So where's the Public Sector Strike thread at???

jzed

notsoblue wrote:

W1 wrote:

Very good - have you got some pretty pictures for who pays the biggest proportions of tax?

Proportions of tax by percentage of income? That would be an interesting graphic.

There was an interesting chart at the bottom of this (http://www.bbc.co.uk/news/uk-politics-13633966) which shows who are the givers and the takers in society.

1. More Of Us Are Winners Than Losers

Some 60% of households are net recipients from the Treasury - though it may not always feel that way. The top 10% of households contribute, on average, five times more than they get back. Our tax and spend calculator can't give you an exact account of your individual circumstances, but it will give you a ballpark figure of what households like yours pay in tax, and get back in benefits and services. It's not perfect, but it does give us a fascinating insight into whether we're net winners or losers.

5. The Rich Pay More Than You Might Think

The top 1% of earners - just 300,000 people - pay 27% of all income tax. Of course, many people believe that the rich should pay more, but identifying who's "rich" - and getting them to stump up - is fiendishly difficult for our politicians.

walkingbootweather

What are the very most important things to you?

For me I guess it is that my family and friends have good health, and that my kids have a good education so that they can make choices and have an opportunity to make a good life for themselves. Pretty much everything else (nice car, foreign holiday, 'stuff') I can happily live without.

Sadly I can't afford private heath care or education. I hope that talented young people decide to become inspirational teachers, or excellent medical professionals rather than bankers or hedge-fund managers. Sadly, a career in the public sector is begining to look less attractive and our public services will be the weaker for it. Reform is inevitable, but I grateful to the strikers, because without their action I suspect pay and conditions of these valuable members of our society would be worse, and the ability to attract and retain excellent public servants would be weakened.

W1

JZed wrote:

notsoblue wrote:

W1 wrote:

Very good - have you got some pretty pictures for who pays the biggest proportions of tax?

Proportions of tax by percentage of income? That would be an interesting graphic.

There was an interesting chart at the bottom of this (http://www.bbc.co.uk/news/uk-politics-13633966) which shows who are the givers and the takers in society.

1. More Of Us Are Winners Than Losers

Some 60% of households are net recipients from the Treasury - though it may not always feel that way. The top 10% of households contribute, on average, five times more than they get back. Our tax and spend calculator can't give you an exact account of your individual circumstances, but it will give you a ballpark figure of what households like yours pay in tax, and get back in benefits and services. It's not perfect, but it does give us a fascinating insight into whether we're net winners or losers.

5. The Rich Pay More Than You Might Think

The top 1% of earners - just 300,000 people - pay 27% of all income tax. Of course, many people believe that the rich should pay more, but identifying who's "rich" - and getting them to stump up - is fiendishly difficult for our politicians.

Thanks, you saved me a google.

The top 1% of earners pay 27% of all income tax.

"Fair"?

okgo

Why do people still think being a banker or a hedge fund bod is a bad thing?

As said above they pay their fair share into the pot, and then some, they spend their large salaries and we see all that money going into the economy? Why is it seen as such a heinous thing to do? Same for solictors etc, what is the problem? Not every one is cut out to be a nurse or whatever, the same as not everyone can just get a job at an investment bank (tiny success rate)!

rick_chasey

W1 wrote:

Thanks, you saved me a google.

The top 1% of earners pay 27% of all income tax.

"Fair"?

Fair? Depends how much they earn.

The top 1% of earners may proportionally pay less tax than those lower down.

A little like Buffett's 17% or whatever it was. He paid proportionally less tax than his secretary > which of course is ridiculous.

rick_chasey

okgo wrote:

Why do people still think being a banker or a hedge fund bod is a bad thing?

As said above they pay their fair share into the pot, and then some, they spend their large salaries and we see all that money going into the economy? Why is it seen as such a heinous thing to do? Same for solictors etc, what is the problem? Not every one is cut out to be a nurse or whatever, the same as not everyone can just get a job at an investment bank (tiny success rate)!

I think the reason people feel that being, say, a hedge fund manager isn't all that is because they effectively make (or lose) their fortune by a series of bets.

The value added to society, beyond the big pay cheque, is rather limited, at least in a tangible sense. They tend to live in their own bubble - by their nature, they tend to be reasonably 'tax efficient'.

The person on an equivalent pay cheque who, say, owns a few factories at least tangibly employs large numbers of people.

When people study engineering and end up in finance, people who value engineering over finance, and that's increasingly a popular view (chat about rebalancing the economy is all the rage), see that as a waste of good talent for their industry.

For what it's worth, I want to earn more than being a teacher pays. With my background I'd probably suit it quite well, but instead I'm in some middle-man role.

okgo

Rick Chasey wrote:

W1 wrote:

Thanks, you saved me a google.

The top 1% of earners pay 27% of all income tax.

"Fair"?

Fair? Depends how much they earn.

The top 1% of earners may proportionally pay less tax than those lower down.

A little like Buffett's 17% or whatever it was. He paid proportionally less tax than his secretary > which of course is ridiculous.

I think that is more than fair. And I'm surprised people put up with it.

If I was on 50% tax rate then I'd move heaven and earth to keep my money away from HMRC.

walkingbootweather

okgo wrote:

Why do people still think being a banker or a hedge fund bod is a bad thing?

Sorry, didn't think I'd said that. If you prefer think of these potentially great young people deciding to emigrate or join some other profession. Either way they are lost to Medicine or Education.

godders1

NozzaC wrote:

Who said anything about "we pay their wages"? That's a strawman.

I'm happy to pay their wages. The jobs (well most of them anyway) need doing and people need paying a fair wage. They also need to be paying into their pension from that wage, like everyone else.

What I'm not happy to do is to pay for a guaranteed pension better than any I can afford to pay for just because their job is in the public sector or allowing them to retire earlier than most private sector workers.

You said “A lot of them also seem to forget that it's the private sector that pays their wages...and that's the large majority of the working population”. I’m struggling to understand how me paraphrasing with “we pay their wages” (on the assumption that you work in the private sector) is meaningfully different.

You are aware that public sector workers do pay into their pension from their wages? And it’s hard to separate pay from pensions (and other conditions of employment) in the real world. When people make career decisions they will (if they’re sensible) consider all conditions as well as pay.

okgo

Rick Chasey wrote:

okgo wrote:

Why do people still think being a banker or a hedge fund bod is a bad thing?

As said above they pay their fair share into the pot, and then some, they spend their large salaries and we see all that money going into the economy? Why is it seen as such a heinous thing to do? Same for solictors etc, what is the problem? Not every one is cut out to be a nurse or whatever, the same as not everyone can just get a job at an investment bank (tiny success rate)!

I think the reason people feel that being, say, a hedge fund manager isn't all that is because they effectively make (or lose) their fortune by a series of bets.

The value added to society, beyond the big pay cheque, is rather limited, at least in a tangible sense. They tend to live in their own bubble - by their nature, they tend to be reasonably 'tax efficient'.

The person on an equivalent pay cheque who, say, owns a few factories at least tangibly employs large numbers of people.

When people study engineering and end up in finance, people who value engineering over finance, and that's increasingly a popular view (chat about rebalancing the economy is all the rage), see that as a waste of good talent for their industry.

For what it's worth, I want to earn more than being a teacher pays. With my background I'd probably suit it quite well, but instead I'm in some middle-man role.

Just because they do not directly employ people, where do you think their money goes?

How people can be so naive to think that just because they do not directly pay peoples wages and give people jobs they do not contribute is beyond me.

Think about how many people and jobs they finance by spending their salary on consumer goods. The spend on eating out, the spend on clothes, the spend on this, that and the other is all greater than the average man, and it all goes back into the system.

jzed

W1 wrote:

The top 1% of earners pay 27% of all income tax.

"Fair"?

Probably is. The real issue for me is that if the burden becomes any more then the "Rich" will migrate. The rich probably feel they are making their contribution and expect others too. If they start to leave (which is easy) then where does the 27% come from, more debt? Before long we'll end up like Italy.

rick_chasey

Ja duh, hence the 'tangible' bit.

The trickle down theory does fall flat re a decidedly wealthy sector.

The economy does need to be rebalanced. It's all very well having a strong financial sector and a demand driven economy, but if there is little investment and little tangible production, over say, debt fueled demand and government spending, it's going to cause problems.

Strong dependence on financials does not make for a robust economy. That the UK is uncompetitive in other areas across the economy can and has been attributed to the 'brain drain' to the financial sector.

What's the value added for executing a trade 5 microseconds faster than the next bank on the street? To the bank with it, a lot. To society as a whole? Minimal.

Equity analysts, who are often considered the smartest on the street, get paid a fortune to make stock advice on behalf of banks. Top analysts can be paid a million or two. Yet, a recent study by bloomberg, taking in 2,900 analysts across 200 firms found that their predictions were no better between '09 to mid '11 than a coin toss. Where does society gain, beyond the tax?

Society would be better off earning the same where the value is more tangible.

It's a bit like deer antlers. They're ridiculously big - yet they've only got that way because of relative competition. As long as your antlers are bigger than the next guys, you'll be more likely to win the battle. If only they could all agree to cut everyone's antlers down by 50%. The competition would be precisely the same, but they wouldn't be encumbered by unnecessarily large antlers.

Just because they earn a lot, doesn't mean they add a lot of value, since, as they above shows, the market doesn't always attribute the correct value for society. It attributes the correct value for making money, which is an important difference.

notsoblue

JZed wrote:

notsoblue wrote:

W1 wrote:

Very good - have you got some pretty pictures for who pays the biggest proportions of tax?

Proportions of tax by percentage of income? That would be an interesting graphic.

There was an interesting chart at the bottom of this (http://www.bbc.co.uk/news/uk-politics-13633966) which shows who are the givers and the takers in society.

1. More Of Us Are Winners Than Losers

Some 60% of households are net recipients from the Treasury - though it may not always feel that way. The top 10% of households contribute, on average, five times more than they get back. Our tax and spend calculator can't give you an exact account of your individual circumstances, but it will give you a ballpark figure of what households like yours pay in tax, and get back in benefits and services. It's not perfect, but it does give us a fascinating insight into whether we're net winners or losers.

5. The Rich Pay More Than You Might Think

The top 1% of earners - just 300,000 people - pay 27% of all income tax. Of course, many people believe that the rich should pay more, but identifying who's "rich" - and getting them to stump up - is fiendishly difficult for our politicians.

Thats pretty interesting, thanks. The key bit about this calculation is the "Benefits received" figure. If you ignore that then someone in the lowest decile will actually be paying the highest proportion of their disposable income in taxes. They pay 2.5% more than someone in the top decile (50.7% vs 48.3%). Thats a pretty tiny margin though, so things would appear fairly equal to me (and I guess this is totally ignoring tax avoidance by the top decile). I guess the take home message from this chart depends on your attitude to supporting other people's health and education. I see it as the price of living in a civilised society, and don't begrudge it (despite "society" apparently owing me 12k ).

notsoblue

okgo wrote:

Just because they do not directly employ people, where do you think their money goes?

How people can be so naive to think that just because they do not directly pay peoples wages and give people jobs they do not contribute is beyond me.

Think about how many people and jobs they finance by spending their salary on consumer goods. The spend on eating out, the spend on clothes, the spend on this, that and the other is all greater than the average man, and it all goes back into the system.

Ah yes, trickle down economics

notsoblue

Rick Chasey wrote:

It's a bit like deer antlers. They're ridiculously big - yet they've only got that way because of relative competition. As long as your antlers are bigger than the next guys, you'll be more likely to win the battle. If only they could all agree to cut everyone's antlers down by 50%. The competition would be precisely the same, but they wouldn't be encumbered by unnecessarily large antlers.

That....is a brilliant analogy...

jamesco

okgo wrote:

Just because they do not directly employ people, where do you think their money goes?

How people can be so naive to think that just because they do not directly pay peoples wages and give people jobs they do not contribute is beyond me.

Think about how many people and jobs they finance by spending their salary on consumer goods. The spend on eating out, the spend on clothes, the spend on this, that and the other is all greater than the average man, and it all goes back into the system.

They don't actually create wealth by adding value, they are rent seekers, i.e. leaches. Even worse, the loss of smart and talented people to such professions makes the economy as a whole less productive. Banking does, of course, play a crucial role in 'oiling the gears of the economy', but practises like high-frequency trading drag us all down.

walkingbootweather

okgo wrote:

Just because they do not directly employ people, where do you think their money goes?

How people can be so naive to think that just because they do not directly pay peoples wages and give people jobs they do not contribute is beyond me.

Think about how many people and jobs they finance by spending their salary on consumer goods. The spend on eating out, the spend on clothes, the spend on this, that and the other is all greater than the average man, and it all goes back into the system.

There is merit in this argument if high earners do spend a high proportion of their income on goods and services from the UK. In reality they may invest it in property (which ultimately pushes up property prices making it even harder for low earners to buy or rent somewhere to live), in long term investments e.g. fine art, or overseas (aiding that economy but not ours)

okgo

There will always be elements that won't trickle down, same as there would be at any level of spending. But as a rule of thumb I'd say the well paid will spend a huge amount more than your average joe on consumer stuff.

BUT I do see that they're not adding anything, per se. Still, I suppose I'm part of the selfish crowd, get in, get the money, get out. Everyone makes a choice, don't hate on others because they made one that pays well and allows them to live a nice life. DESPITE every effort by HMRC to take take take, and really give not a lot back but a few shoddy services.

jzed

notsoblue wrote:

I guess the take home message from this chart depends on your attitude to supporting other people's health and education. I see it as the price of living in a civilised society, and don't begrudge it (despite "society" apparently owing me 12k ).

I don't begrudge paying for health, education, security, pensions. I begrudge the generation that has been developed (primarily by Labour) to expect everything on a plate. Benefits, pensions, 110% mortgages, easy credit cars, big tv, nice trainers, big house paid for by the taxpayer. People have to get real.

RC has a good point on the future sustainabilty of the UK. Other than finance we have very little. People see bankers getting away with tax benefits etc. But the government has no choice. If finance leaves the UK a big slug of that 27% disappears and we really are without a paddle.

rick_chasey

JZed wrote:

RC has a good point on the future sustainabilty of the UK. Other than finance we have very little. People see bankers getting away with tax benefits etc. But the government has no choice. If finance leaves the UK a big slug of that 27% disappears and we really are without a paddle.

They won't leave.

Then again, judging by the cuts we're hearing about, IBs will be about 10% smaller by March anyway.

notsoblue

JZed wrote:

notsoblue wrote:

I guess the take home message from this chart depends on your attitude to supporting other people's health and education. I see it as the price of living in a civilised society, and don't begrudge it (despite "society" apparently owing me 12k ).

I don't begrudge paying for health, education, security, pensions. I begrudge the generation that has been developed (primarily by Labour) to expect everything on a plate. Benefits, pensions, 110% mortgages, easy credit cars, big tv, nice trainers, big house paid for by the taxpayer. People have to get real.

I totally agree. Fraud, laziness and greed at the expense of the state is appalling and needs to be reduced as much as possible. But recent efforts to do so by the tories (and in some cases by Labour when they were in power) can often throw the baby out with the bath water. Veering off point slightly, with regards to 110% mortgages and easy credit - isn't this all largely to do with lax financial regulation by the government during the boom rather than too much?

Back on point though, I think that the bottom decile gets much of their net benefit from the state from programmes like Connexions which actually improves life for *all* of us.

JZed wrote:

RC has a good point on the future sustainabilty of the UK. Other than finance we have very little. People see bankers getting away with tax benefits etc. But the government has no choice. If finance leaves the UK a big slug of that 27% disappears and we really are without a paddle.

True

W1

Rick Chasey wrote:

JZed wrote:

RC has a good point on the future sustainabilty of the UK. Other than finance we have very little. People see bankers getting away with tax benefits etc. But the government has no choice. If finance leaves the UK a big slug of that 27% disappears and we really are without a paddle.

They won't leave.

Then again, judging by the cuts we're hearing about, IBs will be about 10% smaller by March anyway.

Don't bank on it.

There's an argument that we've never fully recovered from the brain-drain of the 1970s.

MonkeyMonster

as for trickle down... yes they use services and shops etc - but more often than not it goes into the coffers of otherwise very well off companies and people and not the shops that need it.

notsoblue

MonkeyMonster wrote:

as for trickle down... yes they use services and shops etc - but more often than not it goes into the coffers of otherwise very well off companies and people and not the shops that need it.

Also, the better off tend to save far more than the less well off.

W1

notsoblue wrote:

Thats pretty interesting, thanks. The key bit about this calculation is the "Benefits received" figure. If you ignore that then someone in the lowest decile will actually be paying the highest proportion of their disposable income in taxes. They pay 2.5% more than someone in the top decile (50.7% vs 48.3%). Thats a pretty tiny margin though, so things would appear fairly equal to me (and I guess this is totally ignoring tax avoidance by the top decile). I guess the take home message from this chart depends on your attitude to supporting other people's health and education. I see it as the price of living in a civilised society, and don't begrudge it (despite "society" apparently owing me 12k ).

So, ignore the bit that is contrary to your point of view, and that's OK then?

Why would "tax avoidance" be included anyway? Of course it's excluded. Do you think benefit maximisiation is included?

rick_chasey

W1 - where will they move to?

I talk to these monkeys all day, about moving. We have pan Euro roles, and rarely anyone wants to leave London.

Switzerland? Only OK if you have serious FU money. Else it's too boring for your late 20s early 30s guy with a lot of disposable cash.

Frankfurt? Dump (so I'm told. Nightmare trying to move someone there)

Paris? Same problem - too much tax

Madrid? S'ok tax wise, but, well, Spain's not the best place to have a lot of finance...

You have to go somewhere in Europe. London's where it's always been, so it will continue.

I haven't come across someone who left London because of the 50p, other than the odd guy on the buy side who really shouldn't be affected by it anyway.

W1

Rick Chasey wrote:

W1 - where will they move to?

I talk to these monkeys all day, about moving. We have pan Euro roles, and rarely anyone wants to leave London.

Switzerland? Only OK if you have serious FU money. Else it's too boring for your late 20s early 30s guy with a lot of disposable cash.

Frankfurt? Dump (so I'm told. Nightmare trying to move someone there)

Paris? Same problem - too much tax

Madrid? S'ok tax wise, but, well, Spain's not the best place to have a lot of finance...

You have to go somewhere in Europe. London's where it's always been, so it will continue.

I haven't come across someone who left London because of the 50p, other than the odd guy on the buy side who really shouldn't be affected by it anyway.

HK? Dubai? Singapore? I have friends who have moved to all three. And don't knock the Swiss.

rick_chasey

W1 wrote:

Rick Chasey wrote:

W1 - where will they move to?

I talk to these monkeys all day, about moving. We have pan Euro roles, and rarely anyone wants to leave London.

Switzerland? Only OK if you have serious FU money. Else it's too boring for your late 20s early 30s guy with a lot of disposable cash.

Frankfurt? Dump (so I'm told. Nightmare trying to move someone there)

Paris? Same problem - too much tax

Madrid? S'ok tax wise, but, well, Spain's not the best place to have a lot of finance...

You have to go somewhere in Europe. London's where it's always been, so it will continue.

I haven't come across someone who left London because of the 50p, other than the odd guy on the buy side who really shouldn't be affected by it anyway.

HK? Dubai? Singapore? I have friends who have moved to all three. And don't knock the Swiss.

Yeah it's tough to do business in Europe if you're in Dubai or Singapore.

You need to be in Europe. Eurozone's the biggest economy in the world.

Plenty of people move to HK - but they have Asian coverage, not European.

jzed

Rick Chasey wrote:

W1 - where will they move to?

I talk to these monkeys all day, about moving. We have pan Euro roles, and rarely anyone wants to leave London.

At the moment the balance is probably right but if austerity doesn't continue then either debt rises or tax rises. Then people may make a different choice. So things at the moment seem to be not far from "fair" but some elements of society have to readjust too.

notsoblue

W1 wrote:

So, ignore the bit that is contrary to your point of view, and that's OK then?

Well I think the "benefit" section is debatable and intangible. For example I've never had to claim child tax credit or EMA, but those are both things that contribute to making my environment more civilised. I know others have differing opinions on this, its subjective. The other sections of the story were based on fact though, so I focused more on that.

W1 wrote:

Why would "tax avoidance" be included anyway? Of course it's excluded. Do you think benefit maximisiation is included?

Does it matter?