Top earners, means testing etc.. Justified?

We

Just because I don't feel fully confident enough in my opinion about supporting/not supporting means tests and charging extra for higher earners, I'd like to rattle a few feathers maybe and get a debate going, primarily so I can get a better understanding.

OK so, taking the medical cards for over 70's as an example.. Why should wealthier over 70's be refused the same privilege that some not so well-off has acquired? They both pay taxes, and by doing this both have over the years, contributed large amounts of their income to the state to fund schemes like this(the higher earner probably more-so).. Considering the higher earner has paid over the years to fund the free medical card given to the lower earner, why does the higher earner not receive the same treatment?

How can you make a distinction between who should pay more based on how much money they earn? If you go for a meal with your wealthy friend would you expect him to contribute more than half the price simply because he earns more money than you?


Once again, I have no opinion on this matter because I haven't fully thought about it, so let's keep this from being a flame war...
Also, please correct me if I've made any mistakes in my rationale and understanding of how these things work, since I am trying to understand it better myself

Scofflaw

We wrote: »

Just because I don't feel fully confident enough in my opinion about supporting/not supporting means tests and charging extra for higher earners, I'd like to rattle a few feathers maybe and get a debate going, primarily so I can get a better understanding.

OK so, taking the medical cards for over 70's as an example.. Why should wealthier over 70's be refused the same privilege that some not so well-off has acquired? They both pay taxes, and by doing this both have over the years, contributed large amounts of their income to the state to fund schemes like this(the higher earner probably more-so).. Considering the higher earner has paid over the years to fund the free medical card given to the lower earner, why does the higher earner not receive the same treatment?

How can you make a distinction between who should pay more based on how much money they earn? If you go for a meal with your wealthy friend would you expect him to contribute more than half the price simply because he earns more money than you?


Once again, I have no opinion on this matter because I haven't fully thought about it, so let's keep this from being a flame war...
Also, please correct me if I've made any mistakes in my rationale and understanding of how these things work, since I am trying to understand it better myself

Well, the rationale behind it is the same as for any redistributive taxation - that a more equal society is both a fairer society and a better one for everyone.

cordially,
Scofflaw

gurramok

A higher earner would not use the Irish public health service, they go private as they want to live longer and can afford it. A non-issue.

silverharp

Scofflaw wrote: »

Well, the rationale behind it is the same as for any redistributive taxation - that a more equal society is both a fairer society and a better one for everyone.

cordially,
Scofflaw

As was proved in the USSR and Eastern Europe in the past:pac:

irish_bob

gurramok wrote: »

A higher earner would not use the Irish public health service, they go private as they want to live longer and can afford it. A non-issue.

i dont believe that for a second unless when you speak of high earners , you mean tony o reilly or dermot desmond

RealityCheck

silverharp wrote: »

As was proved in the USSR and Eastern Europe in the past:pac:

Or as is proved in Sweden :cool:

Exile 1798

silverharp wrote: »

As was proved in the USSR and Eastern Europe in the past:pac:

No, as was proved throughout Western Europe - the wealthiest region in the world with the highest standard of living.

Sliding tax works, public healthcare works - look around you. The much maligned welfare state has been an outstanding success.

silverharp

RealityCheck wrote: »

Or as is proved in Sweden :cool:

In spite of probably , Sweden has alot going for it , It had a very creative and innovative industry and managed to stay out of WW2.

JonathanAnon

I dunno, is it not one of the advantages of Capitalism that every man knows that he could become very wealthy if he works hard and gets lucky. Taxing punters to the hilt, and having such a generous dole is more communist thinking. Discourages lads from working if they get money for nothing.

People on the dole should have to sign on every day, and be made work a few hours, even if it is posting letters etc etc. This would relieve a number of civil servants and prevent fraud.

Permabear

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Zynks

What bugs me is that I am always just outside the "brackets" for all kinds of tax breaks, support, grants, entitlements. Last year I worked on my figures and it was getting close to me being better off if paid half the money I was. I must recheck that under the new scenario. Maybe a part time paternity leave is due...

Exile 1798

donegalfella wrote: »

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Capitalist economies married to government regulation and fair taxation. Public health, education, infrastructure. A Labour ethos.

How lucky we all are to be born at this time and in this region.

Permabear

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Scofflaw

silverharp wrote:

As was proved in the USSR and Eastern Europe in the past

Some of us appear to be unable or unwilling to distinguish between paying tax on parts of one's earnings in a market economy and a non-wage command economy.

donegalfella wrote:

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Certainly there are always people who are willing to either ignore the evidence that fairer societies are better societies, argue that the success of fairer societies comes in spite of their fairness, or bend the meanings of 'fair' and 'better' until they are unrecognisable.

cordially,
Scofflaw

Exile 1798

donegalfella wrote: »

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Which continued throughout the rest of the 20th century.


Is society more just today then it was a hundred years ago? Does someone born into a modern housing estate have a better life, and a better chance for a better life then someone born into a Dublin slum 100 years ago?

thebman

We wrote: »

How can you make a distinction between who should pay more based on how much money they earn? If you go for a meal with your wealthy friend would you expect him to contribute more than half the price simply because he earns more money than you?

If my friend insisted on going to a restaurant I couldn't afford, I'd give him that ultimatum alright.

It could go something like this.

We can go there if you like but I'm not paying those prices so its on you if we are going. Lets go to <insert random insect infested fast food joint> instead, what do you think?

I think it is only fair that those that have benefited most from our society had most to be thankful for and therefore more to contribute.

Permabear

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Exile 1798

donegalfella wrote: »

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Yes, society should be ordered according to the characters of a fictional novel.

Zynks

I've spent years saying I wouldn't mind scandinavian income tax levels if I got the same benefits such as:
- A fantastic transport system
- Great motorway network
- A decent health service
- Subsidised chilcare (no family pays more than €200 p.m., no matter how many kids)
- Improved Paternity and maternity leave (paid by the state)
- A system that looks after its people
- A good, responsible, accountable government
- Low road tax (around €150 p.y. for a 2 litre)
- Low insurance (they don't have a claims culture and individuals are pretty much responsible for themselves)

Now, here we are paying pretty much the same overall taxation than the Swedes, but what value are we getting for our money?

Surely we deserve the government we have!

Scofflaw

donegalfella wrote: »

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I consider it fair for people to be born free and equal under the law and to have the freedom to make of their lives what they will. Others consider it fair to compel productive, innovative, and diligent individuals to support everyone else. I know which definition I find to be unrecognizable![/QUOTE]

That would indeed be the kind of 'bending' I'm referring to. Part of the problem with your redefinition, though, is that there is no evidence that the majority of "productive, innovative, and diligent individuals" object to having a portion of their earnings taxed in order to improve society at large. That portion of society is also the most mobile, and it usually moves only when there is a lack of opportunity, not as a result of tax.

Most of the 'case material' for the movement of high earners is actually based on individuals whose income is measured in millions - a level at which you can to a large extent ignore the rest of society. We note, however, that such high-worth individuals do not choose to move to places where they would be entirely untaxed, such as Pakistan's North-West Frontier.

cordially,
Scofflaw

Permabear

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Scofflaw

donegalfella wrote: »

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If you prefer to use égalité, please do! Which sense of a word precedes which has never settled an argument over what most people understand by it, and very few people understand it to refer to a system in which few are rich and many are poor. To do that requires the services of philosophers - or sophists.

donegalfella wrote: »

The majority don't object? I've been listening to the radio on and off since this morning, and I haven't heard a single person come on to say "You know, I'm thoroughly delighted that the Minister has doubled the income levy, because now he can take even more of my money to help improve society at large." I have heard many hardworking people wonder how they will pay their mortgages, meet their expenses, and keep their businesses running now that the state is taking an even larger slice of their income.

Oh, sure - but you're conflating objections to a price increase with objections to paying at all.

I object to taxes going up currently because I see it as evidence of financial mismanagement by the government. They've had hugely abundant tax takes for a decade, yet within six months of things turning sour they're having to put tax rates back up - so they spent everything that came in, and not only did they not put any aside for a rainy day, but they ramped up expenses to a level that was unsustainable without the boom! I'm not objecting to tax in principle, any more than I object to the pricing of a cup of coffee in principle - I'm concerned that I haven't had value for money. You, on the other hand, are objecting to the tax in principle - but you're in a minority, as I'm sure you know.

donegalfella wrote: »

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I'm sorry - are you telling me that the Scandinavian countries have an actual emigration problem? As far as I can see from the facts, the Scandinavian countries are experiencing net immigration. Perhaps you're talking anecdotally, though.

donegalfella wrote: »

That's a facetious response. One can imagine many obvious reasons why high-net-worth individuals would not want to move to northwestern Pakistan. Declare the South of France to be an entirely tax-free zone, however, and I think you would witness quite an influx.

It's a reductio ad absurdum - which is, I suppose, necessarily facetious. The reasons for not living in Pakistan's Frontier region are largely the reflection of the tax-free environment - no basic services, no security, total reliance on family and personal connections. The reason tax havens are small is because they're parasitic - the South of France would be too large.

cordially,
Scofflaw

segaBOY

thebman wrote: »

If my friend insisted on going to a restaurant I couldn't afford, I'd give him that ultimatum alright.

It could go something like this.

We can go there if you like but I'm not paying those prices so its on you if we are going. Lets go to <insert random insect infested fast food joint> instead, what do you think?

I think it is only fair that those that have benefited most from our society had most to be thankful for and therefore more to contribute.

Those who "benefited" the most did so through hard work and progression-I think they should be allowed to reep some level of rewards instead of being levied with crippling taxes.

thebman

segaBOY wrote: »

Those who "benefited" the most did so through hard work and progression-I think they should be allowed to reep some level of rewards instead of being levied with crippling taxes.

They do they have and earn more money, they are just being asked for a little more of the new money they earn in tax rather so to say they aren't getting any level of reward is misleading.

Permabear

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silverharp

Scofflaw wrote: »

I object to taxes going up currently because I see it as evidence of financial mismanagement by the government. They've had hugely abundant tax takes for a decade, yet within six months of things turning sour they're having to put tax rates back up - so they spent everything that came in, and not only did they not put any aside for a rainy day, but they ramped up expenses to a level that was unsustainable without the boom! I'm not objecting to tax in principle, any more than I object to the pricing of a cup of coffee in principle - I'm concerned that I haven't had value for money. You, on the other hand, are objecting to the tax in principle - but you're in a minority, as I'm sure you know.

You've pointed out why most free market types dont like big gov. You have this economic player that doesnt adhere to basic economic concepts , creates moral hazzard by corrupting other elements in the economy and when they get it wrong they bring the prudent and thrifty down with them.
whats to like? any supposed benefits are surely overwhelmed by the damage the gov. has done and will do over the next few years.
A classic is the forecasts put out of expected GDP growth from 2011 , I'll go as far as saying they are lying or are so disconnected that they are still in their own bubble and havnt a clue, either way they are setting people up for a fall by not dealing with reality in the way that individuals would at least have a fighting chance of doing.
Personally from a pragmatic point of view I'm not calling for 0 taxes but I see no reason why the gov. has to be larger then say 10% of the economy. I wont get my way but hay its good entertainment to watch these clowns flounder from crises to crises, maybe someday the populus will wise up before the economy becomes a wasteland

Scofflaw

donegalfella wrote: »

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I was thinking of what children are taught, myself - indeed, what they work out for themselves. However, you might also ask yourself why it is that the systems that are supposed by libertarians to be most 'stifling' are the most socially mobile:

donegalfella wrote: »

Out of curiosity, what leads you to conclude that such a "system" would ensue in the absence of a welfare state? Do you actually think that people would become poorer if the welfare state did not exist? On what basis, given the consistently upward trend in living standards under liberalism in the USA and Britain prior to the advent of the welfare system?

Consistently upward trends in living standards for whom, exactly? Most of the answer, though, lies in the huge increase in the efficiency of production. When we define poverty relatively, we find that it hasn't changed dramatically, even though our poor can now afford things their ancestors couldn't have dreamed of without hallucinogenics.

donegalfella wrote: »

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I have to point out again that the majority of people agree with such a mandate.

donegalfella wrote: »

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Personally, I'd say that more people are now in the position of a person with a sudden onset of a serious disease - they'll buy any snake oil at the moment.

donegalfella wrote: »

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Mm. That's one of those correlative assumptions, though. Ask how many of the same demographic in Ireland are currently considering leaving, and you'd get a very high proportion again. Look at the Eighties, and you'll see that it wasn't just 40 percent thinking about it - it was 30% of graduates doing it. But we didn't do it because of the high income taxes - we did it because there wasn't any work. The lucky ones stayed, and paid. So the assumption that that mobile cohort think about leaving Denmark because of high tax rates would need further proof - particularly since most of them return with 3-4 years.

donegalfella wrote: »

Again, you're suggesting that a tax-free environment would have no basic services and no security; you even seem to be hinting that Ireland would become analogous to Pakistan's frontier region if we abandoned the redistributionist social democratic model. Do you have any actual reason to believe that this would be the case?

Hm. Actually, I was thinking of it as a result of a no-tax environment, rather than a society that allowed for essential government services ('night watchman government') but didn't follow a redistributionist model - the two are separate questions. Abandoning a redistributive model alone would not lead to a Frontier situation, but an nineteenth century one.

cordially,
Scofflaw

segaBOY

thebman wrote: »

They do they have and earn more money, they are just being asked for a little more of the new money they earn in tax rather so to say they aren't getting any level of reward is misleading.

I wish that was the case. If you look at the statistics high earners already shoulder most of the tax burden. "A little more" tends to be an awful lot more on the grand scheme of things while they are not entitled to any real benefits in return. I come from a higher middle income family-never received a grant in college, never got free health care, my father worked in excess of 85 hours a week and is left with a massive income tax bill for nothing extra in return.

It hardly seems fair that those who manage to succeed in an economy are made pay more than their fair share-the fact is the worse you do in Ireland the more hand outs you get and in my general "those who do well should get rewarded" logic such taxes stunt progression and morale of the most talented and hard working individuals in our society leading them to do less work or simply emigrate.

I agree with some level of a tiered tax system but it takes the biscuit in Ireland. I heard a trade unionist on the news after the budget say (Why couldn't we raise higher income levies to 6% for those on over €100k-that way we could keep the minimum wage earners out of the loop" a bit pathetic considering they are asked to pay around €7 a week in taxes as opposed to €30k + in taxes annually that the higher income earnr is levied with.

Permabear

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Alcatel

Being a "top earner" in Ireland is not a great position to be in. For one, there's this idea that anyone earning over 35,000EUR PA (when they get into 41% territory... 41 euro in every 100, 410 in every 1,000 you earn over that....) is a high earner. 70k is now highly wealthy, apparently. It's not poor, but it sure as schuks ain't highly wealthy. And the more you tax 'em, the less wealthy they get...

Our definition of who's on top is flawed - yes, a banker earning a few million in bonus is overpaid. But a hard working entrepeneur, or managing director, with an average salary of 120,000EUR PA in a successful business at last salary survey I saw, is paying 38,000EUR PA in tax (very roughly, not accounting for car, marital status, etc) today.

Yet, an MD earning that salary is not entirely mobile - he or she can't move country or become a tax exile, like a really, really rich person. He or she is the middle-class rich, and they can't do anything if the levy goes up by 6%, 12%, 100% on anything over 70k or 100k. He or she is usually somebody who is good at what they do and in being good at what they do, drive's business and creates jobs and wealth in the economy.

To be frank, I think that there's two incorrect views in Ireland:
1. There is some uber-rich class who can be taxed that would close the entire gap in our finances.

2. Anyone earning over 70k should be ripped apart by tax, because they earn too much. Well done for being successful and all, but f*** you, hand it over so as we can pay the dole.

I believe in a fair society. But fairness is a two-way street, and people who earn 120k, the average MD salary, is not living a life of luxury; they're working huge hours, often have little time for themselves or their family or social lives, and are creating more jobs and wealth - or, in this climate, fighting to keep them.

Permabear

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Scofflaw

donegalfella wrote: »

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So? Is there such a society? No, there isn't, and nor would I support it - but this is a typical response in a libertarian argument. The European social democracies aren't completely redistributionist (or completely statist, come to that) - they balance the right to retain earnings with social redistribution.

Mind you, even in a completely redistributive society, there is social mobility - it just isn't based on money.

donegalfella wrote: »

For everyone, across the board.

At different rates and to different degrees.

donegalfella wrote: »

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No, the problem isn't that they can't "drive BMWs and wear Gucci" - the problem is that they can't afford decent healthcare or education, can't afford to live outside high-crime areas, can't afford healthy food, don't have security, and know that they're at the bottom of the heap. If it wasn't hard being poor, people wouldn't try to climb out of it.

donegalfella wrote: »

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It certainly makes it socially acceptable - and in this case, the majority of people find gross inequality immoral.

donegalfella wrote: »

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Oh yes.

donegalfella wrote: »

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42% of educated people under 40 - sorry, just comparing like with like here - I doubt the Irish figure is that far off.

donegalfella wrote: »

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While other redistributive societies went ahead quite happily. The problem was not that the government was allowed to borrow-tax-spend, but that they were bad at it.

donegalfella wrote: »

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There's a reason we're not in the nineteenth century any more, and don't follow those policies. They worked for too small a number of people to be socially stable (except by virtue of a repressive state apparatus and the occasional use of the army against the populace), and trying to go back to them would simply invite the same outbreaks of social instability that took us from there to here.

Fortunately, I think enough people have learned from history to avoid the mistake you're proposing.

cordially,
Scofflaw

gurramok

irish_bob wrote: »

i dont believe that for a second unless when you speak of high earners , you mean tony o reilly or dermot desmond

Yes, anyone who can afford priority healthcare(not just millionaires) is not going to sit on a trolley in the Mater for 6 hrs awaiting treatment nor go on a long waiting list for a cancer screening.

Its common sense and they do not need a medical card.

Permabear

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thebman

donegalfella wrote: »

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You make use of state provided facilities and infrastructure so you are obliged to pay taxes. You aren't giving them money but paying to maintain services.

So anything that enjoys a semblance of democratic consensus is socially acceptable? Such as stoning women to death in Iran for alleged infidelity?

Well yes as you can see stoning women to death is acceptable in society in Iran. If there were no government it would still be acceptable as the majority would do nothing to stop it.

As you can see, it is not acceptable in our society by the majority so we don't allow it.

Permabear

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Zynks

donegalfella wrote: »

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You might have to move into a big city in this case. I doubt there would be much infrastructure left in Donegal if the costs were to be paid solely by the users, specially in the country side. Unless there is some hidden wealth around there.

Zynks

Or you could also buy this: http://maisonbisson.com/blog/post/11541/sealand-for-sale-2/

Permabear

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Permabear

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thebman

donegalfella wrote: »

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Well you get that money back in other ways by use of other services. In the end, it should balance itself out. I guess one logic would be that children are necessary for society to have a future so we support them and when you have your own children, you'll get those benefits too. If you choose not to have children then you will most likely have to make use of state facilities and the working people will have to pay for those at that time so you can consider your taxes paid to educate them as an investment.

My point is that the approval of the majority does not give a practice—whether it be stoning women or stealing people's private property—any de facto legitimacy.

It does within that society. If you are outside that society and disagree that is another issue. If you are within the system and disagree, you can try to persuade other people to your opinion and push for change.

donegalfella wrote: »

I don't support government ownership of infrastructure, full stop. If you were to drive on many of the roads in Donegal, you would be forced to conclude that even the dreaded private sector could do better.

No the private sector wouldn't bother with those roads since they couldn't make a profit off them and you'd be trying to get to the profitable areas by traveling over fields if you can make it. Hope you don't run into a collapsed bridge that wasn't profitable to replace.

RealityCheck

donegalfella wrote: »

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You must be joking. I mean if that was the case the majority of roads in Donegal and across the country would be closed. We have one of the highest proportion of roads per head of population in Europe, and most of them are poor back roads.

Zynks

thebman wrote: »

No the private sector wouldn't bother with those roads since they couldn't make a profit off them and you'd be trying to get to the profitable areas by traveling over fields if you can make it. Hope you don't run into a collapsed bridge that wasn't profitable to replace.

No, he couldn't. These fields are private property and he could get shot for trespassing

thebman

^^ lol, good point ^^

RealityCheck wrote: »

You must be joking. I mean if that was the case the majority of roads in Donegal and across the country would be closed. We have one of the highest proportion of roads per head of population in Europe, and most of them are poor back roads.

I'd like to add that the cost of maintaining these unprofitable roads in Donegal offsets at least some of the cost of paying for some kids education.

So overall while some people inevitably don't get everything back that they put in as no system is fair on everyone, most people in our society would agree that they are happy enough with this system as they aren't protesting for removal of government.

segaBOY wrote: »

I wish that was the case. If you look at the statistics high earners already shoulder most of the tax burden. "A little more" tends to be an awful lot more on the grand scheme of things while they are not entitled to any real benefits in return. I come from a higher middle income family-never received a grant in college, never got free health care, my father worked in excess of 85 hours a week and is left with a massive income tax bill for nothing extra in return.

I never got any of those things either. You'll find your father got more than you'd think out of the system if you analyse everything he got. Middle class and upper class areas are usually better maintained by the council than areas with primarily lower class people living in them.

It hardly seems fair that those who manage to succeed in an economy are made pay more than their fair share-the fact is the worse you do in Ireland the more hand outs you get and in my general "those who do well should get rewarded" logic such taxes stunt progression and morale of the most talented and hard working individuals in our society leading them to do less work or simply emigrate.

I agree with some level of a tiered tax system but it takes the biscuit in Ireland. I heard a trade unionist on the news after the budget say (Why couldn't we raise higher income levies to 6% for those on over €100k-that way we could keep the minimum wage earners out of the loop" a bit pathetic considering they are asked to pay around €7 a week in taxes as opposed to €30k + in taxes annually that the higher income earnr is levied with.

I don't disagree that the system is not perfect in Ireland. I think everyone should have make a contribution no matter how small. A small amount from many low earners can equal a significant tax intake and should be looked at.

Permabear

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thebman

donegalfella wrote: »

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And if they require special needs education that you aren't able to provide?

I have no plans to have kids ever but I have no problems paying into a state funded education system for other kids as I can realise the importance of this for our economy and society.

You mean state facilities such as hospitals and the old-age pension? I don't ever plan to become dependent on the state for things like that. I am currently unemployed, and I have no intention of going on the dole, either.

You don't plan on it but it may happen and they will be there whether you want them to be or not. Welfare is also there should your savings eventually run out before you can find employment. The state gives you options, it you that are choosing not to avail of them at the moment because you have the means not to require them. There may be a time when that isn't the case and it is certainly the case for other families at the moment which is why it needs to exist IMO.

Actually, Ireland had quite a network of private toll roads between the early eighteenth century and mid-nineteenth century. You can even buy a book about them.

Yeah the costs have increased since then given the types of vehicles using the roads. I don't think they'd be maintainable by private enterprise throughout the country. You'd have people unable to afford to travel even for interviews for jobs because of the charges to get to the next town.

If we didn't have a state interfering in transportation, we would not have to pay VRT or car tax, and petrol would be approximately one-third of the price it is now. So we would have quite a bit of extra money for paying tolls and keeping up our roads.

Arguable really since you'd have more money, you'd be willing to part more so the car salesman would most likely just charge you the same price and make more profit.

Zynks

donegalfella wrote: »

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Hmmm, so you have the right to come and go, provided you pay (?)...so if you are broke, you stay put?

Permabear

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Permabear

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RealityCheck

donegalfella wrote: »

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Well, I can. You are not going to get private enterprises to maintain many of the rural roads across this country. It is simply not economically viable for them to do so unless they are going to charge extremely high tolls.

Also, what you are suggesting would be an absolute nightmare to put in place. Exactly how do you put in place these many tolls?

Permabear

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