oh goody more advertising about tax evoidance

[AtW]

the big problem is the gulf growing between the rich & poor. For the good of society we need to stop that and as many rich use tax avoidance & evasion schemes clamping down on them makes sense.

Making rich who use tax avoidance to become poor would go a long way towards bridging the gulf ...

[SpontaneousOrder]

So is labour, and it's those with capital who benefit most from poorer men's labour.

To explicitly value a risk and effort free deployment of capital more highly than labour is a nonsense perpetrated by those with capital solely for their own advantage.

Try to grow an ear of corn with brute strength, or to build a railway with hard work and wishful thinking.
It's men of ability that dragged us out of our mud huts - anyone can choose to labour as hard as they possibly can, but without those men of ability we'd still be living in absolute poverty.
Personal wealth is the manifestation of those men's efforts - wealth which can only be created by creating wealth for the rest of us along the way - and it's just that they receive the lion's share.

Valuing the brute strength of a simpleton as equal to the mind of a successful entrepreneur is to value the best of humanity no more than the base instinct of an animal.

To force that mistaken valuation is to bite the hand that feeds you.

[doodab]

Try to grow an ear of corn with brute strength, or to build a railway with hard work and wishful thinking.
It's men of ability that dragged us out of our mud huts - anyone can choose to labour as hard as they possibly can, but without those men of ability we'd still be living in absolute poverty.
Personal wealth is the manifestation of those men's efforts - wealth which can only be created by creating wealth for the rest of us along the way - and it's just that they receive the lion's share.

Valuing the brute strength of a simpleton as equal to the mind of a successful entrepreneur is to value the best of humanity no more than the base instinct of an animal.

To force that mistaken valuation is to bite the hand that feeds you.

Don't confuse intellectual and financial capital. In my earlier statement, and indeed in reality, use of the intellect falls firmly under the heading of labour.

Simple possesion of wealth is only rarely a result of bettering humanity and far more often the result of exploiting it. Witness all the empires built on slavery.

Also, game theory already sees to to it that those with capital reap the lions share of the rewards of shared endeavour. Taxing labour harder simply removes incentives to work.

[SpontaneousOrder]

Witness all the empires built on slavery.

So are you advocating that we banish theft, fraud, slavery & plunder? Or that we tax it?
If it's the latter then there's no point in us talking. If it's the former, then moving on from this red herring and concentrating on legitimately earned wealth...

Intellectual and financial capital go hand in hand - one begets the other. Financial capital is the deferred spending of the fruits of one's intellectual capital.

We can see that congruence in this forum where we're generally all people with an accumulated intellectual capital and are earning a corresponding income based on the value the rest of the world sees in us (as reflected in the price). Compare that to the someone with far less accumulated intellectual capital stacking shelves in a supermarket - they are less valuable because literally anyone can do their job, just as anyone could have done my job when I was a trolley wally; the lower value to the rest of the world is reflected in their minimum wage price. I earn more because I contribute a greater aggregate increase in productivity than the shelf stacker does.

Even if i leave my future riches to my child who then keeps it in a financial institution earning interest, that money has still been earned; And by sacrificing that money's higher present value for a lower future value (in return for interest payments) my child is providing capital for other more productive men to build all of the things that people want - those enterprises wouldn't be profitable if they weren't desired. Those men wouldn't be able to earn their fortunes unless other men determined that their productivity was worth the price.

Taxing labour harder simply removes incentives to work.

I can't argue with that.

So I can only think of 2 ways this works then:
1) People would rather spend their money as they see fit, rather than be taxed.
2) People want to receive goods & services which they haven't earned (at the expense of more productive people).

Option 1 I'm all for, but it's besides the point.
Option 2 I'm obviously against, but ignoring that - the only reason growth in the economy is so important in the current paradigm is because everything the government provides for it's citizens is built on the continual expansion of credit, and so requires the continual expansion of economic output in order to offset the credit growth.
In an environment like that - given that the system is already failing, eating your cake and still wanting to have it makes even less sense. I'd rather not punish the producers in order to make life easier for the consumers.

Perhaps if some of those consumers got off their arses they might be able to offer up some competition for all of those naughty owners of capital. The only thing stopping them, other than apathy, is interference in the freedom of the market; And I don't understand how people can think that more interference in the market, rather than less, can make it all better.

The sooner everyone lets go of this 'all men are equal' nonsense the better off EVERYONE will be.

[doodab]

So are you advocating that we banish theft, fraud, slavery & plunder? Or that we tax it?
If it's the latter then there's no point in us talking. If it's the former, then moving on from this red herring and concentrating on legitimately earned wealth...

Intellectual and financial capital go hand in hand - one begets the other. Financial capital is the deferred spending of the fruits of one's intellectual capital.

We can see that congruence in this forum where we're generally all people with an accumulated intellectual capital and are earning a corresponding income based on the value the rest of the world sees in us (as reflected in the price). Compare that to the someone with far less accumulated intellectual capital stacking shelves in a supermarket - they are less valuable because literally anyone can do their job, just as anyone could have done my job when I was a trolley wally; the lower value to the rest of the world is reflected in their minimum wage price. I earn more because I contribute a greater aggregate increase in productivity than the shelf stacker does.

Even if i leave my future riches to my child who then keeps it in a financial institution earning interest, that money has still been earned; And by sacrificing that money's higher present value for a lower future value (in return for interest payments) my child is providing capital for other more productive men to build all of the things that people want - those enterprises wouldn't be profitable if they weren't desired. Those men wouldn't be able to earn their fortunes unless other men determined that their productivity was worth the price.



I can't argue with that.

So I can only think of 2 ways this works then:
1) People would rather spend their money as they see fit, rather than be taxed.
2) People want to receive goods & services which they haven't earned (at the expense of more productive people).

Option 1 I'm all for, but it's besides the point.
Option 2 I'm obviously against, but ignoring that - the only reason growth in the economy is so important in the current paradigm is because everything the government provides for it's citizens is built on the continual expansion of credit, and so requires the continual expansion of economic output in order to offset the credit growth.
In an environment like that - given that the system is already failing, eating your cake and still wanting to have it makes even less sense. I'd rather not punish the producers in order to make life easier for the consumers.

Perhaps if some of those consumers got off their arses they might be able to offer up some competition for all of those naughty owners of capital. The only thing stopping them, other than apathy, is interference in the freedom of the market; And I don't understand how people can think that more interference in the market, rather than less, can make it all better.

The sooner everyone lets go of this 'all men are equal' nonsense the better off EVERYONE will be.

Such touching naivete. Your idealism is as delusional as any socialist's.

Financial capital is overpriced relative to human capital because feedback mechanisms within the system ensure that this is the case. Genuine intellectual capital is undervalued because those with financial capital are able to sit on it risk free and still turn a profit thus distorting the rewards they expect for placing it at risk. In terms of ability to generate income a basic human is worth, depending on location, perhaps £50k (that is to say a £50k risk free investment will generate the same amount of income) and someone with the ability and potential to harness average workers and create wealth is worth, without the capital to realise their ambitions, perhaps ten times that amount (that is to say they can generate on the open market income approximately equivalent to a £500k risk free investment). These are guesstimate figures based on global rather than UK incomes, but you get the general idea.

Why is a million pounds sat doing nothing worth two effective wealth creators? Simply because in our modern highly unequal but well educated world large amounts of financial capital are relatively scarce compared to large amounts of intellectual capital, concentrating it in the hands of relatively few people. That is not "the way it has to be", it's simply an inevitable consequence of a system with positive feedback loop that skews the accumulation of financial capital in favour of those who already have it. The way to maximise the exploitation of human capital (i.e. maximise wealth creation) is to counter that feedback mechanism. Reinforcing it through the tax system is counterproductive.

One might even argue that all labour income should be tax free and only investment income (which would of course include profits of companies) should be taxed.

[Sysman]

There are loads of reasons for having foreign bank accounts. One might do business there, or own property there, or be tax resident there as well as here. Even if one just visits somewhere frequently it can make sense to have a local bank account when charges and so on are taken into account.

You probably need a local bank account if you have a property abroad or tax liabilities there.

Not keeping all your eggs in one basket is another reason, in terms of both banks and currencies.

Yes you can open up UK bank accounts in other currencies, but I know that when I was sending money back to the UK from abroad on a regular basis I could get a better exchange rate (in either direction) by getting my foreign bank to do the conversion into/out of sterling than the UK one.

[Sysman]

Making rich who use tax avoidance to become poor would go a long way towards bridging the gulf ...

Monty Python's Dennis Moore sketch

[vetran]

Making rich who use tax avoidance to become poor would be very silly

the rich are mainly the ones that mastermind making the money, the problem is they are keeping more of it than they used to and we need more to feed the less productive ones.

so either we cut down the amount they keep, you only need a few billions to live in luxury. Or we drop the unproductive ones. I prefer the first.

[doodab]

I prefer the first.

I prefer the second but then I'd have to feed the kids myself

[Zero Liability]

the big problem is the gulf growing between the rich & poor. For the good of society we need to stop that and as many rich use tax avoidance & evasion schemes clamping down on them makes sense.

For the good of society, our governments need to restrain themselves. Spending bucketloads of money and then trying to fill the gaps they can't fill with money printing (which disproportionately inflates the value of financial assets, further worsening said inequality) or borrowing (deferred taxation to future generations) through taxation is very far from ideal.