World Inequality Report 2018

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Silvanus:
Indeed it is! You'll notice that you're the only one here who has actually mentioned a literal 100% tax band; Seanchaidh did not.

Funny, even I thought I had. But I did only say 'near'.

In any case, I'd endorse a 100% tax on incomes above a million dollars per year. Especially as a starting point to negotiations (100% was FDR's starting point). I don't think there's any terrifically great additional work that anyone already making a million dollars in a year is going to be doing primarily for the pay.

Silvanus:
Indeed it is! You'll notice that you're the only one here who has actually mentioned a literal 100% tax band; Seanchaidh did not.

See post 11

Catnip1024:

Secondly, there are bands of income - a Premier League footballer is on such a band that it makes little difference whether they get 5k a week more or less at one club, their standard of living is essentially unaffected. If it were the choice between being a neurosurgeon or a local GP for the same money, though, people would probably stick at GP - much less stress, among other things. The reason people go for the specialisations is at least partially for the money. Sure, helping people is also nice, but still.

I can quite assure you most doctors are motivated by things other than money. Many are motivated by a desire to heal people, and seek certain types of medicine that are important to them. There's also a sort of hierarchy of status amongst doctors by different specialisation, and frankly many are after the status.

I wouldn't assume being a GP is worse paid or less stress than a surgeon either - the reverse can often be true. Although consultant surgeons tend to have higher salaries than GPs, a GP of similar experience to a consultant surgeon is likely to be partner in a GP practice and thus earn profits from the practice which can easily make good the difference. In terms of stress, GPs can be horribly overloaded with work in ways surgeons are less likely to. Although granted, a top top surgeon will almost certainly out-earn a GP.

Edit: let's also bear in mind effectively all medical incomes will below any likely 100% (or otherwise extremely high) tax band on the super-rich.

Seanchaidh:

Funny, even I thought I had. But I did only say 'near'.

In any case, I'd endorse a 100% tax on incomes above a million dollars per year. Especially as a starting point to negotiations (that was FDR's starting point). I don't think there's any terrifically great additional work that anyone already making a million dollars in a year is going to be doing primarily for the pay.

As a starting point, it has a unique value precisely in that it provokes the question of what the purpose of wage over a certain threshold is.

That in itself is valuable, or at least more valuable than accepting blind the notion that multi-millionaires need the additional revenue to motivate them to work.

Catnip1024:

Silvanus:
Indeed it is! You'll notice that you're the only one here who has actually mentioned a literal 100% tax band; Seanchaidh did not.

See post 11

You mean this post 11?

Post 11:
You have a president that recognized that social stability required taxing the rich near 100% (incomes, at any rate; FDR wasn't perfect) and spreading wealth around.

Agema:
I can quite assure you most doctors are motivated by things other than money. Many are motivated by a desire to heal people, and seek certain types of medicine that are important to them. There's also a sort of hierarchy of status amongst doctors by different specialisation, and frankly many are after the status.

I wouldn't assume being a GP is worse paid or less stress than a surgeon either - the reverse can often be true. Although consultant surgeons tend to have higher salaries than GPs, a GP of similar experience to a consultant surgeon is likely to be partner in a GP practice and thus earn profits from the practice which can easily make good the difference. In terms of stress, GPs can be horribly overloaded with work in ways surgeons are less likely to. Although granted, a top top surgeon will almost certainly out-earn a GP.

Well, I know many people who went into medicine, who did so ultimately for the money - whether it was of their own volition or pressure from family. I don't doubt the majority of doctors care about their patients. But ultimately it is often the money (and status) that persuades one to continue pushing on down a particular specialisation

It's different kinds of stresses. One is extremely high pressure in the instant, the other is prolonged stresses over weeks at a time.

Edit: let's also bear in mind effectively all medical incomes will below any likely 100% (or otherwise extremely high) tax band on the super-rich.

Is it, though? I mean, I've heard a whole host of numbers given, including baselining against the salary of the PM. There are a lot of specialist medical staff earning more than 150,000K, particularly when you take into account overtime.

This is the problem with vague wishful thinking approaches. It's only when you start talking about the specifics that you realise how many people you are screwing over.

As another example - back to footballers. A footballer has a career of 20 years if they are lucky. Often, only a fraction of that will be earning significant amounts. Once their career is over, they have lost the large portion of their earning potential. If you are taxing people staggering amounts beyond a set limit, you are effectively preventing them building a retirement fund. Or an even more extreme example - boxers, some of whom only have a couple of years at the top.

Catnip1024:
As another example - back to footballers. A footballer has a career of 20 years if they are lucky. Often, only a fraction of that will be earning significant amounts. Once their career is over, they have lost the large portion of their earning potential. If you are taxing people staggering amounts beyond a set limit, you are effectively preventing them building a retirement fund. Or an even more extreme example - boxers, some of whom only have a couple of years at the top.

OK, say you have an incredibly low one, like ?150,000. Median income in the UK is ~?23,500.

A few years of boxing for ?150,000 after tax is still quite substantial. Two years of ?150,000 is more than a decade of the median income. And then there's the prestige of having been the best at a sport, which is apt to give opportunities.

And it's not like high top bracket taxes are incompatible with making retirement funds less necessary with social programs (like a UBI). Indeed, high taxes and redistribution of wealth are complementary ideas.

The number I offered before was $1,000,000 a year. That's a huge amount of money. Some people just say "outlaw billionaires", which is a thousand times larger even than that.

edit: the ? is supposed to be the symbol for the British pound.

Seanchaidh:
OK, say you have an incredibly low one, like ?150,000. Median income in the UK is ~?23,500.

A few years of boxing for ?150,000 after tax is still quite substantial. Two years of ?150,000 is more than a decade of the median income. And then there's the prestige of having been the best at a sport, which is apt to give opportunities.

And it's not like high top bracket taxes are incompatible with making retirement funds less necessary with social programs (like a UBI). Indeed, high taxes and redistribution of wealth are complementary ideas.

The number I offered before was $1,000,000 a year. That's a huge amount of money. Some people just say "outlaw billionaires", which is a thousand times larger even than that.

edit: the ? is supposed to be the symbol for the British pound.

But it's not some idealised world. A barely average house in some parts of the UK costs around 500,000K these days. If a man boxes for 5 years at a 150,000K cap and buys a house, he has virtually nothing left to show for his work. And probably still couldn't afford the house, when you consider the lower income tax bandings.

A similar argument applies for 1,000,000. With the current tax brackets in the UK, I'm guessing you would be lucky to actually see 500,000 of that. Two years at the top, buy a house in the first year, and the second year is a retirement fund. 500,000 over say 40 years (and it is likely to be longer, to be fair) still ends up well below the median wage.

Catnip1024:
Well, I know many people who went into medicine, who did so ultimately for the money - whether it was of their own volition or pressure from family. I don't doubt the majority of doctors care about their patients. But ultimately it is often the money (and status) that persuades one to continue pushing on down a particular specialisation

It's different kinds of stresses. One is extremely high pressure in the instant, the other is prolonged stresses over weeks at a time.

Considering that GPs have a fairly average status among Doctors (higher than psychiatrists, much lower than neurosurgeons or infection specialists) it is often considered a safe bet for doctors who prefer a 9-5 job, as they have a lot less time on-call then doctors in the in-patient specialitets, and a safe future with good possibilities to open their own practice (or become partners in an established one) after a decade or two at the job. Neurosurgeons on the other hand are the absolute rock stars of the medical world. These are the men and women (mostly men) who do the bleeding edge, ultra delicate work that embodies the idea of the cool, super competent Doctor that is ready to work on the edge to save people's lives. Neurosurgeons have a lot of time on-call, perform high risk surgeries daily and often face immense pressure to complete said high risk surgeries faster since the queue is seemingly unending. On the other hand, a good neurosurgeon is also a Rock Star in the medical world, they get respect from all other Doctors irregardless of specialization and they can get really lucrative jobs as consultants and "guest" surgeons if they become renowned enough.

These are, literally, two completely different specializations and require two completely different kind of personalities. The GP is a risk-averse workhorse who can do the daily grind every day with a smile and who likes the stability of coming into the same office and doing roughly similar things every day. The Neurosurgeon is pretty much addicted to risk, high pressure and wants to constantly push themselves to the limit of their abilities, because failure leads to permanent disability or death, no matter if failure is "you made a mistake" or "you couldn't do the job". Generally speaking a Doctor about to choose specialization is unlikely to look at these two and compare salaries and projected life income, because the two specializations are so far apart that they require diametrically opposed personalities.

Not that it matters, because as Agema said there are very few MDs that would reach incomes that qualify for the suggested limit for a 100% income tax. Those few that do are either in the employ of pharmaceutical companies (and unlikely to do actual clinical work) or are, ironically, highly specialized and world-renowned neurosurgeons.

Catnip1024:
Is it, though? I mean, I've heard a whole host of numbers given, including baselining against the salary of the PM. There are a lot of specialist medical staff earning more than 150,000K, particularly when you take into account overtime.

I don't see a problem earning ?150k a year, especially with a median annual earnings for a full time job of ~?27k. Five or six times the national average is really not that much. Undoubtedly, some more radical people would think that too much, but they would be very few on the ground.

As another example - back to footballers. A footballer has a career of 20 years if they are lucky. Often, only a fraction of that will be earning significant amounts. Once their career is over, they have lost the large portion of their earning potential. If you are taxing people staggering amounts beyond a set limit, you are effectively preventing them building a retirement fund. Or an even more extreme example - boxers, some of whom only have a couple of years at the top.

Yeah, but no.

Assuming a 40-year career and ?27k average income, the average person makes about ?1.1 million (2018 UKP) in their lifetime (less in take home pay after taxes, obviously). A footballer with a 15-year career on just ?100k a year has thus already earned far more than the median ever will... and realistically still has another ~30 working years to make money.

Never mind that ~?1 million invested by the end of that career would accrue money (~2-2.5% annual after inflation) anyway. In fact, give a median earner their expected lifetime earnings of ?1.1 million at the start of their career, they will have only slightly less in interest as they'd get in salary working a job, and still have ?1.1 million in the bank when they reach retirement age.

In another sense, there's no reason footballers or boxers should necessarily be excused ever having to work again once their sporting career is over. No-one else does if their industrial sector rolls over dies or whatever: the coal miners weren't handed a nice package to see them cosy to retirement. And in fact over two generations ago, many top sportsmen did have to go find other work when they retired from the game.

Catnip1024:

A similar argument applies for 1,000,000. With the current tax brackets in the UK, I'm guessing you would be lucky to actually see 500,000 of that. Two years at the top, buy a house in the first year, and the second year is a retirement fund. 500,000 over say 40 years (and it is likely to be longer, to be fair) still ends up well below the median wage.

You cannot be taxed over 50% of year earnings in income taxes in the UK.

For income tax, there's the tax free allowance to ~?10k, the main 20% band, you only start paying 40% at ?45k. Then there's the extra high rate of 45% over ?150k. Then there's NI with (I think) ~?7k tax free, then 12% - and this is the key point - it drops to about 2% after ~?50k.

Therefore, very shortly after you earn more than the 40% income tax band, your NI hits the 2% tax band so you're only being taxed about 42% on earnings over 50k. Likewise you get to ?150k, it's 47% total past that point. It is therefore impossible to be taxed more than 47% on your salary. Then bear in mind someone who hits the 47% band is almost certainly rich enough to be pulling in earnings through investments, which are on lower tax rates (capital gains tax, for instance, is highest at 28%)

Work it all out, someone salaried ~?50k is paying about ?14k in income taxes, and someone on ?200k is paying a touch under ?80k in income taxes.

I'm sure all that wealth will start trickling down real soon.

Agema:
I don't see a problem earning ?150k a year, especially with a median annual earnings for a full time job of ~?27k. Five or six times the national average is really not that much. Undoubtedly, some more radical people would think that too much, but they would be very few on the ground.

I have run into them. Well meaning people by and large, but rather extreme.

In another sense, there's no reason footballers or boxers should necessarily be excused ever having to work again once their sporting career is over. No-one else does if their industrial sector rolls over dies or whatever: the coal miners weren't handed a nice package to see them cosy to retirement. And in fact over two generations ago, many top sportsmen did have to go find other work when they retired from the game.

Entering a workplace with no transferable skills at 40 is hard. People won't give you an apprenticeship or a low ranking position the same way they would give an 18 year old.

Never mind that ~?1 million invested by the end of that career would accrue money (~2-2.5% annual after inflation) anyway. In fact, give a median earner their expected lifetime earnings of ?1.1 million at the start of their career, they will have only slightly less in interest as they'd get in salary working a job, and still have ?1.1 million in the bank when they reach retirement age.

Depends how this grand scheme works. I thought the idea was to prevent hoarding of wealth, to seize ownership of the companies from the shareholders and to tax the rich into the ground. How does investment work in this brave new world? Surely shares would be the first things to be abolished / taxed to rat shit?

Agema:
You cannot be taxed over 50% of year earnings in income taxes in the UK.

For income tax, there's the tax free allowance to ~?10k, the main 20% band, you only start paying 40% at ?45k. Then there's the extra high rate of 45% over ?150k. Then there's NI with (I think) ~?7k tax free, then 12% - and this is the key point - it drops to about 2% after ~?50k.

Therefore, very shortly after you earn more than the 40% income tax band, your NI hits the 2% tax band so you're only being taxed about 42% on earnings over 50k. Likewise you get to ?150k, it's 47% total past that point. It is therefore impossible to be taxed more than 47% on your salary. Then bear in mind someone who hits the 47% band is almost certainly rich enough to be pulling in earnings through investments, which are on lower tax rates (capital gains tax, for instance, is highest at 28%)

Work it all out, someone salaried ~?50k is paying about ?14k in income taxes, and someone on ?200k is paying a touch under ?80k in income taxes.

Yeah, my bad, I was thinking of people who are their own limited company. Where you throw on corporation tax and other interesting things. After all, how many people actually earn a straight up salary of 1 million, rather than go through all sorts of convoluted means to extract that wealth?

The point is largely the same though.

Catnip1024:
Entering a workplace with no transferable skills at 40 is hard. People won't give you an apprenticeship or a low ranking position the same way they would give an 18 year old.

Footballers can have plenty of outs they can work towards. Never mind that, but the sorts of people who look at exceptionally high tax rates are the sort of people who believe in good provision of retraining schemes, adult education, etc.

Admittedly, it's probably harder now than it used to be. In the old days when footballers knew the clock was ticking they mostly made plans. Modern (top flight) footballers are more likely to be overindulged, overentitled, emotionally underdeveloped and used to managers and aides fixing things rather than being self-reliant.

Depends how this grand scheme works. I thought the idea was to prevent hoarding of wealth, to seize ownership of the companies from the shareholders and to tax the rich into the ground. How does investment work in this brave new world? Surely shares would be the first things to be abolished / taxed to rat shit?

Depends on whether we're talking about a workable system, or whether we just want to set up straw men as if there's nothing between current capitalism and Communism.

In practice, we're often looking at redistribution. There may still be shares, it's just they are more evenly distributed around the populace rather than 90% in the hands of the top 1% (or whatever the exact figure is).

Catnip1024:
Depends how this grand scheme works. I thought the idea was to prevent hoarding of wealth, to seize ownership of the companies from the shareholders and to tax the rich into the ground.

Funny, how leaving somebody with still many hundreds of thousands a year-- many times the average income-- is considered "into the ground". Presumably, by extension, you consider the average earner to be quite a few miles underground by default?

Catnip1024:
Entering a workplace with no transferable skills at 40 is hard. People won't give you an apprenticeship or a low ranking position the same way they would give an 18 year old.

So a friend of mine is married to a guy who used to be a professional soccer player. He never got very high up, playing in Division 1 briefly at the highest, before ending in Division 3 as he retired in his mid-30's. He had no trouble at all getting into College and educating himself into another profession (realtor in his case) on the back of the savings he had amassed and his wife's mediocre Nurse's salary.

Not to mention that professional athletes have plenty of 'soft' skills and traits that are in-demand in many workplaces. They are, if nothing else, used to working under pressure and giving their most when the stakes are high. They are focused and motivated, they are able to set and work towards long term and short term goals both for themselves and for their teams (if they were in any sort of team sport) and are used to working long, hard hours even when they are sick or hurt. They also have extensive knowledge of exercise methods, diets and pretty much anything else related to having been in a profession where they trained or exercised at least 8 hours a day for at least over a decade.

These people can, quite literally, get a PT job at any gym anywhere in an instant and are often desirable for management positions if they can get a few management classes under their belt. And that's if they don't have enough money to start their own business or act as investors for others' business outright. And if we are talking the creme de la creme of athletes, guys like Zlatan Ibrahimovic, David Beckham or Lance Armstrong, they'll be making enough money on their career that they don't need to do anything other than put one years salary into the bank to live off of dividends for the rest of their lives. And that's not counting the endless chain of advertising gigs they can pick up.

Gethsemani:
Not to mention that professional athletes have plenty of 'soft' skills and traits that are in-demand in many workplaces. They are, if nothing else, used to working under pressure and giving their most when the stakes are high. They are focused and motivated, they are able to set and work towards long term and short term goals both for themselves and for their teams (if they were in any sort of team sport) and are used to working long, hard hours even when they are sick or hurt. They also have extensive knowledge of exercise methods, diets and pretty much anything else related to having been in a profession where they trained or exercised at least 8 hours a day for at least over a decade.

These people can, quite literally, get a PT job at any gym anywhere in an instant and are often desirable for management positions if they can get a few management classes under their belt. And that's if they don't have enough money to start their own business or act as investors for others' business outright. And if we are talking the creme de la creme of athletes, guys like Zlatan Ibrahimovic, David Beckham or Lance Armstrong, they'll be making enough money on their career that they don't need to do anything other than put one years salary into the bank to live off of dividends for the rest of their lives. And that's not counting the endless chain of advertising gigs they can pick up.

Not everyone has the temperament to be a PT. Not everyone has the right soft skills to be a manager. Some football players just eat what they are told by the team - while they will probably pick up a fair bit, they aren't bound to be experts by any means.

And as for motivation / professionalism, that also varies a lot across the field. Which is why teams often go through massive slumps, have fallings out or fall apart.

I wasn't saying it is a universal problem. But you can't assume that they will just walk into the workplace.

Catnip1024:
Not everyone has the temperament to be a PT. Not everyone has the right soft skills to be a manager. Some football players just eat what they are told by the team - while they will probably pick up a fair bit, they aren't bound to be experts by any means.

Kind of like anyone else. But with a bunch of extra money.

Catnip1024:
Not everyone has the temperament to be a PT. Not everyone has the right soft skills to be a manager. Some football players just eat what they are told by the team - while they will probably pick up a fair bit, they aren't bound to be experts by any means.

And as for motivation / professionalism, that also varies a lot across the field. Which is why teams often go through massive slumps, have fallings out or fall apart.

I wasn't saying it is a universal problem. But you can't assume that they will just walk into the workplace.

Which is true for everyone, only these guys (women make nowhere near the same money in professional sports) have a bunch of extra money to cushion them while they go to college, take classes or do whatever else they need to do to get a job. In Sweden, a lot of former professional athletes become police officers or firefighters, for example.

That you could score big in the first 15 years of your career is good for you, but ultimately you need to do like everyone else and find a vocation that can sustain you in some way. If you can't live off of that income from professional sports, it is on you to become attractive in the workforce, not on the state to pity you by giving you tax breaks.

Gethsemani:
That you could score big in the first 15 years of your career is good for you, but ultimately you need to do like everyone else and find a vocation that can sustain you in some way. If you can't live off of that income from professional sports, it is on you to become attractive in the workforce, not on the state to pity you by giving you tax breaks.

This is the bottom line right here. Ultimately it is perfectly normal to be expected to work for your income. Work needs to be done regardless. I won't begrudge the few lucky people who are wealthy enough to not have to do that but I'm not going to feel bad once their money runs out either. Most normal people work around 40-50 years of their lives (not even counting studies and volunteer work), not 15. So when it comes to how we should structure society I think we should reward work, preferably without overly large differences, and not ownership. I'm perfectly willing to help those who can't work but I won't have too much patience with those who won't and certainly not with those who argue that rich people should be enabled not to work.

Pseudonym:
Ultimately it is perfectly normal to be expected to work for your income.

Unless you're making more money than everyone else. Then it is expected that you don't need to do anything whatsoever.

Seanchaidh:

Pseudonym:
Ultimately it is perfectly normal to be expected to work for your income.

Unless you're making more money than everyone else. Then it is expected that you don't need to do anything whatsoever.

*gasp*

How DARE you! I'll have you know it's the most hard work on the planet to hire someone to handle your investments for you, while you have to sit in on boring shareholder meetings! You might have to see a POWERPOINT presentation, the horror!

[/obvious sarcasm is obvious]

aegix drakan:

Seanchaidh:

Pseudonym:
Ultimately it is perfectly normal to be expected to work for your income.

Unless you're making more money than everyone else. Then it is expected that you don't need to do anything whatsoever.

*gasp*

How DARE you! I'll have you know it's the most hard work on the planet to hire someone to handle your investments for you, while you have to sit in on boring shareholder meetings! You might have to see a POWERPOINT presentation, the horror!

[/obvious sarcasm is obvious]

Even that can be avoided by investing in an index tracking fund (or just not paying attention to the rights of a shareholder beyond receiving dividends). Would probably do better than fucking up a business with one's own worthless input anyway. ^^

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