18 June 2008

For Most, Taxation Is A Life Saver Not A Burden.

The average wage in the UK is around £24k a year. This is the median average where...

50% earn less than this figure and 50% earn more. The importance of using this type of average for earnings is explained here.

There are 31.7m tax payers (pdf) and of these - 3.8m, earn over £40,835 and pay the higher rate of tax. This means that the top 12% of earners now pay some of their earnings at the higher rate of 40%, compared to around 8% of the top earners who did so in 1997.

These top 12% of earners are referred to by the Daily Mail/Standard/Times/Torygraph/ Express/ (even by the Sun) as 'middle income earners' and as explained above, the press generally use the 'mean' average to try and justify this level of earning as 'middle'. The absurdity of using mean averages for earnings is best exemplified by using the example of Bill Gates moving to the UK - if he did this, the 'average' earner as measured by the mean average would magically overnight become a few thousand pounds 'richer' whereas the median earnings would increase by only a few pence as it would move to the next highest earner in the middle. No wonder the mean is preferred by the wealthy and their press owning friends. Out of control wages at the top end distort the figure. As inequality is already at absurd levels, the mean average becomes effectively meaningless as a guide to what people actually earn.

So given that the Right are generally only speaking to these 12% when they talk of their prime objectives of inheritance tax and income tax cuts, how do they win power?

The Tories get into power using three main tools; their wealthy control of the media and a shameless disregard for the truth, reliance on the fact that lower earners are less likely to vote, and a distorted electoral system that gives them power despite the majority consistently voting against them. With Thatcher and Major, they achieved power with never more than 33% of the electorate support, new Labour has managed to get massive majorities on less than 22% support and the next Tory government is unlikely to get more than 25% support, (at most), when it wins power in 2010. This system of first-past-the-post suits the Tories and their right-wing agenda just fine.

One of the greatest right-wing lies put out about our current electoral system is that it allows voters to 'throw governments out of power'. In fact the opposite is true, unpopular governments can survive until there is perhaps over 70% that oppose them AND are willing to vote for ANYBODY but them. This is why we keep ending up with unpopular governments with unwarranted power in relation to the support they have.

It has been deeply disappointing that Labour have reneged on their promise to give us a referendum on electoral reform - now, in the face of certain defeat it would be very difficult to convince people reform would be anything but desperation to avoid defeat.

Yet...in my dreams I never imagined we would get the wonderful smoking ban, civil partnerships, doubled spending on the NHS and education, free public transport for pensioners and children, a minimum wage increasing faster than the average wage and PR elected devolution for Scotland, Wales, London and the European Parliament etc etc. Labour could have done so much more but all these things are hated by Tory MPs and surely will be under threat by a Tory government. Perhaps the ultimate prize of PR for Westminster was just a step too far this time.

The problem is that the Tories are not going to play fair. Not content with having a massive press bias, the Tories will extend this bias to TV and radio (like in the states where Fox TV plumbs new depths of 'uninformation' at the command of Murdoch).

For a party who makes much of the mythical 'constituency link' when defending the present system, they still think over-riding geographical, administrative and community boundaries is ok in the drive to create more Tory MPs. The Tories will scrap these essential boundary commission rules (and worse) to keep themselves in power. This will make a mockery of our so called democracy, as boundary changes will affect results far more than the voters ever will.

So the majority of voters, who get services they never could afford if not paid for by taxation, continue to end up with Tory governments who cut these services and help the richest 12% of earners in society. One day I believe this cycle of electoral decline and manipulation will end. Under Gordon Brown, all seems lost - Labour MPs denied their members and chose this idiot, but it is we the people who will suffer. It is time to take back the Labour party from these prats - there will only be one party on the left that can give us electoral reform and redistribution. For good or bad, Labour is that party!

14 comments:

  1. Lots of talk of unemployment, minimu wage etc. I see thousands of high paying jobs posted by reputable employers. I know people can find a job if they look.

    http://www.realmatch.com
    http://www.monster.com
    http://www.simplyhired.com

    If you want one, you'll get one!

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  2. ...and, of course, if there weren't a minimum wage there'd be even more jobs (although not so high-paying, obviously).

    See e.g. here.

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  3. At least I now know why a very unpopular Labour Government is still in power.

    Neil, I'm getting worried that you are starting to believe your own analysis that is based on fantasy rather than reality..

    PS Do you find it ironic that so many low income voters vote BNP rather than Conservative or Labour!?!

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  4. Taxation is only a life saver for public sector workers whose lack of skills mean they are generally unemployable within the private sector.

    They need taxation as it's the only way "customers" would pay for the poor quality services they provide! Just consider how many people would want a private education for their children if only they could afford it! They would merely be emulating the patron saint of social mobility, Polly Toynbee!

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  5. Snafu: Once you get past a certain point, material things stop making you happy. What really would help the rich is if they tried to help those less fortunate - taxation is the most efficient way of doing this.

    Every company used to have a few duffers seeping the floor - it was seen as a social responsibility of local companies to employ the local unemployable. There are a million or more unemployable in this country that need employing and as work becomes faster and more stressful this number grows. Long gone are the days when companies had a social conscience, but one way or another the rich will pay - either in rising crime and lower living standards from a crumbling society or by paying a decent amount of tax. I know which option is easier and better.

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  6. Snafu: I would be quite happy for all taxes to be scrapped and replaced with a 100% inheritance tax (in principle anyway - it might be impossible in practise). What would be more meritocratic than just taxing completely unearned income?

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  7. Taxation is the least efficient way of giving from the rich to the poor. The money is taken from you, some third party takes their cut for taking the money in the first place, and then dishes it out how they see fit rather than how the rich see fit.

    Have you never heard of philanthropy? Evidence is already mounting that the best way for aid to reach Africa is direct transfer from family members to their families, cutting out all NGOs! It is also better targeted!

    PS It's good to know that you alone know how to make the rich happier!

    PPS With this in mind, I assume you are leading the way by renouncing your personal tax allowance and welcome the opportunity to pay income tax at 40% on all your earnings. I was worried that your selfish and self-centred calls for other people to pay more tax but you should not contribute any more would be misconstrued!


    PPPS I can think of nothing more meritocratic that letting people keep what they earn and if you earn nothing, you are entitled to nothing but the charity of others. I doubt may pensioners will welcome news that their unearned pensions should be taxed at 100%

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  8. Snafu, have you ever been to Denmark or Sweden? Practically nobody is poor. The better-off pay a fair amount of tax and the result is impeccable universal public services and a feeling that everyone belongs to the society.

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  9. Peezedtee, interesting that you should choose examples of two very small countries with limited immigration as examples of socialism in action and everyone feeling part of society!

    I have not been to Denmark but I know Sweden reasonably well. In my discussions with Swedes, they felt very overtaxed. They raised the subject, not me!

    No doubt you will be aware that schools compete for funding, that undoubtedly raises overall educational achievement unlike in the UK.

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  10. Snafu: Did you know that 1 in 4 Swedes were born abroad?

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  11. Neil, can you answer some of the points I raise before going off at a tangent!?!

    Besides, Peezedtee has chosen two protestant North European countries to prove that taxation works!!

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  12. snafu: This idea that 50% tax/GDP in Sweden and Denmark only works because they are 'white' countries is ludicrous. It is also untrue that they are 'white' countries. Sweden and Denmark both have significant non-white populations.

    The Swedish education system worked well despite the recent introduction of competition for funding. In the 1970s it was well known that the Swedish system was the best in the world. The jury is out on what damage the 1990s Centre-Right imposed 'competition' will do to the next generation of school leavers. That is the key - changes to admissions can take a generation to show what real effect they have had on educational standards. There is already evidence of 'middle class flight' from some schools which is creating 'sink' schools (not anywhere near the level of our bad schools of course).

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  13. Have you never heard of philanthropy?

    Neither have the rich, snafu.

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  14. Neil, the jury is now back on what the destruction of Grammar schools has done to social mobility in the UK.

    Stephen, I am reassured that the politics of envy is alive and well on the left. Just like Neil, I assume you already pay "enough" tax but support tax increases for those on higher incomes than yourself!

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