Replacing social welfare with a basic income

Geuze

Herp_a_Derp wrote: »

quote

I agree there is a worldwide problem with corporation tax rates. All countries must raise their rates together. If one country holds out it can cause problems.
Countries must work together to deliver higher tax returns from corporations.


Ordinary people, who have votes, pay tax at up to 60%.
Why do voters accept that corporations, who aren't even real people, should pay very low rates, as low as 12.5% in theory, but even as low as 1% in practice?


There needs to be a public backlash against corporations who refuse to pay taxes at reasonable rates.

If it's reasonable for hard working normal people to pay tax at 50% it should also be reasonable for corporations.

Please note that as only people pay taxes, then people pay CT.

Shareholders / staff / customers all pay the CT paid by a firm.

Geuze

Would a UBI make rich people better off?

Take the people in Ireland earning 275k+, 2014 data.

They earned 5,431m gross income.

They paid 2,206m in income tax and USC.

So they paid an average ATR of 40.6%.

The SJI proposal means they pay 40% ATR.

http://www.cso.ie/px/pxeirestat/pssn/rv01/DATABASE/rv01/Income%20Tax%20and%20Corporation%20Tax%20Distribution%20Statistics/Income%20Tax%20and%20Corporation%20Tax%20Distribution%20Statistics.asp

Suryavarman

Geuze wrote: »

I don't get your point.

A 40% ATR would be higher than what most high-earners pay now.

As you point out below they get a tax cut and they get €7,600 per year in UBI.

Geuze

They would lose tax credits though.

UBI replaces tax credits.

Suryavarman

Geuze wrote: »

They would lose tax credits though.

UBI replaces tax credits.

And even though they lose tax credits their ATR is still falling.

Herp_a_Derp

Isn't the flat tax rate suggested by Social Justice Ireland 60%, not 40%?
(edit; No, I'm wrong, Social Justice Ireland suggest a 40% tax rate on all income)

I don't agree with flat taxes as they're not progressive. A basic income does not need to be associated with a flat tax.



What does ATR stand for?
Is it effective tax rate?, or actual tax rate?



Corporations are pseudo people are they not?
Corporations do pay tax, and after the tax has been paid by the corporation then the residue is paid out to the shareholders or held as a cash reserve.
Tax is only paid on profits.
If it's ok for ordinary people with votes to pay 50% or 60% tax why is it not ok for corporations?

Water John

Flat tax and UBI are two unrelated concepts.

Bass Reeves

Herp_a_Derp wrote: »

I
If it's ok for ordinary people with votes to pay 50% or 60% tax why is it not ok for corporations?

Because corporate profits are again taxed when they are transferred out of corporate structure's. Because of MN's in Ireland in general our corporate tax rate is too low. It would be higher however this is a worldwkde issue not just an Irish issue.Coporate tax rate is not just applicable to the Apple's of this world but to lads that own small busines's the local publican , the bigger dairy farmer, the lad that owned more than one shop the small local engineering firm.

A corporate tax rate allows him to retain profit's within the busines to expand that business and to create employment. However if he wants to take profit out of the business in the form of a dividend then he has to pay his marginal tax rate on that. If it is a big MN then when they decided late a dividend they are subject to tax, if the share's increase in value and investor sells he pays capital gains on his profits so all corporate tax rate is a tax on the company's profits to retain the profits for further investment.

This is why I have no sympathy for Apple's tax case they were refusing to pay what is one of the lowest tax rates in the world on the idea that they would pay there due in to the US revenue when they repatriated there profits. It was one of the worst cases of corporate greed and of government collusion I have seen.

Sam Russell

Suryavarman wrote: »

This just isn't the case at all. It's a well documented fact that when minimum wages are set too high they reduce employment. It's also well documented that most of the benefits of minimum wage increases go to middle and high income families.



Investment increases short term growth. Only productivity growth increases long run growth.

Do you have a source for any of these points of view?

(Should be easy to find as they are well documented).

Suryavarman

Sam Russell wrote: »

Do you have a source for any of these points of view?

(Should be easy to find as they are well documented).

A minimum doesn't necessarily reduce employment, past a certain point it obviously does. This review of the literature finds that in general minimum wages reduce employment. Arindrajit Dube recommends a minimum wage equal to 50% of the median wage.

The second claim is based on the Solow Growth Model.

Sam Russell

Suryavarman wrote: »

The second claim is based on the Solow Growth Model.

The theory also explains why Germany and Japan, despite losing in the Second World War, managed to grow faster than the US and UK during 1950-1960 period. This is because many capital stocks in those countries were destroyed during the war, so any new addition of capital would have a high return and significantly increase economic development.

This is BS. Both Japan and Germany both have grown more than the UK since 1945, when both J and G were reduced to rubble. According to that theory, they should have never caught up, because the UK was much wealthier. The UK wasted much of its advantage by having ideological problems between their post-war Governments insisting on nationalising and denationalising various state/private enterprises (railways, steel, shipbuilding, etc, etc.). Both Japan and Germany built their industries on the basis of quality production systems, which Britain certainly did not do.

The UK failed to invest in their production facilities, and refused to pay their workforce fairly, who then went on strike.

They also introduced generous welfare payments.

Suryavarman

Sam Russell wrote: »

This is BS. Both Japan and Germany both have grown more than the UK since 1945, when both J and G were reduced to rubble. According to that theory, they should have never caught up, because the UK was much wealthier. The UK wasted much of its advantage by having ideological problems between their post-war Governments insisting on nationalising and denationalising various state/private enterprises (railways, steel, shipbuilding, etc, etc.). Both Japan and Germany built their industries on the basis of quality production systems, which Britain certainly did not do.

The UK failed to invest in their production facilities, and refused to pay their workforce fairly, who then went on strike.

They also introduced generous welfare payments.

The theory quite clearly implies that the output of poor countries will converge with rich ones.

Your explanation for their economic growth considering their economic growth has been mostly driven by the growth in their service industries.

Sam Russell

Suryavarman wrote: »

The theory quite clearly implies that the output of poor countries will converge with rich ones.

Your explanation for their economic growth considering their economic growth has been mostly driven by the growth in their service industries.

Germany and Japan are quite clearly exceptions to your theory, since they have gone from rubble to power houses.

Also most African states are also getting poorer relative to rich countries or even relative to zero growth - they are getting poorer in absolute terms.

So how do you explain these two obvious exceptions to your theory?

Suryavarman

Sam Russell wrote: »

Germany and Japan are quite clearly exceptions to your theory, since they have gone from rubble to power houses.

Also most African states are also getting poorer relative to rich countries or even relative to zero growth - they are getting poorer in absolute terms.

So how do you explain these two obvious exceptions to your theory?

This isn't my theory. It's a well accepted description of how economic growth occurs.

Germany and Japan are two classic examples of this theory at work in the real world. How on Earth do you think they contradict the theory?

Your statement about African nations is just plain wrong.

blanch152

Geuze wrote: »

http://www.socialjustice.ie/sites/default/files/attach/publication/4633/basicincomefullbookdec2016.pdf

2016 book by SJI on UBI.

See page 128 for costs of their proposal.

2015 = 31,298m

It requires an ATR of 40%.

Had a quick look at their figures, they really don't add up.

Firstly, they hide the fact that they are abolishing child benefit and not replacing it with another payment.

Secondly, Table 5 purports to show how people will be better off under their proposal, but they key assumption is "It assumes each household is childless, and that the household is not availing of any tax reliefs."

Taken together, those two points are so significant that you can't give any credence to the figures.

blanch152

blanch152 wrote: »

Had a quick look at their figures, they really don't add up.

Firstly, they hide the fact that they are abolishing child benefit and not replacing it with another payment.

Secondly, Table 5 purports to show how people will be better off under their proposal, but they key assumption is "It assumes each household is childless, and that the household is not availing of any tax reliefs."

Taken together, those two points are so significant that you can't give any credence to the figures.

Child payment is mentioned on page 129.

Its a hefty document, but you should have a read of it before dismissing it out of hand, due to ignorance.

blanch152

Deleted User wrote: »

Child payment is mentioned on page 129.

Its a hefty document, but you should have a read of it before dismissing it out of hand, due to ignorance.

Child benefit costs nearly €2bn and is paid to all families. There is a reference to "Child payment (supplement over UBI)" which is costed at €483m, I am assuming this is a reference to weekly child payments currently paid under social welfare.

Herp_a_Derp

blanch152 wrote: »

...
Firstly, they hide the fact that they are abolishing child benefit and not replacing it with another payment.
...

http://www.socialjustice.ie/content/policy-issues/costing-basic-income-ireland
As per Slide 4, childrens benefit continues to be paid at the rate of 31.05 euro per week.

Is that the same as current payments?

blanch152

Herp_a_Derp wrote: »

http://www.socialjustice.ie/content/policy-issues/costing-basic-income-ireland
As per Slide 4, childrens benefit continues to be paid at the rate of 31.05 euro per week.

Is that the same as current payments?

The table on page 129 includes a figure of €483m

Table F shows that social welfare expenditure on children was €2.25bn approximately. A shortfall of around €1.8bn, that isn't small change.


https://www.welfare.ie/en/Pages/Annual-SWS-Statistical-Information-Report-2014.aspx