I am attending a discussion on wealth taxes this morning. In that context I noticed this on the Ekklesia web site as part of my morning mail:
The Walton family which owns this has seen its wealth grow so exponentially that they now have as much wealth as the bottom 48.8 million Americans combined, but are still pushing for tax breaks. Meanwhile, many of their employees in the US are paid so little they qualify for food stamps.
Here in the UK, ‘[t]he general work force's share of the gross national product has shrunk by 12 per cent since the mid seventies.'
And this is not chance:
The rich achieved this by becoming active in politics, but not in a visible, upfront way. Behind the scenes they funded the politicians who would deliver the kind of low tax, small state, anti-union, survival of the fittest society they desired. They also funded a host of think tanks that promoted economic theories and policies which would be favourable to their interests, and pressure groups that would shape public opinion. Whereas in the US the super-rich funded the tax-hating Tea Party, and then claimed it was a spontaneous grassroots movement, here in the UK the Taxpayers Alliance claims to speak for all taxpayers, whilst many suspect it really represents the interests of the very rich.
Wealth taxes have problems. But there's not a shadow of a doubt that we need them.
Incidentally, my initial thoughts before attending this meeting are shown here. They're not meant to be comprehensive (click on image to enlarge it):
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Richard,
You must be pleased that your work seems to be gaining traction in so many political and social areas and I should like to say how grateful I am to you for doing it and urge you to keep up the pressure. I fear there will be many politicians in power giving lip service to some of your ideas but privately hoping they can get away with the least possible change. Osbourne’s extra few millions to HMRC just for the next couple of years looks to me like such a case. Public pressure needs to be maintained and one has to battle against the attitude one often sees expressed, ‘I don’t care if Amazon (for example) don’t pay taxes: it makes things more affordable for me and the government just spends tax on evil things anyway.’
I confess I haven’t yet read your book but the general theme strikes me as extremely apt. Some years ago (pre-coalition) I used to think the ‘left’ needed to espouse an idea of the ‘responsible state’ (but definitely not in the Taxpayers’ Alliance sense) and wept that it seemed instead to think it had to follow in the Blair footsteps.I sometimes think there is little hope for the ‘left’ even now and one just has to switch to supporting something further away from the political centre of power, such as the Green Party.
I am sure you have far more public support than you hear of.
“Behind the scenes they funded the politicians who would deliver the kind of low tax”
http://i.imgur.com/XaiUx.gif
… but if you have a £1 and no debt you will have more wealth than the combined wealth of many of America’s poor because they are in debt and so have negative wealth. On that basis my 4 year old daughter is richer than the combined wealth of millions of America’s poor. Not saying it’s right. I’m just saying such statistics aren’t that helpful but happy to be persuaded otherwise.
I have a very strong sense that this is pedantry
It is always possible to argue stats
It is the messaging that is important
I would add ‘reality’ as being important as well.
I actually agree with you here – it might be the only time ever.
Clearly what was meant was “Excluding those who have no wealth at all, they now have as much wealth as the least wealthy 48.8 million Americans combined”
You might have clarified this, but the meaning is reasonably clear as it is.
I’m not suggesting of course that my amended version is actually true – I have no idea.
@Ivor. You are joking? You alter the statement to suit your position in a crude attempt to undermine the counter argument put forward. Then say you have no idea whether this is right. Presumably on the basis that the ends justify the means.
I have posted this – but am not sure what you mean
I suspect Bethany is right on this one.
However I also think it is a shame that the wealth of individuals can’t be measured more accurately. The wealth of the Walton Family is based on some hypothetical potential earnings in the future because they happen to own a very large company and could arguably sell that company on the open market. On the other hand the wealth of most individuals is measured on the basis of what they have today, but completely ignores their potential earnings in the future. Perhaps this is because future work isn’t an asset you can easily sell, but it clearly is an asset that is recognised by a bank when taking out a loan.
There should be some way to recognise that a person unable to work is less wealthy than an individual who earns a great deal and simply chooses to spend it all.
I think we’re in the realms of angels and pinheads
It is not obvious to me that what Bethany says is ‘pedantry’. To dismiss it as such seems lazy.
It is indeed always possible to ‘argue stats’, but I was not able to find anything backing up the assertion that the 48.8 million Americans ‘excludes those with no wealth at all’. Maybe they are excluded, maybe they are not. But it is relevant to know, surely? Otherwise we are just deciding what a number means and then quoting it to suit whatever we want!
As to the stat that the “general work force’s share of the gross national product has shrunk by 12 per cent since the mid seventies”, this is indeed true. But measuring something from it’s all time peak is misleading to say the least.
Hope you’ll bear in mind that LVT is the most effective wealth tax.
“World’s top auditors under fire in US fraud probe”
http://rt.com/business/news/us-auditors-fraud-probe-224/
“200,000 Protest in Rio for Oil Royalties”
http://riotimesonline.com/brazil-news/front-page/200000-protest-in-rio-for-oil-royalties/#
“Samaras to hold coalition talks over contentious tax bill”
http://www.ekathimerini.com/4dcgi/_w_articles_wsite1_1_04/12/2012_472799
Just reading the comment above “Here in the UK, ‘[t]he general work force’s share of the gross national product has shrunk by 12 per cent since the mid seventies.’” I was bound to respond since I’d just read something rather surprising on this very same argument [wage/profit ratio bad in terms of wages when compared to 70’s] by Chris Dillow [stumbling and mumbling] titled:ON WAGE AND PROFIT SHARES. He includes a chart outlining the trend since 1955 right up to 2012. Here’s a url for the chart:[http://stumblingandmumbling.typepad.com/.a/6a00d83451cbef69e2017c343aa22d970b-pi]
Suffice is to say that he concludes with some apparent justification, the following; “Since the mid-90s, the wage share has risen and profit share fallen”. Furthermore; “The wage share was unusually high in the mid-70s, and the profit share unusually low. It is, therefore a little misleading to speak of changes in income distribution since the mid-70s. Profits then were so low that they either had to rebound or capitalism would have collapsed.”
Anyway here’s the url for the short article since I’d like to get some feedback from someone-anyone?:
http://stumblingandmumbling.typepad.com/stumbling_and_mumbling/2012/12/on-wage-and-profit-shares.html
I have looked at the data
Just add a trend line I suggest
Do and it glaringly obvious the claim he is making is just wrong
1/10 for effort only
0/10 for evidence
But from where to where do you draw the trend line. From the 70’s wages fall as a percentage of GDP and profits rise. From 1960 the trend is barely discernible. From 1980 wages have fallen but this ‘he claims’ this is mainly due to the increasing number of self employed, as profits as a share of GDP have hardly risen much. That seems to be quite clear from the chart.
I’ve drawn the trend line for you here.
Thank you
And I look to other conformists who mysteriously can’t find this trend
Today, Tuesday I did an item on fiscal cliffs etc. Youir diagram looks to me something like the old track layout at Melton Constable on the M&GN Joint. France went over the fiscal cliff in the 1780’s at at time when wealth was privileged and very little taxed. Look at what happened then.
Apparently they do now have the guillotines in the US!
Inheritance Tax threshold £325,000 up 1%; = £3,250 more. Doesn’t seem to be listening to you, Richard.