[Aspiringlawstudent]

(Original post by stefl14)
Tax is necessary. Some goods would not be provided by the free market due to the free rider problem. People cannot be prevented from benefiting from things like street lights or national defence and for this reason they will wait for other people to pay for it and it will not be provided at all in the end. Other goods would be over-consumed if taxes did not make the use of such goods more expensive. It is therefore more efficient for taxes to be in place for some things if they are spent efficiently or used to correct negative externalities so that output is optimal. With that said, tax rates are too high and the size of the public sector is damaging overall efficiency.

So, I take it you favour some sort of minimal-to-low tax rate? Care to put a figure on it?

[ThisIsTheLife]

(Original post by stefl14)
I'm a free market person but if you think that a full on free market is the way to go then you are wrong. The countries who operate closest to a free market are African economies - how is the free market working out for some of them? In addition, Russia tried to break out of communism by adopting fully free market policies while China adopted a more interventionist approach to escaping communism. I think we can safely say which country has been more successful.

There are many confounding variables in the evolution of these economies and I don't think you can say with any degree of certainty that adopting free market policies is the cause of the problems we've seen and are seeing with these nations.

Free markets have their problems too, of course, as does everything. But I'm willing to face those problems in exchange for a clear, fair system of economics that doesn't involve unwarranted state coercion. It is morally abhorrant and I'm willing to take a few on the chin in order to get rid of it.

[stefl14]

(Original post by ThisIsTheLife)
There are many confounding variables in the evolution of these economies and I don't think you can say with any degree of certainty that adopting free market policies is the cause of the problems we've seen and are seeing with these nations.

Free markets have their problems too, of course, as does everything. But I'm willing to face those problems in exchange for a clear, fair system of economics that doesn't involve unwarranted state coercion. It is morally abhorrant and I'm willing to take a few on the chin in order to get rid of it.

I agree with small government but no government is asking for trouble. It simply would not work at all and the evidence for this is pretty strong.

[turboweevil]

(Original post by Aspiringlawstudent)
I'm of the opinion that a truly free market will always be capable of achieving greater efficiency than a government.

Please inform me as to how this makes sense. I cannot fathom how in a real world situation, human greed can create a fair system for all of us. Social mobility would be crushed, exploitation of workers would be rife, scientific and medical progress would be driven by money and not necessity. Explain to me how this either wouldn't happen or could be considered a good thing?

To answer the thread I'd say top rates should be higher. Over the past year, my dad's lost his job and taken a 25% pay cut for another one, my sister will pay three times more for university than me and my mother is now waiting indefinitely for arthritis related surgery that was rationed last year. Now I get that we should all pool together to get out of the deficit but when you see news of the top 10% of earners, floating around shielded from the world in their limousines, with 50% fatter pay checks than last year you know there's something wrong.

and I've not even got it that bad! imagine what life is like for a family earning half of what we have. imagine how they must feel when they hear numbers like 2.4 million to describe BONUSES, not even wages! you can argue all you like that they've earned their keep, that they need to be more skilled than others to do their job and that makes sense, but it definitely doesn't warrant this sort of wage gap. We are a united nation and as a united group of people we should all be willing to help our own when times are hard. It's not tax rates that need changing it's our attitude towards tax and those whom it helps.

[thegodofgod]

Well...

It's pretty much essential - it accounts for the majority of the revenue of HMRC; getting rid of income tax would screw over the public sector completely.

However, I feel that there is a currently a lot of wastage / inefficiency of spending within the government: if the expenditure were more efficient, a tax cut could probably be afforded.

[Super Mario 64]

Top rate of income tax in 1945 was 94%. Obviously WAY too high for today's standards, but it helped greatly to equalise the distribution of income, and brought us the NHS and effective nationalisation

Point is, a high rate is needed for the much more richer, simply because at this day in age, the distribution of income is shocking. Rich people use the excuse that they should be able to keep more of their income to invest in their companies to help the economy etc but it's total bull****.

Too high can cause tax evasion of course, which is still a problem, but something that can be addressed with a REASONABLE tax system.
Top rate at the moment is 50% on anything over £150,000. This should be lowered to anything over £100,000 imo, or something similar.

[WelshBluebird]

(Original post by Aspiringlawstudent)
I'm of the opinion that a truly free market will always be capable of achieving greater efficiency than a government.

And what about those people who would be left behind by a truly free market?

(Original post by s.a.u)
45% taxation plus national insurance is an absolute travesty. Since when has it become customary to be punished for doing well?

But you are not being punished. Someone in the 45% tax band will take home more than someone who is not in the band.

[ThisIsTheLife]

(Original post by WelshBluebird)
And what about those people who would be left behind by a truly free market?

Who?

But you are not being punished. Someone in the 45% tax band will take home more than someone who is not in the band.

They'll take home more in absolute terms, but less in percentage terms. How is that justified?

[Tom_Hagen]

(Original post by thecrimsonidol)
I agree with tax in essence. Everyone benefits out of it in some waty or another. I think of it as paying for insurance for myself.

I recommed 'Anarchy State and Utopia' by Robert Nozick to you though, he had some interesting ideas....he largely didn't agree with tax at all. Can't say I agree with him, but he had interesting arguments at the very least.

If governments weren't meddling - we could have insurance companies doing just that - providing insurance and covering for you when things go wrong.

Though I voted 'all rates should be the minimum possible', because I think some services should be provided by the government. E.g. national defence - It's only a fanciful libertarian theory that suggests private militia could work in the modern world. I think there should be private militia though through a licensing system, but there should be a proper government army, navy and air force.

I believe it would be better to subsidise health for poor people, but the NHS should be privatised, rich people should be made to pay for their own private healthcare and people under a certain income threshold or in exceptional circumstances should be covered by the state. So in essence there is no monopoly on the health system from the government. The government will be forced to use private health care providers for those that do not earn enough.

[WelshBluebird]

(Original post by ThisIsTheLife)
Who?

Loads of people.
Those of cannot work because of illness or disability.
Those who have lost a job / cannot find work.
Those who care for ill relatives.
Those who would get paid next to nothing and so not be able to afford to live.
Those who come from poor backgrounds and so wouldn't be able to afford things like university and such.
Those who get costly illnesses that insurance companies won't touch.
Those who a born with disabilities or illnesses that insurance companies won't touch.
Etc etc etc etc.

(Original post by ThisIsTheLife)
They'll take home more in absolute terms, but less in percentage terms. How is that justified?

Who cares about percentage terms?
No one goes around saying I took home 70% of my wage this month. You go around saying a specific number

[WelshBluebird]

(Original post by Tom_Hagen)
If governments weren't meddling - we could have insurance companies doing just that - providing insurance and covering for you when things go wrong.

But they would only do so if it was profitable.
We already see insurance companies turning away people for tonnes of reasons.
So who would stop an insurance company saying "sorry, your family has a history of heart disease so we will not cover you for that".

[fudgesundae]

(Original post by Aspiringlawstudent)
I thought it might be interesting to gauge support for taxation. For the sake of simplicity, let's just concentrate on income tax in this thread.

Do you agree with income taxation?

I'm for a flat taxation. Probably something in the range of 15-20%.

(Original post by Super Mario 64)
Top rate of income tax in 1945 was 94%. Obviously WAY too high for today's standards, but it helped greatly to equalise the distribution of income, and brought us the NHS and effective nationalisation

Point is, a high rate is needed for the much more richer, simply because at this day in age, the distribution of income is shocking. Rich people use the excuse that they should be able to keep more of their income to invest in their companies to help the economy etc but it's total bull****.

Why should there be more income distribution? Rich people should be able to keep their income because it is their income, simple. If they want to save it then that should also be fine. I can see no logical argument for income distribution.

[funsongfactory]

A lower flat rate of taxation (around 20%?) would be fairer imo.

[Super Mario 64]

(Original post by fudgesundae)
I'm for a flat taxation. Probably something in the range of 15-20%.



Why should there be more income distribution? Rich people should be able to keep their income because it is their income, simple. If they want to save it then that should also be fine. I can see no logical argument for income distribution.

I don't mind if there's some unequal distribution. It's the problem of the poor being deprived of opportunity.

[Aspiringlawstudent]

(Original post by turboweevil)
Please inform me as to how this makes sense. I cannot fathom how in a real world situation, human greed can create a fair system for all of us. Social mobility would be crushed, exploitation of workers would be rife, scientific and medical progress would be driven by money and not necessity. Explain to me how this either wouldn't happen or could be considered a good thing?

To answer the thread I'd say top rates should be higher. Over the past year, my dad's lost his job and taken a 25% pay cut for another one, my sister will pay three times more for university than me and my mother is now waiting indefinitely for arthritis related surgery that was rationed last year. Now I get that we should all pool together to get out of the deficit but when you see news of the top 10% of earners, floating around shielded from the world in their limousines, with 50% fatter pay checks than last year you know there's something wrong.

and I've not even got it that bad! imagine what life is like for a family earning half of what we have. imagine how they must feel when they hear numbers like 2.4 million to describe BONUSES, not even wages! you can argue all you like that they've earned their keep, that they need to be more skilled than others to do their job and that makes sense, but it definitely doesn't warrant this sort of wage gap. We are a united nation and as a united group of people we should all be willing to help our own when times are hard. It's not tax rates that need changing it's our attitude towards tax and those whom it helps.

Your post raises a number of issues, so I shall attempt to separate them and deal with them individually.

Firstly, free markets are more efficient because competition makes it a necessity. Think about it; what incentive do you have to increase the quality of your products or keep your prices low when you effectively control the entirety of the market? When someone competes with you, you've got three real choices; make your products popular by making them a better quality than your competitors, make your products popular by making them cheaper than your competitors, or face losing your market and failing. If a business does not compete in a free market, it is doomed to fail.

Secondly, on social mobility, I don't see why it would be 'crushed' at all. The state is not the engine that drives social mobility and creates wealth. Commerce creates wealth. Trade creates wealth. Enterprise creates wealth. Governments sap wealth and spend money inefficently that could arguably be spent better by individuals who actually know what they want. Think of it this way; if you own a business and earn £100k a year, you could spend some of that money hiring a junior to work for you in order to free up more of your time to pursue earning more money by doing an activity that is valuable to you.

Imagine you're a lawyer. Say you can make £100 an hour by working on cases for clients. But you also need to do a lot of paperwork. So, you hire a legal secretary for £25 an hour to do that for you, meaning you can pursue a more valuable activity and grow your business.

If half of your money disappears in tax, you can't afford to hire this new worker and will have to do it yourself. You earn less money because your time is taken up on activites that are not valuable and as a result, you are not creating wealth by hiring another employee. You aren't able to grow your business as quickly.

Meanwhile, the government is using the money it took from you in tax to pay for things that don't create wealth at all (for example, providing benefits to the chronically unemployed) or create wealth less efficiently by targetting the wrong areas of the economy due to a lack of knowledge about where it is needed.

Thirdly, on the issue of 'exploitation' of workers, it is arguable that there really isn't any 'exploitation'. Slavery is obviously wrong and cannot be defended. However, if someone takes a job of any sort, they are better off working than earning nothing, even if not by a lot. So long as nobody is enslaved, it is hard to argue that anyone is being exploited; the employer-employee relationship is mutually beneficial - it is not to the detriment of the worker as 'exploitation' would suggest.

Fourthly, on the issue of scientific and medical progress, I'm not sure how it has ever been based upon anything other than money and the desires of a market. People are willing to pay for increases in their standard of living in terms of having better overall health, and the ability to live longer. Other people are willing to spend their time working on developing technology, drugs and other to do this. Why should this be discouraged? People want to buy something, other people want to sell something - what is wrong with this situation? I propose that there is nothing at all wrong with it.

Fifthly, on the issue of certain people earning more than others - I don't believe this is a problem at all. People in life make differing choices about how they invest in their human capital and how they want to live their lives. If one person wishes to become a doctor, that is their choice. If another wishes to be a teacher, it is their choice. If another wishes to be a cleaner, it is their choice. If another wishes to be a banker, it is their choice. Choices define us as human beings, and we must live with the consequences of our choices. To deride the achievements of others simply because they have higher-than-average living standards appears rather nonsensical; it appears motivated more by jealousy than any sort of sound economic policy. In what way is lowering living standards for those in the top brackets of income going to benefit anyone?

The fact is over the last hundred years living standards have risen for EVERY group in society, not just the rich. Everybody is in absolute terms in a far better position than they were 100 years ago, or even 25 years ago. The fact that relative proportions of wealth owned by percentages of society seems, to my mind, immaterial. What does it matter if your neighbour earns twice as much as you do? What does it matter if your other neighbour earns half as much as you do? These disparities in wealth are merely the product of the choices that people make and of the vicissitudes of life that are unavoidable, often unfortunate, but the burdens of one person cannot ultimately be placed fairly upon others that have no desire to be so burdened.

Sixthly, on the issue of attitudes about tax, it is inevitable in a free society that there will be disagreements about who should pay tax, what should be taxed, the rate taxes should be set and and the sort of things taxation should be used to pay for. Some believe that taxation should be very high and the state should have a very high degree of control over the lives of citizens. Others believe there should be no state whatsoever and therfore no taxation at all, and that all peoples shall exist therefore in a state of nature. Most people fall somewhere inbetween, and disagree widely.

However, if one attempts to shut down reasoned, objective debate by making the issue an emotive one rather than an economic one, ultimately everyone shall pay the price. A proper debate is needed in this country and indeed around the world about the proper role of government, and about what government revenues (read: taxes) should be used to fund. We cannot sleepwalk into the future and hope for the best. We must carefully consider the future of economic policy or face potentially disastrous consequences.

[Aspiringlawstudent]

(Original post by WelshBluebird)
And what about those people who would be left behind by a truly free market?

Why is that a problem?

Do you not believe in evolution?

[fudgesundae]

(Original post by WelshBluebird)
Who cares about percentage terms?
No one goes around saying I took home 70% of my wage this month. You go around saying a specific number

No, but that is where the unfairness stems from. Why should someone be able to take home 80% of everything they earn, whilst another person can only take home 55%?

[WelshBluebird]

(Original post by fudgesundae)
No, but that is where the unfairness stems from. Why should someone be able to take home 80% of everything they earn, whilst another person can only take home 55%?

Because 55% of £150k is a hell of a lot more than 80% of £20k.

(Original post by Aspiringlawstudent)
Why is that a problem?

Do you not believe in evolution?

Why is that a problem? Are you seriously asking that

[fudgesundae]

(Original post by Super Mario 64)
I don't mind if there's some unequal distribution. It's the problem of the poor being deprived of opportunity.

I don't see them being deprived of opportunity. They get free schooling, free university education (at the point of access). It is never going to be as easy to make your way in life if you are poorer, but there are plenty of opportunities afforded to those born to poorer families and plenty of examples of people who have gone from rags to riches. Even discounting the famous examples (such as Lord Sugar) there are plenty of CEOs of British companies, top financiers and leaders in industry who did not come from well off backgrounds. The problem in this country is the entitlement issues of the poor, not the opportunities they have. They do have a harder start to life, but it can't be an excuse to stop you getting anywhere.

[WelshBluebird]

(Original post by fudgesundae)
I don't see them being deprived of opportunity. They get free schooling, free university education (at the point of access).

But they would not get those things if we had a truly free market.