Tax, Council elections and payscales

[sobrique]

Socialism and Capitalism are pretty much opposite ends of an axis of the political scale.
At one end of the scale, we have Capitalism.
Conceptually, "You get what you pay for".
If you need medical care, then that's going to cost. You get paid in accordance with 'worth'.

At the other end, we have socialism. The state provides for each, according to their needs.

The USSR seems to have demonstrated that a socialist approach doesn't really work - if you provide according to needs then there's no real 'work ethic'.

By a similar token, whilst capitalism _sort of_ works (I use America as the example here) it's also often very hard for poorer people to 'get by' - hospital treatment for example, is very expensive.

The reason I'm going off on one on this subject, is that as some of you may know, there are local council elections in the next month or so. And the discussion of 'Council tax, and alternatives' are being discussed.

There's debate as to the 'best' method.
Current proposals include:

A tax based on property value for the household.

This is the way it's done at the moment. You have a nice house, you pay more towards the common good, if you live in a cardboard box, less. Oh and you pay the same amount as a couple (there's a discount for single) as you would with a 27 person family.

A tax based on property value and number of tenants. Property price linked again, but will be a little more 'pain' for familes rather than couples. Because of problems with the poll tax, this is a politically risky option.

A 'local income tax'. The council takes a cut of your wages.

I'm a capitalist at heart really. Personally I don't have kids, so have no need for schools, I have private medical insurance, and haven't been to the public library since I moved to Coventry.
I fully accept though, that these things need to exist. They're important aspects of a community, and someday I may need to make use of them.

The problem I have though, is that our taxation systems are fundamentally unfair, and contrary to a work ethic.
I've heard the comment on several occasions that it's just not worth getting a minimum wage job for a few hours a week, because you 'do better' if you're on the dole.

In an ideal world, taxation would be a 'per person' bill, for everyone in the country. After all, there's access to all the same services for ... well pretty much everyone. OK, so the better off don't typically _use_ subsidised public transport, health service or public schools, but the facility is available to them.

In fairness to those who don't earn a living, I'd be prepared to accept a 'percentage of income' based taxation.
Call it 20% (ok, it might be nearer 30, but just for arguments sake).
Now the person earning £6000 a year, will be paying £1,200 of that to the government, to use for 'public good'.
The person earning £600,000 will be paying £120,000 to the same end.
Each according to their ability to pay right?

Of course, that's not the way it is. The tax burden falls upon those with an income, because 'well, they can afford it'.

Bollocks to that. I'm getting close to the 40% tax bracket. OK, there's still a way to go, but I think I'll make it there. It may be arrogant, but I had the same opportunities as every other fucker. Went to a 'public school' (by which I mean I had a state education). Went on to 6th form college. Went to university lived on 'a few hundred a term'. Got a part time job at Uni. Got degree. Went and got a job.

I'm still paying off the debts today, 4 years later. I hear 'well, you got lucky'. Maybe I did. Maybe I was lucky enough to have parents who taught me my outlook on life. Maybe I was lucky enough to be born 'clever' or 'ambitious'.

But if you suggest I got an easy ride through education, and into a job, then you can just sod off. I have worked to end up where I am. Some days, it seemed to not be worth it. Others, I realise that I'm doing what I enjoy at a professional level. Where I am is achievable by anyone who cares to try it. Many of the people I work with didn't do degrees, but there again a few of them did.

I'm taxed a healthy amount. This is my contribution to society. I believe that a family, bringing up children well, are also providing a contribution to society. This is why I accept that tax is a percentage rather than a flat rate - after all, children are a tax all of their own. (Perhaps we need to have a 'paid parent' system - if you have kids, then you get paid as a 'carer'. More if you're good at it.).

Someday I may have a family. I want to be in a position where I can provide for them when I do.

I would support a council tax based on property value and number of tenants. I believe everyone has a 'right' to basic services, especially those that impact upon the community as a whole. I would not support a percentage taxation based on income. Community services are important, but the money has to come from somewhere.

Oh I know full well that things are never going to change. The number of voters impacted negatively (compared to positively) by my suggestion just means it'll never happen - you vote against the person hurting your pocket, which is why this uneven tax system exists in the first place.

I suppose it's easier to take the handouts and complain about the 'fat cats' than it is to actually go and do it.

That doesn't mean I have to like it.

Comments

Re: flat rate taxes

[sobrique.livejournal.com]

And because someone could afford to buy a new car, does it make it right to steal it from them?

How about the man who has lots of children, is it reasonable to kill one or two for meat because he won't miss them?

There may be a relative difference in 'worth' if you have a hundred pounds rather than if you have a million. This is why taxation is typically a percentage rather than a flat rate.

That doesn't mean that it becomes 'cheaper' to run a school, just because the people using it are paying less tax each year. It just means that the relative few are having to subsidise the many.

I would have no problem at all with contributing 40% of my income in return for 'appropriate' quality of services. But that's only as long as everyone else is inclined to contribute a similarly 'fair' proportion of _their_ income.

That, to my mind, is a 'fair' way of running a taxation system. Some pay more, some less, but exactly in proportion with their ability to do so.

Surely penalising relative high earners is essentially a negative work ethic?

Re: flat rate taxes

[malal.livejournal.com]

"I would have no problem at all with contributing 40% of my income in return for 'appropriate' quality of services. But that's only as long as everyone else is inclined to contribute a similarly 'fair' proportion of _their_ income."

The problem is, high earners can contribue 40 % and still have enough to live comfortably on. Low earners can't.

Now, I could be wrong here, but you take 20% off a low earner's income, and 40% off a high earners. The high earner still has more money, so what's the problem? If you can afford to pay more, why shouldn't you? As long as everyone has enough to live on. What do you think is more important to spend money on, high performance cars, or hospitals & schools?

Yes, perhaps everyone could work hard and get a great, high paid job. The shitty, low paid jobs still need to be done by someone! And since no-one is ever going to pay for a job inversley to how enjoyable it is, there isn't going to be a solution to that.

No, absolute Communisum doesn't work. (As an aside, I don't see the old USSR, China, etc as being communist in anything but name, but that's a different topic. Besides, Russia was better off in the USSR than any point since IIRC). However I'd like pay scale's to be much closer than they are today.

Finally, a disclaimer. I'm cynical enough to belive that human's just wont accept anything like an "ideal" society. The flaw in communisum is that people won't accept everyone being paid exactly the same. Most people need others to look down on.

Re: flat rate taxes

[sobrique.livejournal.com]

"The problem is, high earners can contribue 40 % and still have enough to live comfortably on. Low earners can't."

I don't agree. Yes, there's a certain amount that one needs to live on. I reckon I was pretty close to that when I was a student. But I don't think that means you need to stop taxing it - that just means that wages will 're balance' to account.


Now, I could be wrong here, but you take 20% off a low earner's income, and 40% off a high earners. The high earner still has more money, so what's the problem? If you can afford to pay more, why shouldn't you? As long as everyone has enough to live on.


If I can afford to pay more, why shouldn't I? Well, why should I?. Would you, if sharing a house, pay all the rent if you were employed, and the others weren't?

How about: We take a hypothetical person who's been claiming unemployment for 3 years watching TV. Then he goes out and starts doing washing up in a hotel. Let's imagine he earns £100 a week.
Then we take another hypothetical person who went to Uni. He spent 3 years working for a degree, and came out with a first, and £15,000 of debt. And imagine that this person is able to get a job as a manager of the same hotel, dealing with day to day hassles and getting paid £1000 a week.

Now obviously it's possible to live on £100 a week - the kitchen staff are doing so. So why not tax the manager 90% on his £1000? After all, £900 will go to pay for hospitals and schools for many people.

Except that this manager has spent 3 years of his life working, unpaid, and emerged with some valuable skills. Day to day is dealing with 'challenges' and has run up a debt in doing so.

Skills are a commodity like any other. They have a value. Payscales are typically linked to that value. In general terms, that's why 'unskilled' labour is paid less than 'skilled' - to encourage people to learn the skills, go to university, gain a doctorate etc. - because it pays better.

Or could it be that a _flat rate_ of tax already means that one is paying more. Why make a stronger negative incentive?

There's the argument that charity is a virtue, but it's not charity when there's no choice.

What do you think is more important to spend money on, high performance cars, or hospitals & schools?

Oh yes, that's right, I never realised before. I'll start paying all my salary to the government straight away. I don't need to drive to work after all, and I'm sure the council will be happy to give me a cardboard box to live in.

It's not a _choice_ between the two. It's a question of how much is _fair_ to take from people in order to support their community and country.

I agree that it's worth investing in hospitals and schools.

If it ever reaches that extreme of socialism that all my wages are 'taxed' then there's no advantage to me doing a job at all. I might as well just sit around and watch my subsidised TV, claiming my dole cheque and housing benefit.


Yes, perhaps everyone could work hard and get a great, high paid job. The shitty, low paid jobs still need to be done by someone! And since no-one is ever going to pay for a job inversley to how enjoyable it is, there isn't going to be a solution to that.


Actually, they do. Bin men for example (sorry, refuse disposal operatives) get paid rather well. It's called 'economics'. If there's a shortage of skills and willingness to do a job, then the compensation increases until there is no longer a shortfall.

If we ever reach a point at which anyone could do _any_ job, then payscales indeed _would_ be in proportion to how shitty the job is.

Re: flat rate taxes

[malal.livejournal.com]

OK, my post was too long for one comment, I'm going to have to split it....

"But I don't think that means you need to stop taxing it - that just means that wages will 're balance' to account."

Your optimistic!

"Now obviously it's possible to live on £100 a week - the kitchen staff are doing so. So why not tax the manager 90% on his £1000? After all, £900 will go to pay for hospitals and schools for many people."

*Sigh*. I discounted that extreme in my post. Re-do it with the manager being taxed 80%. Then the rest of the "being rewarded for more skills" arguement dissapears. He is, just not as much.

Oh, it should be noted that this also does need a "Grants not fees" approach to further education is assumed for this arguement, that lessend reward needs to be an actual reward, not paying off debts.

"Then we take another hypothetical person who went to Uni. He spent 3 years working for a degree, and came out with a first, and £15,000 of debt."

Case in point. I was the last year that got grants. I made a profit off my grant in the first year, and only lived above my grant later years because I was being extravigant (and could afford it). OK, I had a full grant, and Coventry isn't the most expensive place to live, but still. You really didn't have to put yourself in debt as a student when the old grants were still around...

"Would you, if sharing a house, pay all the rent if you were employed, and the others weren't?"

If I could afford it, they genuinly couldn't, and I genuinely was happy to share with them, yes. (That last part is me being selfish, I know. Also, I'd probably want it back if they ever could afford it).

"Payscales are typically linked to that value. In general terms, that's why 'unskilled' labour is paid less than 'skilled' - to encourage people to learn the skills, go to university, gain a doctorate etc. - because it pays better."

OK, say everyone went to university because of the inherant advantages? Everyone would want good jobs. The people hiring for good jobs would cherry pick for a lower wage than before, and everyone else would be forced to do the lower paid shitty jobs.

"If we ever reach a point at which anyone could do _any_ job, then payscales indeed _would_ be in proportion to how shitty the job is."

Doubt it. That only works if a very large number could cheat the system and stay long term unemployed, which will never happen. Yes, some people cheat the system and stay long term unemployed now. That's actually quite difficult to do, and you need to be a real Arsehole, to the point that you're job prospects are amazingly poor. And if there is ever a real lack of workers, unemployment will almost certainly get changed to be much harder to stay in, driven by (justified?) anger at the slackers by those who work (who, having the money, will have the ear of the government).

"I don't need to drive to work after all"

Again, you've missed my point. Yes, you need a car. Do you need one that costs £30,000 and can go three times the speed limit? No.

"Or could it be that a _flat rate_ of tax already means that one is paying more. Why make a stronger negative incentive?"

Because a flat rate doesn't reduce the gap enough.

Re: flat rate taxes

[sobrique.livejournal.com]

Actually, could it be the uneven tax rate that's _causing_ the large differential in wages?
If you're in the 'high' tax bracket, for each 10% pay rise you get, you _see_ 6% in your pay packet. So logically, you're going to want 'more' of a raise, to cover it.

To be honest though, 30,000 for a car is expensive. Then again an 'average' new car costs in the region of 10-25k. OK, there's second hand available, but _someone_ has to pay the 'new' price...

Hmm, I wonder.
If 'unemployment' was actually a conscript workforce cover charge, would that work?
What I mean is that in return for benefits, the government can require some work out of you each week. Which in turn may lead to 'experience' and help in getting on the ladder.

Re: flat rate taxes

[malal.livejournal.com]

"There's the argument that charity is a virtue, but it's not charity when there's no choice."

OK, I'm a cynic, but I belive that if it was left to people's generosity, there wouldn't be enough charity to run the essentials.

"If it ever reaches that extreme of socialism that all my wages are 'taxed' then there's no advantage to me doing a job at all. I might as well just sit around and watch my subsidised TV, claiming my dole cheque and housing benefit."

And, if you'll forgive the implied insult, that level of basic human selfishness is the reason complete communisum doesn't work. You need a payscale, the problem is that the gap's got out of hand.

"Actually, they do. Bin men for example (sorry, refuse disposal operatives) get paid rather well."

Ah, fair enough. That's probably because that's an exceptionally shitty job, but I belive they're an exception...

"If there's a shortage of skills and willingness to do a job, then the compensation increases until there is no longer a shortfall."

Not entirely true. We'll ignore skills for a moment, since I was talking about unskilled jobs. Unskilled work, when there's a shortfall, they end up pushing the long term unemployed into it (not nessesarily a bad thing, but stops the compensation increasing).

Hmmm.... You've certainly made me think. I never realised that my view on these issues was this integrated before...

Re: flat rate taxes

[ewx.livejournal.com]

I think your fallacy is in measuring "ability to pay" purely in numeric terms; the satisfaction of human needs and wants (which is what we have money for in the first place) just doesn't work like that. See my previous remarks about differing utility of money at different ends of the poor/rich scale.

Re: flat rate taxes

[sobrique.livejournal.com]

No, I agree. It doesn't.
But how else can one make that measurement?

We assess skills in terms of a payscale. It would make sense to me if were to extend the concept.