About to get much easier for companies to sack folk

[Dracoro]

Countdown said:

You can look at it in two ways.

The Govt raised £6k from the private sector and spent this on Public sector services, from which it recovered £1.2k in taxes. Now it DOESN'T keep this money. Either (a)

It spends it on more public services - so total spend is £7.2k

Oh dear...

Total spend is still £6k (it does NOT have any more than this to spend in the first place!).

You're adding £1.2k to the £6k which is wrong. They've already spent £6k to get that £1.2k back, leaving them with a net spend of £4.8k. Add that to your £1.2k and you have £6k.

Using your "logic" you could "make" more money by just taxing public sector workers more Let's say you tax them 100% then you've got £12k to spend each year from that £6k

Actually, I don't have enough money in my life. What I'll do it tax myself 100%! Add that to my salary and my income has doubled! Woopee!

Edited by Dracoro on Wednesday 30th May 14:21

[heebeegeetee]

Gaspode said:

Not if you are one of the private sector taxpayers whose tax is used to pay the tax of the public sector employees.

And where do companies get their money from? Do they grow it?

[CBR JGWRR]

heebeegeetee said:

Gaspode said:

Not if you are one of the private sector taxpayers whose tax is used to pay the tax of the public sector employees.

And where do companies get their money from? Do they grow it?

That's an easy one - providing goods or services for payment.

[heebeegeetee]

CBR JGWRR said:

That's an easy one - providing goods or services for payment.

And who pays for that?

When you whittle it all the way down to the very bottom, what else can you find other than a private individual?

[jesusbuiltmycar]

Countdown said:

Dracoro said:

Countdown said:

I have tried to answer your question - again not sure why you don't understand. Total tax ( and total spend on public services) is NOT 6k. It will be 6k plus 1.2k = 7.2k.

The INCOME to government is £6k, NOT £7.2k.

The £1.2k that the public sector pays comes FROM that £6k. So it's £6k MINUS £1.2k, i.e. £4.8k. You can then add back your £1.2k and it comes back to £6k. In other words, the £1.2k that the public sector pays is effectively RECOVERED from the £6k expenditure.

What the government do NOT have, is an income of £7.2k

You can look at it in two ways.

The Govt raised £6k from the private sector and spent this on Public sector services, from which it recovered £1.2k in taxes. Now it DOESN'T keep this money. Either (a)

It spends it on more public services - so total spend is £7.2k

OR

It gives a rebate to the private sector (so Public service expenditure remains at £6k but the net tax levied on the private sector is 4.8k)

In both the above circumstances Public Expenditure = Private Sector Tax + £1.2k

The £1.2k comes from taxes levied on the public sector. hence the point Im making that we ALL pay for Public Sector expenditure, regardless of which sector we work in.

The only difference between Public and Private sectors is that Public Sector services are purchased via the Government rather than directly from the vendor. other than that there is no difference.

I think the example needs to be a little more complex. You are ignoring the fact that that the government must must initially borrow £6000 to pay for the first years services before collecting public and private sector tax, i.e:

Year 0
Balance Brought Forward: £0
Public Salary Costs: -£2000
Service Costs: -£4000
balance -£6000

Year 1
Balance Brought Forward: -£6000
Tax Receipts Private Sector: £6000
Tax Receipts Public Sector: £1200
Public Salary Costs: -£2000
Service Costs: -£4000
balance -£4800

Year 2
Balance Brought Forward: -£6000
Tax Receipts Private Sector: £6000
Tax Receipts Public Sector: £1200
Public Salary Costs: -£2000
Service Costs: -£4000
balance -£4800


Ergo all of the government's income is from the private sector.

[singlecoil]

It's worth remembering that the public sector provides the framework in which the private sector is able to operate. Everything from providing an actual currency to trade with, to the roads over which most of the goods and services have to travel, to the police who ensure that business can operate in a relatively crime free environment.

[Dracoro]

singlecoil said:

It's worth remembering that the public sector provides the framework in which the private sector is able to operate. Everything from providing an actual currency to trade with, to the roads over which most of the goods and services have to travel, to the police who ensure that business can operate in a relatively crime free environment.

I don't think that's in dispute. They help create the environment to enable those that create wealth to do so.
It's further complicated by the fact that sometimes the public sector almost act as a private sector company by selling products/services to others (foreign nations etc.), so they can bring in wealth too.

[PugwasHDJ80]

singlecoil said:

It's worth remembering that the public sector provides the framework in which the private sector is able to operate. Everything from providing an actual currency to trade with, to the roads over which most of the goods and services have to travel, to the police who ensure that business can operate in a relatively crime free environment.

all of which could be provided by a private sector

Currency- gold standard
roads- privatised with eaese,
police- again could be privatised (although that really is more efficient at a government level)

[CBR JGWRR]

heebeegeetee said:

CBR JGWRR said:

That's an easy one - providing goods or services for payment.

And who pays for that?

When you whittle it all the way down to the very bottom, what else can you find other than a private individual?

Shiny bits of metal?

[Countdown]

Dracoro said:

Countdown said:

You can look at it in two ways.

The Govt raised £6k from the private sector and spent this on Public sector services, from which it recovered £1.2k in taxes. Now it DOESN'T keep this money. Either (a)

It spends it on more public services - so total spend is £7.2k

Oh dear...

Total spend is still £6k (it does NOT have any more than this to spend in the first place!).

You're adding £1.2k to the £6k which is wrong. They've already spent £6k to get that £1.2k back, leaving them with a net spend of £4.8k. Add that to your £1.2k and you have £6k.

Why are you adding the £1.2k back to the £4.8k? Net spend is £4.8k, Goods/Services produced by the Public Sector is £6k. So where did the £1.2k difference come from?

Dracoro said:

Using your "logic" you could "make" more money by just taxing public sector workers more Let's say you tax them 100% then you've got £12k to spend each year from that £6k

Funnily enough yes - you're right. the Govt will have £6k in cash (raised from the Private Sector) and £6k worth of services obtained from effectively what is slave labour. How did the Govt end up with £12k on the balance sheet when only £6k was provided by the private sector?

Dracoro said:

Actually, I don't have enough money in my life. What I'll do it tax myself 100%! Add that to my salary and my income has doubled! Woopee!

Again, you are absolutely correct. If you work for a salary of £6,000, and then do the same amount of work for no pay (taxing yourself 100%) you will have produced goods/services to the value of £12,000

[don4l]

Countdown said:

You can look at it in two ways.

The Govt raised £6k from the private sector and spent this on Public sector services, from which it recovered £1.2k in taxes. Now it DOESN'T keep this money. Either (a)

It spends it on more public services - so total spend is £7.2k

Brilliant! So, we can get rid of the defecit by simply paying public sector more. That way, the tax receipts will go up. /sarc

When Public Sector workers get their pay, the tax has already been deducted. In other words, they don't ever receive the £6000 as the £1200 has already been deducted.

So, the Government actually give £4,800 in pay, and yes there is still another £1,200 left. However, the total is still £6,000.

Don
--

[Countdown]

PugwasHDJ80 said:

all of which could be provided by a private sector

Currency- gold standard
roads- privatised with eaese,
police- again could be privatised (although that really is more efficient at a government level)

Quite easily. The "fairest" system would be with everything 100% private and all transactions directly between the producer and the consumer. That way you have freedom of choice and you only pay for what you use. Its a system very close to this in most 3rd world countries.

Some downsides; for most people it would be more expensive because we are subsidised by the HNWI minority. Im not sure how many people would willingly pay for a public police service, Army, Refuse collection, roads etc. Despite what PHers seem to think things would be worse for the majority of people.

[Countdown]

don4l said:

Countdown said:

You can look at it in two ways.

The Govt raised £6k from the private sector and spent this on Public sector services, from which it recovered £1.2k in taxes. Now it DOESN'T keep this money. Either (a)

It spends it on more public services - so total spend is £7.2k

Brilliant! So, we can get rid of the defecit by simply paying public sector more. That way, the tax receipts will go up. /sarc

When Public Sector workers get their pay, the tax has already been deducted. In other words, they don't ever receive the £6000 as the £1200 has already been deducted.

So, the Government actually give £4,800 in pay, and yes there is still another £1,200 left. However, the total is still £6,000.

Don
--

For the umpteenth time

Services Provided by Govt = £6000
Net cost to private sector = £4,800
Net cost to public sector = £1,200

OR

Services Provided by Govt = £7,200
Net cost to private sector = £6,000
Net cost to public sector = £1,200

Both sectors consume public services, Both sectors pay tax.

Your tax does not change whether you are a Police Officer or you work for G4S
Your tax does not change whether you are an NHS Nurse or a BUPA nurse
Your tax does not change whether your a teacher at Grange Hill or a Teacher at Harrow

The ONLY (please note ONLY) differemce between most Public Sector services and their equivalent in the Private Sector is with the Public Sector you buy in bulk via an intermediary. If the Govt disappeared tomorrow Manchester Royal Infirmary would be come MRI (Ltd) and you would pay them directly rather than via your monthly payslip.

[Gaspode]

jesusbuiltmycar said:

I think the example needs to be a little more complex. You are ignoring the fact that that the government must must initially borrow £6000 to pay for the first years services before collecting public and private sector tax, i.e:

Year 0
Balance Brought Forward: £0
Public Salary Costs: -£2000
Service Costs: -£4000
balance -£6000

Year 1
Balance Brought Forward: -£6000
Tax Receipts Private Sector: £6000
Tax Receipts Public Sector: £1200
Public Salary Costs: -£2000
Service Costs: -£4000
balance -£4800

Year 2
Balance Brought Forward: -£6000
Tax Receipts Private Sector: £6000
Tax Receipts Public Sector: £1200
Public Salary Costs: -£2000
Service Costs: -£4000
balance -£4800


Ergo all of the government's income is from the private sector.

Precisely my point. Thank you Jesus! Thanks you Lord! I think I'll run 20 red lights in your honour!

It doesn't matter how you restate the budgets the source of the income remains the same.

[Murph7355]

Countdown said:

...
can you think of any succesful 100% private sector economies ?

I guess one could argue that some of the Middle Eastern states are as close as you get. Or perhaps places like Lichtenstein and maybe Monaco.

But neither extreme has ever been truly tested. Human nature gets in the way of those sorts of experiment.

[heebeegeetee]

Gaspode said:

Precisely my point. Thank you Jesus! Thanks you Lord! I think I'll run 20 red lights in your honour!

It doesn't matter how you restate the budgets the source of the income remains the same.

Yes, the private individual. The consumer.

[Countdown]

Murph7355 said:

Countdown said:

...
can you think of any succesful 100% private sector economies ?

I guess one could argue that some of the Middle Eastern states are as close as you get. Or perhaps places like Lichtenstein and maybe Monaco.

But neither extreme has ever been truly tested. Human nature gets in the way of those sorts of experiment.

The ME States are actually as close to 100% Public Sector as you could get rather than private sector. Public Sector revenues are from taxing the oil producers and providing a high standard of living for their citizens.

[Countdown]

Gaspode said:

Precisely my point. Thank you Jesus! Thanks you Lord! I think I'll run 20 red lights in your honour!

It doesn't matter how you restate the budgets the source of the income remains the same.

Struggling to find any way of making it simpler

Perhaps you could explain this to me;

the taxes of an NHS nurse and a BUPA nurse both go to the Govt
Both provide a service to patients
Patients pay either directly or indirectly

Therefore how is the economic effect any different??? What would the difference to the economy be if nurses were ALL Bupa or all NHS ?

[Gaspode]

Countdown said:

Struggling to find any way of making it simpler

Perhaps you could explain this to me;

the taxes of an NHS nurse and a BUPA nurse both go to the Govt
Both provide a service to patients
Patients pay either directly or indirectly

Therefore how is the economic effect any different??? What would the difference to the economy be if nurses were ALL Bupa or all NHS ?

That's not the argument I am trying to make or have ever tried to make. The point I am making is that unless the government owns the means of production, then all government income derives ultimately from private sector activity. Taxes paid by public sector workers are not 'new money', in the sense that the government has given that money to the public sector workers in the first place, and is then taking it back. Since the UK got rid of all its nationalised industries, there are no government-owned enterprises which generate wealth. These are all in the private sector now, and that's where the surplus value is created which is then taxed to provide the government with its revenue.

It could be argued that this process of paying public sector workers out of one pot and then taking some of it back to go into another pot is a fiscally inefficient means of distributing the available income across different budgets - although it does have the politically desirable effect of promoting the illusion that public sector workers are contributing to the economy in exactly the same way as private sector workers - which clearly they aren't, if for no other reason than their relationship with the State.

This is NOT trying to imply that public sector workers do not contribute to society. That would be specious and insulting to millions of hard-working and valuable public sector workers. But it does help us to recognise that the contribution is made in a different way - and you yourself have identified that this difference exists in your distinction between the way services are procured across the two sectors.

At its simplest, the private sector exists to provide goods and services which the public want to have and which they don't mind being rationed by price. The public sector exists to provide the goods and services which the public need and to which they don't wish to have their access restricted by wealth. A mixed economy is clearly a good thing, I am not arguing against the public sector's existence in any way. But to understand the value we get from it, and to understand it's role in society, it's important I believe to understand exactly how it is funded.

[heebeegeetee]

Gaspode said:

That's not the argument I am trying to make or have ever tried to make. The point I am making is that unless the government owns the means of production, then all government income derives ultimately from private sector activity. Taxes paid by public sector workers are not 'new money', in the sense that the government has given that money to the public sector workers in the first place, and is then taking it back. Since the UK got rid of all its nationalised industries, there are no government-owned enterprises which generate wealth. These are all in the private sector now, and that's where the surplus value is created which is then taxed to provide the government with its revenue.

It could be argued that this process of paying public sector workers out of one pot and then taking some of it back to go into another pot is a fiscally inefficient means of distributing the available income across different budgets - although it does have the politically desirable effect of promoting the illusion that public sector workers are contributing to the economy in exactly the same way as private sector workers - which clearly they aren't, if for no other reason than their relationship with the State.

This is NOT trying to imply that public sector workers do not contribute to society. That would be specious and insulting to millions of hard-working and valuable public sector workers. But it does help us to recognise that the contribution is made in a different way - and you yourself have identified that this difference exists in your distinction between the way services are procured across the two sectors.

At its simplest, the private sector exists to provide goods and services which the public want to have and which they don't mind being rationed by price. The public sector exists to provide the goods and services which the public need and to which they don't wish to have their access restricted by wealth. A mixed economy is clearly a good thing, I am not arguing against the public sector's existence in any way. But to understand the value we get from it, and to understand it's role in society, it's important I believe to understand exactly how it is funded.

Apart from going to great lengths to teach us to suck eggs, I'm still not sure what your point is.

I think we would all agree that some tasks within a society are best left to the public sector, and that capitalism cannot cover everything.

If we agree on that, what's the problem? We all know how it works and it doesn't need explaining.