See also: • Creative Capitalism • Economic Wargames • Election Fever • Pyramid Economy
money dosh
TAX

UK BUDGET 2009

Top rate tax increase from 40% to 50%
This is an illusion!
Actually it is a £2.22 per week tax on the poor!

People are being duped by the government and the "rich" people.  It is a commonly expressed view that the rich people should pay more tax.  Sadly there is a serious level of emotional distress in these "intellectual" comments.  The trouble with humans is that they interpret their world first emotionally and then intellectually.  Given the way people are brought up (in the industrialised world) they are strangled from birth with judgemental, prejudicial, moralistic junk. [see cascading oppression]  The natural perception of balance and harmony is basically perverted by the current prevalent assumptions about the way the world works.  Children are constantly treated as if they would be greedy, selfish, violent and deceitful if they weren't kept in line.  This means that they are endlessly treated unfairly and deprived of a reasonable equality with others in the community. [see educating children]  Worse than this, any resistance or objection or even reasonable questioning is treated as immoral by reactions like "Don't be cheeky.", "Don't be rude." and "Don't argue."  and (ironically a favourite of teachers) "Don't be clever!" [see Uncle Adolf Syndrome]  Ultimately this results in a society that feels cheated.  When people "feel" cheated it is natural that they want to redress the balance (the natural harmony which is in all humans) and when they spot someone who has "more" or is getting away with something, they are compelled to complain.  It is rationalised and intellectualised into the paradigms of the culture "They are greedy" or "That's not fair."  We live in what is almost humorously referred to as a "free" market economy and this actually results (because of the consumer based value culture) in the majority feeling they have an unfair deal.  Unfortunately this leads them to seeing the people with more as somehow having it unfairly.  Now in the UK budget of 2009 the higher rate income tax was raised from 40% to 50%.  This, tragically, is perceived as fair by the distressed majority of the population.

The following was snipped from http://www.ukbudget.com/UKBudget2009/index.cfm
The top rate of tax will rise to 50% for the 350,000 people with income over £150,000 - from April 2010. At the same time, those with income over £100,000 will lose all personal allowances - which will cost about 700,000 people something like £220 pm. Tax deductions for pension contributions for those earning over £150,000 will be limited to basic rate - from April 2011, with some rules to stop early contributions. These measures are expected to raise £7 billion pa.

But this is an unholy illusion.  The population of Britain is over 61 million.  So that is approximately 0.57% or 1 in every 200 people who earn over £150,000 per annum.  Unfortunately most people can't look around and estimate that 1 in every 200 people around them are earning that sort of money because the rich tend to cluster in groups.  It is also true that the "rich" people are the one's running the show.  Just keeping these figures simple for a moment a person earning £150,000 per annum is taxed at 40% resulting in a take home pay of  £90,000.  So the government wants to tax them at 50% resulting in a take home pay of £75,000.  They lose £15,000 per year.  What are these directors of companies, these entrepreneurs, these independent freelance sharp people going to do?  Well it doesn't take a lot of working out.  They will increase their pay.  In order to make the same income as before they now need a pre-tax income of £180,000 such that when 50% is taxed they are left with £90,000.  In fact they'll probably add another ten grand for good measure.  They largely control their own pay.  It is not hard for them to emigrate in many cases like rats deserting a sinking ship! (See Zyra's Squeak! ... Splosh! page) but it can be more lucrative for them to remain if they can increase their salary.  So what happens to the price of the goods and services that, further down the line, are being sold to Joe public?  The prices go up.  And poor old Joe is not in such a strong position to hike his wages up a notch to compensate for the higher cost of living.  There is no escaping from the fact that it is the poor people who will be "taxed" to raise this £7 billion for the inland revenue.  I am sure the government seriously believe they need the money and maybe they do but to suggest they are taking it from the rich as some sort of moralistic notion is a deception and a sad one at that.  Sad because the "poor" people can be heard cheering in the alleyways and congratulating each other over a pint of (increased price) beer in the pub.  It is all an insidious device to maintain oppressive power and control over the population.

We should be a free collection of people in our culture.  We should all be taxed the same and receive the same benefits.  Everybody should be allowed a house to live in and a reasonable basic living.  Everybody should get that.  The rich and the poor.  Then everybody can improve their life, increase their opportunities and their happiness by doing more to earn more.  As they earn more every penny is taxed at the same rate.  That way richer people pay proportionally more tax.  It is that simple.  But what this avoids is the poverty traps and the accumulation of wealth into families and pockets of society.  What this achieves is real unsullied capitalism.  [see creative capitalism]  Capitalism is primarily a mechanism for accumulating wealth to afford more expensive, larger scale, more efficient mechanisms of surviving.  The reason very expensive satellite communications work is because they are far cheaper per message than sending ships full of letters around the world.  This can only be achieved by the mechanism of accruing capital.  If everybody who wanted a swimming pool in a town had to build their own it would be very expensive and inefficient.  Allow someone to work hard and join forces with other like minded people and they have the choice and the opportunity to build one swimming pool for all to share.  Tax every one the same percentage on every penny and there is more incentive for people to work harder to earn more because at every stage they receive a proportional increase in their personal wealth.  Ultimately it is what we do that increases our real wealth not what we can accumulate from others' toil.  But have an escalating tax regime and the incentive soon dies down.  You can work twice as hard but you won't get twice as much.  This tends to polarise the population into a small elite group of very rich people living on the toil of the majority of poor people.  And the real tragedy of this is that it is divisive and enslaving.

There are only two ways to get a grip on what is the right thing to do with respect to tax.  One way is to analyze all the details until you actually know how the system works (like you could know how a nuclear power station works) and then make a well informed decision.  That, incidentally, is probably unrealisable.  The other way is to put yourself in the other person's shoes and ask yourself if it still feels right.  If it is not right then it is not right.  You don't have to know what the right thing is to know what the wrong thing is.  I know that this hike in tax is the wrong thing.  I don't know what can be done in the short term that is right.  But the only result of this tax increase will be a lot of rich people getting richer and chuckling away to themselves in secret as the poorer people are subdued by the illusion that the rich are getting their just deserts.  And I am absolutely sure that the people who will give the money, the £7 billion, to the treasury will be the poorer section of society.  £7 billion represents about £115.41 (that's £2.22 per week) for each of the remaining 60,650,000 people in the UK who earn less that £150,000 per annum.  Ask yourself if you think over the next year it is possible with all the emphasis on how we are all suffering and we all have to pull together that actually it is the poorer people who will be paying the £7 billion to the treasury in raised prices.

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