How much have Thatcher/Reagan contributed to the state of the world today?

[Elbow beards]

One of the most insidious cunts to ever infested the British political arena.
Morrissey succinctly captured the atmosphere when he penned Margaret on the guillotine.

 

[SebastianBlue]

I think you're being a bit disingenuous on points 1 and 4, or at least economical with the truth.

On point 1, as per the tables available here (Table 2.4);

Income Tax liabilities statistics: tax year 2020 to 2021 to tax year 2023 to 2024

These statistics are based on HMRC’s annual Survey of Personal Incomes, a representative sample of individuals in HMRC’s PAYE, Self Assessment and repayment claims administrative systems.

www.gov.uk

the share of income earned by the top 1% has gone up from its recent low in 2019-20, but at 13.0% in 2024 it remains below where it was 2008 (13.4%) and 2010 (13.9%). The same is also true for the top 5%; 25.2% of income in 2024 versus 26.4% in 2008 and 2010 (there are no data for 2009 unfortunately).

The share of income tax paid by the top 1% has however risen from 26.5% in 2010 to 28.5% in 2024, and for the top 5% the share has risen from 44.8% in 2010 to 49.2% in 2024. That's a major increase for the top 5% in particular, and so from the levels seen in the last couple of years of the previous Labour government, the share of income tax paid by the top 5% has clearly increased ahead of any change in the distribution of earnings.

To follow up on point 4, again I think by concentrating on just the latest annual movement you're distorting the picture provided. The top 50% paid 90.5% of income tax liabilities in 2024, down from a peak of 90.7% in 2022, but well up from the 88.8% seen in 2010. For completeness, the share of income earned by the top 50% has fallen from 77.1% in 2010 to 75.3% in 2024.

I appreciate the responses including source and statistics!

But I am not sure how what you have provided refutes or amends my point 1, nor do I think I have been disingenuous.

1) The passage immediately following the graph in the report explains to some extent the increased concentration of higher tax receipts from those with the highest incomes in 2020/2021, namely an “increase in the share of total income going to those at the top of income distribution”. In other words, intensifying wealth inequality is contributing to a larger proportion of tax receipts coming from the top income earners. As this overview benchmark is 2020/2021, this issue will have only become more severe over the last few years, as the shift in income distribution accelerated during the pandemic.​

The first two sentences are factual regarding the overview that was referenced (that I had to track down because it wasn’t originally provided).

The third sentence is also still factually correct: the shift in income distribution favouring the top deciles accelerated during the pandemic (2020-to-present).

This also a great resource on the subject of Income Inequality in the UK:

https://researchbriefings.files.parliament.uk/documents/CBP-7484/CBP-7484.pdf

Regarding your response to point 4:

4) Per HMRC, the share of tax paid by both the top 50% of earners and the top 1% of earners has actually fallen as of 2023/2024. Meaning, the tax burden of the top half of the income distribution has actually decreased.​

​

Summary Statistics

www.gov.uk

Again, this is factual — the tax burden of the top 50% and the top 1% of earners has fallen as of 2023/2024.

And looking at the curve from 2008 to present is actually not particularly helpful, because the further out we go the less relevance it has to current policy analysis (time bias effect). I was also only providing context to an isolated graph provided without source, not attempting to undertake a survey of all shifts over the last 15-20 years (again, because it wouldn’t actually be that helpful to analysis of what should be done now given conditions are very, very different to during the GFC).

Beyond all of that, the editorial thrust of my post was in points 2, 3, and 5, given the content of the original graph provided:

I don’t think it is fair to characterise my factual response to that graph as “disingenuous” or “economical with the truth” given everything I said was true.

Now, if you want to argue that the income distribution trends over the last 15 years are more important than many believe (including myself) and that top earners are actually paying too high an overall share of taxes in light of that long frame curve, and that assets should continue to be taxed at the current low relative rate, which would have no negative impact on wealth inequality, I am happy to hear your argument for that.

Genuinely, as I am interested to see any research showing that growing wealth inequality could be combatted by relieving the tax burden on the top 50% of earners or the top half of wealth deciles.

 

[Trevor Morley's Tache]

Reagan very much paved the way for the Christian fundamentalists who have infiltrated the higher echelons of government in the US.

 

[PPT]

I think you're being a bit disingenuous on points 1 and 4, or at least economical with the truth.

On point 1, as per the tables available here (Table 2.4);

Income Tax liabilities statistics: tax year 2020 to 2021 to tax year 2023 to 2024

These statistics are based on HMRC’s annual Survey of Personal Incomes, a representative sample of individuals in HMRC’s PAYE, Self Assessment and repayment claims administrative systems.

www.gov.uk

the share of income earned by the top 1% has gone up from its recent low in 2019-20, but at 13.0% in 2024 it remains below where it was 2008 (13.4%) and 2010 (13.9%). The same is also true for the top 5%; 25.2% of income in 2024 versus 26.4% in 2008 and 2010 (there are no data for 2009 unfortunately).

The share of income tax paid by the top 1% has however risen from 26.5% in 2010 to 28.5% in 2024, and for the top 5% the share has risen from 44.8% in 2010 to 49.2% in 2024. That's a major increase for the top 5% in particular, and so from the levels seen in the last couple of years of the previous Labour government, the share of income tax paid by the top 5% has clearly increased ahead of any change in the distribution of earnings.

To follow up on point 4, again I think by concentrating on just the latest annual movement you're distorting the picture provided. The top 50% paid 90.5% of income tax liabilities in 2024, down from a peak of 90.7% in 2022, but well up from the 88.8% seen in 2010. For completeness, the share of income earned by the top 50% has fallen from 77.1% in 2010 to 75.3% in 2024.

Here endeth the lesson. :-)

 

[SebastianBlue]

I think you're being a bit disingenuous on points 1 and 4, or at least economical with the truth.

On point 1, as per the tables available here (Table 2.4);

Income Tax liabilities statistics: tax year 2020 to 2021 to tax year 2023 to 2024

These statistics are based on HMRC’s annual Survey of Personal Incomes, a representative sample of individuals in HMRC’s PAYE, Self Assessment and repayment claims administrative systems.

www.gov.uk

the share of income earned by the top 1% has gone up from its recent low in 2019-20, but at 13.0% in 2024 it remains below where it was 2008 (13.4%) and 2010 (13.9%). The same is also true for the top 5%; 25.2% of income in 2024 versus 26.4% in 2008 and 2010 (there are no data for 2009 unfortunately).

The share of income tax paid by the top 1% has however risen from 26.5% in 2010 to 28.5% in 2024, and for the top 5% the share has risen from 44.8% in 2010 to 49.2% in 2024. That's a major increase for the top 5% in particular, and so from the levels seen in the last couple of years of the previous Labour government, the share of income tax paid by the top 5% has clearly increased ahead of any change in the distribution of earnings.

To follow up on point 4, again I think by concentrating on just the latest annual movement you're distorting the picture provided. The top 50% paid 90.5% of income tax liabilities in 2024, down from a peak of 90.7% in 2022, but well up from the 88.8% seen in 2010. For completeness, the share of income earned by the top 50% has fallen from 77.1% in 2010 to 75.3% in 2024.

In addition to my other response, I wanted to follow up to highlight the major thrust of my post you were responding to, as it actually highlights the issue with your and @PPT ’s approach to analysis.

You have both focused on earned income (and taxation of earned incomes), which itself heavily distorts both the effective tax rate and tax contribution for the top 50%, especially the top 5%, which you have also focused. That is because over the last 20 years (and particularly the last 5 years) the overall composition of wealth for the top wealth deciles has continually shifted from earned income to asset holdings, particularly property and equity, partly as a mechanism for tax avoidance.

https://www.resolutionfoundation.org/app/uploads/2020/12/The-UKs-wealth-distribution.pdf

Sophisticated tax evasion by the super-rich skews inequality measures

Tax evasion schemes are helping more of the top one per cent hide their wealth than has been previously thought, finds research from LSE economist Daniel Reck.

www.lse.ac.uk

There is currently a massive push within the top wealth deciles in the UK to offshore as much of their holdings as possible to avoid anticipated higher tax obligations under Labour, as well. These are not holdings that would have regularly been used for direct investment in the UK economy (thus serving as an economic multiplier, as some conservatives argue)—they are primarily for the purpose of maintaining the wealth of the individuals.

Super-rich being advised how to avoid Labour tax clampdown, undercover investigation suggests | Tax avoidance | The Guardian

Revealed: Wealthy being pitched offshore products said to shelter fortunes from inheritance tax and capital gains tax

amp.theguardian.com

This is a great write up from Oxfam regarding how exactly the exceptionally wealth around the world use assets (rather than income) to avoid tax obligations and significantly lower their effective tax rate on the overall wealth, often to well below the effective tax rate of the middle class. This is without even dipping our feet in to how externalised cost and resource exploitation relate to wealth generation and maintenance in the top wealth deciles. The wealthy in the UK exploit this same failure in the tax system in various ways.

The super-rich pay lower taxes than you – and here’s how they do it… - Views & Voices

How do the wealthy get away with paying a lower percentage of their income and wealth in taxes than ordinary people? A big part of the answer is that many of their fortune streams, from dividends to inheritance, are chronically undertaxed, says Chiara Putaturo in our latest blog for Davos 2023

views-voices.oxfam.org.uk

Focusing on earned income and related taxation itself is a flawed approach to analysing wealth inequality, tax policy, and their effects on the UK economy and overall healthy of the country. The only real helpful measure in that regard is to highlight the absurdly low effective tax rate of the top wealth deciles compared to the lower deciles, largely because of these elaborate methods of tax avoidance through asset holding structures.

Edit: further reading on the subject, including several responses to common warnings (or threats) from the super wealthy over higher tax obligations, for anyone that is interested.

How much tax do the rich really pay? Evidence from the UK

Abstract. Using anonymized administrative data on the population of UK taxpayers, we show that—in line with high-profile anecdotes about the tax affairs of

academic.oup.com

How much tax do the rich really pay? | LSE Research

Tax has long been a contentious political issue. But with COVID-19 wreaking huge economic damage, at some point tax rises might become inevitable. While those on higher incomes might already feel they pay the most, Andy Summers and Arun Advani explain how their research shows this may not always...

www.lse.ac.uk

Britain

Tax advantageous destinations are widely regarded by the wealthy as

www.lse.ac.uk

 

[PPT]

One of the most insidious cunts to ever infested the British political arena.
Morrissey succinctly captured the atmosphere when he penned Margaret on the guillotine.

It was nearly 50 years ago. The majority of the posters on here weren't even born, or were children when she was in power. Let it go...