Hunger $ Billionaires

[Serial_Apologist]

What about hire purchase, aka "the never-never"? That kicked in as far as I remember in the fifties. Christmas clubs? There were also the informal arrangements amongst groups of friends, called a "menage" - pronounced "menodge", in Glasgow.

Eg for a bicycle... Bikes cost (say) £15 - and they probably did, in those days. 15 people would pay a pound a week, for 15 weeks, and each week someone got a bicycle. They'd draw lots to see who got the bike each week.

This of course is the source of the expression, said of someone useless, "He couldnae run a menodge!"

That's right - HP was the source (sic)! Worried about the potential costs of repairs etc of owning a set I hired my first TV between 1982 and 1993 after learning that a workmate had acidentally upset his hire TV while cleaning around his house, smashing it to smithereens. He phoned the hire company, and within 24 hours they sent a man round, cleaned up the debris, and gave him a brand new TV! Such stories came to change attitudes towards "personal belongings" - items once regarded as to be worked and long saved for.

[Lateralthinking1]

This of course is the source of the expression, said of someone useless, "He couldnae run a menodge!"

Or of a bunch of huddies!

(I'm taking a risk here as I am not sure what it means. But someone described Ross County as a bunch of huddies. Before I make "the Staggies" my formal Scottish team, I need to check this statement with someone who will know. Do I change the "u" to an "oo" or is it something less innocent? Otherwise, it's Claccy Thistle, the Arabs at Tannadice or back to predictable old Celtic.)

On the main point, yes I suppose there was HP and also shopping catalogues etc. The sea change though came very much later. And with hindsight there is a direct contradiction between being told to look after pennies by a grocer's daughter and the economics of Friedman as they became. I am not sure that anyone anywhere has fully explained it. And John Major didn't say either "spend like there's no tomorrow", nor was it in his demeanour. So were they deliberately misleading people - or was there some chasm in their philosophy that no one, for or against them, ever questioned? None of it makes any real sense.

[ahinton]

A great deal less? If you were to save £200,000 or more per annum? I doubt it. How much would you pay in a non tax scenario to save £200,000? I would be prepared to pay up to £195,000 if I had that kind of money. (On tax, I am an exception).

If it is true as you suggest that fewer would bother, accountants in that field would have less demand. Consequently they would have to reduce their costs. That in turn would bring back the same old customers.

Should Jersey etc update its legislation on smuggling?

It's not for me to say what Jersey should do about its legislation on anything.

I did not suggest that, in a climate such as that which you posit, those on high incomes would no longer seek tax avoidance advice; I merely suggested that there would be less urgent demand for such advice, as it is obvious that the more punitive the taxes and tax rates the more people will seek the more avoidance advice.

As to accountants, don't worry - they'll find plenty of other areas within the scope of their customary professional activity to keep them going, so don't expect a reduction in their fee levels! Accountants, after all, work for companies as well as individuals and you only mentioned relatively low rates of personal income tax; there are many other taxes, both personal and corporate, to keep accountants going - or at least there will be until and unless your proposed flat rate of income tax is accompanied by so vast a simplification of the tax régime that many of the current taxes will simply be abolished.

[ahinton]

On the main point, yes I suppose there was HP and also shopping catalogues etc. The sea change though came very much later. And with hindsight there is a direct contradiction between being told to look after pennies by a grocer's daughter and the economics of Friedman as they became. I am not sure that anyone anywhere has fully explained it. And John Major didn't say either "spend like there's no tomorrow", nor was it in his demeanour. So were they deliberately misleading people - or was there some chasm in their philosophy that no one, for or against them, ever questioned? None of it makes any real sense.

Perhaps I've always had a rather jaded and cynical view of the whole business of borrowing at all levels. I don't know why (perhaps it's because of the kind of things that I do) but I've always tended towards the view that when someone pays me to do something I'm "borrowing" the money because it's perfectly possible that the payer has borrowed all or some of the money with which I'm paid.

Perhaps it's also something to do with that famous speech by Enoch Powell - actually, no, not that one, but an earlier one that's so non-famous that it's hardly ever referred to these days and in which he sought to claim (though on the basis of quite how much reliable corroborative evidence I cannot be certain) that less than 3% of the money circulating around the world was actually backed up by hard collateral, which appears to demonstrate his premonitory understanding of quantitative easing and its potential and actual vagaries; this was way back in the 1960s, long before credit cards and the general perception that if one wanted or needed anything one had to borrow in order to acquire it.

If Powell was broadly correct in his view, the fact that nowadays almost no country on earth could repay its debts on demand is thus perhaps hardly surprising. Few people could buy their own homes without borrowing, but they have to live somewhere. Few could buy their cars without borrowing, but they need them to get to work (among other things). Few can afford their own healthcare and primary and secondary education, so they borrow from the state to fund it. Few can afford their university education so they have to borrow to pay for it. Who could start a business without first borrowing? And so on - not to mention that, in Powell's terms, even those who can afford to pay for any or all of these things without having to have recourse to direct borrowing are only able to do so as a consequence of the money that they've managed to save out of their borrowings from others, because most of the money in circulation is, in effect, borrowed. As I have pointed out before, those whose smug complacency prompts them to boast that they have no borrowings of any kind are kidding themselves to the extent that their salaries and pensions may well be funded in part out of borrowings, so the only difference between them and those with mortgages, credit card debts, bank overdrafts and the rest is that they're able to confine their activities in this regard to what might be termed "passive borrowing". As to this idea of not living beyond one's means, I am reminded of a response to that which I heard some while ago, which was that if one has no means, does one therefore have a social duty to commit suicide?

Whilst I would be the first to admit that debt on all levels is a serious issue that needs to be addressed as effectively as possible, it is and will forever remain a given that many people, SMEs, local authorities, large corporations and nations will need to borrow funds on many occasions whatever might be done to rein in this kind of activity; the only problem will arise when no one is any longer able and/or willing to lend...

[mangerton]

Or of a bunch of huddies!

(I'm taking a risk here as I am not sure what it means. But someone described Ross County as a bunch of huddies. Before I make "the Staggies" my formal Scottish team, I need to check this statement with someone who will know. Do I change the "u" to an "oo" or is it something less innocent? Otherwise, it's Claccy Thistle, the Arabs at Tannadice or back to predictable old Celtic.)

I've never come across that expression, but it would appear to be correct as written. "Hoodies" are hooded crows in the Scottish vernacular - long before the garment was invented.

[Lateralthinking1]

I've never come across that expression, but it would appear to be correct as written. "Hoodies" are hooded crows in the Scottish vernacular - long before the garment was invented.

Ah, interesting. I think that the hooded crows and the hoodies as in the garment probably go together. Wikipedia says:

The Hooded Crow is omnivorous, with a diet similar to that of the Carrion Crow, and is a constant scavenger..........In Celtic folklore, the bird appears on the shoulder of the dying Cú Chulainn, and could also be a manifestation of the Morrígan, the wife of Tethra, or the Cailleach. This idea has persisted, and the Hooded Crow is associated with fairies in the Scottish highlands and Ireland; in the 18th century, Scottish shepherds would make offerings to them to keep them from attacking sheep.

So I think the notion is of scoundrels or something very similar from a fan of an opposing team. The substitution of "u" for "oo" sounds Scottish to me but then I say that as an Englander and could easily be wrong.

[Lateralthinking1]

I did not suggest that, in a climate such as that which you posit, those on high incomes would no longer seek tax avoidance advice; I merely suggested that there would be less urgent demand for such advice, as it is obvious that the more punitive the taxes and tax rates the more people will seek the more avoidance advice

The influence of tax rate on demand for tax avoidance advice is miniscule compared with the influence of amounts of income.

Someone with an income of £8m would logically still seek advice if the tax rate was 4.5% rather than 45%.

Another with an income of £80,000 would not logically spend money on accountants where the tax rate was 4.5% but might logically consider the argument for it where the tax rate was 45%.

I believe that the case for a lower tax rate is being presented as a means for ensuring tax is paid by the exceedingly well-off but is actually an argument from and for those who have very reasonable incomes and simply want to pay less tax.

The exceedingly well-off still wouldn't pay tax, the very reasonably well-off would pay far less tax, more people reliant on public services would have a lower quality of life and those in real need of social services would die earlier in greater numbers.

I've always tended towards the view that when someone pays me to do something I'm "borrowing" the money because it's perfectly possible that the payer has borrowed all or some of the money with which I'm paid...........even those who can afford to pay.......without having to have recourse to direct borrowing are only able to do so as a consequence of the money that they've managed to save out of their borrowings from others, because most of the money in circulation is, in effect, borrowed. As I have pointed out before, those whose smug complacency prompts them to boast that they have no borrowings of any kind are kidding themselves to the extent that their salaries and pensions may well be funded in part out of borrowings, so the only difference between them and those with mortgages, credit card debts, bank overdrafts and the rest is that they're able to confine their activities in this regard to what might be termed "passive borrowing".

While I fully understand your argument, it is based on a blurring of individuals' demarcation lines. Yes, if Person X borrows money to run a company and then pays a salary to Person Y, Person Y is paid with borrowed money or otherwise wouldn't be paid. But that does not mean Person Y is equally a borrower, nor does it make him a diluted or "passive" borrower, if his own personal finances are without debt. Borrowing is a choice. Being employed by a borrower is a different choice. To hold the second category responsible for the former's preferences is to pretend to accept risk for greater gain and displace it in case of losses.

The political weakness in the argument is that it is inconsistent with the business case for ever lower taxes. Those are presented on the basis that an individual's money is his or her own to keep. There the demarcation lines couldn't be clearer. So in scenario A, everyone is connected as a society and carries interconnected responsibilities for the ongoing system and in scenario B, there is no such thing as society. In each case, that benefits Person X and is disadvantageous to Person Y. Powell was intellectually clever but morally deficient. He was an under achiever precisely because his self-interests were incompatible with the broad responsibilities that accompany teams. He would be wholly at home with the dominant attitudes we are seeing in business now.

[ahinton]

The influence of tax rate on demand for tax avoidance advice is miniscule compared with the influence of amounts of income.

Someone with an income of £8m would logically still seek advice if the tax rate was 4.5% rather than 45%.

Another with an income of £80,000 would not logically spend money on accountants where the tax rate was 4.5% but might logically consider the argument for it where the tax rate was 45%.

I believe that the case for a lower tax rate is being presented as a means for ensuring tax is paid by the exceedingly well-off but is actually an argument from and for those who have very reasonable incomes and simply want to pay less tax.

The exceedingly well-off still wouldn't pay tax, the very reasonably well-off would pay far less tax, more people reliant on public services would have a lower quality of life and those in real need of social services would die earlier in greater numbers.

Some or all of that may be true in certain cases but, ultimately, if people want to undertake tax planning irrespective of their income or asset levels, they'll do it and if a government clamped down on as many aspects of that as possible then at least some of those will up sticks and move - probably more of them than would be the case if tax planning was not outlawed altogether.

While I fully understand your argument, it is based on a blurring of individuals' demarcation lines. Yes, if Person X borrows money to run a company and then pays a salary to Person Y, Person Y is paid with borrowed money or otherwise wouldn't be paid. But that does not mean Person Y is equally a borrower, nor does it make him a diluted or "passive" borrower, if his own personal finances are without debt. Borrowing is a choice. Being employed by a borrower is a different choice. To hold the second category responsible for the former's preferences is to pretend to accept risk for greater gain and displace it in case of losses.

Whether or not you would choose to use the terms "diluted" or "passive" for such borrowers, they are nevertheless accessories after the fact, but you seem to assume that, in so designating them, I am somehow accusing them of being so, which is emphatically not the case to the extent that I am not seeking to "hold them responsible" for their part in their employers' borrowings.

The political weakness in the argument is that it is inconsistent with the business case for ever lower taxes. Those are presented on the basis that an individual's money is his or her own to keep. There the demarcation lines couldn't be clearer. So in scenario A, everyone is connected as a society and carries interconnected responsibilities for the ongoing system and in scenario B, there is no such thing as society. In each case, that benefits Person X and is disadvantageous to Person Y. Powell was intellectually clever but morally deficient. He was an under achiever precisely because his self-interests were incompatible with the broad responsibilities that accompany teams. He would be wholly at home with the dominant attitudes we are seeing in business now.

There will never be correct rates or amounts or types of taxes to suit any given situation; furthermore, situations that effectively impact of taxation requirements change by the second whereas tax legislation can only change very now and then. I'm not here to defend Powell in his take on borrowing but I do not see in any case that he was necessarily seeking to make a value judgement about the relationship between the values put on currency in circulation at any time and the inherent monetary values of collateral at the same time.

The only issue that I am inclined to take with your comparison between scenario A and scenario B is that, in the former, your "society" seems somehow to be imposed upon its members as though everything has to be accomplished in teams for some kind of common good whereas scenario B does not have to be defined by the notion that "there's no such thing as society" because (a) there obviously is and (b) it can be - and usually in practice is - self-creating and self-developing and in which individuals and teams ought ideally to be capable of functioning compatibly rather than being at loggerheads for the sake of it.

[heliocentric]

if a government clamped down on as many aspects of that as possible then at least some of those will up sticks and move

Why not just let them go? - I can't think of a reason why it's necessary to hang on to these parasites. Oh yes, they're supposed to be vital to the, er, health of the economy, aren't they?

[Lateralthinking1]

Some or all of that may be true in certain cases but, ultimately, if people want to undertake tax planning irrespective of their income or asset levels, they'll do it and if a government clamped down on as many aspects of that as possible then at least some of those will up sticks and move - probably more of them than would be the case if tax planning was not outlawed altogether.

We are never going to agree. The scenario you paint is one in which elected Governments are at the mercy of those with wealth. I think you over-estimate the universality of their attractiveness. Had the sale of Rolling Stones records been banned in Britain for the last 40 years, they may well have returned to Blighty rapidly. We have all sorts of policy tools but not the motivation.

Whether or not you would choose to use the terms "diluted" or "passive" for such borrowers, they are nevertheless accessories after the fact, but you seem to assume that, in so designating them, I am somehow accusing them of being so, which is emphatically not the case to the extent that I am not seeking to "hold them responsible" for their part in their employers' borrowings.

This depends on the situation. Someone who knowingly takes out a risky pension plan accepts a significant part of the provider's risk. Those who are informed that they are paying into a guaranteed state or public sector pension make their choices on the basis of the misinformation given out. For that reason, they have no basis on which to share the responsibility when those managing the arrangement prove unscrupulous and/or inept. It is pure misselling.

There is a big difference between the father who says that the daughter will have a bike if she mows the lawn and one who says that she will have the bike if she mows the lawn and he can manage his own finances adequately.

There is an even bigger difference when she is told she will have a bike, she mows the lawn, the father proves useless at paying off debt, he still buys himself a Rolls Royce, the daughter doesn't get the bike, and the father tells the daughter that she shares the responsibility for his immature management of the finances. There are a lot of lousy parents around.

The only issue that I am inclined to take with your comparison between scenario A and scenario B is that, in the former, your "society" seems somehow to be imposed upon its members as though everything has to be accomplished in teams for some kind of common good whereas scenario B does not have to be defined by the notion that "there's no such thing as society" because (a) there obviously is and (b) it can be - and usually in practice is - self-creating and self-developing and in which individuals and teams ought ideally to be capable of functioning compatibly rather than being at loggerheads for the sake of it.

One might argue that there was a natural self-creating society in the mid 1800s and earlier. It depends on the kind of society you want. Of all the rising traits in individuals in the 21st Century, the Victorian mill owner is now alarmingly common. We finished paying our debts to the US after more than five decades under Blair and then suddenly couldn't afford services. It's a con.

[ahinton]

Why not just let them go? - I can't think of a reason why it's necessary to hang on to these parasites. Oh yes, they're supposed to be vital to the, er, health of the economy, aren't they?

Whether or not any of them may be so, I'll give you one good reason not to let them go; if one does that, the wealthiest of those remaining will then become the same kinds of target as those that have just left, so then they'll be invited to leave as well - and where does this stop?

In any case, no one is a "parasite" by sole virtue of being wealthy. In so describing them, however, do you - or don't you bother to - distinguish between those whose assets and/or income are inherited and those whose ditto are the fruits of their own labours? Likewise, if you describe someone as a "parasite" solely because they believe that they are being expected to pay too much tax, are there not "parasites" at all income and asset levels?

[ahinton]

We are never going to agree. The scenario you paint is one in which elected Governments are at the mercy of those with wealth. I think you over-estimate the universality of their attractiveness.

Whose? The governments or those with wealth? And, to some extent, aren't governments to some extent at the mercy of all taxpayers, most conspicuously the wealthiest ones of whom some pay the most?

Had the sale of Rolling Stones records been banned in Britain for the last 40 years, they may well have returned to Blighty rapidly. We have all sorts of policy tools but not the motivation.

Why so? I don't see the connection. Had those records been banned from sale in UK, people in UK and elsewhere would have bought them elsewhere, so what difference would that have made? Even had the importation of such records also been banned in UK, I rather doubt that the dent in worldwide sales would have been sufficient to motivate the band's members to return to Britain or indeed have any other impact on their respective residency and/or domiciliary decisions for tax or any other purposes.

Someone who knowingly takes out a risky pension plan accepts a significant part of the provider's risk.

Whilst this is broadly true (so we do agree from time to time!), is there such a thing as an investment without risk? (and pensions are, after all, investments); aren't all pension plans inherently risky? (albeit some more than others) - and the risk factor of all investments can change over time according to all kinds of factors, which is arguably more of a serious consideration for pension plans as these are among the longer-term investments. You also begin with the word "someone", as though addressing only individuals who take out pension plans, but the same kinds and levels of risk likewise affect employers who offer pension plans/schemes to their employees (and there are still some who do this!).

Those who are informed that they are paying into a guaranteed state or public sector pension make their choices on the basis of the misinformation given out. For that reason, they have no basis on which to share the responsibility when those managing the arrangement prove unscrupulous and/or inept. It is pure misselling.

Absolutely correct; in fact, it's little better than any other Ponzi scheme in the way in which successive governments have sought to market state retirement benefit over decades.

There is a big difference between the father who says that the daughter will have a bike if she mows the lawn and one who says that she will have the bike if she mows the lawn and he can manage his own finances adequately.

There is an even bigger difference when she is told she will have a bike, she mows the lawn, the father proves useless at paying off debt, he still buys himself a Rolls Royce, the daughter doesn't get the bike, and the father tells the daughter that she shares the responsibility for his immature management of the finances. There are a lot of lousy parents around.

Well, at least I'm exonerated from blame there, since I've never had children or promised anyone that I'd buy them a bike, but I'll take your point in principle nevertheless!

One might argue that there was a natural self-creating society in the mid 1800s and earlier. It depends on the kind of society you want. Of all the rising traits in individuals in the 21st Century, the Victorian mill owner is now alarmingly common. We finished paying our debts to the US after more than five decades under Blair and then suddenly couldn't afford services. It's a con.

Not everyone does or indeed ever did all want the same kind of society, although I don't quite see that fact as identifying that the world is now replete with people possessed of a Victorian mill owner mentality. The con that you mention is only one of so many that they're uncountable, although it was admittedly one of the more glaring examples - and, let's face it, US is itself now more indebted than ever it was while Britain was paying off its debts to it! - isn't that the outcome of just as much of a con?!

[Lateralthinking1]

ahinton, You will continue to intellectualise the matter. What might work arithmetically on paper does not necessarily work in the real world. Unless I hear from you to the contrary, it seems to me that you would be quite prepared in principle to step over large numbers of the ill and the homeless on the streets. How do you propose that such people are protected, and your health and safety are not compromised by their condition, or is rural France and then a demise before it happens, all that concerns you?

Governments are not at the mercy of taxpayers. They are accountable to voters. When I read your comments, it is as if the electoral process is a bloody nuisance and you would prefer that it didn't exist. The roads you use in France will have been paid for by French taxpayers. Why should they not say that they are theirs and that you have no right to use them? Of course, if Marine Le Pen is ever elected, she might have a negative view on the British owning homes in France. How ironic that would be!

And actually, I don't accept that all investment carries a meaningful risk. There is a level of investment in, say, basic education from a starting point of an absence of education which is guaranteed to lead to dividends, other than in a complete wiping out of the population. That minimal risk of devastation is minimised further not through narrow applicability but breadth. The greyer areas are high levels of investment, the possibility only of marginal returns, and the numbers, range and severity of potential risks, all of which might or might not arise with greater complexity. Similar arguments apply to most, if not all, policy areas.

[aka Calum Da Jazbo]

it is not , for me, about tax .... but gangsters, theft and murder ... this ongoing nit pick about tax rates on income is just that a nit pick ... finance wants to subject food to their casino, extract billions in $$$ and pay no tax on the proceeds ... letting the poor starve to death ...... got it?

[heliocentric]

it is not , for me, about tax .... but gangsters, theft and murder ... this ongoing nit pick about tax rates on income is just that a nit pick ... finance wants to subject food to their casino, extract billions in $$$ and pay no tax on the proceeds ... letting the poor starve to death ...... got it?

Quite. The "starving to death" part is infinitely more important than the "pay no tax" part. Nitpickers are part of the problem.