Wealth Distribution In Britain

[Rare Bear]

I went to a lecture on inequality at the Royal Geographical Society yesterday given by Danny Dorling from the University of Sheffield. He's one of the country's leading experts on the subject. The general message of the lecture was that affluent societies with larger wealth inequalities are responsible for higher levels of ecological damage when compared to affluent societies with more equal wealth distributions.

In relation to the UK, wealth inequalities fell during the period 1918 to around 1970 at which point they went into reverse. Today the richest 10% of the British population now earn 13.8 times more than the poorest 10% and that gap is growing. In Western Europe only Portugal is more unequal. We are 50% more unequal than countries like Holland and Germany; twice as unequal as Norway and almost three times more unequal than Japan. On the bright side we are not as unequal as the US but in 13 years of Labour government the gap between ourselves and the US has shrunk by 25% as we become more unequal.

The lecture discussed many aspects of this data. For example, celebrity culture was more prevalent in unequal societies. Also, people seem more likely to accept growing inequality so long as they maintain their position in it relative to other people. In Professor Dorling's view the only effective way to reduce wealth inequality was to reduce the wealth of the rich (as opposed to increasing the wealth of the poor). Anecdotally I notice all my banker friends who threatened to move to Switzerland last year are still living in the UK. Anyway, I'd urge you to Google Danny Dorling's work as it's fascinating. His work calmly and rationally shows that this country's inequality is neither normal nor pre-determined.

Agreed that if you do reduce the waelth of the richest you do reduce inequality but it also tends to reduce the wealth of the poorest. The inequality is less but the poor are worse off in absolute terms.

[jareth]

The uneven distribution of wealth has been around long before our current problems. Wealth inequality did not cause them and redistributing wealth by force will not solve them. You cannot create wealth by dividing it. Some people are cautious and sensible with their money others are not. Educate those that are not to be more sensible rather than punish those that have been sensible.

Yes wealth provides an innate advantage but it does not guarantee success. It can and has been frittered away again and again by feather-bedded plonkers up and down the land. Some families guard their accumulations well, others do not. Educate those that do not rather than punish those that do.

The bigger the state has got the more keenly it agitates against private wealth - not because of some wheezing class warfare or to right some dim and distant perceived wrong but in order to fund its excesses. It exploits a seam of petty socialism that robs Peter to pay Paul rather than tell Paul to get his finger out. It *does not want* greater wealth equality it wants a mob bigger than any other to lend it the flimsy authority of weight of numbers. The tyranny of a majority is still a tyranny. A long time ago I think politicians knew this - that the Government merely having more seats and more support than the opposition didn't give it a free hand to do as it pleases and interfere in almost every aspect of our lives.

If the State truly cared about those at the bottom of the pile it wouldn't trap them there with subsidies.

[erranta]

Agreed that if you do reduce the waelth of the richest you do reduce inequality but it also tends to reduce the wealth of the poorest. The inequality is less but the poor are worse off in absolute terms.

WTF are you on about!

The poor will raise up at some point and rip them to pieces!

Nearly the whole of South America is in revolt against the few percent of the wealthy, who abuse them constantly, who sell out their nations resources and force them into starvation/abject poverty whilst pocketing any extra cash for themselves.

The wealthy set up secret concentration camps to torture and kill anyone who speaks out/belongs to the wrong party/an activist etc - they have killed hundreds of thousands!

Ever wondered why you never hear any news about Sarf America?

Edited May 18, 2010 by erranta

[Tired of Waiting]

The rich have the most expensive houses.

You learn something useless everyday on here.

(...)

Quantification.

[Guest sillybear2]

You're not kicking the richest guy out of the bar, he's still rich. It doesn't eliminate poverty, and it doesn't make people more wealthy in absolute terms, but it does in relative terms. But I don't agree with taxing the income of the wealthiest, in fact I don't agree with an income tax at all. I prefer CG tax, tariffs and tax on total wealth above some threshold.

So you're basically saying they're still as poor as ever (maybe even more so) but closing some notional gap made them feel better? How does that help.

Having low taxes is fine if there's a countervailing non-monopolization of assets, remember that capitalistic rent seeking behaviour and usury is nothing but a private tax system. So if you believe 'taxes' are bad you need to be intellectually honest and include rent seeking too. If the working poor have 70% of their value added stolen via usury or landlordism to them it's no different from the government doing the thieving. In fact that's what the banking system has now done in cahoots with the political class, they've stepped up their plundering by getting the government to do it on their behalf, and by also making liabilities immortal via the national debt.

Edited May 18, 2010 by sillybear2

[Tired of Waiting]

You may find this hard to swallow, but if you tax the land appropriately it doesn't matter who inherits or owns it because its possession /ownership no longer confers a privilege. The reason land ownership is so influential is because it allows you to collect the value of other people's work and taxes - take that ability away from the landowner and the issue disappears.

I think we are mixing 2 different issues here (though they overlap, of course).

I agree that land tax is a very good way to rationalise land use. I am in favour of it.

Inheritance Tax (IT?) deals with different problems: inequality and inefficiency. If you manage to implement that tax well (difficult though), you would reduce the accumulative distortion that capitalism generates. And if you have a reasonable tax revenue from Inheritance Tax you can tax less productive work.

[Toto deVeer]

So you're basically saying they're still as poor as ever (maybe even more so) but closing some notional gap made them feel better? How does that help.

Having low taxes is fine if there's a countervailing non-monopolization of assets, remember that capitalistic rent seeking behaviour and usury is nothing but a private tax system. So if you believe 'taxes' are bad you need to be intellectually honest and include rent seeking too. If the working poor have 70% of their value added stolen via usury or landlordism to them it's no different from the government doing the thieving.

No, what I'm saying is to remove the adverse influence and power of extreme wealth on the political process, and preserve the wealth of the middle class, in relative terms.

We live in a world today where a handful of people possess or control more wealth than most nations. This cannot be a good situation for the people of those nations.

Can you give me one valid argument as to why any individual needs a wealth of more than one billion dollars?

Edited May 18, 2010 by Toto deVeer

[indirectapproach]

Lets think about the example of Sterling Moss.

He's got quite a few gaffs. That's how he makes most of his money apparently.

Despite that, he seems like quite a nice chap. I don't think too many people would be gutted to wash up next to him on a lengthy plane journey.

What should we do with his and his ilk?

[Toto deVeer]

I think we are mixing 2 different issues here (though they overlap, of course).

I agree that land tax is a very good way to rationalise land use. I am in favour of it.

Inheritance Tax (IT?) deals with different problems: inequality and inefficiency. If you manage to implement that tax well (difficult though), you would reduce the accumulative distortion that capitalism generates. And if you have a reasonable tax revenue from Inheritance Tax you can tax less productive work.

What happens if one cannot pay the land tax, do we just put them adrift at sea?

[Guest sillybear2]

No, what I'm saying is to remove the adverse influence and power of extreme wealth on the political process, and preserve the wealth of the middle class, in relative terms.

We live in a world today where a handful of people possess or control more wealth than most nations. This cannot be a good situation for the people of those nations.

Can you give me one valid argument as to why any individual needs a wealth of more than one billion dollars?

So you do advocate robbing the rich guy blind before kicking him out of the bar? Make your mind up

[Toto deVeer]

So you do advocate robbing the rich guy blind before kicking him out of the bar? Make your mind up

No this is the way I see it. The currency of a country should belong to the people, no single person, nor the state.

The person who has gained wealth, has done so within the regulatory structure and market framework of that country.

When any individual accumulates sufficient wealth above a certain threshold, as $1 billion, then any excess is simply returned to the treasury, and either recycled, or destroyed.

I don't call that robbing someone, I call it socially and politically responsible. And he's still the richest guy in the room.

Edited May 18, 2010 by Toto deVeer

[Tired of Waiting]

Can you give me one valid argument as to why any individual needs a wealth of more than one billion dollars?

Did he inherited it, or made his own fortune?

If he inherited it, then f"ck him, take it all away. (OK, allow his parents to leave him some money, if they want to, but that is all. And tax it, of course.)

But if he is a "self made man", earned it, invested it (obviously well), and grew it, then the reason is: He is a brilliant allocator of resources, and should be allowed to keep doing it, as this benefits us all.

( Remember that the weakest point of Karl Marx theory of exploitation is that not all work adds value. Stupid work, or in the wrong direction, adds less value, and sometimes can even destroy value. Hence, people who can direct work (or investment) in wise directions are very worthy indeed for society in general. )

Then, when he dies, take it all away, and ideally invest in education - including Grammar schools, for bright poor kids.

.

Edited May 18, 2010 by Tired of Waiting

[indirectapproach]

"Can you give me one valid argument as to why any individual needs a wealth of more than one billion dollars?"

Well I think the argument is you start off cutting the King's head off.

The you cut Marie Antoinette's head off, then a load of aristos who really did deserve it.

Then a load that didn't.

Then there is arguably a genocide in the Vendee.

Then nearly every one else gets killed and it just about ends when the cossacks nail some unfortunate miller to the sails of his windmill in Montmartre and we end up with an overrated, overpriced cabaret called the Moulin Rouge.

I suppose that is there is any justice in it, it would be that the Russians succumbed to the same error so hopefully that poor old miller can rest in peace.

[Guest sillybear2]

No this is the way I see it. The currency of a country should belong to the people, no single person, nor the state.

The person who has gained wealth, has done so within the regulatory structure and market framework of that country.

When any individual accumulates sufficient wealth above a certain threshold, as $1 billion, then any excess is simply returned to the treasury, and either recycled, or destroyed.

I don't call that robbing someone, I call it socially and politically responsible. And he's still the richest guy in the room.

Absolutely, the only problem is liquid wealth can soon disappear off to Zurich, so that brings us back to taxing the revenue streams stemming from hard assets regardless of ownership.

[Tired of Waiting]

What happens if one cannot pay the land tax, do we just put them adrift at sea?

Property tax is usually a very small percentage of the property's market value, like 1% per year, or less. If he can't afford to pay that, he should sell to someone who can.

[Stars]

What happens if one cannot pay the land tax, do we just put them adrift at sea?

You only pay if you OWN the land. It's not a usage charge.

Edited May 18, 2010 by Stars

[Stars]

Agreed that if you do reduce the waelth of the richest you do reduce inequality but it also tends to reduce the wealth of the poorest. The inequality is less but the poor are worse off in absolute terms.

That depends. If the rich hold assets which are licences to coerce and abuse others, reducing this wealth of the rich can raise the wealth of everyone else.

Edited May 18, 2010 by Stars

[Toto deVeer]

Did he inherited it, or made his own fortune?

If he inherited it, then f"ck him, take it all away. (OK, allow his parents to leave him some money, if they want to, but that is all. And tax it, of course.)

But if he is a "self made man", earned it, invested it (obviously well), and grew it, then the reason is: He is a brilliant allocator of resources, and should be allowed to keep doing it, as this benefits us all.

( Remember that the weakest point of Karl Marx theory of exploitation is that not all work adds value. Stupid work, or in the wrong direction, adds less value, and sometimes can even destroy value. Hence, people who can direct work (or investment) in wise directions are very worthy indeed for society in general. )

Then, when he dies, take it all away, and ideally invest in education - including Grammar schools, for bright poor kids.

.

Well, I don't agree with this. In my view, as long as someone has not exceeded the wealth limit, they should be allowed to inherit, without taxation. After all, we do not wish to destroy the motivation for work, and some people work hard in this life so that future generations may benefit. That is their motive and it should be respected, in my view.

I'm not a supporter of inheritance tax, when a max limit tax is placed on individual wealth. As I indicated, tax revenue should only be derived from CG, tariffs and total wealth. Otherwise, the state should just butt out.

Edited May 18, 2010 by Toto deVeer

[Toto deVeer]

You only pay if you OWN the land. It's not a usage charge.

But all people have to live somewhere, and where do you live if own no land and have no money?

Or if you own land and have no money?

Would someone, who owns a small plot, and grows their own food, be cast adrift by the state, to starve?

Edited May 18, 2010 by Toto deVeer

[Tired of Waiting]

Well, I don't agree with this. In my view, as long as someone has not exceeded the wealth limit, they should be allowed to inherit, without taxation. After all, we do not wish to destroy the motivation for work, and some people work hard in this life so that future generations may benefit. That is their motive and it should be respected, in my view.

I'm not a supporter of inheritance tax, when a max limit tax is placed on individual wealth. As I indicated, tax revenue should only be derived from CG, tariffs and total wealth. Otherwise, the state should just butt out.

Sorry, but meritocracy is one of the strongest ethical principles.

Besides, the successful investor benefits the whole society. I don't see any logical reason to stop this investor from keep working, investing. Remember that his income will still be taxed, and his estate will be taxed when he dies.

Regarding inheritance, paraphrasing you, why a heir should be allowed to inherit more than, say, 10 million pounds?

[Toto deVeer]

Sorry, but meritocracy is one of the strongest ethical principles.

Besides, the successful investor benefits the whole society. I don't see any logical reason to stop this investor from keep working, investing. Remember that his income will still be taxed, and his estate will be taxed when he dies.

Regarding inheritance, paraphrasing you, why a heir should be allowed to inherit more than, say, 10 million pounds?

Sorry, I don't follow you. I'm against income tax. I don't see how my suggested taxation system interferes with meritocracy. It rewards the efforts of labour and physical world wealth, not speculative wealth, or the gain of wealth for wealth's sake.

[Tired of Waiting]

But all people have to live somewhere, and where do you live if own no land and have no money?

Or if you own land and have no money?

Would someone, who owns a small plot, and grows their own food, be cast adrift by the state, to starve?

Nowadays Council Tax, in cr@p cheap properties (like this flat I rent)) is actually around 1% of this property market value. But for better properties it gets proportionally cheaper, and then there is a ceiling.

[subsidiser]

Well, I don't agree with this. In my view, as long as someone has not exceeded the wealth limit, they should be allowed to inherit, without taxation. After all, we do not wish to destroy the motivation for work, and some people work hard in this life so that future generations may benefit. That is their motive and it should be respected, in my view.

I'm not a supporter of inheritance tax, when a max limit tax is placed on individual wealth. As I indicated, tax revenue should only be derived from CG, tariffs and total wealth. Otherwise, the state should just butt out.

So the person leaving the inheritance has a greater incentive to make money (presumably because they like the idea of working for their offspring more than working for themselves).

But what about the offspring who inherits? Surely they are brought up in the belief that they will not have to do anything other than safeguard the inheritance?

And what about the effect of this on society as a whole? People then get used to the idea that Mr/Ms inheritor has wealth that is unobtainable by working - surely the incentive for them to work hard disappears?

I say inheritance tax should be 100%

[Toto deVeer]

Nowadays Council Tax, in cr@p cheap properties (like this flat I rent)) is actually around 1% of this property market value. But for better properties it gets proportionally cheaper, and then there is a ceiling.

I've got very mixed feelings about this proposed land tax, like that promoted at the Renegade Economist web site. My concern is about the fairness of it, especially for the poor and the elderly.

My view is that people should largely be left alone by the state. I don't see how the state interfering with land rent would square with that principle.

However, I can see the merits in it, from a social equality perspective.

Edited May 18, 2010 by Toto deVeer

[erranta]

"Can you give me one valid argument as to why any individual needs a wealth of more than one billion dollars?"

Well I think the argument is you start off cutting the King's head off.

The you cut Marie Antoinette's head off, then a load of aristos who really did deserve it.

Then a load that didn't.

Then there is arguably a genocide in the Vendee.

Then nearly every one else gets killed and it just about ends when the cossacks nail some unfortunate miller to the sails of his windmill in Montmartre and we end up with an overrated, overpriced cabaret called the Moulin Rouge.

I suppose that is there is any justice in it, it would be that the Russians succumbed to the same error so hopefully that poor old miller can rest in peace.

So you are part of the aristocracy are you?

They need 'culling' every now and then just to remind them, that people will only put up with so much exploitation/taxing and they have gotten out of 'their' place by raising the pyramid walls to a near vertical slope through gross manipulation of govt, laws and finances!

Edited May 18, 2010 by erranta