AIBU to think that people with low income generally contribute more to economy than they take

[MagnificentDelurker]

Hi there
l mostly lurk as most of the time what I want to say is said much more eloquently by others. However every once in a while when the question of tax or benefits comes up someone comments as self evident truth that if you pay little or no tax then you are a burden. Some poster a while back went as far as saying unless you are high earner then you are a burden. While these views are challenged, they are not challenged enough.
Today a poster speculated that children of a particular family were likely to become adults on minimum wage and hence a burden. Do we really think that we can have a society full of bankers and lawyers?
Maybe if robots take over but seriously where do people think goods and services come from?

I'm interested in understanding your argument more. Maybe you can explain it further?

Why do you think people on low incomes who are not in a position to pay much tax contribute more than they consume?

They still need services, healthcare, education etc like everyone else.

YANBU
People on lower incomes keep money flowing through the economy.
People on very high incomes often hoard it. It flows up to them but never comes back down again.

It’s problematic and unsustainable.

Yes, YABU. Those with lower incomes are generally low contributors to the economy, due to the fact that they pay little tax but still use services, and although they spend it is obviously less than somebody on a higher wage. That is not to say that any contribution they make is not valuable, but they certainly don't contribute more than somebody on a higher wage, by default.

I don't really understand your argument. If they pay less tax, receive more benefits (I'm not bashing it, just stating facts) and use the same (or more) public services as high earners, how exactly are they contributing more to the economy?

How? See www.telegraph.co.uk/finance/personalfinance/tax/10638283/How-much-we-give-the-state-in-tax-and-how-much-we-get-back.html

You have to earn 35k to contribute more in taxes than you get in benefits.

The family with 21 kids? They have cost far far more than they have ever contributed.

I’m not sure i agree that rich people hoard their wealth and poorer people spend more - how can they, if they don’t have the spare money?

*when I say "higher earners use the same or more public services" I mean that they are more likely to have private health insurance and send their children to private schools.

Oops, I mean LOW earners use the same or more services!!!

YANBU.

People on low incomes often do jobs that desperately need doing such as the very physical work of caring for those who can't care for themselves. As they are paid so little for this work, a very high proportion of that money goes straight out again on living costs, in many cases to private landlords who no doubt like to think of themselves as economic contributors.

They don't sit on piles of cash that could otherwise be circulating through the economy. They aren't, generally speaking, overoccupying property. They absolutely aren't avoiding the minimal tax they are liable to pay because they can't afford the very advice expertise that the rich pay for in order to avoid their responsibilities to society. They are, however, paying the same 20% VAT as the wealthy do when they buy bog rolls, but as a much higher proportion of their income.

Without them society would crumble, and yet some people who are working full time in almost literally backbreaking roles are having to claim benefits to top up their income enough just to live. I wouldn't call that taking.

Because money doesn’t run a society people do. Those services we need will not be run without low income workers. I am also interested in knowing how the high incomes are generated.

I don’t think low earners maintain the economy - it definitely costs taxpayers to provide benefits to others. I do think many low earners contribute a huge amount to society and help maintain community cohesiveness, doing jobs others don’t want to.

Sossages

Thanks. I knew someone more eloquent will show up. This discussion is really important as I think we think about who contributes and who doesn’t back to front. Not that contribution is all that matters but it is the stick that low income are beaten by.

CherryPavlova

So if we were all bankers then we would be better off?

You argue that someone on a low income but with an job that is important to society (care for ex) contributes more than someone on a high income but «meaningless» job (lawyer, banker...). However the high earner’s taxes are paying for the low earners’s house / healthcare / school etc so this financial contribution has to count? Without it the low earner wouldn’t be able to give to their contribution.

Surely it depends on what you class as 'contribution'.

In purely financial terms then a higher rate tax payer with children in private education and private health insurance 'costs' less than they contribute.

However, it's also true that society desperately needs lower rate tax payers and NMW roles whether that's cleaners, hospitality staff, binmen, retail staff, labourers etc.

Both make a contribution .

I think that the only burdens to the system are the ones who take from it while giving very little back, from lazy unemployed people claiming benefits to fat cat businesses not paying enough tax.

To clarify I know that not all businesses are evading tax and that unemployment is a horrible thing that most people wouldn't suffer by choice or through being lazy!

Well individually, you were an investment banker I suspect you’d be better off. If everyone earned more and paid more tax without the need for benefits society would obviously be financially better off. It’s why austerity doesn’t work. It limits payments to those at lower end who can’t then spend much to keep the economy moving.
Do I think we’d be a better society? No. I think we need to have a complete and complex mix to make society work.

We do need richer people to create employment. We need people on higher salaries to pay taxes (and we should chase those who don’t).

We need people willing to work in less glamorous and lower paid jobs too. Of course we need carers, lollipop people, gardeners, cleaners, shop assistants, healthcare assistants, waitresses and chambermaids. They definitely support the economy but not quite as much in purely financial terms as the wealthy.

Between my husband and I, we pay a lot of taxes - and I mean a lot. We also spend a lot and employ a few people. We definitely boost the economy and generate more communal wealth than say, my low income, elderly mother who lives on a pension. We’re not bankers either and contribute in more than financial terms because of the jobs we do.
There are definitely people who use clever accounting to cheat the system but not everyone on over £100k does.

YANBU. Essential workers such as carers are on extremely low wages and the contribution they make (in terms of their work) saves the government money, i.e. by enabling people to live independently rather than being in a home, and helping them take care of themselves which reduces the chances of hospitalisation.

Ultimately the bankers, lawyers, etc, need these lower paid workers to look after their kids/parents, collect their bins, serve them in shops, etc. Without them society would fall apart, and the high earners wouldn't be in the position to keep working in their jobs.

Just looking at the numbers and the precise monetary contributions people make is very short sighted.

I think it's silly to divide people on who contributes the most financially.

If you are doing a job that needs doing, be that a medical director or a street cleaner, then you contribute

It's not a competition

Ultimately the bankers, lawyers, etc, need these lower paid workers to look after their kids/parents, collect their bins, serve them in shops, etc. Without them society would fall apart, and the high earners wouldn't be in the position to keep working in their jobs.

And where would the low earners be without doctors, architects to design their houses, lawyers to defend their rights, accountants paying their salaries and company owners to give them jobs?

Essential workers such as carers are on extremely low wages and the contribution they make (in terms of their work) saves the government money

And high earners save the government money by uses fewer public services and not receiving financial aid.

My point is that both high earners and low earners contibute to society but I don't see how low earners contribute more to the economy.

It is not matter of competition but when people who provide services are told that somehow they are a burden because financially they are not net contributor, then something is wrong

Money is not a resource but a mean of distribution. People and natural materials are resources. Money is infinite but real resources are not.

If working people are paid little that is because shareholder value has dictate that and companies have gotten away with it. It can be argued that many high salaries are off the hard work of low level workers.

Houseonthelake The difference being that the high earners you mention are well compensated for their work and aren't looked down on or made to feel like they're somehow not contributing enough.