Wednesday, 19 April 2017

"People earning more than I do are rich"

From The Daily Mail:

People earning £70,000 a year (1) are 'rich' and should pay more tax, shadow chancellor John McDonnell said today.

On what is effectively the first day of the election campaign, Mr McDonnell said Labour would create a 'fairer' system - hinting that could include a new tax band.

The intervention will cause dismay among party moderates who have been warning that the hard-left leadership is driving away middle class voters (2).

Mr McDonnell added: 'The rich will be above £70,000 to £80,000 a year and that's roughly defined as what people feel is an earning whereby people feel they can pay more.'(3)

1) An MP's basic salary is £74,000. Coincidence? Admittedly John McDonnell is currently being paid more than that for acting as Shadow Chancellor, but he knows it won't last.

2) Only a few per cent of people are paid more than £70,000 a year.

3) Nope. The real difference is whether people have to pay rent or not, that is the largest single cause of inequality in this country. A home-owner with no mortgage on £45,000 has the same disposable income (after PAYE and privately collected tax i.e. rent) as a tenant on £70,000. Hence and why it would advance the cause of equality much more if taxes on residential land were increased and taxes on wages and output reduced.


Mike W said...

'Daves Chums' post did make me see red as predicted. But I declined to rant. In particular the City Chiefs raking in £500,000 just for doing what central guv tells them to do! But this £70,000, tokenism, does raise the high blood pressure count. John Mcdonnell really has no excuse, being a member of Labour Land Campaign. They (Mcdonnell and Corbyn)have also been sitting on submissions about LVT for well over a year to my knowledge.
The timid two will cease to be in power by June, and still cannot link their modest 'LVT light',(buried in Corbyn's,'10 Pledges') with starting LVT proper.I am interested to see how good the Fabian's figures are about the core 'remains' of Labour after the election. 200ish MPs? Much better then,to tell the Ashcroft type sociology, pollsters to fuck off, and go down fighting, putting a LVT start budget in the political discourse as you Brexit. Of course, the remaining Labour fuckers will still find a City of London, Blairite leader, and ignore it all again! But what a noble way to go... And what a start for the center left in the new decade. Rant over.

As you can see, I fear my own particular charitable work for Macdonald and the Labour Party is nearing its predictable end.

Striebs said...

Those in receipt of generous contributions from others to their pension never fail to neglect to mention them when discussing "pay" .

You of course make the important point that it is depressing to hear politicians rehash the age old tax debate within the confines of treadmill taxes rather than expand the universe of discourse to rents .

PS , I am looking to read Adam Smiths "An Inquiry into the Nature and Causes of the Wealth of Nations" and understand it originally came in 5 volumes .

Can you/anyone recommend a summary I could read now or do I need to delve straight in on volume 1 and grit my teeth ?

Mike W said...

Sorry spelling, Macdonald should be McDonnell. That's the trouble with ranting!

Mark Wadsworth said...

MW, agreed

S, I don't know what to recommend. Like everybody else, I just quote the bits I like :-)

Lola said...

re (3) and tax. Tax freedom day being late May/early June - that's about 45%

Lola said...

Striebs. The ASI have a lot of good free stuff on Adam Smith's works. Also Amazon if you put in 'student guides' or similar.

Lola said...

MikeW. Socialism is not compatible with liberty. Corbyn at al see LVT as an 'extra' tax, not a replacement. They all just think they can spend my money better than I can. And yours too come to that. And they are not sound on 'property rights' (and I don't mean real estate).

Bayard said...

"Tax freedom day being late May/early June "

June 9th?

Derek said...

Striebs, I just read the whole thing. It wasn't too bad. Adam Smith was writing for the average well-educated, upper-class resident of the 18th-century UK. That equates to just about any half-educated citizen of the modern UK. The WoN may not be a page turner but it's pretty readable. You shouldn't have any trouble.

Striebs said...

Derek , Lola , Mark W , thanks for your input on Adam Smith .

I've decided to follow Derek's advice and tackle the whole thing .

The Modern Library version appears to be unabridged with an added index . Is that the version you read Derek ?

DBC Reed said...

It is not reasonable to say "Socialism is not compatible with liberty."There are solid grounds in modern philosophy for showing you cannot use "liberty" without qualification, as from prepositions. The language only allows us to say "liberty to do x "; "liberty from y".As for Socialism : a word which is used to describe Venezuela and post -war British governments is clearly useless.
As you know, I regard Harold Macmillan as the country's leading "socialist".In 1957 he declared "You have never had it so good"after a long period when real wages had grown by 20%. Six years later (after Macmiilan's fall from power and a stonking sex scandal) the Tories were in a state of panic and abolishing Schedule A taxation on housing and abolishing the country's traditional Resale Price Maintenance leading to the slow death of the high street as the supermarkets took control of price levels.(See Helen Mercer's paper on RPM for LSE)
The slow drift to people being imprisoned by high house prices had begun.

Mike W said...

Lola above,

'Corbyn at al see LVT as an 'extra' tax, not a replacement. They all just think they can spend my money better than I can.'

Of course this is possible, indeed very likely to be true. It may well be that they do not start the process argued out here, of LVT replacing the bad taxes. But to move from the world as it is, to what could come, even the worse case you point out would be a significant political moment to build from.I would still go for it. No question.

In the real world of course, Jabba the Watson finds his Blairite leader and we have three 'brands' of NeoLib 'Tory' party fighting it out again. I will be viewing all this in my walking books and sensible hiking clothes in the company of the Ramblers and Greens :)

Lola said...

DBCR. Seriously?
Socialism is a liberty destruction system. It can be nothing else as its declared aim is to 'control the means of production'. And the 'means of production' is not land - as we agree.
Both Chavez and British government and political parties have avowed themselves to be socialist. The Tories are just opportunists with no particular philosophy - (which is what Thatcher had and why they hated her). So there is a such a thing as 'socialism' and it has a unerring ability embedded right in its core to morph into bureaucratic failure and totalitarianism. After all socialism is just a stage to full on Marxism, nesty par?
Removing Schedule A etc. was, as we agree, a Bad Thing.
Removing RPM was not. Stuff is lower priced. And I thought that we had all agreed that the Supermarket/High Street argument would resolved were LVT to be properly applied?

Derek said...

Which edition did I read? Now you're asking! I read it in the late '80s or early '90s. As far as I remember it was the Penguin Classics dead tree version but my copy is still packed away in boxes waiting for me to buy more bookcases after my latest house move, so I can't be sure.

In any case even a slightly abridged version is worth reading, so it sounds like the Modern Library edition will be excellent.

Bayard said...

"and abolishing the country's traditional Resale Price Maintenance leading to the slow death of the high street as the supermarkets took control of price levels."

I am old enough to remember the rise of the supermarkets and, AFAICR, their key advantaqes over the High St were parking and extended opening hours, not price. The High St's demise was much to do with the shopkeepers' failure to adapt to the dying out of the full-time housewife and her replacement by the shopping worker.

DBC Reed said...

The question of Resale Price Maintenance needs quite a lot of digging.
Did you know that the USA re-legalised it in ,I think, 2007 as a result of a test case, Leegin Creative Leathers Versus PSKS dba Kay's Kloset which went to the American Supreme Court and took a lot of expert academic evidence then found in favour of Leegin, who did n't want Kay's selling their goods for whatever rock bottom price Kay's decided, destroying Leegin's commercial strategy of establishing themselves as slightly expensive, high class manufacturers?
If you read Resale Price Maintenance clippings on Google you may be able to discern there is a stand-off between the US and the EU (fortress NO RPM) with China dithering to and fro first adopting the American ruling that RPM is not per se anti competitive then clamping down.
As a Remainer, or faint heart who doesn't want to jump off a cliff, I would waver if a return to RPM was in the offing.
(As with all the headstrong disasters inflicted on the UK this one and abolishing Schedule A and deliberately inflating house prices for votes originates with the surrealistic stupidity of the kind of Tories Waugh depicted in "Decline and Fall" though even he would have balked at suggesting that Buller (or Bolly as he called it) would form a government.)
Helen Mercer is good on RPM concluding that its abolition would do for British retailing AND MANUFACTURING what abolishing the Corn Laws did for agriculture.