The rich - poor gap

[Justayellowbadge]

Careful with the WW1 comparison, members of the aristocracy were 10 times more likely to die than the working classes, mainly due to junior officers leading from the front.

Being a posho in the trenches was a death sentence, it more than decimated the aristocracy and it never recovered.

[avinalarf]

Siscar said:

avinalarf said:

I have never suggested you should pay more tax,don't know where you get that from.
We are getting a bit bogged down in your personal affairs let's move on,please.

Well I don't want to quote personal stuff but it's by doing so that a lot of the nonsense published gets exposed as nonsense.

avinalarf said:

All I am saying is that we do not live in a bubble.
It's just the principle of living in a society where there is such a huge differential between the "rich" and "poor" will inevitably breed envy and discontentment and all the social unrest that will bring.
Now how that is achieved without unduly punishing the wealth creators, whilst allowing for the dreams and aspirations of the large majority, is the question !
The big problem is how to frame this legislation so that it is "fit for purpose".
A recent example is the "spare bedroom tax".
Theoretically it is not unreasonable to ask those with more bedrooms than they need to move to another property,but there appear to be so many anomalies that it is causing huge resentment.
Obviously not all that resentment is justified but the system cannot deal with each individual case as sympathetically as one might wish.

Well firstly it is wrong to suppose that there is anything new about a differential between rich and poor, there's always been one. The problem now is that we are increasingly a skills based economy, and an increasingly mobile economy where people with skills can achieve. However there is a large group of people without the skills to do so and they increasingly get marginalised, unwilling to do the more menial jobs. The net result is an immigrant population willing to do those roles.

So you have a sector of the population who are at the benefit claiming, minimum wage level for whom society has very few opportunities not helped by an education system that seems more geared to it's own agenda of meaningless politically correct courses than one that is focused on giving people the skills they need to get on with life.

avinalarf said:

The same goes for say Inheritance tax ,where the threshold has been kept in place for so many years that it catches out people it was never intended to affect when first introduced.
Like many of you I work hard,pay my taxes and wish to give my kids a "decent"start in life.
I recognise that there are lots of people worse off than me but feel "I do my bit "and do not want the state to take any more off ME.
So we have a conundrum,how to let the "rich"keep most of their hard gotten gains whilst insuring that the less well off are also given a "fair"chance to live a "decent"lifestyle.
I am certain TB will come along to play semantics with me but that really doesn't solve a very real problem.

I may be in a small minority but actually I would make inheritance hard harder than it is, I see no reason why I should be able to bestow riches on people who have done nothing to earn it. Wealth should be earned, not given to you.

I agree with a lot of what you say.
Regarding inheritance tax ,well let us agree to disagree on that .

[avinalarf]

Justayellowbadge said:

Careful with the WW1 comparison, members of the aristocracy were 10 times more likely to die than the working classes, mainly due to junior officers leading from the front.

Being a posho in the trenches was a death sentence, it more than decimated the aristocracy and it never recovered.

I did say Generals not junior officers,but I will admit to no in depth knowledge of the subject so apologise if I got that wrong.

[Justayellowbadge]

avinalarf said:

Justayellowbadge said:

Careful with the WW1 comparison, members of the aristocracy were 10 times more likely to die than the working classes, mainly due to junior officers leading from the front.

Being a posho in the trenches was a death sentence, it more than decimated the aristocracy and it never recovered.

I did say Generals not junior officers,but I will admit to no in depth knowledge of the subject so apologise if I got that wrong.

More Generals died at Loos in 1915 than in the entire second world war.

Junior officers had it worse - just over 5000 Eton boys fought. 1200 or so didn't come back.

There are a lot of misconceptions.

[ClaphamGT3]

Justayellowbadge said:

avinalarf said:

Justayellowbadge said:

Careful with the WW1 comparison, members of the aristocracy were 10 times more likely to die than the working classes, mainly due to junior officers leading from the front.

Being a posho in the trenches was a death sentence, it more than decimated the aristocracy and it never recovered.

I did say Generals not junior officers,but I will admit to no in depth knowledge of the subject so apologise if I got that wrong.

More Generals died at Loos in 1915 than in the entire second world war.

Junior officers had it worse - just over 5000 Eton boys fought. 1200 or so didn't come back.

There are a lot of misconceptions.

My only family is a classic case in point. Norfolk squirearchy with four sons. The scary stats were:
4 sons
3 served as junior officers
2 served in France on the Western Front in the Suffolk Regiment
2 didn't come back from France

[turbobloke]

avinalarf said:

turbobloke said:

avinalarf said:

Now how that is achieved without unduly punishing the wealth creators, whilst allowing for the dreams and aspirations of the large majority, is the question !

Firstly, these are not separate entities originally except in a few rare cases. Dreams and aspirations in employment are part of the typical recipe mix that generates and fosters individual enterprise. Depending on others to realise dreams and aspirations has limitations, and always will. Secondly, the wealth creators pay for everything so the logical response is to take care of them, as they take care of everyone else who can't take care of themselves. Words of empathy from the left in support of the poor bloody infantry which are then followed by tax and control, increased poverty, wider wealth gaps and an economic trainwreck only do harm to everyone (except the top 1% ironically). Finally this 'large majority' which is claimed to exist, but may in fact be a vocal minority alongside a silent majority, needs to take care also that the sheer dead weight of whatever influence is available from selling their vote to wordsmiths and snake oilers doesn't bite the hand that feeds them, then take off the arm, then most of the body.

Once again TB you grab a phrase out of a lengthy comment where I have tried to discuss a difficult dilemma as briefly as possible.

Not sure what your problem is, in reality the element of your post that I addressed was clear enough - as was my reply.

avinalarf said:

I really do not know why you choose to denigrate the huge majority that have not got your talents for making money.

Curiously enough I don't choose to denigrate anybody, which should be clear as I don't do it - it would help to identify (false) accusations if you could quote something denigratory as opposed to factual.

[Siscar]

avinalarf said:

I agree with a lot of what you say.
Regarding inheritance tax ,well let us agree to disagree on that .

Well inheritance is an interesting one. People get all het up about the rich and this gap between rich and poor and when you go through it most come round to the concept that those who started with little and created their wealth and employed a lot of people and paid a lot of taxes along the way aren't the people who need to be targeted.

It's inherited wealth that people dislike, at least those who don't benefit from it. This vision of some stuck up youngster living a great life on the back of family money and doing nothing for it, and contributing little to society to get there.

Yet everybody gets twitchy about inheritance, the concept that you don't get your own family wealth, such as it is, the concept that whatever you have earned couldn't be passed on to your nearest and dearest is something people run a mile from.

I'm not actually suggesting things should be changed from where they are, the complication and impact of doing it would be immense, but IMHO it illustrates the gap between the theorists of cutting the wealth divide and the realities of what it means if you actually try to do it.

[nightflight]

Siscar said:

I may be in a small minority but actually I would make inheritance hard harder than it is, I see no reason why I should be able to bestow riches on people who have done nothing to earn it. Wealth should be earned, not given to you.

That's very easy to sort out. You just make a will to that effect, and if my kids were lazy and feckless, that is what I would do. I would rather leave my estate to charity than a bunch of lazy kids. However, so far they seem to be turning out OK. They are all hard working high achievers. So with some estate planning, the tax man will get no more of my money when I'm gone. Inheritance tax is optional if you plan it in advance.

[turbobloke]

Siscar said:

It's inherited wealth that people dislike, at least those who don't benefit from it.

It does seem to to be so. Yet it's still a mystery as to why somebody else's wealth is of any interest whatsoever to another individual who has never met them and doesn't know anything about them and will never have any connection of any kind with them.

The basis for the dislike is difficult to separate from pure envy, or the notion that if somebody else is forced to hand over some money then those egging it on may somehow get a slice, or pay less in some equivalent way (both of which are selfish) or a desire to enact some sort of revenge for being worse off than some other random person, given that this state of affairs must be somebody else's fault...victims of society nonsense.

Given that high earners and owners of more expensive property also pay more, way out of proportion to the services these people consume, it can't possibly be some sort of fairness argument.

Council tax bands are already based on the irrelevance of house valuations while 1% of earners paying 30% of all income taxes on only 13% of all earnings is unfair so let's get top rates of income tax down asap on the basis of this fairness concept.

Which leaves envy and/or selfishness and/or vengefulness with blame transfer to go. All of the above being a nonsensical basis on which to base policy, unless otherwise unelectable incompetent politicians want to continue buying the votes of selfish, vengeful and envyist sheeple.

[Tonberry]

jeff m2 said:

In any system or market there are going to be winners and losers, it's inescapable.

Part of the problem is politicians exploiting the gap for their own ends.

Education is such that it does not prepare most people to become wealthy, it prepares them to slot into the current needs of the country.

A few people realise that being part of the herd is not what they want and make their choices using different criteria.
A "herd person" may work in IT and get a large mortgage and believe that as the price of his house increases he is getting richer.

The problem with this is....everyone else is doing the same. The prices of houses are governed by demand and the ability of lenders to lend. The ability to make a monthly payment is the key, that monthly payment currently consists of more principal than it has historically. In prior years the interest portion was much higher which had a moderating factor on house prices. (lendability, lower int rate means higher loan amount)

A non herd person may see what is occurring earlier enough and decide not to become part of that club.
That doesn't mean that they don't get a mortgage, it means they arrange their finances in such a way that all their income does not go to funding a non realisable asset and a late model car with the correct letter on the plate. That can come later. (and usually does)

Some people are going to hate me for this but....
Part of it is knowing how smart or stupid you are....
It's not a problem not being super smart, the problem is not being realistic about your abilities.
To think you are super smart but have no money and consider all the rich people to have attained wealth through luck is a recipe for a life of mediocrity.

Could be time to look at why those people have what you don't.

Taxing the rich more will not make you wealthier.
Taxing your employer more could mean you looking for a new position

Sums up everything that ever needs to be said on the matter.

[nightflight]

Tonberry said:

jeff m2 said:

In any system or market there are going to be winners and losers, it's inescapable.

Part of the problem is politicians exploiting the gap for their own ends.

Education is such that it does not prepare most people to become wealthy, it prepares them to slot into the current needs of the country.

A few people realise that being part of the herd is not what they want and make their choices using different criteria.
A "herd person" may work in IT and get a large mortgage and believe that as the price of his house increases he is getting richer.

The problem with this is....everyone else is doing the same. The prices of houses are governed by demand and the ability of lenders to lend. The ability to make a monthly payment is the key, that monthly payment currently consists of more principal than it has historically. In prior years the interest portion was much higher which had a moderating factor on house prices. (lendability, lower int rate means higher loan amount)

A non herd person may see what is occurring earlier enough and decide not to become part of that club.
That doesn't mean that they don't get a mortgage, it means they arrange their finances in such a way that all their income does not go to funding a non realisable asset and a late model car with the correct letter on the plate. That can come later. (and usually does)

Some people are going to hate me for this but....
Part of it is knowing how smart or stupid you are....
It's not a problem not being super smart, the problem is not being realistic about your abilities.
To think you are super smart but have no money and consider all the rich people to have attained wealth through luck is a recipe for a life of mediocrity.

Could be time to look at why those people have what you don't.

Taxing the rich more will not make you wealthier.
Taxing your employer more could mean you looking for a new position

Sums up everything that ever needs to be said on the matter.

+1. I especially like the bit about being realistic about your abilities. The world is full of people who claim/think they are something they are not. When they fail, they then spend their time trying to blame someone else for their incompetence and failure.

Edited by nightflight on Saturday 19th April 17:37

[durbster]

I don't know if anyone caught the Hans Rosling presentation a few months ago but that was an unusually positive that essentially suggested everyone was gradually becoming more wealthy. Made a nice change from the usual

Anywya, I used to be all for ruthless capitalism and letting the market manage itself but I've become disillusioned with it more recently. As the line between Government and big business appears to have become less distinct in recent times, the concern is that the people making the rules are the people who benefit from them, and that's a problem.

I think it's hard to justify one single human being worth the ludicrous values some are today. I don't mind a company being worth billions but an individual is ridiculous. One billion pounds is an absurd amount of money in any context. I don't blame anybody with wealth but it does suggest a problem with the system; don't hate the player, hate the game.

I don't think taxation is the problem or the solution. It seems to be more of a monopolies and mergers problem. The number of companies that make things seems to be shrinking year on year and it seems competition is often purchased rather than competed with.

However, it's hard to say we don't have extraordinary choice these days and many more people have access to the gadgets and technology that would have been exclusively available to the wealthy not so long ago.

[hidetheelephants]

durbster said:

I don't know if anyone caught the Hans Rosling presentation a few months ago but that was an unusually positive that essentially suggested everyone was gradually becoming more wealthy. Made a nice change from the usual

You can tell he's scandinavian; I like the washing machine lecture, he does a good job of selling the merits of capitalism.

[Derek Smith]

ClaphamGT3 said:

My only family is a classic case in point. Norfolk squirearchy with four sons. The scary stats were:
4 sons
3 served as junior officers
2 served in France on the Western Front in the Suffolk Regiment
2 didn't come back from France

My father was one of 18 children, 8 of who were male.

At the end of WWII, five were dead. This included one who was torpedoed in WWI, suffered lung damage and was invalided out of the merchant navy. He opened a pub in Portsmouth and was killed in the bombing.

Every daughter who was married lost a husband during one or other of the wars, although battle was not the sole cause as illness seemed to be a significant factor. One woman lost two husbands, one was married on day one and on day two he went to war and did not return. My family were mostly merchant navy, although two uncles were Royal Navy, both on battleships, both being killed on the same day.

We were not quite squires so much as, according to my grandmother, whose husband lost a lung in a gas attack in WWI, bog Irish.

I'm not sure what the point is about how many suffered from middle/working/upper classes. The simple fact is that on the battlefields the death rate was tremendous. The hierarchy didn't get to grips with the requirements of trench warfare, at least as far as protecting the soldiers, until late in the war.

[Derek Smith]

jeff m2 said:

In any system or market there are going to be winners and losers, it's inescapable.

Part of the problem is politicians exploiting the gap for their own ends.

Education is such that it does not prepare most people to become wealthy, it prepares them to slot into the current needs of the country.

A few people realise that being part of the herd is not what they want and make their choices using different criteria.
A "herd person" may work in IT and get a large mortgage and believe that as the price of his house increases he is getting richer.

The problem with this is....everyone else is doing the same. The prices of houses are governed by demand and the ability of lenders to lend. The ability to make a monthly payment is the key, that monthly payment currently consists of more principal than it has historically. In prior years the interest portion was much higher which had a moderating factor on house prices. (lendability, lower int rate means higher loan amount)

A non herd person may see what is occurring earlier enough and decide not to become part of that club.
That doesn't mean that they don't get a mortgage, it means they arrange their finances in such a way that all their income does not go to funding a non realisable asset and a late model car with the correct letter on the plate. That can come later. (and usually does)

Some people are going to hate me for this but....
Part of it is knowing how smart or stupid you are....
It's not a problem not being super smart, the problem is not being realistic about your abilities.
To think you are super smart but have no money and consider all the rich people to have attained wealth through luck is a recipe for a life of mediocrity.

Could be time to look at why those people have what you don't.

Taxing the rich more will not make you wealthier.
Taxing your employer more could mean you looking for a new position

Thanks for that post. I always enjoy reading one that is a classic of its kind.

Edited by Derek Smith on Saturday 19th April 21:57

[Rovinghawk]

avinalarf said:

If a company makes a profit what is "wrong"with everybody in that company enjoying a teeny weeny share in that profit.

I'll answer this with a question- if the company makes a loss, will they accept a retrospective pay cut?

Of course not- they've chosen a fixed fee for their work rather than a variable fee based on the company's fortunes. Only in socialist trade union land do you go up the ladders but not down the snakes.

[Dr Jekyll]

Siscar said:

I may be in a small minority but actually I would make inheritance hard harder than it is, I see no reason why I should be able to bestow riches on people who have done nothing to earn it. Wealth should be earned, not given to you.

But if the person who earned it is dead then it's obviously going to have to go to someone who didn't.

[KENZ]

What level do you determine someone as being rich? By the nature of capitalism people are leveraged to some extent.

[AstonZagato]

That's the lunacy of the mansion tax. Someone who owns a £2 million house with a £1mio mortgage gets hit. Someone with a £1.5mio house and no mortgage is exempt.

[turbobloke]

Dr Jekyll said:

Siscar said:

I may be in a small minority but actually I would make inheritance hard harder than it is, I see no reason why I should be able to bestow riches on people who have done nothing to earn it. Wealth should be earned, not given to you.

But if the person who earned it is dead then it's obviously going to have to go to someone who didn't.

The government certainly didn't earn it so scrap IHT.