I've yet to see evidence to support the proposition that "if you try to tax the high earners properly, they leave the country." This axiom is a prop holding up the Thatcher/Reagan notion of trickle-down, which came many years after Keynesianism and hasn't held up as well.
The reductio ad absurdum of this is that you don't tax the higher earners at all. I'll leave you to pursue the consequent simple mathematics.
As for "taxing low wage earners properly," that's an entirely different can of worms. Perhaps you can dig into your thesaurus to replace "properly" with what you actually meant.
Irregardless, there'll always be a black market. Indeed, there'll always be several black markets, in any given economy.
In the case of Greece, and perhaps of south Italy, the black market economy (with or without mafia or army assistance) is pretty much outdistancing the real economy. Which of course is a problem. And which, of course, nobody is going to do anything about, any time soon.
In the case of the UK, and to simplify:
(1) Almost anybody earning over £100,000 a year is benefiting from the black economy. The tax system is absurdly complicated. You can hire an accountant to hide or postpone this or that, or if you're lucky, you can even move funds to one of the UK's convenient offshores. It's a Special Purpose Vehicle, if you will. (2) Almost anybody earning under £10,000 a year is benefiting from the black economy. Half of the people I meet down the pub here in Birmingham have got some sort of dicky connection to cash-in-hand deals, or semi-legit commodity smuggling, or something. I suppose that's another sort of Special Purpose Vehicle -- I understand that a white Citroen Berlingo is preferred.
It's a silly argument. You can't tax the bottom end of this, because what they do is illegal, and since the law apparently doesn't work, you've got nothing left. You can't tax the top end of this, because the tax system is riddled with loop-holes and the fuckers can just create artificial losses against real gains, or move money from one legitimate bucket to another legitimate bucket. I don't know why the Conservative party is against the EU. It's a God-send in this respect.
This might also be a silly argument; but I can't see anything wrong with piling appropriately designed taxes on those who have made money in the financial sector. At the worst, they'll leave: oh dear, some other country will have to bail the fuckers out next bubble. (And don't forget that this is something like the fourth bubble in fifteen years. S&L, dot-com/telco, Enron/Worldcom, easy credit/CDS ... and I'm not sure I didn't see tulips in the middle there.)
At the best, the government claws something back. Which of course they'll throw away on consultants and Big IT. But that's a different problem.
In between, we might actually rebalance the UK economy. Hardly very likely, is it?
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Re: The rural economy
Date: 2010-05-04 07:20 pm (UTC)I've yet to see evidence to support the proposition that "if you try to tax the high earners properly, they leave the country." This axiom is a prop holding up the Thatcher/Reagan notion of trickle-down, which came many years after Keynesianism and hasn't held up as well.
The reductio ad absurdum of this is that you don't tax the higher earners at all. I'll leave you to pursue the consequent simple mathematics.
As for "taxing low wage earners properly," that's an entirely different can of worms. Perhaps you can dig into your thesaurus to replace "properly" with what you actually meant.
Irregardless, there'll always be a black market. Indeed, there'll always be several black markets, in any given economy.
In the case of Greece, and perhaps of south Italy, the black market economy (with or without mafia or army assistance) is pretty much outdistancing the real economy. Which of course is a problem. And which, of course, nobody is going to do anything about, any time soon.
In the case of the UK, and to simplify:
(1) Almost anybody earning over £100,000 a year is benefiting from the black economy. The tax system is absurdly complicated. You can hire an accountant to hide or postpone this or that, or if you're lucky, you can even move funds to one of the UK's convenient offshores. It's a Special Purpose Vehicle, if you will.
(2) Almost anybody earning under £10,000 a year is benefiting from the black economy. Half of the people I meet down the pub here in Birmingham have got some sort of dicky connection to cash-in-hand deals, or semi-legit commodity smuggling, or something. I suppose that's another sort of Special Purpose Vehicle -- I understand that a white Citroen Berlingo is preferred.
It's a silly argument. You can't tax the bottom end of this, because what they do is illegal, and since the law apparently doesn't work, you've got nothing left. You can't tax the top end of this, because the tax system is riddled with loop-holes and the fuckers can just create artificial losses against real gains, or move money from one legitimate bucket to another legitimate bucket. I don't know why the Conservative party is against the EU. It's a God-send in this respect.
This might also be a silly argument; but I can't see anything wrong with piling appropriately designed taxes on those who have made money in the financial sector. At the worst, they'll leave: oh dear, some other country will have to bail the fuckers out next bubble. (And don't forget that this is something like the fourth bubble in fifteen years. S&L, dot-com/telco, Enron/Worldcom, easy credit/CDS ... and I'm not sure I didn't see tulips in the middle there.)
At the best, the government claws something back. Which of course they'll throw away on consultants and Big IT. But that's a different problem.
In between, we might actually rebalance the UK economy. Hardly very likely, is it?
But maybe it's the best chance we've got.