"the only role the rich had in all that was that quite a few of them were philanthropists and made donations, set up hospitals, etc. "

This is the trick we're missing today. Tax is a punitive, blunt instrument method of raising money that everyone, from the cash-in-hand plumber to the billionaire with a team of accountants will try to reduce as much as possible. The welfare state took the place of the old-fashioned hospital-building philanthropists and they've taken a back seat every since. We need to get them back at the forefront. Not simply by offering tax-relief on donations but making generosity a UK cultural imperative.

Quite a few people on these very boards believe that wealth trickles down. You often see the argument made when it comes to public sector wages that we should pay them more because they then go onto consume goods and services.

And how can anyone believe that wealth trickles down?? It never has!

The idea that when A gets rich he will provide jobs for b, c, d, and e is true, but A keeps hold of the land and the capital. I don't call that sharing!

And I know all ye merrie capitalists say that over the last couple of hundred years we have all got richer as a result of capitalism - but isn't that more as a result of social reform movements and enlightened government policies (they built council houses, set up the NHS, made school compulsory, etc)? They got the money to do that from taxes, but everybody pays taxes, not just the rich.

Iirc (yes, I really am that old), during the agricultural and industrial revolutions, ordinary people had a wretched time. It was only due to enlightened reformers that things got changed for the common wo/man.

As far as I can see, the only role the rich had in all that was that quite a few of them were philanthropists and made donations, set up hospitals, etc.

P p p p pick up a pitchfork? (More effective than penguins in street battles, I find).

Probably better to wait until 2015. But the opposition parties need a different strategy.

Have you read this? www.guardian.co.uk/business/2012/jun/08/why-uk-no-longer-superpower

I'm not sure I agree with all of it, but the authors say we are now a 'de-developing' economy and quote George Osborne as saying:

"We are working to develop London as a new offshore market for the Chinese currency."

' ... Not only is the UK supposedly averse to offshore financial centres, believing them to be hotbeds of tax evasion and money laundering, but deliberately setting out to create one has been the act of developing nations around the world, from Panama to the Seychelles, not of mature, developed economies. ...'

Clearly the Tories would only make things worse.

I'm not at all surprised.
The politicians are highly unlikely to do anything whatsoever about it.