Why have higher taxation?

Announcements Posted on
How helpful is our apprenticeship zone? Have your say with our short survey 02-12-2016
    Offline

    3
    ReputationRep:
    (Original post by TimGB)
    Basically the aim of taxation is to take money from those who don't need it and to redistribute it to people or important projects that do, while making sure that richer people are still richer people. Higher tax rates on the rich means taking more money from those with little need for it, and thus being able to allocate more money towards welfare. There's not much of an ethical problem with this, however if you go overboard you'll get rich people moving abroad, which is not too good for our economy.
    I'll just walk into your house, take your games console, your jewelry, and a big chunk of anything else you don't really need, and distribute it all amongst the poor and homeless. Oh, and if you don't let me in, I'll come back with a gun and lock you up in a cage for a few years.

    I'll be back next year. If it looks like you've got even more stuff than you did last time, I'm taking half of it.

    Wait, you have a problem with that? You earned that stuff? Well I don't care, you greedy hater of the poor. And don't even think about hiding your stuff in another house somewhere I can't get it.
    Online

    3
    ReputationRep:
    (Original post by TheBirdman)
    It seems to be a common argument by many on the left nowadays to massively increase taxation on the rich. I know, admittedly, very little about economics but with the findings of the laffer curve, how can high taxation be argued for?
    On a fundamental level most people either believe that government spends too much (most Tories) or that spending money will solve all problems (i.e. the people that think the NHS is about to collapse).

    The lafer curve actually illustrates that their is a maximum tax rate before diminished returns set in, it does not say that you can't raise taxes (that depends how close we are to that optimum revenue raising rate). I of course don't support higher taxes.
    Offline

    3
    ReputationRep:
    (Original post by Seale321)
    For those talking about England having a progressive tax system you could argue that is not the case. Though we have a progressive personal income system allot of the others are regressive and actually bring us back to a near regressive tax system e.g. VAT, national insurance (not technically a tax but still), council tax and excise duty. So surely a care can be made for increasing the top tax rate to cover for the regressive nature of other taxes?


    Posted from TSR Mobile
    It's flat, not slightly regressive. Or at least the flatness is sufficient it's difficult to say whether it's progressive or regressive without narrowing it down to a specific income bracket where it is true one way or the other.
    Offline

    1
    ReputationRep:
    (Original post by TheBirdman)
    It seems to be a common argument by many on the left nowadays to massively increase taxation on the rich. I know, admittedly, very little about economics but with the findings of the laffer curve, how can high taxation be argued for?
    I see virtually no relevance between the laffer curve and low taxation (other than Art Laffer was advocating for lower taxes?).

    The Laffer curve simply states that there's an optimal tax rate beyond which any increase will not result in more revenue from tax.

    The optimal tax rate could be, for all we know, 90%. You can draw a laffer curve with an optimal tax rate of 90%. It's very simple: set it to maximise tax revenue at 90% and it's done brah.
    Offline

    1
    ReputationRep:
    In politics it's always easier to attack the very minority (the rich) in order to please the majority (the poor).

    Take the poll tax for example, the logic behind it is that people pay per head (ie. pay for what they use) instead of using council tax bands, which wealthy households pays much more council tax than poorer households, even though statistically wealthier households have much lower crime rate and smaller family size than poorer households, therefore requiring less council maintenance (e.g. less policing, waste disposal). People rioted and called the tax 'unfair' because without richer households bearing the lion's share of the council tax bill, they suddenly have to pay more.

    It goes to show that fairness and equality is not what society wants. To be quite frank if there is true equality in society, most people cannot handle it.
    Offline

    3
    ReputationRep:
    (Original post by RainbowMan)
    I see virtually no relevance between the laffer curve and low taxation (other than Art Laffer was advocating for lower taxes?).

    The Laffer curve simply states that there's an optimal tax rate beyond which any increase will not result in more revenue from tax.

    The optimal tax rate could be, for all we know, 90%. You can draw a laffer curve with an optimal tax rate of 90%. It's very simple: set it to maximise tax revenue at 90% and it's done brah.
    Well, it's sort of widely regarded as being around about the 40% rate, and if you want to deny it's that low I suggest you look at how the cut of the top rate of tax cost next to nothing compared to what it theoretically would have had there been no avoidance being avoided.
    Offline

    1
    ReputationRep:
    (Original post by Jammy Duel)
    Well, it's sort of widely regarded as being around about the 40% rate, and if you want to deny it's that low I suggest you look at how the cut of the top rate of tax cost next to nothing compared to what it theoretically would have had there been no avoidance being avoided.
    I didn't really suggest a number, 90% was chosen randomly to demonstrate that Laffer's model doesn't necessarily support "low" taxation (don't think 40% is low either anyway). I've read papers which posit a 60 or 70% rate btw. In any case, it is to be determined empirically, not a-priori through some magic model.
    Offline

    2
    ReputationRep:
    Because poor people.
    Offline

    3
    ReputationRep:
    (Original post by RainbowMan)
    I didn't really suggest a number, 90% was chosen randomly to demonstrate that Laffer's model doesn't necessarily support "low" taxation (don't think 40% is low either anyway). I've read papers which posit a 60 or 70% rate btw. In any case, it is to be determined empirically, not a-priori through some magic model.
    And empirically says about 40pc in the UK and US, higher on the continent,

    Posted from TSR Mobile
    Offline

    1
    ReputationRep:
    (Original post by Jammy Duel)
    And empirically says about 40pc in the UK and US, higher on the continent,

    Posted from TSR Mobile
    I'd love to see the papers then.
    Offline

    3
    ReputationRep:
    (Original post by RainbowMan)
    I'd love to see the papers then.
    If the paper you refer to is this one with the standard leftist answer of "make the rich pay a bazillion dollars" the ASI take the methodology and apply it to the UK giving low 40s before including other factors that would bring it down, namely that if somebody in the UK doesn't like their tax rate they bugger off to somewhere cheaper, while a US citizen can't do that to the same extent.

    Alternatively there is the empirical evidence of the behavioral changes caused by the top tax rate being cut from 50% to 45% meaning the losses went from a forecast £3.5bn a year without any behavioral impact down to an actual reduction in revenues of only £100m, and you have a piece here from the IFS on this, or more specifically Balls and Miliband wanting to bring back the 50% rate, which has their figures as well as those of the Treasury and OBR showing the mid 40s to be around about the peak, specifically they quote to chair of the OBR, with regards to the cut, saying we were “strolling across the summit of the Laffer curve”.
    Offline

    3
    ReputationRep:
    (Original post by Jammy Duel)
    If the paper you refer to is this one with the standard leftist answer of "make the rich pay a bazillion dollars" the ASI take the methodology and apply it to the UK giving low 40s before including other factors that would bring it down, namely that if somebody in the UK doesn't like their tax rate they bugger off to somewhere cheaper, while a US citizen can't do that to the same extent.

    Alternatively there is the empirical evidence of the behavioral changes caused by the top tax rate being cut from 50% to 45% meaning the losses went from a forecast £3.5bn a year without any behavioral impact down to an actual reduction in revenues of only £100m, and you have a piece here from the IFS on this, or more specifically Balls and Miliband wanting to bring back the 50% rate, which has their figures as well as those of the Treasury and OBR showing the mid 40s to be around about the peak, specifically they quote to chair of the OBR, with regards to the cut, saying we were “strolling across the summit of the Laffer curve”.
    Let's note that the increase in revenues seen with the change in the top tax rate was not caused by that change, but rather, a one-off choice to defer income by high-rate taxpayers (likewise, with any tax increase, you'd see artificially hgih revenues the year before the increase) (https://fullfact.org/economy/did-cut...ise-8-billion/) - and also, IIRC, a change in the accounting standards used, though I should note I can't remember where I read that, or find a source.

    --------------------------

    The primary thing which must be achieved in the future is international tax union. This will change the decisions which are possible to profitably make regarding tax. Possibly, in the short-term, non-haven countries should adopt a policy of absolutely barring entry to all persons domiciled in haven countries.
    Offline

    0
    ReputationRep:
    Higher taxation is a good thing - it encourages greater equality. We should have income tax rates at up to 90%
    Offline

    2
    ReputationRep:
    (Original post by TheBirdman)
    It seems to be a common argument by many on the left nowadays to massively increase taxation on the rich. I know, admittedly, very little about economics but with the findings of the laffer curve, how can high taxation be argued for?
    I don't see a need for higher tax now but I do see a need for much higher tax rates when automation is taking lots of jobs to pay for the government to pay for those out of work what a job would have

    I'd also like to see real tax reform in areas of VAT most of the low 5% vat rate products should be vat free such as tampons/gas/electricity/mobility scooters to name a few.

    Car tax's bring in 33 billion but only 9 is spent on car stuff.

    Train tickets are heavily subsidised.

    Things should be priced by their real cost instead of what is effectively stealth taxation.

    If you need the car tax money to pay for general stuff it should come from general taxation


    Posted from TSR Mobile
    Offline

    2
    ReputationRep:
    (Original post by Jammy Duel)
    So you don't see punishing success as an ethical issue, or even in a world where people for some reason believe everybody is and should be treated equally, advocating discrimination on the grounds of income?
    I love how you claim your interest is in regards to equality, it's the complete opposite.
    Offline

    2
    ReputationRep:
    (Original post by Jammy Duel)
    So you don't see punishing success as an ethical issue, or even in a world where people for some reason believe everybody is and should be treated equally, advocating discrimination on the grounds of income?
    Sigh. Taxation isn't punishment. Unless you want to live in anarchy with no law and order and no societal structure, we need taxation.

    People with more money are able to contribute more and should do so. Unless of course you want to live in a state of anarchy.**
    Offline

    2
    ReputationRep:
    (Original post by Jammy Duel)
    If the paper you refer to is this one with the standard leftist answer of "make the rich pay a bazillion dollars" the ASI take the methodology and apply it to the UK giving low 40s before including other factors that would bring it down, namely that if somebody in the UK doesn't like their tax rate they bugger off to somewhere cheaper, while a US citizen can't do that to the same extent.

    Alternatively there is the empirical evidence of the behavioral changes caused by the top tax rate being cut from 50% to 45% meaning the losses went from a forecast £3.5bn a year without any behavioral impact down to an actual reduction in revenues of only £100m, and you have a piece here from the IFS on this, or more specifically Balls and Miliband wanting to bring back the 50% rate, which has their figures as well as those of the Treasury and OBR showing the mid 40s to be around about the peak, specifically they quote to chair of the OBR, with regards to the cut, saying we were “strolling across the summit of the Laffer curve”.
    If mid 40s is peak I suspect you won't be arguing for any more tax cuts?*
    Offline

    2
    ReputationRep:
    (Original post by Rakas21)
    On a fundamental level most people either believe that government spends too much (most Tories) or that spending money will solve all problems (i.e. the people that think the NHS is about to collapse).

    The lafer curve actually illustrates that their is a maximum tax rate before diminished returns set in, it does not say that you can't raise taxes (that depends how close we are to that optimum revenue raising rate). I of course don't support higher taxes.
    The larger curve is an ideologically motivated theory. That's not to say that there isnt some truth in it but it's not some unchallengeable piece of evidence proved beyond all reasonable doubt.
    Offline

    2
    ReputationRep:
    (Original post by BasicMistake)
    The Laffer Curve is useless.
    Whoever wrote it must have been having a Laff...


    Posted from TSR Mobile
    Offline

    1
    ReputationRep:
    (Original post by Bornblue)
    If mid 40s is peak I suspect you won't be arguing for any more tax cuts?*
    Tax revenue is not the only consideration when setting tax policy. E.g. if you are a minarchist you might think that the only functions of gov. is to protect against the initiation of force. In which case a 10% or 5% tax rate is all that you need.
 
 
 
Write a reply… Reply
Submit reply

Register

Thanks for posting! You just need to create an account in order to submit the post
  1. this can't be left blank
    that username has been taken, please choose another Forgotten your password?
  2. this can't be left blank
    this email is already registered. Forgotten your password?
  3. this can't be left blank

    6 characters or longer with both numbers and letters is safer

  4. this can't be left empty
    your full birthday is required
  1. Oops, you need to agree to our Ts&Cs to register
  2. Slide to join now Processing…

Updated: October 21, 2016
TSR Support Team

We have a brilliant team of more than 60 Support Team members looking after discussions on The Student Room, helping to make it a fun, safe and useful place to hang out.

Today on TSR
Poll
Would you rather have...?
Useful resources

The Student Room, Get Revising and Marked by Teachers are trading names of The Student Room Group Ltd.

Register Number: 04666380 (England and Wales), VAT No. 806 8067 22 Registered Office: International House, Queens Road, Brighton, BN1 3XE

Quick reply
Reputation gems: You get these gems as you gain rep from other members for making good contributions and giving helpful advice.