@JB Re: Just a bunch of wiggly lines?

When I first arrived in the US about 12 years ago i was truly shocked at the state of the infrastructure here. Roads and bridges left to the point of collapse and beyond before being maintained, water and power supplies work most of the time, we have lost water 4 times in the last year due to lack of investment in the local supply system, power goes out if you breathe out too quickly, or at least it seems like that. Whenever infrastructure is invested in, it seems to be an excuse for corporations and the mob to screw the system for the most you can, e.g The Big Dig in Boston. The rapacious 1% have screwed this country for the last 40 years or more and I wonder how much longer the peons will take it. The next few years are going to be "Interesting Times".

Re: Just a bunch of wiggly lines?

The homeless drunk does nothing to better society, the company director is creating jobs and helping society to flourish. You can save only one, which one do you pick? I choose the company director.

Re: Execuive Pay...

Really?

All I see is that the tax take has risen, which means the state is getting more of people's pay.

Re: Execuive Pay...

Correct. But in the case of this author it wouldn't do to break down the statistics to disprove one's own argument.

@Nick

> All I see is that the tax take has risen,

Try here: http://www.guardian.co.uk/news/datablog/2010/apr/25/tax-receipts-1963 for another view, It shows that since the 1960's the overall tax take as a proportion of GDP has always been somewhere in the thiry-percents.Even though during that half-century, the amount we have earned (our wealth?) has increased about fifty-fold.

Re: Execuive Pay...

I am pretty sure this is the case.

Also, I was reading a book about hedge funds over the Christmas period, (A Demon of our own Design by Bookstaber) and I've concluded that if anyone is even less reliable on seeing the bigger economic picture than the Government or the TUC, it's a hedge fund trader. I'd listen hard to Mr. Worsthall on lanthanides, but when it comes to take home pay, I rather suspect that the reason that public sector salaries have increased so much at the top end is because outsourcing companies are competing for those people and offering very high pay in order to deplete the public sector of expertise, so it can be claimed that only outsourcing will solve the resulting problems. Which coincidentally is a tactic of hedge funds...corner a resource and create an artificial scrcity, thus driving up prices.

Re: how the distibuion of pay has changed

I'm sure you would, because that's part of the smoke and mirrors to keep you excited, and get you to the barricades where you can be used as canon fodder to advance the goals of the socialist dictators.

But if you're really looking for some enlightenment, perhaps you should study the materials at the following link:

http://www.heritage.org/research/reports/2012/09/defending-the-dream-why-income-inequality-does-not-threaten-opportunity

Re: Executive Pay...

Now that's something we really shouldn't be doing.

Comparing US statistics on the distribution of pay with UK statistics on the distribution of national income. We've got different countries, with different tax systems, different levels of inequality and we're even talking about different things.

Not really very comparable

Re: Execuive Pay...

False. As you'll read in my post, Reuters's recent article proves that, at least for corporate taxes, government take as gone DOWN in comparison to rising corporate profits.

The only taxes that have gone up are *personal* taxes, which not only effects all income brackets (conveniently, the lower and middle-classes) but also has 'loopholes' for full collection from the upper classes.

The perfect, ideal solution...at least from the perspective of the oligarchs. The wealthy and the corporate interests have gotten you in the exact position that they want you in.

Re: tl;dr

Tim is a "senior fellow" at the Adam Smith Institute. Rather like Lewis Page on climate change or Andrew Orlowski on the media, you can tell what his point of view is just from the headline and summary. The Wealth of Nations is fantastic for quote mining because it rambles so much that you can get almost any point of view out of it. I can't see the ASI being too impressed about this bit:

"It is not very unreasonable that the rich should contribute to the public expence, not only in proportion to their revenue, but something more than in that proportion."

Re: tl;dr

That the rich should contribute more than in proportion is why we at the ASI suggest a progressive tax system. For we do indeed suggest one. A flat tax with a large personal allowance (£15k per adult).

The provides, above 15k, a static marginal tax rate of 33% in our proposed system. With a rising average tax rate as incomes rise. The rising average tax rate being the definition of a progressive tax system.

Re: tl;dr

That is not the definition of progressive taxation.

A progressive system increases the rate as the taxable base amount increases.

As the £15k isn't in the taxable base amount (clue - it isn't taxed) your proposal is proportional - not progressive.

Proportionate taxation as a theory certainly has its merits and many proponents - the main one for me is that it is politically more stable. Maybe you should read some stuff from the Adam Smith institute to provide you with some pretty good ammo for your position rather than trying to pass it off as something else.

Re: None of the above explains why I haven't

Then you mustn't be a very good engineer. I thought engineers were supposed to be good with logic and numbers.

Let's try a simpler example.

Say your company could afford a total compensation package for you of 10,000 units in 2008. Of that 10,000 units, they have to pay 3,000 units directly to the government in taxes. In addition they have to pay for certain things like insurance and workers compensation (non-cash benefits to you) in the amount of 2,000 units. That leaves you with 5,000 units in pay.

Now jump up to 2012 where the company can you 13,000 units. Meanwhile your benefits have gone up to 3000 units. And the taxes the company has to pay directly to the government have gone up to 5,000 units. That means you still only make 5,000 units in pay.

Re: The Blame

The article clearly points out that inflation went through the roof in the late 70s and things went downhill from there. Who was in charge in the late 70s?

Re: The Blame

Nixon was in charge during the relevant period of the 70s. The rest of the world was taken for a ride.

Re: The Blame

I thought she was a half bottle of whisky a day woman...oh, I see what you mean.

Re: The Blame

"Who was in charge in the late 70s?"

The Saudis. Oh, and the other oil producers - the ones who would never, ever manipulate the futures markets with the help of certain well-known financial institutions.

And surely not for political reasons.

You're welcome.

Oh - and next time The Heritage Foundation or some other grubby think tank oozing intellectual pus pays for a 'feature' like this one, let's at least have that fact acknowledged. Thankyousomuch.

Re: since Maggie got booted out for remedial action.

Actually, that's your problem right there. Instead of recognizing how much good she did for you and the rest of the world, you've spent the last 20+ years remediating her actions instead of building on them to increase your productivity.

Sadly, you've been less efficient at it on your side of the pond than we've been on ours. With the result that while you might have started somewhat closer to the Cliffs of Financial Armageddon, it looks like we're going over before you do. Even more unfortunate for you, once we do, you haven't got a chance either.

Re: The Blame

the price of a barrel of oil from 1971 to 1980.

1971 $3.60

1972 $3.60

1973 $4.75

1974 $9.35

1975 $12.21

1976 $13.10

1977 $14.40

1978 $14.95

1979 $25.10

1980 $37.42

http://inflationdata.com/Inflation/Inflation_Rate/Historical_Oil_Prices_Table.asp

Re: One or the other

Rich, it's you that is the cretin. If it is "skimmed off as wages" then tax is paid on it, at a high rate what's more. Much harder to avoid tax on wages. Fair distribution, we know what that means, leeching off the back of those who actually work.

Re: One or the other

It always amuses when people use the word 'fair'. You could say 'fair' is in the eye of the beholder.

For example, you can make tax 'fair' by rationalising it down to a page or two saying that everyone who has an interest in this country (work, residence, investments) pays a given rate on income above (for example) minimum wage), no exceptions or loopholes. Trouble is, you'd never get such a scheme through the politicians. A complex system works well for either side of the political spectrum - on the right, you look after the tax accountants and lawyers, while the left needs to keep plenty of union dues flowing by justifying lots of tax office workers as well as the need to be seen punishing the rich.

As for 'fair distribution', this is even more dodgy to define. Someone who has been able to acquire and exploit a particular (or unique or rare) skill should be rewarded by having more of a share of wealth than someone who won't/can't or has less valuable skills. Is it 'fair' to punish success? To those who aspire to the idea of a 'fair distribution' of the wealth, the answer is yes - after all, it's apparently 'fair' to reduce everyone to the lowest common denominator.

At the end of the day 'fair' is an illusion - life wasn't fair to the dinosaurs, the dodo or the cart builders and lamplighters, but c'est la vie.

Of course, this may not be a popular view, but I'm not fussed - after all, who said life was fair?

Re: One or the other @GiveMeMyShootinIrons

You ask: "Is it 'fair' to punish success?"

I'm not getting into any argument over that, but what Britain manages to do so completely is reward failure and incompetence.

I wouldn't have minded drawing GBP450,000 for 54 days' work - plus, no doubt, a decent pension pot.

And then of course, they move on to equally well-paid jobs in some other set-up in the old boys' network.

Re: Doesn't add up

It is worth noting that about the only thing that article in wikipedia gets right is a small mention of the point of intervention in Keynesian theory - to work towards increasing employment levels during a recession.

It is not about fiscal stimulus for the sake of it or about increasing economic volumes per se - it is about keeping your economy and your people in a state to take advantage of the cyclical upswing.

The rest of it tends to swallow the "New classical economics"* orthodoxy that Keynesian theory is about an ever increasing state control of the economy.

* That thought free zone which is most attractive to politicians because it absolves policy makers of any responsibility for anything whatsoever - remember all those nice charts about M1 and inflation - wonder what happened to them? They got conveniently forgotten when politicians saw that NOT controlling the money supply was the real vote winner and got them off the hook for all kinds of shit.

Re: Howabout..

I hate to burst your bubble, John, but we are in for a round of inflation the likes of which has not been seen since Jimmy Carter was president. Everything they teach about economics in school today is blatantly wrong. Don't buy gold, buy something useful like copper pipe. The price on copper items will shoot up about as fast as the price of gold and sliver, but the governments will not be able to force you to sell it to them at their price the way FDR did back in the 1930's. You want to know what is going on today? It's pre-world war II happening all over again. Hit the history books. They are an eye-opener.

Re: Howabout..

John, money is like water: it will find the cracks.

One of the issues Obama's people raised in both election campaigns is that American businesses are more interested in investing offshore. Well, partly: they're interested in making money, and sometimes your own country isn't the best place to invest in Doing X.

But compounding this is that US companies will have to pay taxes on profits made overseas when the money is brought back into the US ... money that's already been taxed. So if you export your goods or services overseas, you are taxed in that country then taxed when it's brought back. Better, from the company's view, to keep it overseas to invest and make more money.

The obvious solution here is to reduce or eliminate that tax so companies will be more willing to invest in their own country. However, Obama's view is that we should raise taxes on corporations to pay for more government ... so now they'll invest LESS in America.

Re: Howabout..

Easy way - legalise all drugs and tax them. (Keep the quality high and at a price that cannot be matched by the criminals.) Overnight it would turn into a much smaller problem (Like we have with fake and cheap alcohol / cigs being sold in council estates.) People being able to grow hemp to make paper (Faster and Cheaper than using what they use now) might upset the status quo but it needs to be upset and the solution needs to be radical. (Cuts won't work not done in the way they are trying now anyway.)

A solution that works (Because it will involve making a fairly big change) will never be popular with the Daily Mail reading types.

The problem we have is the baby boomers basically who were given everything by their parents generation (Who also took part in a war from them and had a really hard time) have left nothing for their children and took everything for themselves. I was in a pub on Christmas Eve with a fair few people of my dad's generation I was close to punching a few of them. (They retired at 50 on really good pensions that cannot ever be reduced). I think each generation should have it better and easier than the last due to enhancements in Technology / Medical stuff.

What we should be doing is trying to reduce the amount people have to work to 4 days.

(My grandfather's generation used to work 4 1/2). Instead of just creaming off the profits to pay for the people who went to school and university with Cameron. (Clegg is worse though because it outright betrayed everyone who voted for him).

People working for the Public Sector did so on the grounds that they would make less whilst they were working in return for a good pension. (My mother when she left university had 4 friends with the same results as her - 1st Pure Maths - She went into teaching because she wanted to do it but she could have been an acturer / finance director of big PLC's / Professor of Maths - screwing people over at the end of their lives is not a good thing to do.)

I know a retired fireman (Over 70) gets an absolutely insane pension keeps going up. Same as police they retire early if they want to (With a full pension) and then get another job. No reason they couldn't do a desk bound job. (At the moment they just get another job.) That is nothing like teachers.

It is going to get to the point where especially in London the only teachers are immigrants as they are the only people who could and are willing to work for what is on offer.

The only way to improve is to invest in the young. It is only going to get worse if really expensive private schools are the only places with good teachers it won't work.

Maybe we get a meteor hitting the earth or another ice age starting that changes things when people realise how pointless things are these days.

(My parents will get a huge cash injection also when their parents die (They were born during the war and had nothing and lived in council estates and worked very hard and ended life pretty rich) for people starting now with nothing something like that just isn't possible. If your family is very poor now it is far more likely to stay so no matter what they do which is bad.