Kerrigan: Rich have been left alone for too long

creedp

PeadarCo wrote: »

For managers of companies its perfectly possible to manage any company from abroad in the age of the internet. The Dail has enough to be getting on with than wasting time that could be devoted to far bigger problems. If you feel this idea would be an effective use of Dail time far enough.

I though the Dail had already done enough to incentivise high income people to live abroad, i.e. live in NI and work in the South, by exempting them from the high rate of (7%) USC in the same way as the 'vulnerable' medical card holder is exempt in the South. I always loved this when commuting on the M1 and watched executive NI reg'd cars fly by thinking my taxes are subsidising his taxes ... that warm feeling again!! Now can someone tell me why a non-resident working in this country should be treated more favourably that a resident for tax purposes. Absolutely no difficulty with NI people working in the South but I think they should be treated the same as southeren taxpayers, especially as high income southerners are taxed so highly. Maybe we should all, or at least high income people, locate just over the border (for tax purposes) and enjoy the savings!!

Supermensch

KyussBishop wrote: »

Why not though? Subsidies and tax breaks, and indeed higher taxes on specific items, all get used to tweak incentives/disincentives in various industries; what is so unique about income tax?

There are definitely valid ethical reasons to incentivised or disincentivised certain areas through the use of tax. Smoking is one. While we are willing to grant people the liberty to smoke, we rather they didn't, and taxing is the easiest way of discouraging the practice. But to imply that there is an ethical motive for income tax, you have to examine exactly what it is you are trying to discourage or disincentivise.

What you're arguing is that income tax discourages a disparity of wealth in society. The question that has to be asked is whether this is really an efficient way of dealing with this inequality. If you were to say that income tax should be higher so that the government has more money to set up schemes which help those who are not wealthy, for example Back to Education, then I would agree that this could be a feasible method of reducing the wage gap. However, this would not be an ethical reason for raising income tax, this would be a procuring-more-funds reason. On the other hand, I do not agree that raising income tax as a means in itself of reducing a wealth disparity is an ethically justified measure, because what this line of thinking essentially comes down to is that nobody should be allowed to accrue wealth, and that this wealth, even if it gained through honest means, should be taken and given to those who are not of wealth, simply because they are not of wealth.

Another potential policy I have read elsewhere for instance, which is a lot more explicit/well-defined than arguments I've put for taxing high-income before, is the idea of capping executive payments in a corporation to 40-60x (maybe even go to 100x if you like) that of the lowest salary earned within a corporation.

That idea tackles the problem of excessive executive salaries, whilst simultaneously incentivizing giving all workers of a corporation benefits from the profits, by raising the wage floor.

That is surely a lot less objectionable than my other generalized arguments in favour of high taxes? (specifically as a CEO can pay himself whatever he likes, so long as he pulls the bottom wages up with, after a point)

The question here is what does the CEO or shareholders of a company owe to the workers, beyond the wage and benefits which the workers agreed upon of their own volition? Provided that the CEO is earning this wage in such a way that is of no detriment to society (evading taxes and such), then why should a CEO earn less or raise the wages of workers purely because a gap exists between the two? As I said before, by all means, you can make the case that money should be raised from incomes to fund schemes which work to improve the lives of those who are not wealthy, but to regulate wages for the sole reason of stopping people from becoming rich makes no sense. As I said in my original post, being rich in itself is not intrinsically immoral or of detriment to society.

What about tackling growing income inequality, and all of the societal/political ills that creates? That is justification in itself really, as it's well documented that disproportionate political power is in line with disproportionate income (for one, among much else).

There are more efficient manners of reducing political corruption than by instating higher income tax (tighter laws on corporate and political corruption, harsher sentences for offenders, etc.) which are of less detriment to entrepreneurship. If those with wealth have more political power, it makes more sense to learn why exactly that is, considering we live in a supposedly democratic society, and to confront that reason directly, rather than assuming that wealth and power are inexplicably linked.

KyussBishop

PeadarCo wrote:

Could you point me towards one specific tax treaty as an example. I don't want to have to read 60+ tax treaties

Try the first link.

PeadarCo wrote:

http://swissramble.blogspot.ie/2011/...asterplan.html

My point was that TV revenue is only one element. Take Man City media revenues contribute less than half their income. I agree with Kinski that some clubs are arguably commercially unsustainable but I also make the point that clubs such as Bayern Munich can still pay large wages and be profitable year after year.The author notes in the paragraph above the 2 graph the German club have been profitable for 19years.

Also in this subsequent link a table which has a graph showing the contribution of TV revenue to clubs. For most its less than half. Also in Bayerns situation wages are only about half of their overall turnover.
http://swissramble.blogspot.ie/searc...ayern%20Munich

The chart on the first link shows tickets are about one tenth of the profits; completely dwarfed in comparison to media profits and sponsorships (which are the commercial profits), which is mainly advertising (thus tying back into TV as a profit source) that consumers have no control over whatsoever.
In the other link, the ticket profits could meet 25% at a stretch.

It actually substantially backs up my point, as these figures show between 75-90% of the profit generated is completely beyond consumers control.

PeaderCo wrote:

The point what you don't seem to get is that people are not forced to watch the sport. There are plenty of other things to watch.

You don't seem to get, from my previous posts, that people pay for it indirectly anyway, whether they watch it or not.

Do you have a TV subscription? You probably pay for it. Do you have a subscription for any TV sports? Your TV provider was nice enough to bundle that into a package of a dozen or so channels, without giving you any option to pick or choose; you pay for it.
Do you go to the pub occasionally; a hotel, a club? Do they show big sporting events? You pay for it (indirectly).
Do you buy products from any of the companies that sponsor these matches? You pay for it (again, indirectly).

Again, like I described in my previous post, you cannot overcome the inertia caused by public apathy; there is literally nothing you can do, and the football teams and supporting industries can treat their customers as crap as they like, can splash out on massively oversized incomes as much as they want, and they won't see any consequences so long as they don't tip the balance of public apathy, by pissing off enough people to make them care and do something.

And again, public apathy is not an endorsement of their practices or massively overinflated wages.

PeaderCo wrote:

Could I ask you to restate your arguments using empirical evidence to support your arguments. At this stage I see your argument as being that's its immoral to earn more than €X. You believe anyone earning more than €X is benefiting from unethical behaviour and hence should be taxed according. Any downsides to this are outweighed by the benefit to the general public. I could be wrong and am open to correction.

I obviously disagree with that and with no empirical evidence to support your position we end up going round in circles.

My argument was really simple: The high-income tax would be used to disincentivize many of the previously mentioned societally undesirable behaviours (plus other added reasons), whilst counterbalancing that against the impact it would have on genuinely earned income.
It would balance the harm caused to genuine earners, against the need to discincentivize.

There is no empirical evidence needed to back this, as you appear to be requesting empirical evidence upon the straw man.

KyussBishop

Supermensch wrote:

What you're arguing is that income tax discourages a disparity of wealth in society. The question that has to be asked is whether this is really an efficient way of dealing with this inequality. If you were to say that income tax should be higher so that the government has more money to set up schemes which help those who are not wealthy, for example Back to Education, then I would agree that this could be a feasible method of reducing the wage gap. However, this would not be an ethical reason for raising income tax, this would be a procuring-more-funds reason. On the other hand, I do not agree that raising income tax as a means in itself of reducing a wealth disparity is an ethically justified measure, because what this line of thinking essentially comes down to is that nobody should be allowed to accrue wealth, and that this wealth, even if it gained through honest means, should be taken and given to those who are not of wealth, simply because they are not of wealth.

Not quite, I have no problem with people becoming wealthy so long as they earn it (i.e. so long as what they provide society is proportional to the earnings), and it's very hard to make a case that earnings 60x beyond the average are proportional; that is just one argument as well, among many.
It is also demonstrable that the more wealth someone earns, the more disproportionate political power they hold, and there are also many societally undesireable practices that can be easily dissuaded/ameliorated by taxing earnings past a high enough point.

The intent would not be to take money from the high-earners (which is not synonymous with wealthy) and give to the poor, as the likely effect would be capped salaries with money staying within companies instead.

I would argue actually, that taxation is the most effective way of capping off future wealth disparity; what else can you think of, that can so immediately put a limit on excessive wealth creation?

Distribution of money in an economy is a zero sum game in the end; there is a definite, hard-to-define point, at which concentration of wealth becomes damaging to society, so you can't say 'proportionality' of income is subjective, therefore any income is always justified, because there is every justifiation on clamping down on excessive earnings to ameliorate the negative societal effects.

Money held is a debt from society to that person, so there's every right for society to have that person justify the proportionality of such an income (and to enact laws to restrict it if deemed a net benefit to society).

Supermensch wrote:

The question here is what does the CEO or shareholders of a company owe to the workers, beyond the wage and benefits which the workers agreed upon of their own volition? Provided that the CEO is earning this wage in such a way that is of no detriment to society (evading taxes and such), then why should a CEO earn less or raise the wages of workers purely because a gap exists between the two? As I said before, by all means, you can make the case that money should be raised from incomes to fund schemes which work to improve the lives of those who are not wealthy, but to regulate wages for the sole reason of stopping people from becoming rich makes no sense. As I said in my original post, being rich in itself is not intrinsically immoral or of detriment to society.

Being rich is not immoral itself on an individual basis, but when income inequality becomes excessive it creates definite societal damage and hazards to society; capping the CEO salary as a multiple like I mention is a policy aimed at ameliorating the damage that can be caused by income inequality.

Supermensch wrote:

There are more efficient manners of reducing political corruption than by instating higher income tax (tighter laws on corporate and political corruption, harsher sentences for offenders, etc.) which are of less detriment to entrepreneurship.

As I've said in my previous posts, it's not about outright corruption, and no you cannot regulate every possible borderline-legal/unethical practice that can net disproportionate income, because for every one you regulate there will be another; there is no way that is even remotely as efficient as using tax.

Right now, there is so much political influence generated through wealth and earnings, that it is impossible to hold people to account, or get proper enforcement of regulations etc. (just look at the finance industry) because there is disproportionate control over politics; trying to close every potential ethical loophole, past present and future, is an endless war of attrition which is not going to stop excessive political influence from redeveloping; again, there is no more efficient way than tax.

Supermensch wrote:

If those with wealth have more political power, it makes more sense to learn why exactly that is, considering we live in a supposedly democratic society, and to confront that reason directly, rather than assuming that wealth and power are inexplicably linked.

It's simple really, politics is inherently (and will always be) corrupt to a point, because people want to make money. Politicians are the gatekeepers to the pesky laws and regulations keeping the floodgates closed for corporations, and if a politician gains enough influence to repeal/adjust a few laws, add a loophole or two, he can make a crapload of money by co-operating with corporate interests, probably going through the revolving door to work in the industry he was previously in charge of regulating (or vice versa).

There are numerous legal (and many illegal) ways of accepting hidden payments (or future payments), that would put a politician in a position of conflict of interest, and that's going to stay true for a very long time still.

PeadarCo

KyussBishop wrote: »

The chart on the first link shows tickets are about one tenth of the profits; completely dwarfed in comparison to media profits and sponsorships (which are the commercial profits), which is mainly advertising (thus tying back into TV as a profit source) that consumers have no control over whatsoever.
In the other link, the ticket profits could meet 25% at a stretch.

It actually substantially backs up my point, as these figures show between 75-90% of the profit generated is completely beyond consumers control.


You don't seem to get, from my previous posts, that people pay for it indirectly anyway, whether they watch it or not.

Do you have a TV subscription? You probably pay for it. Do you have a subscription for any TV sports? Your TV provider was nice enough to bundle that into a package of a dozen or so channels, without giving you any option to pick or choose; you pay for it.
Do you go to the pub occasionally; a hotel, a club? Do they show big sporting events? You pay for it (indirectly).
Do you buy products from any of the companies that sponsor these matches? You pay for it (again, indirectly).

Again, like I described in my previous post, you cannot overcome the inertia caused by public apathy; there is literally nothing you can do, and the football teams and supporting industries can treat their customers as crap as they like, can splash out on massively oversized incomes as much as they want, and they won't see any consequences so long as they don't tip the balance of public apathy, by pissing off enough people to make them care and do something.

And again, public apathy is not an endorsement of their practices or massively overinflated wages.

Your argument is predicated on the basis the people are forced to watch the sport. How can TV companies force millions to watch premier league matchs. How can they force them to not switch channel to something they are interested in. Very few channels provide only sport. There is more than one channel and more than one programme on at a time. Why would not they not spend the money on things people want to watch. Larger audiences means advertising space is worth more which is a key part of a broadcasters revenue. If nobody is watching ad space is worth €O.

Commercial also includes elements such as shirt sales etc. TV does help do what you also note from the links that it is not directly correlated to TV income. This indicates if a clubs wants to increase it it must have a separate help although I agree a larger audience helps but my would people sponsor something that reflects negatively overall on their brand.

Which us back to the original point are people who earn more than €3 million worth it. Given that some teams are able to pay wages of this amount sustainablely its less than €60,000 a week. This for top top teams is a relatively low wage so obviously some people do believe they are worth it.You are free to disagree.

KyussBishop wrote: »

My argument was really simple: The high-income tax would be used to disincentivize many of the previously mentioned societally undesirable behaviours (plus other added reasons), whilst counterbalancing that against the impact it would have on genuinely earned income.
It would balance the harm caused to genuine earners, against the need to discincentivize.

There is no empirical evidence needed to back this, as you appear to be requesting empirical evidence upon the straw man.

You have a theory that's all. You have no evidence to support your position. Raising and lowering tax's and the various costs and benefits associated are not theoretical. This has been done for hundreds of years. There is plenty of evidence available for you to use to support your position should you choose. If as it appears as your unwillingness to produce it suggests that there is no evidence to support your position it indicates that your theory however sound you think it is does not work in the real world. Which means this theory is unsound and needs to be revisited as it obviously ignores certain real world factors that need to be invesitagated.

Economics is a social science and like any science were possible theories are tested against the real world. If you don't do this you can't validate your theory in any way.

PeadarCo

KyussBishop wrote: »

Try the first link.

Thanks for that.

KyussBishop

PeadarCo wrote:

Your argument is predicated on the basis the people are forced to watch the sport.

No they are not, the fact of the matter is your money goes towards funding it whether you watch it or not; that is the argument I've been making.

It completely does not matter whether you are interest in or watch sport, because there are several indirect ways you end up funding it.
In short, the funding that goes into it is heavily disconnected (though still correlated) with who actually watches or is interested in it.

PeadarCo wrote:

Commercial also includes elements such as shirt sales etc. TV does help do what you also note from the links that it is not directly correlated to TV income. This indicates if a clubs wants to increase it it must have a separate help although I agree a larger audience helps but my would people sponsor something that reflects negatively overall on their brand.

The meat of the commercial expenditure is on sponsorship, which is rooted in advertising, which heavily ties into TV and media in general; none of which the consumer has any control over.

Also, you haven't addressed the point about overcoming the extremely significant inertia of apathy (and the massive leeway that gives any industry overall), or how such significant apathy does not mean excessively high wages are endorsed.

PeadarCo wrote:

Which us back to the original point are people who earn more than €3 million worth it. Given that some teams are able to pay wages of this amount sustainablely its less than €60,000 a week. This for top top teams is a relatively low wage so obviously some people do believe they are worth it.You are free to disagree.

Yes the people who are making craploads of money from the entire industry think it's worth it, because it's in their interest in as it boosts their profits and personally nets them a crapload of cash.

This does not mean the end-consumer thinks it is worth it, they just don't have a say in the entire affair; your argument basically boils down to "they can pay such high wages, so because they can then their wage is automatically proportional".

Even within the industry, a majority support capping the pay:

Despite the high salary figures, 64% of Premiership footballers who responded said they were in favour of a salary cap, which would mean that no more than 75% of a club's income should be spent on its wage bill.

http://news.bbc.co.uk/sport2/hi/football/4898392.stm

PeaderCo wrote:

You have a theory that's all. You have no evidence to support your position. Raising and lowering tax's and the various costs and benefits associated are not theoretical. This has been done for hundreds of years. There is plenty of evidence available for you to use to support your position should you choose. If as it appears as your unwillingness to produce it suggests that there is no evidence to support your position it indicates that your theory however sound you think it is does not work in the real world. Which means this theory is unsound and needs to be revisited as it obviously ignores certain real world factors that need to be invesitagated.

Economics is a social science and like any science were possible theories are tested against the real world. If you don't do this you can't validate your theory in any way.

Eh? Where did I theorize? I outlined a policy, I wasn't making up some fanciful theory. You seem to be evaluating my argument based on the straw man you presented, once again, which is consciously dishonest.

What exact part of what I said do you contest by the way? You don't seem to have directly argued against anything other than your straw man presentation, and now you're spinning another straw man by saying I'm 'theorizing'.

In general here, you seem to babble on about 'theorizing', 'real world factors' demanding 'empirical evidence' to back up....to back up what exactly? What specific statement or claim are you asking me to back with empirical evidence there? (the straw man argument you presented perhaps? which I don't have to find evidence for because it isn't a position I argued in the first place?)
You go on about that and other nondescript/irrelevant points, which all seem to completely avoid addressing any of the actual arguments I have made, and in general avoid saying anything coherent at all, just still trying to bash down the same straw man I brushed aside a page or two ago.

Anyway, while the football aspect of the discussion was slightly interesting, the circular nature of the rest of the discussion pretty heavily limits where it can go or what may potentially be learned still, so I'm going to leave it at that.

PeadarCo

KyussBishop wrote: »

Eh? Where did I theorize? I outlined a policy, I wasn't making up some fanciful theory. You seem to be evaluating my argument based on the straw man you presented, once again, which is consciously dishonest.

What exact part of what I said do you contest by the way? You don't seem to have directly argued against anything other than your straw man presentation, and now you're spinning another straw man by saying I'm 'theorizing'.

In general here, you seem to babble on about 'theorizing', 'real world factors' demanding 'empirical evidence' to back up....to back up what exactly? What specific statement or claim are you asking me to back with empirical evidence there? (the straw man argument you presented perhaps? which I don't have to find evidence for because it isn't a position I argued in the first place?)
You go on about that and other nondescript/irrelevant points, which all seem to completely avoid addressing any of the actual arguments I have made, and in general avoid saying anything coherent at all, just still trying to bash down the same straw man I brushed aside a page or two ago.

Anyway, while the football aspect of the discussion was slightly interesting, the circular nature of the rest of the discussion pretty heavily limits where it can go or what may potentially be learned still, so I'm going to leave it at that.

If you are not theorising then you will have no problem providing hard evidence that your policy will work or has the potential to work based when implemented.

What I want you to show me that in the past when high taxes were levelled on high earners that it reduced the incidence of corruption/unethical behaviour and any the various benefits and costs associated. If you can show using hard data that this will produce a net benefit to society I will have no problem supporting your position. Tax's of various sorts are not exactly new so you shouldn't have any problem obtaining this information should evidence exist for it.

You can't simply argue using logic when real world data exists that can either prove or disprove this logic. Its very hard to proper debate when someone doesn't produce evidence and works on the basis this is true because I say so. You need to back it with data. We're not dealing with theoretical physics as already mentioned taxes are very real.

Supermensch

KyussBishop wrote: »

Not quite, I have no problem with people becoming wealthy so long as they earn it (i.e. so long as what they provide society is proportional to the earnings), and it's very hard to make a case that earnings 60x beyond the average are proportional; that is just one argument as well, among many.

Your opinion on whether wages 60x the average are proportional or not is irrelevant, unless you are a shareholder or in some way own a stake in such a company. As long as this company operates in a manner which is legitimate and complies with regulations, your or my opinions on how inflated wages are is moot.

It is also demonstrable that the more wealth someone earns, the more disproportionate political power they hold, and there are also many societally undesireable practices that can be easily dissuaded/ameliorated by taxing earnings past a high enough point.

As I said before, this problem, which I don't deny exists, would be better dealt with through better regulations on corruption, or some reform of the political system.

The intent would not be to take money from the high-earners (which is not synonymous with wealthy) and give to the poor, as the likely effect would be capped salaries with money staying within companies instead.

Whether this is the effect of such a policy or not, the question is why do private companies have to established a fixed wage ratio between employees? To put it bluntly, it's their money, why can't they do what they want with it? This is more of an argument on how Libertarian you believe society should be, however, and is not so relevant here in this thread.

I would argue actually, that taxation is the most effective way of capping off future wealth disparity; what else can you think of, that can so immediately put a limit on excessive wealth creation?

Distribution of money in an economy is a zero sum game in the end; there is a definite, hard-to-define point, at which concentration of wealth becomes damaging to society, so you can't say 'proportionality' of income is subjective, therefore any income is always justified, because there is every justifiation on clamping down on excessive earnings to ameliorate the negative societal effects.

You're going to need to delineate to me exactly what is wrong with legitimately accumulated wealth, bearing in mind that I have addressed the argument that wealth garners disproportionate political power.

Money held is a debt from society to that person, so there's every right for society to have that person justify the proportionality of such an income (and to enact laws to restrict it if deemed a net benefit to society).

Could you elaborate on this point?

As I've said in my previous posts, it's not about outright corruption, and no you cannot regulate every possible borderline-legal/unethical practice that can net disproportionate income, because for every one you regulate there will be another; there is no way that is even remotely as efficient as using tax.

Right now, there is so much political influence generated through wealth and earnings, that it is impossible to hold people to account, or get proper enforcement of regulations etc. (just look at the finance industry) because there is disproportionate control over politics; trying to close every potential ethical loophole, past present and future, is an endless war of attrition which is not going to stop excessive political influence from redeveloping; again, there is no more efficient way than tax.

Fundementally, what you are doing by using high income tax to discourage corruption is punishing the earning of money. It is not even a matter of the means not justifying the ends, but rather the means being of a distinct motive to the end result. While you have made the case that wealth begets political power, a point I don't dispute, by increasing income taxs as a method of dealing with this problem, you are not dealing with the unfair distribution of power in society, rather you are dealing with the 'problem' of wealth, and unless gaining wealth can in itself be demonstrated as being a henious act, this measure remains ethically dubious.

The Tree of Liberty

Diarmuid wrote: »

So according to Gene if you are paying marginal tax rate, you're rich

And he points to the US as a example of how to do it


Earn more than €36,000? Welcome to your future tax rate if Gene has his way. I, and my job, will be on a plane to some nice sunny country if that happens.

I don't think Gene Kerrigan is someone to be taken seriously when it comes to taxation, his views generally come in somewhere to the left of the ULA.

"Tax the Rich" has always been the mantra of Gene and his ilk, but without defining who exactly the "rich" are. Unfortunately for taxpayers they quickly find out when these people get into power that the "rich" in their eyes is about half the working population.

enricoh

so basically u bust your ass studying, bust your ass at work n then hand over the majority of your wages in tax? why bother in that case? just get the dole n a few nixers n even the odd claim!
but honestly i think that gene kerrigan so head off to north korea or any other communist place still on the go. to me there has to be an incentive to work hard and get on in life

Idbatterim

We don't have a taxing problem in this country but a spending problem.

nail on the head!