Do we need Public Service Cuts?

[mintogrubb.livejournal.com]

In the Uk, we call CEOs 'Company Directors' - but the fact is , they still earn far more than the people at the bottom of the pay scale. i forget where i read it, to be honest, but I'm pretty sure that they used to earn about 20- 30 times as much as the people on the bottom a few decades back - but now in the UK, they earn almost 100 times as much as the poorest workers do.

the rich are getting richer and the poor are getting poorer. The problems happen when people like 'Fred the shred' take out loads of midddle layer people and pocket the difference. It isn't that the organisation got better, it's just that the workload for middle layer managers increased, and there was less payout on wages and salaries.

And for this, Fred gives himself a bonus.

now the Cameron government is in on the act. The "Big Society" simply means that one guy gets paid a few grand a year to mow the grass on the village playing field. the government fire him and get some other guy to do it on a voluntary basis, and the other guy goes on Welfare.

So, instead of paying a bit of income tax, he is now picking up taxpayers money instead - but the government is still saving money on one side of the balance sheet and not telling us the rest.

What ought to be happening is a big investment to keep people in work - useful, community based services instead of the arms industry, for sure, but paid employment trumps a welfare payout, right?

And this could be afforded if we closed the tax loopholes. The fact is that if you live in the UK, you can simply sign everything over to your wife, have yourself be paid a salary by a limited company that she owns, and stuff all the excess money into an off shore tax haven, where it collects minimum taxes and you can pick it up and take it with you when you choose to retire. I kid you not, this really happens.

A system whereby CEOs could only earn 10 times what their lowest paid worker earns would handle the wealth distribution problem better than taxing the rich directly- yes, let the bankers have a hundred grand in salaries and a big bonus besides - so long as the workers who make it happen share the wealth and get at least 10% of what the fat cats earn.

And why not close the tax loopholes too? Rather than closing schools and hospitals that serve the whole community, we should be closing tax loopholes that only serve the very rich. rather than putting people out of work, we should be putting our house in order and having a more equal pay scale, with less of a gap between the top and bottom earners in our society.

We are not all in this together - some of us are going first class and the rest of us are travelling in steerage.

Comments

Re: Economies are not closed systems, little mercantilist.

[montecristo.livejournal.com]

Tsk tsk, calling names, and we haven't even been properly introduced. Love the atmosphere in here. It would be right at home in any junior high school playground. Let's boil this out and see just how dumb you look for using a term like mercantilist when you probably have very little understanding of what it means at all.

Every time money is spent between people for goods or services, regardless of its source, it creates additional wealth for whomever is turning a profit in the deal.

Patently false. Government spending of tax money is most certainly not "money spent between people for goods and services" it is other people's money, taken with no regard to their own wishes, and spent upon goods and services a politician deems beneficial or necessary. Wealth is created when parties engage in voluntary trade to mutual benefit via the division of labor. Value is subjective. The only way to be sure that both parties have benefitted from a transaction is to establish that they traded their respective values after each has examined his own opportunity cost evaluation of the transaction and then voluntarilly participated in the trade.

Furthermore, what I said was true about Lawnmower Man. His entire salary is composed of tax money. What he "pays" in taxes could have just as easily been collected by the government simply by lowering his salary by some amount in the first place and the government merely retaining the difference, and that second approach would not have wasted resources used in overhead accounting when the government pays Lawnmower Man out of one hand and re-confiscates a portion of the money with the other. Lawnmower Man is, by nature of the transaction, a net tax consumer. He will never be a net tax payer unless the service he provides is objectively more valuable to the net tax payers (who do NOT work for government) than the salary the government pays Lawnmower Man. In addition to this, we have already established that this is not the case, specifically because mintogrubb has already informed us that the government got "some other guy to do it on a voluntary basis," — prima facie evidence that Lawnmower Man was being paid "a few grand a year" more than the market would bear for his service.

To compound folly, the original premise behind the post seems to be the fallacy that there are are a specific, set number of jobs in the world and that government politicians find and allocate them to people. In such a world, Lawnmower Man does inevitably go on welfare when dismissed by the government because of the original poster's hypothetical zero-sum game, not mine. The original poster implicitly assumes that there are no other jobs for Lawmower Man to take, no additional wealth for him to create, outside of cutting the grass on the village playing field. In actuallity, when the volunteer is found to mow the lawn for the government, essentially as a donation, then the tax payers pick up the value of the lawn service and Lawnmower Man is now free, not necessarilly to go on welfare, but to offer his services to someone else at profit to himself and them.

So many words.

[squidb0i.livejournal.com]

So little actual addressing of the points in my reply.

Instead, you prefer to repeat variations on your theme of 'ZOMG TAXAYSHUN IZ BAD U GAIZ! NO GOOD KAN KUM UV IT!!1'

Telling.

Re: So many words. So few words to work with.

[montecristo.livejournal.com]

So little actual addressing of the points in my reply.

If you have a point to make, make it. If you think there is an issue that you raised that I didn't address, state it. Self-congratulatory rhetoric does nothing but impress the simple-minded. On the off chance that you weren't just engaging in exhibitionistic rhetorical onanism, I will break down what you said line by line and address it again, just so we're clear.

Labor is turned into profit. Finished goods exceed the sum of the value of their components.

Every time money is spent between people for goods or services, regardless of its source, it creates additional wealth for whomever is turning a profit in the deal.

Labor is turned into profit through voluntary transactions where each party to the transaction has the opportunity to apply a subjective valuation to the objects of the transaction compared with the subjective values of the opportunity costs experienced by the traders involved in the transaction. A bald assertion by a politician that "The taxpayers received more in value from the productive work of the government employee than the tax money they paid" is merely an assertion by a politician spending someone else's money. No politician is able to objectively evaluate the myriad opportunity costs experienced by all the taxpayers with reference to the work performed by the government employee — that is one of the biggest reasons why government should be kept small and the division of labor left almost entirely to individuals acting freely in the market. It is the reason that socialism fails so spectacularly when it is seriously attempted. The concept explaining this is called The Economic Calculation Problem (http://en.wikipedia.org/wiki/Economic_calculation_problem) and this problem inheres in all transactions made by command as opposed to conducted voluntarilly. You cannot evaluate a transaction where no choice of alternatives is possible or the choices are artificially foreclosed by fiat.