No wonder we are struggling here:
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Is that any more valid that the whine, by a USian pol, that half of USians donât pay income tax? It has been aired here, several times, how many states receive more benefits from the Federal government, than the government receives from the state in taxes. How does education funding work in the UK? Is college as expensive as it is in the US? How much do people pay out of pocket for medical insurance and care, vs what is paid by the national health program?
Steve
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Well, one reason why folk are usually eligible for benefits is because theyâre poorâŚmaybe either working poor or unemployedâŚhence the low taxes.I could see that as something thatâs obvious, reallyâŚexcept to readers of the Mail.
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Another thing that is obvious is that if you already have a relatively large supply of working poor, importing more working poor from other countries will increase the labor supply and will further depress average wages for the working poor.
Now that can be generally true, but not necessarily true for all cases. For example, if the local working poor have certain jobs that they will not take regardless of wages, but the imported working poor will take those jobs, then the affect on average wages in that sector may not affect the local working poor. An example of this might be agricultural work in the USA. By and large, people who have been residents of the USA their entire life do not want to work in agriculture, at least not in direct agriculture actually working outdoors in the fields. But new immigrant poor are more willing to take those jobs.
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Quite correct, but what economy can survive in these conditions?
Itâs really just the old law of supply and demand. The government creates a demand and it gets filled!
Um, the US economy has almost since the beginning of the income tax, which originally taxed only people making 4 times the average per capita income, so 90% of the country escaped it.
When it was reinstituted in 1913 (the USSC declared Lincolnâs income tax invalid, then the 16th Amendment was passed), just 3% of the population was subject to the tax.
And yes, there were direct payments to parts of the populations, most notably veterans and widows benefits. There were also large swathes of the population eligible for things like the Homestead Act, slavery reparations (paid to slave owners for the âtakingâ of property), and such. Thereâs more, too, but youâd have a crack a book to find out.
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Another tricky way of generating headlines like these in order to attract the attention of the credulous, is to leave out many of the various taxes that folk actually pay. Since this twaddle refers specifically to âBritainâ youâre not just looking at income tax as a revenue source, but various other forms of taxation âŚVAT being a prime example.
I remember back in the early 1970s, when VAT was first introduced, and dad was wittering on about a tricky way to tax the rich and poor alike. It wasâŚand still isâŚincluded in the purchase price and not itemised in the way it is here in the US. âYou watchâ sez he âit wonât stay this rate for longâ. Well, he was right, wasnât he?
Another reason why the Daily Mail is the chosen newspaper among those in the know for lining the bottom of their budgieâs cage.
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The Mail is only reporting figures issued by The Office for National Statistics (ONS). If this upsets people then try the Telegraph:
https://www.telegraph.co.uk/business/2024/12/19/more-than-half-of-britain-receives-more-in-benefits/
The original data can be found at the ONS:
Iâm pretty sure he is talking about the UK. Recently I heard the UK described as âone wealthy city called London, and the rest of the country in povertyâ or something like that. But the UK has been on the decline for nearly 100 years already, from a most powerful empire, to a smaller empire, to a small country of squabbling nations.
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Yes, itâs about the UK. As for the areas outside of London:
VAT is a consumption tax. You pay only when you spend. Not when you save or invest. Or hold assets like real estate.
Itâs likely the poor pay a higher fraction of income than the wealthy.
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Think about that, if the promised tariffs are enacted in the US, in conjunction with an income tax cut.
Steve
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Maybe but VAT is not a single rate. Basic foods are exempted, luxury goods have the highest rate so itâs not as regressive as some claim.
Is American sales tax a version of VAT?
The Captain
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I suppose so, but note VAT is a national tax paid by all. Sales tax is a state tax and rates and exemptions vary widely.
In the US a proposal for a VAT implies a national sales tax in addition to our state sales taxes. In my area sales tax is incremental in many areas with total close to 10%. I canât imagine voters approving additional sales tax for the feds. There must be easier taxes for the feds to collect.
Plus, of course, VAT is on the value add and sales tax is on the price.
Merry Christmas everyone!
Just want to point out that you and conservatives in general have totally missed the forest because of a preoccupation with the tree of big government. What you described for the UK is happening throughout the world in countries that are aging.
Politics doesnât matter. Economic theory doesnât matter. The impact of demographics is simply too large.
As a country ages such that its working population declines relative to retirees two things inevitably happen. The first is that the economy slows. It happened to Japan and it is happening to Europe and China. A slowing economy means more people need a safety net. The second is that on a relative basis, fewer workers are supporting more dependent elderly.
As a consequence, the national debt rises along with the tax burden of the decreasing number who can pay taxes.
Empirically the long term impact of immigration, even of poor immigrants, is an economic positive. Immigrants generally work really hard, pay taxes, and their children are generally more successful than their native peers. Immigration acts to mitigate or even reverse the negative impacts of an aging population.
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This is absolutely true. There is no doubt about it, and most of history shows it. My comment was about short-term effects on the working poor.
This is also generally true. The only thing that remains to be seen is if immigrants that refuse to integrate into society, or integrate much more slowly than previous generations of immigrants did, also become successful.
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I think most agree we need to revise immigration quotas to address current needs. But we also need to control illegal immigration. And address the problem of asylum with prompt hearings of applicants.
We should favor immigrants with needed job skills.
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At the same time, Europe and the UK have been big (or bigger) on larger government and higher taxes for a long time before their populations began to age. Think of the National Health Service just after WW2 and Thatcherâs pushback in the '80s on continually increasing the use of OPM (âThe problem with socialism is that you eventually run out of other peopleâs money.â)
DB2
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⌠where we find:
A much greater proportion of retired individuals were net recipients (85.3%); this is largely because of the classification of State Pension and Pension Credit as cash benefits. This was a 3.7% reduction from FYE 2022 bringing it back in line with pre-coronavirus values. In comparison, 45.3% of [non-retired] (Effects of taxes and benefits on UK household income - Office for National Statistics)people were net recipients, contributed to by greater benefits in kind received for education and childcare.