To think the 'Net Contributors' argument is just wrong?

[Yetmorebeanstocount]

Just been reading about "Net Contributors" of tax and how it supposedly is a bad thing that we don't have enough in this country.
i.e. - that most people receive more, in cash benefits, social care, NHS, police, education, roads, bin collections etc. etc. than they will ever pay for via their taxes, so they are 'net recipients' of the system rather than 'net contributors'.

My reaction is - well yes of course. That is how it should be!

Take a very-over-simplified example to illustrate the maths:

Say there are 100 people who earn £1k, and one person who earns £200k. Say the 100 pay no taxes, and the one person pays tax at 50% of £100k.

That tax gets re-distributed to the 100 people in the form of services and benefits and pensions, so that the 100 now have the equivalent of £2k each and the one person still has £100k.
What is supposed to be wrong with this? It is just basic re-distribution of income, which is something that every civilised society should do.

Of course in real life people earn all sorts of amounts and receive different things, so it is not so simple, but the principle is the same - a few at the top are 'net contributors' and the rest are 'net recipients'.

And of course, those at the top still get something back as they drive on roads and have their bins collected, and have the benefit of living in a civilised society which is policed and (mostly) does not have people dying on the streets.

That’s what will happen if the wealthy keep leaving at the rate they are doing. The burden ends up falling entirely on those with less without the means to bear it.

There’s very little point in increasing taxes on the wealthy when it leads to a loss of revenue. Competitive taxation attracts wealth, investment, job creation etc, which in turn increases revenue.

You'll find "the poor" pay very little tax. The Jeff Bezos' of the world put in more than we think - these massive companies pay a massive chunk of invisible taxes that don't necessarily end up in their financial report. Employer's NI contribution per worker, private healthcare subsidies which take the pressure of state services, and so on. Much of their "wealth" is actually paper wealth, tied up in shares they can't sell. Its not just about corporation tax and their personal income tax. Why would anyone want to be responsible for a company of over a million people's livelihoods, and taking huge business risks into new technology, if there wasn't a massive reward at the end of it? I know I'd rather have a less stressful little job in my home town if the outcome at 65 was the same.

That’s nice, but plenty do, and they’re the ones leaving en masse. That means, whether you consider it fair or not, the burden is falling, and will continue to fall, on those with less.

Abso-bloody-lutely.

How quickly we forget how much we rely on so many roles that are paid so poorly. I really thought the pandemic would change that but sadly the likes of Sunak will never give a toss about ordinary working people whilst swanning around in his fucking private helicopters and jets. It makes my blood boil.

Nail on the head. Add into that politicians over the past 20-30 years who've all lauded "tax avoidance", i.e. setting up tax "efficient" opportunities to avoid paying tax, i.e. pension schemes, ISAs, gift aid donations, special tax allowances for dividends, interest, etc, plus the "personal savings tax allowance", ever increasing the tax/nic thresholds so more people don't pay it at all, Gordon Browns attempt to create "negative" taxes by the introduction of tax credits, etc etc.

It all sends the message that it's OK not to pay tax or minimise the tax you pay! That's completely the wrong message. Instead of encouraging people not to pay tax, we should have been changing the tax rates, thresholds and allowances so that it's "good" to pay tax, but at much lower levels. Much as I hate to admit it, I think Gordon Brown was right to introduce the new 10% income tax rate but he botched it (as normal) and withdrew it again a couple of years later!

We should have more tiers, i.e. income tax rates of 10%, 20%, 30%, 40% so that people just breaching a threshold don't "feel" the pain of high marginal tax rates. Likewise with benefits, there should be a much broader "tapering" element where earning a few pounds more or working an extra shift doesn't mean you lose too much in benefits, i.e. no "cliff edges" for things like free prescriptions or free childcare or council tax relief, etc.

Instead of the usual lazy political tinkering with rates/allowances, etc., we need someone with vision and guts to bring in major changes to tackle all the anomalies, the stupidly high marginal tax rates around thresholds, the cliff-edges, different tax rates for different "types" of income, etc, getting rid of NICs, etc etc.

The top 1% in the UK already pay 30% of taxes. We're a long way from "the poor pay all the tax". In fact, most "poor" people pay very little tax due to the personal allowance, zero rate VAT on food, rent, council tax, etc., lower VAT on domestic power, no vat on public transport costs.

Get rid of that 1% like some posters here want to happen, and we've a massive gaping hole in the country's finances that "someone" has to pay for, which will be those left behind, who'll either have to pay more tax themselves or suffer reduced public services.

Be careful what you wish for!

We also need to discourage reproduction by people who can't support themselves, let alone offspring. Everyone should have a viable career, decent savings and stable, long-term partner before even contemplating pregnancy.

Your example uses very extreme figures. Reality is a lot more nuanced than that. The way things currently are it's middle earners who are doing most of the subsidising. You've got households with a 50k income supporting other households who also have a 50k income.

Yep, I agree, but easier said than done.

Yes, hence why we need a radical change in our tax/benefits systems. All the "tweaks" over the past 25 years have made it a haphazard jumble of contradictory rules which make no sense at all.

Ok. So the very wealthy leave. What happens to their properties? If they are still earning rent, that will be taxed - preferably heavily (I am not talking about people with one or two properties to aid their pension needs but those with a portfolio). If they sell them then house prices will come down and be more available to the average person. They can then save money by having a mortgage rather than paying rent. They will have better security which help with their well being and health. Will have equity over time to fund their retirement needs. Might be able to retire sooner as might have paid off their mortgage. Will cost less to society than if they spend their entire working life stuck in low paid work, servicing rent that is basically money down the drain in terms of the future and only meets their current requirement for a roof over their head. Exhausting themselves and only just managing. Having constant stress of knowing they may be evicted.

If they move abroad they have no influence on our government and won’t be lobbying and voting to maintain their wealth and power.

To those wealthy that leave because they don’t want a more equal society and want to maintain obscene levels of wealth whilst ordinary working families struggle to keep their kids warm and well fed, I say: ‘fuck off! We don’t want mean spirited, greedy fuckers like you anyway!’ I am in a professional role, mortgage paid off and living a comfortable but very modest life.

I came from poor beginnings but was supported to go to uni by the government. Able to claim benefits for a short time between two courses. Had the benefit of reasonable rents and affordable houses to buy. Equity built has given us financial freedom. If I was back to 18 now there is not a hope in hell I could have done this.

This assumes that the only contribution a person can make is a financial one. Some people on very low wages may not be contributing huge sums in tax, but may be contributing greatly to the benefit of society.

We aren’t talking about Philip greens for Christ’s sake!

we are talking about software engineers, doctors, actuaries….!

How long do you think revenue from house sales will plug the gap for? Or rather, a particle of the gap. That isn’t a source that regenerates in order to be repeatedly mined.

Politics are international. You don’t have to be resident in the UK in order to exert influence. This is especially true when it’s in the best interests of a country to attract you.

Again, the wealthy don’t care that you don’t want them here. They’re leaving in droves already without a backwards glance 🤷🏻‍♀️ that isn’t hurting them, but it is hurting those left behind.

Eh?

you’re still assuming that these ‘millionaires’ have massive property portfolios. you and a ton of people on this thread think ‘millionaire’ and think ‘property magnate’.

the reality is that the software developer or doctor sells his/her one property, takes the £££ and ‘fucks off’ to somewhere with a much better quality of life.

if you think benefits, free uni and the NHS are good things- surely you’d want people to sticking around to pay for them!

Oh god yes. Don’t let the poor reproduce for goodness sake. What good could come of that.

While we are at it why don’t we revisit eugenics as an idea? Workhouses could be great too. Get those lazy poor doing something useful the feckless swines.

And those arseholes with long term conditions like Type 1 diabetes should pay more. All that insulin to keep them alive costs us folk with a working pancreas loads. My pancreas creates insulin (for now) so why should I contribute to those idiots whose pancreas gave up the ghost eh?

Oh and don’t mention people with disabilities. I don’t have any so why should I contribute to supporting them?

And let’s talk about all those people whose development was damaged by childhood trauma who might struggle in various ways. I mean, who do they think they are. They should just pick themselves up and get over it.

I mean, I managed to be born with no disabilities or conditions - to parents who looked after me well and supported me to meet my potential so why didn’t everyone else. Idiots!! Let them suffer and die I say.

What Ho! Off to shoot some pheasants old chap.

It matters because if enough of the super rich leave and the tax amount continues to drop and we will have to cut services or continue to borrow huge amounts.
There is our drop in productivity as well but that is another problem.

https://www.statista.com/statistics/275325/government-revenue-and-spending-in-the-united-kingdom/

https://m.youtube.com/watch?v=ZXP8gH0wddE&feature=youtu.be

Im talking about taxing wealth/assets of the very wealthy. This guy was a city trader. This is what I’m talking about. He explains it far better than I am.

whilst you are it you also might want to examine how you fund and provide services for the elderly, diabetics and those with mental health problems…

because you clearly care about them a lot (as do i) and don’t seem to be connecting the dots about how public services are funded

(here’s a clue- it’s the people you want to fuck off)

I’m not talking about taxing the income of doctors and the like. I’m talking about wealth and assets. This guy used to be a city trader. A very successful one. He’s very relatable and clear. H explains better than me.

Taxing income and taxing wealth are different. We don’t tax wealth properly and this has created the massive gulf between the most wealthy and poorest in the U.K. greater inequality is bad for all. Not just the poorest.

https://m.youtube.com/watch?v=ZXP8gH0wddE&feature=youtu.be

I want the very very wealthy taxed properly. Those with assets that create wealth without them lifting a finger. That they then use to hoover up more assets. And so on. Which then creates this massive gulf between rich and poor that is bad for us all. They register the assets within companies and use very clever and currently legal ways to dodge tax. That’s not ok.

It’s like a game of monopoly when someone has managed to buy all the properties on one side of the board so you can’t go past without paying them something and so they make more and more and buy more and more and you lose more and more. There is NO way you are ever going to win that game. It’s too inequitable.

That’s what needs to change.

@Camerasforinthehouse

There's a huge difference between experiencing involuntary misfortune and proactively exacerbating difficult conditions by adding kids one can't afford.

No one incapable of self-support should be producing additional human beings on an already over populated planet.

I think governments around the world need to cooperate together on this and leave the international super rich nowhere to hoard their profits from their employees (who actually did the work to create the wealth) or hide money from taxation. Of course it'll never happen though and I'm sure someone will be along to say entrepreneurs wouldn't bother working and would chose to live on benefits instead if they couldn't amass hundreds of billions all for themselves.

I don’t misunderstand your position, I just don’t agree that ramping up taxes on the wealthy will in fact increase tax revenue. Nor do I agree that encouraging the wealthy to fuck off is to the UK’s economic benefit (as opposed to the benefit of your moral sensibilities). It isn’t.

I believe that some would happily see the country crumble to nothing rather than even slightly compromise their ideology. Better to have no NHS or public services at all than create an environment that attracts the dreaded wealthy.

We are quite like minded to our Viking cousins and Demark have some good ideas. But our 67 million population does make it a different kettle of fish to their 5 million. But they also receive criticism.

Have a read of this - it's locked behind paywalls but you can read it here:

Denmark is demolishing non Western neighbourhoods it considers no-go zones

Read more at:
http://timesofindia.indiatimes.com/articleshow/104745154.cms?from=mdr&utm_source=contentofinterest&utm_medium=text&utm_campaign=cppst