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10-01-2017, 11:30   #1
Jpeters
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Left wing odd ball Jeremy Corbyn has suggested today that there should be an arbitrary earnings limit, conveniently in excess of his six figure salary.

This is dangerously naive in economic terms. Should this man be in control of the nation's opposition? This is the kind of rhetoric that drunk students spout.

Does anyone on here think Corbyn is right on this one?
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10-01-2017, 11:39   #2
unbeliever
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Originally Posted by Jpeters View Post
Left wing odd ball Jeremy Corbyn has suggested today that there should be an arbitrary earnings limit, conveniently in excess of his six figure salary.

This is dangerously naive in economic terms. Should this man be in control of the nation's opposition? This is the kind of rhetoric that drunk students spout.

Does anyone on here think Corbyn is right on this one?

He's essentially talking about 100% income tax (and presumably CGT) above a certain income. Not at all surprising as I always assumed these were his ideals.
The real world effect of this is to ensure that nobody with earning power over this limit takes up or retains residence in the UK, thereby devastating the economy.
Socialism makes everybody equally poor.
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10-01-2017, 11:40   #3
sgtkate
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Yes and no. I can totally understand the logic behind this, however putting it into practice would be impossible I think.

So love the idea, but have no delusions about it's feasibility.
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10-01-2017, 11:41   #4
Robin-H
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Originally Posted by unbeliever View Post
He's essentially talking about 100% income tax (and presumably CGT) above a certain income. Not at all surprising as I always assumed these were his ideals.
The real world effect of this is to ensure that nobody with earning power over this limit takes up or retains residence in the UK, thereby devastating the economy.
Socialism makes everybody equally poor.
It would be completely unworkable anyway. Hopefully nobody is deluded enough to think that it is remotely possible.
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10-01-2017, 11:46   #5
sgtkate
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Originally Posted by unbeliever View Post
He's essentially talking about 100% income tax (and presumably CGT) above a certain income. Not at all surprising as I always assumed these were his ideals.
The real world effect of this is to ensure that nobody with earning power over this limit takes up or retains residence in the UK, thereby devastating the economy.
Socialism makes everybody equally poor.
However, lots of research and evidence showing that countries that are poor but have low wealth inequality are some of the happiest in the world, contrasting with rich countries with high wealth inequality. I'd say that once our basic needs are dealt with so shelter, food, relationships (friends or sexual etc) then everything else between that and the top of Maslow's hierarchy of needs is fluff that we convince ourselves makes us happy. If we are going to go into philosophical economics, then everything from the basic needs right up to self-fulfilment are hygiene factors. Take them away and we are sad, but never have them in the first place and it has no impact. So if you or I suddenly had our salaries slashed and our TVs taken away we'd be bloody upset and miserable, but if we'd never had a TV or never had a salary above a level that allowed us to meet needs and have certain freedom and everyone else around us was exactly the same then we'd be just as happy if not more so.

Use of the term poor is often used to simply mean financial whereas it should be looked at far more holistically. I'd rather be financially poor but happy than rich and miserable.
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10-01-2017, 11:46   #6
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He must think he's more powerful than his job role entails. Does he really think he can stop football clubs paying outrageous salaries?
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10-01-2017, 11:57   #7
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Originally Posted by Jpeters View Post
<...> Should this man be in control of the nation's opposition? <...>
Not for much longer: he single-handedly handed the LibDems a massive electoral boost this morning
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10-01-2017, 12:00   #8
unbeliever
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However, lots of research and evidence showing that countries that are poor but have low wealth inequality are some of the happiest in the world, contrasting with rich countries with high wealth inequality. I'd say that once our basic needs are dealt with so shelter, food, relationships (friends or sexual etc) then everything else between that and the top of Maslow's hierarchy of needs is fluff that we convince ourselves makes us happy. If we are going to go into philosophical economics, then everything from the basic needs right up to self-fulfilment are hygiene factors. Take them away and we are sad, but never have them in the first place and it has no impact. So if you or I suddenly had our salaries slashed and our TVs taken away we'd be bloody upset and miserable, but if we'd never had a TV or never had a salary above a level that allowed us to meet needs and have certain freedom and everyone else around us was exactly the same then we'd be just as happy if not more so.

Use of the term poor is often used to simply mean financial whereas it should be looked at far more holistically. I'd rather be financially poor but happy than rich and miserable.

And if you or somebody you love gets sick and there's not enough money to help them?
This is very common. Been through it myself.
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10-01-2017, 12:07   #9
sgtkate
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And if you or somebody you love gets sick and there's not enough money to help them?
This is very common. Been through it myself.
That's a horrible situation and you have my fullest sympathy. And yes in some of those poor countries I mentioned they probably encounter that situation more than we do, but that's because we have the NHS which I accept is funded by money from taxes from wages and company profits. But if you put a cap on earnings then doctors and nurses would be paid less too so the relative costs of the NHS would fall and therefore would need less tax to pay for it. Simplistic I know, and doesn't take into account the cost of drugs from outside the UK etc.

As I said, I love the idea but I love the idea of absolute full socialism as well where there is not money at all, but I can't see either as being realistic unless we find a way to reboot humanity and start over again.
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10-01-2017, 12:08   #10
Jpeters
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However, lots of research and evidence showing that countries that are poor but have low wealth inequality are some of the happiest in the world, contrasting with rich countries with high wealth inequality.
Do you have any evidence of this?

The evidence I have seen (world happiness reort 2016)highlights a strong postie correlation between wealth and happiness.

All of the top 10 countries are European, save Australia, New Zealand and Canada. The highest country that falls below the average GDP of the world is Guatemala, in poisition 39. The only countries in the bottom 50 of average or better GDP is South Africa, Bulgaria and Gabon (none of which are wealthy). The bottom "rich" country is Greece at number 99.

Corbyn is dangerous, more dangerous than Trump.
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10-01-2017, 12:10   #11
unbeliever
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Originally Posted by sgtkate View Post
That's a horrible situation and you have my fullest sympathy. And yes in some of those poor countries I mentioned they probably encounter that situation more than we do, but that's because we have the NHS which I accept is funded by money from taxes from wages and company profits. But if you put a cap on earnings then doctors and nurses would be paid less too so the relative costs of the NHS would fall and therefore would need less tax to pay for it. Simplistic I know, and doesn't take into account the cost of drugs from outside the UK etc.

As I said, I love the idea but I love the idea of absolute full socialism as well where there is not money at all, but I can't see either as being realistic unless we find a way to reboot humanity and start over again.


These 2 things do not cancel.
If you cut GDP you cut tax revenue. If you cut tax revenue you cut NHS spending far more than you save on reduced NHS salaries.

We need money to take care of the least amongst us. Rich people help us make money.
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10-01-2017, 12:11   #12
Robin-H
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That's a horrible situation and you have my fullest sympathy. And yes in some of those poor countries I mentioned they probably encounter that situation more than we do, but that's because we have the NHS which I accept is funded by money from taxes from wages and company profits. But if you put a cap on earnings then doctors and nurses would be paid less too so the relative costs of the NHS would fall and therefore would need less tax to pay for it. Simplistic I know, and doesn't take into account the cost of drugs from outside the UK etc.

As I said, I love the idea but I love the idea of absolute full socialism as well where there is not money at all, but I can't see either as being realistic unless we find a way to reboot humanity and start over again.
I don't think the cap that Corbyn proposes would be anywhere near the level to affect workers in the NHS. When questioned on what the cap would be he couldn't name a figure, but said footballers shouldn't be paid 50million a year.

He said it would be in excess of his salary of 140,000 a year or so, which would rule out the vast majority of people working for the NHS.

He probably has in mind something like in excess of 1million a year or so - so way beyond what anybody earns in the NHS.
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10-01-2017, 12:11   #13
Jpeters
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Quote:
Originally Posted by sgtkate View Post
That's a horrible situation and you have my fullest sympathy. And yes in some of those poor countries I mentioned they probably encounter that situation more than we do, but that's because we have the NHS which I accept is funded by money from taxes from wages and company profits. But if you put a cap on earnings then doctors and nurses would be paid less too so the relative costs of the NHS would fall and therefore would need less tax to pay for it. Simplistic I know, and doesn't take into account the cost of drugs from outside the UK etc.

As I said, I love the idea but I love the idea of absolute full socialism as well where there is not money at all, but I can't see either as being realistic unless we find a way to reboot humanity and start over again.
I'm fairly sure that if a corby could earn his juicy 6 figure slay without breaching the cap, nurses and doctors would also be fine earning what they do.
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10-01-2017, 12:22   #14
sgtkate
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Originally Posted by Robin-H View Post
I don't think the cap that Corbyn proposes would be anywhere near the level to affect workers in the NHS. When questioned on what the cap would be he couldn't name a figure, but said footballers shouldn't be paid 50million a year.

He said it would be in excess of his salary of 140,000 a year or so, which would rule out the vast majority of people working for the NHS.

He probably has in mind something like in excess of 1million a year or so - so way beyond what anybody earns in the NHS.
Ah apologies, for some reason I managed to get the massively wrong end of stick there...

Unless we ditch capitalism which I'm all for by the way (in theory only...I don't actually want to have to live through the painful transition) then the market defines the wages as rubbish as this is. Clearly footballers don't 'earn' 50m a year but then I don't 'earn' my salary either and probably neither do many of us, but we are paid as by market forces so the rarer the skill or the more profit making the job then higher the salary.

There's been many an algorithm showing income tax vs actual tax takings so if the aim is to get more taxes from the rich then this needs looking at careful, but if the aim is simply to make a point and hurt them financially then go for it but that's a dangerous and pointless game to play.
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10-01-2017, 12:26   #15
unbeliever
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There's been many an algorithm showing income tax vs actual tax takings so if the aim is to get more taxes from the rich then this needs looking at careful, but if the aim is simply to make a point and hurt them financially then go for it but that's a dangerous and pointless game to play.
The top rate of income tax is already above the peak of the Laffer curve.
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10-01-2017, 12:28   #16
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Bring back the higher tax rates.
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10-01-2017, 12:31   #17
unbeliever
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Bring back the higher tax rates.
What spending would you cut when tax revenue goes down as a result?
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10-01-2017, 12:36   #18
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I don't know the exact details of Jeremy Corbyn's speech, however as someone who has worked in the public sector for many years previous, I've seen the creation of so many 'jobs' at the top of these organisations by people paid an absolute fortune ( in public bodies like Executives of Councils, Hospitals, Colleges). So many people working on the front line of these services are facing redundancies, wage freezes - yet this doesn't apply to those in senior positions.

Unfortunately I only have anecdotal evidence, rather than hard facts. But it would be very interesting to find out the composition of these organisations in terms of their workforce, their salaries, and where the axe falls.
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10-01-2017, 12:37   #19
sgtkate
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Bring back the higher tax rates.
To achieve what? If it's to get more tax then you'll need to look very carefully at how best to do that as it's diminishing returns. If it's simply to make a point then go ahead but you might end up reducing tax returns which I don't think benefits anyone.
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10-01-2017, 12:38   #20
Robin-H
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It just so deluded and unworkable it's laughable.

I read an article the other day that said that Lord Sugar paid himself 181 million in dividends last year (before the rise in tax on dividends). He still paid around 40 million in tax from that sale.

What is Corbyn proposing? If he isn't included things like income from dividends from his cap then it is absolutely pointless, as that is how the super wealthy pay themselves - very few people actually have a salary in excess of 1million say, and anyway if they did, they'd just make sure they they were paid in dividends (or some other method) in the future.

If Corbyn is including dividends, then he must be willing to let the country lose a hell of a lot of money in tax revenue. Alan Sugar wouldn't have paid the 40million he did for example.

How can a man who clearly has no idea about how the economy works be in charge of the opposition.
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