TJ – for once, stop and read what someone else is writing, then engage brain and then, and only then, reach for the keyboard.

I am making the comparison between history in the days of Ford and Gates. Of course, there was more of a trickle down effect in Ford’s time as all parts of the value chain were located close together. So whole local communities saw the benefit. Today, this is less obvious as globalisation does not naturally lead to trickle down into the same communities. Hence Gates can make billions and be philanthropic without a local community benefiting the the same degree as in Ford’s day.

There is no wing -right or otherwise here – merely an observation as to why trickle down may be less obvious today.

MSP – ok, make no incentives for people to invest in companies but don’t complain if there is nobody willing to support more start ups.

MSP – ok, make no incentives for people to invest in companies but don’t complain if there is nobody willing to support more start ups.

Try reading what I actually wrote, I support giving tax insensitive to start ups, but that is a minimal part of the so called investing that currently goes on. Buying shares in most companies does not provide finances to the company, you are buying from someone else who owns them, just like buying second hand goods provides no further income to the manufacturer.

You need to take a more realistic view of what the markets really are, they do not primarily provide finance for growth.

And what do you think will happen to all that money, it will still be traded on the markets whether taxed as earning or not, where else do you think its all going to go?

Teramhurtmore -I did read what you posted

trickle down is a discredited far right idea. Thats the point. It simply has no meaning and is an excuse to grab as much wealth as you can. It does not happen – there is no trickle down effect

Right thru this thread you have been espousing discredited far right dogma

MSP, love your theory. I assume you studied at London Business School or Harvard to gain such a knowledge of business funding or did you hear it down the pub?
Some very blinkered and wrong views on how businesses work and the taxing of their profits, effects of losses and distribution of wealth to it’s share holders. Pointless me telling you how it does actually work since you already know it all but I’d try checking your facts before making more factless comments.

MSP – ditto, you made the leap to stock and shares. I was talking broadly (if not clearly accepted!) about investing directly in companies. 50/50!!

OK TJ well I simply don’t agree. There was considerable trickle down in the times of Ford, Carnegie and even the Cadbury family here. There is less (arguably) today – you can get stuck into dogmas of whatever wing while I will prefer to read the sensible analysis.

FWIW – there is a whole series on the future of capitalism (as weakly as that is defined) in FT starting today.

I have only appeared to take one view because I am interested in the argument/logic. Not fussed about the politics. So I merely challenged the assumptions made on fairness in taxation and the automatic assumption that equality of outcome (esp income) is fair earlier. And I challenged the idea that utilitarianism is naturally better than Libertarianism (although not in those words) merely because the Utilitarian argument was presented first. As I said (if you had read) each of the three core principles of philosophy can be challenged which is whey these subjects are interesting and frustrating at the same time.

If I appear to be defending a RW dogma then that will only be because the LW dogma will have been spouted before. Trust me, you have no idea about my persuasions!

Go on then craig – explain why shareholders in say Pricewaterhouse should get tax relief on their unearned income from the shares? what risk have they taken?

Why do bonuses get given in shares – to avoid tax.

Teamhurtmore – sorry – you maybe fooling yourself, you are not fooling the rest of us – you espouse not just right wing but far right wing economic dogma on here all the time.

Go on then craig, enlighten me with your wisdom!

MSP – ditto, you made the leap to stock and shares. I was talking broadly (if not clearly accepted!) about investing directly in companies.

The discussion was about the classification of investments as defined for tax purposes, if you decided that you are only talking about a small subsection of this, then can I assume that you support the more general taxation of capital gains as earnings.

TJ – you are doing it again. But I do not want to get into the usual TJ will keep posting BS until he bashes you into submission type arguments again. If you want to think that, feel free. I hope it makes you happy. I accept that on this thread my posts may have taken on a libertarian bias, but for the reasons outlines above.

[ oh and dont forget that paying bonuses in shares was essentially about aligning interests and then locking people into contracts (via deferrals etc) long before any idea of tax avoidance. But that doesn’t fit your more overt dogma does it.]

Teamhurtmore are you saying you do not believe in flat rate tax, trickle down theory then?

The only economic arguemnets I have seen you espouse on here are far right neoliberal

I have never seen you argue for anything that would redistribute wealth or protect those without power

TJ, it’s an investment risk that they are getting a return on. PWC aren’t 100% safe and you only need to ask the investors of Arthur Anderson, Northern Rock and lord knows how many other businesses have gone under. Did the shareholder get their investment back? Most got nothing and those that did got pence in the pound after every other creditor has preferential treatment over them.
You compare very big businesses with all the small, medium and large who wouldn’t survive without the tax structures which are comparable with most non Islamic countries. Without these businesses it would leave a lot of the country unemployed and no taxes to fund any public services.

MSP, I can’t possibly enlighten you when you already know everything.

Most got nothing and those that did got pence in the pound after every other creditor has preferential treatment over them.

And a lot of people lost their jobs, so why is the loss of employment less worthy that the loss of investment?

MSP, I can’t possibly enlighten you when you already know everything.

Knowing more than you hardly means I know everything.

I explained flat rate taxation and how it can be progressive as long as you have allowances. This was in response to JY asking how a FR tax can be anything other than equal (or words to that effect). Like most tax systems it has strengths and weaknesses.

Trickle down – I am interested in why trickle down effects are/seem less evident today. I think analysis in this area is incomplete and superficial -including the FT today. The OECD made a crack at it last year. I can supply the link if your are interested. Before you can correct it (and protect those without power), you need to understand it. That’s where we will continue to differ!! Read back my comments on education. That is where I want to give people real power but that is a long way from current ideology.

To the (limited) extent that I have presented my views on any thread as opposed to debating previous assumptions, I will accept that I have argued occasionally for equality of opportunity over equality of outcome. If they constrains me to a neoliberal camp in your eyes then so be it. I know where I stand!

When they lost their jobs they got redundancy and paid for their wages, even of the company didn’t have the funds to pay the employees the government pays out as the employees are protected. The shareholder get a big fat nothing. If the investor bought a £1m worth of shares and the company goes under they get nothing or at the best pence in the pound. They do get tax relief for the losses against any other capital gains they may have but this can’t be used against income tax so they still have to pay that.

Knowing more than you hardly means I know everything.

You project that you do know everything instead of looking up the facts before commenting with rubbish

Go on then craig – explain why shareholders in say Pricewaterhouse should get tax relief on their unearned income from the shares? what risk have they taken?

TJ PWC is a limited liability partnership (LLP), it’s not the same structure as a Ltd company or a PLC. The meaning differs around the world, but ultimately, if you make equity partner (in PWC or any law firm which also uses LLP as its structure) then ostensibly you have to buy in. This costs a small fotune, so much that usually it’s facilitated by taking a big discount against your salary/share structure of some time.

So all in, there is a significant investment and therefore risk (even if the LLP shields you as an individual).

Teamhurtmore

You have not even argues for equality of opportunity – you really do argue a far right neo liberal viewpoint. The viewpoint you espouse cements inequalities by keeping power and wealth concentrated in the hands of a minority. I want equality of opportunity and to get that you need to redistribute wealth and power. a few % of the population of the UK have grabbed a vast amount of the wealth – I think its 55 of the population have 40% of the wealth. hardly equality of opportunity.

to get equality of opportunity yo need a level playing field not one where a small elite has all the power and wealth

I guess that the people you know are maybe further to the right than you so you do not realise how far right of centre the view you argue for is compared tot eh nation at large – either that or you don’t believe the pint you argue for

Geetee – PWC a bad example then

If they have only invested in the one company, then they are very bad at investing, if they had had 10 million invested in a portfolio, then even allowing for the loss they would be better off than if they had their earnings actually taxed as earnings.
Have you seen the amount people get for redundancy? 1 week for every year of employment? Do you really expect me to have greater sympathy for the millionaire investor than the near minimum wage call centre operative in that scenario?

You project that you do know everything instead of looking up the facts before commenting with rubbish

Three posts three insults well done sir!

Wunundred! 😀

Din’t pay tax on it either.

As I said before TJ you win….its TJ law…I bow into submission before the onslaught of forum BS that you will inevitably continue to espouse.

Were you a ventriloquist in your youth?

[either that or you don’t believe the pint (sic) you argue for – mmm, think about that for one second!!!]

Geetee – PWC a bad example then

It was but that’s OK. I got your point.

You know TJ you and I are pretty much on opposite sides of this debate. But still, can I just say, I love your input. Don’t ever change (I know you won’t).

Anyone who gets too frustrated with your arguments should pause for a moment and remember what living in a plural society actually means.

No insult just how I view your comments

Is every investor a millionaire? If we put massive taxes on on dividends, which via tax credits are tax free up to but not including higher rate tax payers, who would invest in this country to create the capital required for a business to operate?

Capital gains are also taxed but an annual allowance allows people a small amount of tax free earnings and tax bands on the amounts above this allowance allow basic rate tax payers to pay less than others.

Teamhurtmore.

do you believe in the economic philosophy you espouse on this and other threads?

How can you have equality of opportunity with power and wealth concentrated in the hands of a small elite?

Edit – Ill echo that comment from Geetee. YOu have an informed and interesting viewpoint

I assume you studied at London Business School

I did! 😀

Elfinsafety – Member
I assume you studied at London Business School
I did!

Hopefully then you can separate the fact from fiction.

Is every investor a millionaire?

Your example not mine.

Capital gains are also taxed but an annual allowance allows people a small amount of tax free earnings and tax bands on the amounts above this allowance allow basic rate tax payers to pay less than others

But at a lower rate than earnings, which is not justifiable IMO, after all that’s what they are.

No not always – you assume my position most of the time. I normally argue about a point of logic or principle. So you stated earlier that FRT was unfair and not progressive. I showed that that was not necessarily the case with some simple maths. Didn’t say whether I approve of it or not. You merely assumed.

Ditto we argued about Eton Collge before when you argued that you don’t have to be intelligent to go there – or words to that effect. I argued against that by posting a copy of one of their scholarship papers for 12/13 year olds. Just pointing out the flaws in your diatribe at the time. Didn’t say one way or the other what I thought of Eton College. But noticed that you failed to respond the the questions in the exam paper. Convenient that. (FWIW – I wish everyone could be educate to that standard)

But it gives me a laugh to be described in the way that you do!! If only you knew…..!!

I did!

Elfin really? I went to Manchester Business School myself. I wasn’t clever enough for LBS!

teamhurtmore

You accuse me of not reading your posts 🙂 – both those examples you have not represented what I said

On the flat rate tax I said it was not progressive unless thresholds and rates were high ( when you then un into the drawback of high marginal rates)

there is a difference between going to Eton because you can pay and going on a scholarship.

You do not have to be clever to go if you are rich

Why do you only ever espouse a neoliberal stance? Good point tho that it is too easy to assume what people are arguing for – I get caught on that one a lot as on scottish nationalism. Point taken

Guess I misread:

Flat rate tax is only very slightly progressive. Its manifestly unfair. we have historically used the tax system to redistribute wealth from those who have the power to grab it to those who do not. flat rate taxation unless thresholds are very high and the rate is very high would increase inequality

As my maths showed, the threshold in a different argument (albeit related) and the progressive nature can be quite strong. Look at the maths. Threshold can be low and income still redistributed.

You do not have to be clever to go if you are rich

And you are accusing me of dogma???? They have rigorous pre-testing, entrance exams and scholarship papers. Actually you do have to be clever…you are 50, go and try one of the maths papers I posted.

Is this about tony blair only paying a fraction of the tax that he should be?

TandemJeremy – Member

Why do bonuses get given in shares – to avoid tax.

Or you could look at it another way – why are tax reliefs available for share-based payments that are not available for cash payments?

Elfin really? I went to Manchester Business School myself. I wasn’t clever enough for LBS!

Erm, when I say ‘studied’…

It was a lady’s bottom actually. I can’t lie. And she caught me looking too. 😳

Bonuses are given in shares for a number of reasons, but from a corporate governance and management perspective, it’s about aligning an individual with the fortunes of the company, it’s tax efficient FOR the company (you don’t pay PAYE) and they are controllable from the point of vesting, which means they act like golden handcuffs.

When you sell them, you get taxed on them at the capital gains tax rate and usually the shares issued to employees are structured so they don’t pay dividends; which is where the income would be tax efficient for the individual but since you pay capital gains on the vested and cashed shares, it’s not a tax doge for the employee.

you pay capital gains on the vested and cashed shares, it’s not a tax doge for the employee.

Well thats 12% lower than income tax, which isn’t an option available to most employees.

teamhurtmore was that the scholarship exam or the entrance exam.

Lets put it this way – I have known a couple of old etonians and they were not particularly clever.

Well thats 12% lower than income tax, which isn’t an option available to most employees.

It may be, but shares are far more risky than salary. That risk will change depending on the company (you can measure that degree of risk by the company’s beta and capital structure) but ultimately the higher degree of risk should be compensated by a higher return.

Imagine that you took a job where there was a one in ten chance that you wouldn’t get paid every month. How much more would you want to earn over and above your market rate (assuming that this was a known/absolute value) to compensate for that risk.

TJ – that may be the case (you know OEs that aren’t particularly clever) but the notion that you can get in on connections/with lack of intelligence today is flawed.

It was actually a scholarship exam if I recall correctly. Not sure apart from their pre-test if they use common entrance or their own entrance paper like Winchester. Have a look at one of those, they are even harder!!

Thank you geetee, you explained shares and bonuses much better than me. You really did go to B School – CAPM on a cycle thread. Its amazing what we cover!!

but ultimately the higher degree of risk should be compensated by a higher return.

Again you state that share investment is a risk worthy of tax benefits, its just a value judgement based on giving preference to earning money from one source rather than another. I just do not see owning shares as any more worthy of tax breaks than earning money from employment.
Tax earnings as earnings no matter what the source.