jimenato

Ooh! Goody! Does that mean I can stop paying tax if the government isn't responsible for providing anything?

amideislas

Well we'd all like that, but unfortunately, over a few decades we've made everything the responsibility of our beloved government, who, at our demand, spent themselves into oblivion with the belief that we'd all pay big taxes, but that didn't work out since we're all jobless now, and our beloved government is faced with having to minimise our benefits whilst raising taxes, which fewer people or businesses are willing or able to pay, and so we find ourselves in a vicious cycle of decline.

So, no. The current wisdom is that we're likely to pay more and get less. True, that's not what we asked for, but it is one result of what we foolishly demanded.

But it isn't our fault, is it? We gave that responsibility to the government a long time ago. So who's buying this round?

amideislas

Suppose that every day, ten men go out for beer and the bill for all ten comes to £100...

If they paid their bill the way we pay our taxes, it would go something like this...

The first four men (the poorest) would pay nothing.
The fifth would pay £1.
The sixth would pay £3.
The seventh would pay £7..
The eighth would pay £12.
The ninth would pay £18.
The tenth man (the richest) would pay £59.

So, that's what they decided to do..

The ten men drank in the bar every day and seemed quite happy with the arrangement, until one day, the owner threw them a curve ball.

"Since you are all such good customers," he said, "I'm going to reduce the cost of your daily beer by £20". Drinks for the ten men would now cost just £80.

The group still wanted to pay their bill the way we pay our taxes.

So the first four men were unaffected.

They would still drink for free. But what about the other six men?
The paying customers?

How could they divide the £20 windfall so that everyone would get his fair share?

They realised that £20 divided by six is £3.33. But if they
subtracted that from everybody's share, then the fifth man and the sixth man would each end up being paid to drink his beer.

So, the bar owner suggested that it would be fair to reduce each man's bill by a higher percentage the poorer he was, to follow the principle of the tax system they had been using, and he proceeded to work out the amounts he suggested that each should now pay.

And so the fifth man, like the first four, now paid nothing (100% saving).

The sixth now paid £2 instead of £3 (33% saving).

The seventh now paid £5 instead of £7 (28% saving).
The eighth now paid £9 instead of £12 (25% saving).

The ninth now paid £14 instead of £18 (22% saving).

The tenth now paid £49 instead of £59 (16% saving).

Each of the six was better off than before. And the first four continued to drink for free. But, once outside the bar, the men began to compare their savings.

"I only got a pound out of the £20 saving," declared the sixth man.

He pointed to the tenth man,"but he got £10!"

"Yeah, that's right," exclaimed the fifth man. "I only saved a pound too. It's unfair that he got ten times more benefit than me!"

"That's true!" shouted the seventh man. "Why should he get £10 back, when I got only £2? The wealthy get all the breaks!"

"Wait a minute," yelled the first four men in unison, "we didn't get anything at all. This new tax system exploits the poor!"

The nine men surrounded the tenth and beat him up.

The next night the tenth man didn't show up for drinks, so the nine sat down and had their beers without him. But when it came time to pay the bill, they discovered something important. They didn't have enough money between all of them for even half of the bill!

And that, boys and girls, journalists and government ministers, is how our tax system works.

The people who already pay the highest taxes will naturally get the most benefit from a tax reduction.

Tax them too much, attack them for being wealthy, and they just may not show up anymore.

In fact, they might start drinking overseas, where the atmosphere is somewhat friendlier.

David R. Kamerschen, Ph.D.
Professor of Economics.

For those who understand, no explanation is needed.
For those who do not understand, no explanation is possible

cricketman

Well yes it is, but it is completely irrelevant to this thread

I know you go on and on about the entitled poor, but your mindset is one focussed on the UK where many "poor" do have this attitude

This thread is about Spain where the situation is completely different. Millions of people have no jobs with no prospect of one, and are struggling to feed and shelter their families. I dont think trying to find a solution for them is giving in to the entitled, but just trying to eliminate daily suffering in an unfair world

Try watching Andalucia Directo as Pocoloca suggested

rachelk

I'm still always surprised at how many people can close their eyes to the misery of others or worse, blame them for it.

amideislas

It's not arguable that there is poverty. The question is what to do about it.

There is always a vibrant and ongoing debate about taxation and how we should better support the poor. Which is true, and indeed relevant to this thread.

The argument I'm making is that all taxpayers already do submit a lot of support toward the poor (in case nobody noticed), which places increasing burdens on all of us - and in many cases, actually pushes many of us further into the "poor" category, making us even more reliant on welfare.

The support we can afford may not be enough to raise everybody out of welfare, but rising above welfare is subject to many other factors than simply welfare - it has even more to to do with education, opportunity, willingness to contribute, etc..

But one of the other key factors minimising the effectiveness of our welfare system is the unfairness of the system that pays for it, which we like to believe is unfair because of the "haves", who we also want to believe do not contribute their fair share, despite being the ones who demonstrably contribute the most. And more than monetarily - the "haves" also build businesses, which hire people, and get them back on a track to prosperity.

Yet, we like to believe the solution is simply to increase the burdens on the "haves", which, as that anecdotal story illustrates, the entire notion is wholly unfair to those who already contribute the most, and only serves to discourage the very prosperity that demonstrably already contributes the most to the welfare system.

It seems clear to me that we should be actively promoting prosperity and economic development, not welfare. Not giving stuff away, but creating opportunity. Welfare only serves to stifle economic development and prosperity, which is the very thing that enables us to support a welfare system. It's self-defeating.

You can give away fish, but until you give them a lake and a fishing rod, you'll forever just be giving away fish.

So, spend less on fish, and more on building lakes and fishing rods.

cricketman

Again, you are not talking about Spain, you are just being dogmatic

What welfare are you talking about? The 400 euros per month that each household is entitled to if they have no other source of income and go on training schemes - which could be withdrawn at any moment?

That hardly breaks the bank. Especially compared to the 20 billion euros given to Bankia which hardly made a dent in their balance sheet

The proportion of taxes that go on "welfare" (whatever that is) is very small. And remember that most of welfare payments go to pensioners.

Is everybody on here happy to foresake their state pension? Surely people should have saved much from their own pockets to fund their retirement

amideislas

A testament to my point - your entire argument seems to live in the notion that there should be greater welfare, as opposed to greater opportunity to prosper.

In fact, it could be argued that your view subtly suggests that prosperity is a bad thing and should be penalised so that we can sustain the greater welfare you seek.

In my view, that's entirely bass-ackwards. We should be doing everything to facilitate prosperity for everyone, not penalising it. How is penalising prosperity ever going to make anyone prosperous?

cricketman

You're just making sh*t up. I've not said any of the above. Of course jobs are what is needed, but while there are no jobs, people need looking after

chrisjolly

I understand what you are saying but what I am trying to say is that each of us should be responsible for our own destinies. I live in India for several months every year where there is no benefit system whatsoever and all the people we know however rich or poor take on the responsibility for their own families etc. Its just a different way of looking at it and in many ways one we could all learn from.

Pocaloca

What about all that overseas aid that flows into India?

Hardly a model example of self-sufficiency, is it?

Pocaloca

I don't think he's suggesting that at all. Go back to the original meaning of "welfare" i.e. health and well-being. The responsibility of the state should be to ensure that basic human needs are met - healthcare, education, enough to eat, a roof over your head. If it doesn't do that, as Rachel says, it has failed. This doesn't have to mean penalising prosperity, just sharing it out in a fairer way.

There is this romantic idea amongst right-wingers that if the rich prosper, their prosperity will trickle down to the poor. That's bollocks. Look at India - billionaires on one side of the city and slum-dogs on the other!

chrisjolly

and when was the last time you visited Mumbai?

cricketman

I haven't but I have work colleagues who have. They say they never want to go back because it makes you doubt your very humanity

Try reading Shantaram

I'd rather not live in a world where people have to hack off a couple of limbs in order to make a living - or where young children prostitute themselves so that they can eat.

I guess our eyes see only what we want them to see

Domino

But if those who were unemployed and paid nil were not invited the bill would only be £60 and as those "freeloaders" were not there everyone could then pay their own way.