Re: Proof the "Trickle Down" effect is a myth? : Sun Jan 26, 2014 1:27 pm  

JerryChicken wrote: Taxes on the business profits are irrelevant to the argument on direct taxation on wages, you may as well argue that a busy business pays more tax on fuel for their deliveries, more VAT on the supplies of paperwork they generate etc, its peripheral but not relevant. If you want to see what Working Tax Credits and Child Tax Credits for working people can amount to then here's a link http://www.hmrc.gov.uk/taxcredits/payments-entitlement/entitlement/how-worked-out.htm these are maximum figures of course and dependant on qualifying circumstances but as you can see they are not small amounts and frankly they shouldn't be because they were designed to make it preferable for the unemployed to find SOME work rather than NO work, designed to make it more profitable to get off the unemployed register than to remain on it. I'm sure you'll understand from those figures what the potential level of subsidy to employment is for an employer, it may not happen in your business sector but I do know for a fact that in the world of low minimum hours contracts in the hotel industry its normal for an employee to state at the time of job application that they are "only looking for 16 hours" or 20 hours, or whatever the tax break figure is that year and it suits both employer and employee for there is a big drop-off in credits when you work above the specified figure. It also suits the government of the day of course for two people splitting 32 hours a week between them is the main measure of their policy success, no-one ever asks "Ah but how much do you pay out in tax subsidies", more "look at the employment figures dropping, we must be successful" Gary - if your are saying government is supporting big business and thus enabling them to pay less wages then you should be able to produce the data that qualifies that. As yet nobody has shown the amount paid to subsidise the low wages of the people they employ is less than the contribution to the pool made by business, through employers NI - a tax on employing people, corporation tax - a tax on the success of a business and tax on dividends - another tax on the success of a business. I am not talking about VAT, fuel duty etc. My point has always been remove the employers NI on low pay and pay it directly to the worker i.e. increase the minimum wage by 14% therefore cutting out the need to collect and redistribute the tax. That seems logical and efficient to me but I suspect that would be a loss to the treasury?

JerryChicken wrote: Taxes on the business profits are irrelevant to the argument on direct taxation on wages, you may as well argue that a busy business pays more tax on fuel for their deliveries, more VAT on the supplies of paperwork they generate etc, its peripheral but not relevant. If you want to see what Working Tax Credits and Child Tax Credits for working people can amount to then here's a link http://www.hmrc.gov.uk/taxcredits/payments-entitlement/entitlement/how-worked-out.htm these are maximum figures of course and dependant on qualifying circumstances but as you can see they are not small amounts and frankly they shouldn't be because they were designed to make it preferable for the unemployed to find SOME work rather than NO work, designed to make it more profitable to get off the unemployed register than to remain on it. I'm sure you'll understand from those figures what the potential level of subsidy to employment is for an employer, it may not happen in your business sector but I do know for a fact that in the world of low minimum hours contracts in the hotel industry its normal for an employee to state at the time of job application that they are "only looking for 16 hours" or 20 hours, or whatever the tax break figure is that year and it suits both employer and employee for there is a big drop-off in credits when you work above the specified figure. It also suits the government of the day of course for two people splitting 32 hours a week between them is the main measure of their policy success, no-one ever asks "Ah but how much do you pay out in tax subsidies", more "look at the employment figures dropping, we must be successful" Gary - if your are saying government is supporting big business and thus enabling them to pay less wages then you should be able to produce the data that qualifies that. As yet nobody has shown the amount paid to subsidise the low wages of the people they employ is less than the contribution to the pool made by business, through employers NI - a tax on employing people, corporation tax - a tax on the success of a business and tax on dividends - another tax on the success of a business. I am not talking about VAT, fuel duty etc. My point has always been remove the employers NI on low pay and pay it directly to the worker i.e. increase the minimum wage by 14% therefore cutting out the need to collect and redistribute the tax. That seems logical and efficient to me but I suspect that would be a loss to the treasury?

Re: Proof the "Trickle Down" effect is a myth? : Sun Jan 26, 2014 1:48 pm  

Mintball wrote: Off the top of my head: • concentration on 'benefits scroungers' and refusal to do anything meaningful about tax avoidance/evasion by big corporates; • creation of 'workfare' as a scheme that big businesses were able to use in order to lay off paid workers (IIRC, Asda being a particular culprit) and reluctance to do anything about it; • continued privatisation – even to companies that have already screwed up more than once: G4S, for instance; • reluctance – at best – to do anything meaningful in terms of banking regulation, and continued efforts to pretend that big finance was not behind the recession; • fracking – with added financial benefits to companies to get involved. And so on. Edited to add the following: it's a read, but here's another quite specific one – big business and public health. As I posted earlier if this is so obvious the data must be there - I suspect it isn't the case just a scare tactic from the left. None of the above prove the point your raising that big companies can pay lower wages because the government pick up the difference? What the above shows is government trying to encourage inward investment and job creation/maintenance.

Mintball wrote: Off the top of my head: • concentration on 'benefits scroungers' and refusal to do anything meaningful about tax avoidance/evasion by big corporates; • creation of 'workfare' as a scheme that big businesses were able to use in order to lay off paid workers (IIRC, Asda being a particular culprit) and reluctance to do anything about it; • continued privatisation – even to companies that have already screwed up more than once: G4S, for instance; • reluctance – at best – to do anything meaningful in terms of banking regulation, and continued efforts to pretend that big finance was not behind the recession; • fracking – with added financial benefits to companies to get involved. And so on. Edited to add the following: it's a read, but here's another quite specific one – big business and public health. As I posted earlier if this is so obvious the data must be there - I suspect it isn't the case just a scare tactic from the left. None of the above prove the point your raising that big companies can pay lower wages because the government pick up the difference? What the above shows is government trying to encourage inward investment and job creation/maintenance.

Re: Proof the "Trickle Down" effect is a myth? : Sun Jan 26, 2014 4:39 pm  

Sal Paradise wrote: As I posted earlier if this is so obvious the data must be there - I suspect it isn't the case just a scare tactic from the left. None of the above prove the point your raising that big companies can pay lower wages because the government pick up the difference? What the above shows is government trying to encourage inward investment and job creation/maintenance. Two points: I was responding to the idea of government supporting big business in general. Admittedly, I do think it's hard to beat: 'we'll invite you onto public health committees and then pay for you to advertise your products under the guise of health advice'. Second, in-work benefits are paid to people who are in work, but cannot afford to live on the wage they're paid. Unless no such person works for any major, profitable corporate, in-work benefits are subsidising corporate profits. There is also plenty of anecdotal evidence of Asda in particular reducing the hours of staff – at the same time as taking on people under the Workfare scheme. There's also plenty out there about campaigns to get the likes of Tesco, Sainsbury's, Morrisons, M&S and John Lewis to pay their cleaning staff a living wage rather than just the minimum one. Some of the above are in long-term negotiations on the subject. In some cases – such as at B&Q in Stoke – stores have awarded the living wage locally after campaigning. These are all big, highly profitable and successful companies. From 2001 research from the department of economics at Cambridge into the impact of the national minimum wage: "Total spending on in-work benefits is somewhat more sensitive than the poverty rate. Expenditure would be 2.7% higher if there were no NMW and 5.5% lower if the NMW were set at £5 per hour. The scale of spending is particularly sensitive for groups not eligible for the Working Families Tax Credit (WFTC): single people and couples without children. For example, benefit spending on single people without children would rise by 4.4% if there were no NMW and would fall by 11.5% if it were set at £5 per hour. [Table 8]" [my emphasis, but it's all relevant] Full report. Mind, one of the pledges from late last year to deal with in-work benefits was to say that some people aren't working enough hours. Because obviously we know that underemployment doesn't exist and people can simply work the hours that they need/want.

Sal Paradise wrote: As I posted earlier if this is so obvious the data must be there - I suspect it isn't the case just a scare tactic from the left. None of the above prove the point your raising that big companies can pay lower wages because the government pick up the difference? What the above shows is government trying to encourage inward investment and job creation/maintenance. Two points: I was responding to the idea of government supporting big business in general. Admittedly, I do think it's hard to beat: 'we'll invite you onto public health committees and then pay for you to advertise your products under the guise of health advice'. Second, in-work benefits are paid to people who are in work, but cannot afford to live on the wage they're paid. Unless no such person works for any major, profitable corporate, in-work benefits are subsidising corporate profits. There is also plenty of anecdotal evidence of Asda in particular reducing the hours of staff – at the same time as taking on people under the Workfare scheme. There's also plenty out there about campaigns to get the likes of Tesco, Sainsbury's, Morrisons, M&S and John Lewis to pay their cleaning staff a living wage rather than just the minimum one. Some of the above are in long-term negotiations on the subject. In some cases – such as at B&Q in Stoke – stores have awarded the living wage locally after campaigning. These are all big, highly profitable and successful companies. From 2001 research from the department of economics at Cambridge into the impact of the national minimum wage: "Total spending on in-work benefits is somewhat more sensitive than the poverty rate. Expenditure would be 2.7% higher if there were no NMW and 5.5% lower if the NMW were set at £5 per hour. The scale of spending is particularly sensitive for groups not eligible for the Working Families Tax Credit (WFTC): single people and couples without children. For example, benefit spending on single people without children would rise by 4.4% if there were no NMW and would fall by 11.5% if it were set at £5 per hour. [Table 8]" [my emphasis, but it's all relevant] Full report. Mind, one of the pledges from late last year to deal with in-work benefits was to say that some people aren't working enough hours. Because obviously we know that underemployment doesn't exist and people can simply work the hours that they need/want.

Re: Proof the "Trickle Down" effect is a myth? : Sun Jan 26, 2014 5:44 pm  

Mintball wrote: Two points: I was responding to the idea of government supporting big business in general. Admittedly, I do think it's hard to beat: 'we'll invite you onto public health committees and then pay for you to advertise your products under the guise of health advice'. Second, in-work benefits are paid to people who are in work, but cannot afford to live on the wage they're paid. Unless no such person works for any major, profitable corporate, in-work benefits are subsidising corporate profits. There is also plenty of anecdotal evidence of Asda in particular reducing the hours of staff – at the same time as taking on people under the Workfare scheme. There's also plenty out there about campaigns to get the likes of Tesco, Sainsbury's, Morrisons, M&S and John Lewis to pay their cleaning staff a living wage rather than just the minimum one. Some of the above are in long-term negotiations on the subject. In some cases – such as at B&Q in Stoke – stores have awarded the living wage locally after campaigning. These are all big, highly profitable and successful companies. From 2001 research from the department of economics at Cambridge into the impact of the national minimum wage: "Total spending on in-work benefits is somewhat more sensitive than the poverty rate. Expenditure would be 2.7% higher if there were no NMW and 5.5% lower if the NMW were set at £5 per hour. The scale of spending is particularly sensitive for groups not eligible for the Working Families Tax Credit (WFTC): single people and couples without children. For example, benefit spending on single people without children would rise by 4.4% if there were no NMW and would fall by 11.5% if it were set at £5 per hour. [Table 8]" [my emphasis, but it's all relevant] Full report. Mind, one of the pledges from late last year to deal with in-work benefits was to say that some people aren't working enough hours. Because obviously we know that underemployment doesn't exist and people can simply work the hours that they need/want. We must in this agree to disagree - the figures must not justify your position or you would have produced them. I cannot say you are wrong as I cannot produce figures to the contrary. It could be in a company such as Morrisons that the total tax take in the categories I suggested is greater than the benefits their staff receive in which case Morrisons are supporting society as a whole. Asda may be the opposite but in the round until somebody can prove otherwise we must accept your point to be unproven?

Mintball wrote: Two points: I was responding to the idea of government supporting big business in general. Admittedly, I do think it's hard to beat: 'we'll invite you onto public health committees and then pay for you to advertise your products under the guise of health advice'. Second, in-work benefits are paid to people who are in work, but cannot afford to live on the wage they're paid. Unless no such person works for any major, profitable corporate, in-work benefits are subsidising corporate profits. There is also plenty of anecdotal evidence of Asda in particular reducing the hours of staff – at the same time as taking on people under the Workfare scheme. There's also plenty out there about campaigns to get the likes of Tesco, Sainsbury's, Morrisons, M&S and John Lewis to pay their cleaning staff a living wage rather than just the minimum one. Some of the above are in long-term negotiations on the subject. In some cases – such as at B&Q in Stoke – stores have awarded the living wage locally after campaigning. These are all big, highly profitable and successful companies. From 2001 research from the department of economics at Cambridge into the impact of the national minimum wage: "Total spending on in-work benefits is somewhat more sensitive than the poverty rate. Expenditure would be 2.7% higher if there were no NMW and 5.5% lower if the NMW were set at £5 per hour. The scale of spending is particularly sensitive for groups not eligible for the Working Families Tax Credit (WFTC): single people and couples without children. For example, benefit spending on single people without children would rise by 4.4% if there were no NMW and would fall by 11.5% if it were set at £5 per hour. [Table 8]" [my emphasis, but it's all relevant] Full report. Mind, one of the pledges from late last year to deal with in-work benefits was to say that some people aren't working enough hours. Because obviously we know that underemployment doesn't exist and people can simply work the hours that they need/want. We must in this agree to disagree - the figures must not justify your position or you would have produced them. I cannot say you are wrong as I cannot produce figures to the contrary. It could be in a company such as Morrisons that the total tax take in the categories I suggested is greater than the benefits their staff receive in which case Morrisons are supporting society as a whole. Asda may be the opposite but in the round until somebody can prove otherwise we must accept your point to be unproven?

Re: Proof the "Trickle Down" effect is a myth? : Sun Jan 26, 2014 7:26 pm  

Sal Paradise wrote:

We must in this agree to disagree - the figures must not justify your position or you would have produced them. I cannot say you are wrong as I cannot produce figures to the contrary. It could be in a company such as Morrisons that the total tax take in the categories I suggested is greater than the benefits their staff receive in which case Morrisons are supporting society as a whole. Asda may be the opposite but in the round until somebody can prove otherwise we must accept your point to be unproven?

The main problem is the complexity of the tax credit system itself, I posted a link to the HMRC advisory page on tax credits but they are very careful on there to state that those figures are the maximum that any family could expect to receive, there is no chart that I can link you to and say "A person on 20 hours at NMW will draw £xxx in tax credits" because it simply doesn't work like that.

To apply for tax credits, working or child and for both you have to be in employment, you have a document which from memory was a dozen pages long (I drew some of my entitlement down in the year of my wifes unemployment, she was entitled to child tax credits, I was entitled to working tax credits), and ultimately its the job of an assessor to declare what your prize will be, I say that because having spoken to them on at least half a dozen occasions during our application I was convinced that none of them knew how the system worked and I was given totally different answers to the same questions on at least two occasions.

Ultimately they then overpaid me and 12 months later asked for some of it back, not because I'd gone and earned too much but because one of the boxes on the form was ticked wrong after I filled it in following their telephone advice however the reward for that year before they asked for it all back was greater than my tax contribution that year - having contributed for forty previous years without ever claiming a penny I didn't feel too guilty but I've been put off ever having to deal with the incompetent barstards again - even got my MP on the case and he involved a senior civil servant, ultimately it was their word against mine - tw*ts.

So, are we subsidising employers who choose to employ people on low hours and at NMW by then topping up their pay with tax credits which are in effect a misnomer because they aren't a credit against tax that an individual has paid but simply a top-up payment to discourage them from thinking that it would be more beneficial not to work at all - I think we are subsidising employers who deliberately employ non-skilled staff in this manner but if you need evidence then I'll let you go through the claim process because I for one don't want to have another go on that merry-go-round.

Re: Proof the "Trickle Down" effect is a myth? : Sun Jan 26, 2014 7:42 pm  

Sal Paradise wrote:

We must in this agree to disagree - the figures must not justify your position or you would have produced them...

It's mainly that such specific figures are extremely hard to get hold of via the internet, although there is a huge amount of stuff on individual companies and the living wage, which is what I've essentially picked up on in my previous post.

But I think that there's a validity to pointing back to that blog post of mine, from a couple of years ago, that I linked to on an earlier post.

How much more help could big business want, than being invited onto public health committees and then, just two or three months later, effectively being given free advertising in the guise of public health information, paid for by the taxpayer?

Re: Proof the "Trickle Down" effect is a myth? : Sun Jan 26, 2014 11:47 pm  

Sal Paradise wrote:

We must in this agree to disagree - the figures must not justify your position or you would have produced them. I cannot say you are wrong as I cannot produce figures to the contrary. It could be in a company such as Morrisons that the total tax take in the categories I suggested is greater than the benefits their staff receive in which case Morrisons are supporting society as a whole. Asda may be the opposite but in the round until somebody can prove otherwise we must accept your point to be unproven?

Please will you desist with the straw man argument about company taxation versus in-work benefits.

None of us, not one single person that I know of, has ever sat down and costed out what he puts in against what he takes out. It's a stupid and fulite argument.

Companies pay tax at the prevailing rates. That is a given, apart from those who choose to offshore or employ aggressive tax avoidance schemes. Many of these companies employ people who have to rely on in-work benefits in order to subsist. The companies who benefit from their employees receiving in-work benefits are being subsidised through general taxation. i.e. some of the tax that you or I pay, along with the corporation tax and employers' NI that companies pay, is going towards in-work benefits. If you can't see that in-work benefits are a direct subsidy from the taxpayer to employers and landlords then I really do wonder about your method of thinking

Re: Proof the "Trickle Down" effect is a myth? : Mon Jan 27, 2014 1:39 pm  

cod'ead wrote:

Please will you desist with the straw man argument about company taxation versus in-work benefits.

None of us, not one single person that I know of, has ever sat down and costed out what he puts in against what he takes out. It's a stupid and fulite argument.

Companies pay tax at the prevailing rates. That is a given, apart from those who choose to offshore or employ aggressive tax avoidance schemes. Many of these companies employ people who have to rely on in-work benefits in order to subsist. The companies who benefit from their employees receiving in-work benefits are being subsidised through general taxation. i.e. some of the tax that you or I pay, along with the corporation tax and employers' NI that companies pay, is going towards in-work benefits. If you can't see that in-work benefits are a direct subsidy from the taxpayer to employers and landlords then I really do wonder about your method of thinking

It is primarily a subsidy to the employees concerned.

Re: Proof the "Trickle Down" effect is a myth? : Mon Jan 27, 2014 1:48 pm  

Dally wrote:

It is primarily a subsidy to the employees concerned.

If someone cannot afford to keep a roof over their head, eat, keep warm etc, their productivity will inevitably fall as a consequence.

Thus in-work benefits mean that the individual recipient doesn't end up on the street, sleeping rough – and the employer doesn't see such a decline in productivity, replicated across a number of employees.

We know, form the likes of KPMG, that the living wage helps productivity – along with recruitment, retention and sick rates – so if a company is relying on the taxpayer to make up the difference between, say, the minimum wage and a living one, then it is the company that is benefiting.

There's also something that should be of concern if we start to suggest that work doesn't need to pay – and that the taxpayer will make up the difference. If nothing else, it makes a mockery of politicians' claims.

And for work to pay, it needs to maintain the wage earner in something above destitution and reliance on the state simply to get by.

Re: Proof the "Trickle Down" effect is a myth? : Mon Jan 27, 2014 4:16 pm  

Mintball wrote:

If someone cannot afford to keep a roof over their head, eat, keep warm etc, their productivity will inevitably fall as a consequence.

Thus in-work benefits mean that the individual recipient doesn't end up on the street, sleeping rough – and the employer doesn't see such a decline in productivity, replicated across a number of employees.

We know, form the likes of KPMG, that the living wage helps productivity – along with recruitment, retention and sick rates – so if a company is relying on the taxpayer to make up the difference between, say, the minimum wage and a living one, then it is the company that is benefiting.

There's also something that should be of concern if we start to suggest that work doesn't need to pay – and that the taxpayer will make up the difference. If nothing else, it makes a mockery of politicians' claims.

And for work to pay, it needs to maintain the wage earner in something above destitution and reliance on the state simply to get by.

If it were primarily a subsidy to the employer it would be paid the the employer. The cynic in my says that working tax credits, etc were a Labour ploy to have people beholden to them. They could have raised the tax threshold, etc like the coalition have but no they prefer a dependency culture that gets them votes. Same applies to their expansion of public sector jobs.

PS Labour have a Twitter campaign extolling people who have allegedly joined them. So I looked at their website yesterday and, unless I was looking in the wrong placce, I could not find anything about what they stood for or policy! I took a look at the other main parties and they did. Now, if I haven't missed something that seems to me a wholly disgraceful and inept state of affairs.