What do you think of the 5% tax hike for those earning more than £150k - good or bad?

[soapbox]

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BP is making a huge amount of money.

The Nurse example is also skewed by the fact that they are mostly female. Female dominated professions are almost universally poorly paid (nursery workers, publishing etc etc). I would guess this in turn reflects the combination of a lack of bargaining power and also the fact that many women value flexibility above pay, particularly after they have children.

I have worked in investment banking for 18 years but now work 4 days a week school-hours, term time only for a consultancy. I earn about 8% now of what I earned at my peak although the actual work I do is virtually identical. But I have none of the stress, responsibility, hideously long hours or travel and the 92% pay cut is worth every single penny.

I made that point about nursing traditionally being a female dominated profession too noonki.

It seems hugely obvious that this plus nurses generally being employed by the state has much more to do with their pay levels than supply and demand or value of the their work.

Chocolat, that seems a massive pay cut for flexibility? Are you really happy with that? I would happily take a pay cut for more flexibility in time, but not 92%!!

[obviously though if you were one of those people earning a squillion every year then no, it's not a massive pay cut and in fact you should have given it all back to the rest of us anyway!!! ]

CD'A: 'They act to benefit (1) themselves, and (2) their loved ones. Then (3) others, if and only if this doesn't conflict with 1 and 2.'

These clauses are so transparently untrue I can't begin to write the dissertation it needs...

1. People act to benefit themselves first. What is OCD? Alcoholism? Self-mutilation? Anorexia? Shopping addiction? Can these be explained with the utility function?

1. Then their loved ones. Right. But to assume love is a non-economic, non-rational assumption is it not? We are individualistic actors first and foremost.

1. Then everyone else if it doesn't conflict with 1 and 2. Right: that's why soldiers fulfil their duty willingly then?

Beachcomber, you say where is the money? The contribution of financial services to the tax revenue and GDP of the UK is pretty well documented. An example is as follows:

A capital contribution - London?s Place in the UK Economy, 2007-08
Despite making up only 12% of the UK?s population, a City of London research report published today (Wednesday 17 October) says London accounts for 19% of UK GDP and 15% of jobs. London?s unique place in the UK economy is further confirmed by Londoners? net contribution of £12.7 billion to UK public finances in 2005-6.

The report, London?s Place in the UK Economy, 2007-08, prepared by Oxford Economics, highlights the increased importance of London?s wealth and tax generating capabilities at a time when the overall UK budget balance is continuing to deteriorate. With the exception of the Wider South East (comprising London, the South East and Eastern regions), all other regions in the UK have a net fiscal deficit.

Genuine question chocolatedot. If you have been in a profession with high pay levels, do you think the salaries, bonuses, etc are justified?

I am not sure how I feel about Cote's argument, but Wilfsell surely you're not suggesting that everyone falls is the same (and I imagine Cote wasn't either).

Soldiers are the minority - hence why in times of war conscription becomes an option.

Anorexia, alcoholism etc are considered diseases for a reason - because they act against what we consider natural or healthy instincts.

Just because some people don't fall into myself, my loved ones, then everyone else, doesn't mean that the majority don't.

I will openly admit that I suspect I do. I want to help other people, but I'm unlikely to choose to eat baked beans so that I can send more food to homeless people. Sorry.

Okay so why does the government need to inject all this cash into the economy then if all this city work has been doing so well for us all?

Is "conscription" right? It just feels wrong somehow. Like I'm using a similar, but incorrect word. I hate that.

Chocolatedot I'm not sure I really understand your quote.

Is it refering to tax contribution made by Londeners as a whole or is it just talking about tax from finance institutions and their workers?

I can only speak personally Beachcomber but I wouldn't have done it for any less money and I certainly wasn't willing to do it once I had children.I look back on the latter stages of my career with total horror.

And as for givign it to the rest of you, well don't forget that for every £1m bonus, you pay £400,000 tax!

Good point mummypoppins, I hadn't looked at it that way.

I'm slightly concerned that we're being encouraged to look at all spending as a 'good thing'.

We spend far too much, we buy far too much and we waste far too much.

Isn't there a way of protecting jobs that doesn't require us to purchase mountains of tat and indulgences that we really don't need - isn't that how we got into this mess in the first place?

How are we going to explain to our grandchildren that we screwed the planet over to produce acres of crap that we all bought to protect the economy?

Maybe I'm being hopelessly naive.

Beachcomber, the London economy is pretty much financial services.

Yup - and to clarify, the london economy being financial services covers a lot more than just company and personal tax revenue. It's office space and other services. It's shops and restuarants in the area. It's income that's generated and then spent in shops, restuarants and services outside of the "square mile".

morriszapp - I made a similar post yesterday morning..suggesting it would be more sensible to save money for a rainy day and not spoil the environment by getting the latest TVs, mobiles etc and throwing the old ones in landfills.

Only one person replied to my post and about 200 more posts have now beed added to this thread so no one will read it now!

I suggested that more jobs could be created in environmentally friendly areas.. eg. building high speed rail lines to avoid building 3rd runway at heathrow etc.. but the government don't care..they don't seem able to plan for the future and look at the long term consequences of their actions.

Chocolatedot you seem to be implying that the work was so onerous that it has to be very highly paid or people wouldn't want to do it. Could you expand please?

I see that much of the London economy is finance based. What I don't see is that if the contribution made to the economy as a whole by finance has been so wonerful then why is the state having to inject huge volumes of cash into the economy and nationalising banks?

Is this not the old, privatise profits, nationalise losses that shows only too clearly that we do not operate in a free market apart fom when it suits those operating in that 'free market' because they are making shedloads of money?

I read your post happywomble and I'm sure plenty others did too.

It stuck out actually because it was looking at things from a different slant.

Agree with you happywomble (but missed your post - sorry). There was a very good issue of the New Scientist devoted to this recently.

Because: Your average well paid banker takes the risk when he works for a bank that one day his job will simply cease to exist and he will be asked to leave with no chance of finding anything similar at any time. He does that in exchange for the huge profits he makes in the meantime and hopes that the profits will outweight the potential downside.

In the same way, our economy has enjoyed unprecedented growth and resilience but there was a risk premium built in. Unfortunately, most people didn't see that. they thought the good times would just carry on rolling forever.

Oh, and I work in the City for a bank. And I can tell you that while in some ways I love my job, I would not continue to do it without the salary. It's that money that allows me to get up every morning when it's still dark, stagger to the office, work 10 hours at least (minus MN time), then stagger home again. Commuting around 2 hours in between.

In due course, the money will no longer be sufficient incentive and I will do something else, less well paid, but that hopefully I will enjoy as much or more and that won't affect the quality of my life as much.

As I said Beachcomber, I can't speak for anyone else but I've taken a 92% pay cut to get rid of the stress and to me and my family, it's worth it.

I'm not saying the contribution by financial services has been "wonderful" or otherwise, just that it has been very very big. The drop in bonuses alone this year is expected to mean the Govt. will have to borrow an extra £10bn, around 10% of the annual cost of the NHS.

BL..........I made the same point above. They get paid well because they make money for their employers and they take a risk that tomorrow they could be out of a job...........that has to be rewarded otherwise people simply wouldnt do it.

We may need nurses and fireman but we also need bankers and accountants and lawyers. We all make the world go round in one way or another.

aah thank you beachcomber and Iroekbyrnison . I must start reading the New Scientist!

So blinglovin, you're accepting that the principle of utility is only 'normal' (and not universal) practice? Which simply serves to make the point that neo-classical economic theory is based on entirely theoretical grounds and not empirical ones.

In actuality, most mental health deviations are excessive versions of normal health behaviour or are not well enough understood to be able to determine their precise causality (pace schizophrenia).

You said anorexia etc were 'considered diseases' for a reason: ie that they are not 'normal'. This is absolutely right: we have medicalised what is in fact part of the 'normal' range of behaviour.

You accept then that these do constitute apparently 'irrational' non-utility serving behaviour; yet the features of mental health deviancies are present in micro versions in most of us (the chocolate you know you 'shouldn't' eat but you do anyway; the phobia that keeps you away from spiders even though you know they can't harm you; the habitual practice you can't quite shake off even though you want to). The soldier's duty is - as you say - also an outlier, but a sense of duty is not so far away from many peoples' experience, especially in cultures other than our own.

Rational homo economicus is a figment of the theorist's imagination despite how comforting an idea it is.