Sunday, April 26, 2009

Michael Caine blows the bloody doors off

It seems that Michael Caine is contemplating buggering off back to the US.
He said that the announcement had prompted him to seriously consider moving back to America, where he lived during the 1970s and 1980s as a tax exile.

"Tax got to 82 per cent [in the 1970s] and I thought this was kind of unfair," he said. "Also, I see... that the government has taken it up to 50 per cent and if it goes to 51 I will be back in America.

"I will not pay the Government more than I get. No way, ever. So they've reached their limit with me. That's the lot."

Of course, when one factors in National Ponzi Scheme Insurance Contributions, the actual top rate of tax is 63.8%. This is disgusting: it is, in the opinion of your humble Devil, absolutely, totally, morally wrong that the government should take more than half of what you earn—irrespective of how much you earn.

Why the fuck should they take that much? The fucking government isn't the one having to haul themselves out of bed every fucking morning; they aren't doing the work; they aren't doing anything at all except force you to pay for their personal morals.

There is absolutely no moral justification for it at all. But worse, as Caine points out, there is no economic case for it either.
"You know how much they [the government] made out of that high taxation all those years ago?

"Nothing and they sent a mass of incredible brains to America. Yes they did. The most stupid act you've ever seen in your life."

Some people, of course, did stay: my grandfather—a rather eminent cardiologist, who also had a private income—stayed, for instance, teaching medical students in Cardiff and paying a fuck load of tax for the privilege. But many, many people did leave in the Brain Drain. Why the fuck should they stay?
"We've got three and a half million layabouts laying about on benefits and I'm 76 getting up at six o'clock in the morning to go to work to keep them.

"Let's get everybody back to work so we can save a couple of billion and cut tax, not to keep sticking it on."

Quite.

Whatever the motivations of those who set up the Welfare State, in reality it has been a fucking disaster. And the people that it has been most disastrous for is the poor; as the Welfare State has become increasingly expensive, successive governments have had to slap more and more tax on.

And because there are far more poor than rich, the burden of taxation has fallen disproportionately on them because that is the way that one raises money. And then governments, realising the potential for vote-buying, have taken advantage of that to create a "client state" in which the poor are taxed and then made to beg for some of their own money back—always threatened with the notion that "the other lot" will stop their hand-outs.

And as the hand-outs have increased, and the tax got higher, more and more people have found themselves caught in the Benefits Trap—for many, it is no longer worth going to work, for they would be worse off.

And as these extra benefits payments and benefits claimants have increased, taxes on businesses and on employment have risen. The inevitable result is that businesses have employed technology (or any other method) rather than people, and so the number of jobs available has contracted; and, since there are fewer jobs available, businesses have been able to choose those with the highest qualifications and the most skills.

And so the poor have become poorer and, crucially, with no hope of bettering their lot. And still the governments pile on the tax on the productive, whilst paying the unproductive not to work and to have babies who will also be unable to work.

It's a fucking shit situation. For everyone.

How might we possibly improve the situation? Well, as people like myself have been banging on for years, you might start by not taxing the fucking poor—it's an argument that Timmy makes, yet again, at The Register.
We need to have a thorough overhaul of the UK's income tax system. It's not that many decades ago that you only started to pay income tax as your income approached the average. Now you pay income tax if you're working part time on the minimum wage (no, really, 20 hours a week or so will get you into that tax net).

The mechanism that has been used to get us to this horrible state is "fiscal drag". In most years (the current perhaps excepted) and certainly over time, wages rise faster than inflation. This is the end result of that useful thing which capitalism alone amongst economic systems manages: a general and sustained increase in the standard of living. But successive Chancellors have raised the personal allowance in line with general inflation and not the higher rises in wages. So ever more people on ever lower wages get to pay income tax, with the absurd result that for many we are now taking income tax away and then paying it back to the same people in the same week in benefits.

The Budget itself recognises this: there are some 2 million people who face marginal tax rates of over 60 per tax. Hundreds of thousands face even higher rates than this with the combination of income tax and benefits being withdrawn as their working income rises. Yes, just as we think that there are Laffer Curve effects on the rich, we also believe that exactly the same happens to the poor. Yet in this monstrosity of a tax system we tax the working poor at higher marginal rates than we do the rich.

The solution to this is well known: to raise the personal allowance. The Adam Smith Institute (where I'm a Fellow) has been shouting in the wilderness about this for years. As a simple rule of thumb the personal allowance should be the same as working full time all year on the minimum wage. Some £11,500 or so. At the moment it's around £6,400.

The Joseph Rowntree Trust produced a survey on what it is to be poor in the UK. It concluded that you needed a pre-tax income of £13,400 in order not to be poor. That's just about that £11,500 after tax. Yes, we really do insist that those we define as poor pay income tax. UKIP (where I'm also involved) has had the same policy for some years. Last week Oxfam urged the same and Nick Clegg of the Liberal Democrats unveiled his third tax policy of the past year and urged the allowance be raised to £10,000.

As happens so often, good ideas start out way way out there, and then as people consider their merits they approach the mainstream. Or at least, they can do. And that's what I think has been the biggest mistake of this budget. Sure, bashing the rich for a few pennies here and there will always get cheers from Labour backbenchers, but we should really be concentrating our attention upon the poor. And the best thing we can do for them is to stop bloody taxing them.

Absolutely. But remove the poor from the tax system, and you remove much of the incentive for them to keep voting for you—because you are no longer paying them those lovely free benefits, you see (if only because you can no longer afford them).
That's my complaint: that Darling's allowed a good crisis to go to waste.

Darling, like his fucking one-eyed organ-grinder, is not really interested in the poor, and never has been. The politicians are interested in only one thing—power.

To be in power, they must be elected, and to have even the faintest hope of being elected, the politicians believe that they must, at all costs, retain their client electorate.

The Budget was gesture politics at its worst: the lack of spending cuts was designed to keep the client electorate voting Labour, whilst the extra tax on the rich was designed solely to appeal to said clients' most evil sensibilities.

I have said it before and I'll say it again: if you really want to help the poor, then stop fucking taxing them.

11 comments:

JD said...

The best way to help the poor is to not be one of them.JD.
NO TO LISBON MEANS NO TO LISBON!
http://www.facebook.com/group.php?gid=38059363467&ref=mf

Jimmers said...

Fiscal Drag - Broons favourite stealth tax. You can bet that if the one eyed mendacious cunt got voted back in he would leave the top rate levied on £150k for all the next term.

Jeff Wood said...

Tim is consistent in his view on this point. I change my mind every other week.

I am old enough to remember the time when you had to earn close to the average wage before paying tax, though national insurance was paid earlier.

I reckon that to get the same effect today, a single person (back then a husband and wife's income was aggregated for tax) we would need a personal allowance of about £12,000.

And yet...

I am sure I have seen the concept of no representation without taxation discussed here before, and if you take people out of the tax net but leave them the vote, what might be the effect? More bread and circuses, at the expense of taxpayers?

As I said, I know the answer to that, but only for two weeks in four.

Anonymous said...

"The point about him [Gordon Brown] is he's never been elected by anybody" said Caine

He was elected by the people of Kirkcaldy.

If DK was brought up in a place with 60% tax and excellent public sevices, do you think he would have become a libertarian?

Anonymous said...

I dare say that as a gentleman employed on the government payroll it may raise a few eyebrows but this tax is simply wrong. Unlike Mr Caine, my employment is limited to 39 paid weeks of the year. No holidays, no sick leave and I cannot claim for the 13 weeks when I am unpaid. It grips my S@&t that my hard earnt money goes to fund the feckless and workshy. God knows I work with enough of the little sods. You cannot make people rich by taking from the hardworking. You cannot make people industrious by rewarding idleness. Our clearly insane PM has engaged in gesture politics of the worst kind. How can we "innovate", invent or develop the means to rectify our economy if the rewards for doing so are to have any benefit stripped away and given to the openly workshy.
I taught at one school where the openly stated ambition of the feral little vermin was "to go on the dole and get stoned".
TTFN

Anonymous said...

Not only are there more poor than rich but the welfare system is set up to ensure the poor remain poor. This may be a bug or it may be design but, either way, what happens is that the poor remain poor, deprived not of opportunity but of ambition and the drive to improve themselves.

My grandfather worked for the cleansing department. My father left school at 14 and worked on the railways. I have a doctorate and earn significantly more than the national average. Work provided the promise of self-improvement, the promise that, if one applied oneself, there was a better life available. It provided the promise of progress and of reward based on talent and effort. The welfare state, on the other hand, promotes stasis and the status quo; it promotes the idea that you should never progress, that you should always stay in one place eternally dependent, eternally receiving a uniform amount of money from the state and raising children whose sole purpose is to eat, drink, breed and collect more welfare.

If the left truly gave a damn about the poor, they would see the damage their ideology has wrought and move to fix it. But they do not care and they never have so the poor are stripped of their ambition, public schools are stripped of their ability to educate and our universities, once the envy of the world, are turned into shops where the rich buy degrees that signify nothing and the poor are locked out - locked out of education and locked into a world of dependency and idleness.

For the sake of fairness, for the sake of the poor and for the sake of equality and opportunity, the welfare state must be flushed down the toilet of history - or, for preference, stuffed up the arse of Gordon Brown and his evil Labour bastards.

thefrollickingmole said...

Australias welfare pays out in a similar fashion. The government taxes then "gives back" our money in a whirl of stupidity.

The latest we have from our new Broon lite is $900 "stimulus packages.

The first lot went out to the unemployable, apparently some bottle shops sold out of full strength beer that week.
The second lot went out to those who pay tax.
Now theres talk of a 3rd lot, oh and by the way they are also looking at putting up the tax rates here....

So its not only you lot with a bunch of sub-retarded shit flinging gibbons for leaders...

RareBreed said...

The only thing i would disagree with is that wages increase quicker than inflation.

Remember that in a sound money economy prices fall naturally through competition, innovation and economies of scale etc. So the Chancellors 2% target is more like 4% and now the 2.5 % wage increase looks less appealing. i.e. Fiscal drag is actually double that claimed.

If ever there was a better argument (for the poor) to support sound money I never heard it!

RareBreed said...

TTFN

no-one is stopping you change career or dare I say actually work another job during those 13 weeks.

My wife is a teacher and does tutoring in the hols. Lots of tax deductables for that too!!

neil craig said...

I'm afraid it looks like government spending gas passed 50% of our economy so we are all im Caine's paying more than we keep situation if you assume we are going to repayb the money we are borrowing.

Worse than that is that about 50% of our economy seems to disappear into regulations (housing costing proportionately 4 times what it used to, electricity 4 times what France pays, all these bloody safety & eco-fascism restrictions. The only good thing is that the 2 50%s overlap or we would starve.

Triffid said...

Hmm, methinks Devil, that you missed the 90% tax layer - £100,000 to £112,500.

Unless I misread the fetid mewlings of Darling I believe that should I earn £100,000 and say, get a £10,000 pay rise I would of course be taxed 40% on the rise (£4,000.) Under the new scheme I'd also lose £1 of personal allowance for every £2 over £100K I earn (50% tax).

In other words, the Government think it's OK to take 90% of the money on this layer. Unfortunately, we're hitting people who are unlikely to be able to afford to bugger off like Mr Caine.