Zombiefacts: "tax cuts for millionaires"

Posted by Christie Malry on February 10, 2013 at 7:30 pm

This time it's the Sunday Mail, the sister paper of frothing Scottish newspaper, Daily Record:

The bedroom tax tells you everything you need to know about Cameron, George Osborne and the rest of their shower.

Many of these silver-spoon ministers sitting around the cabinet table will be £100,000 a year better off when their tax cuts for millionaires arrive in April.

I can be quite cynical, for sure. But even I don't believe that ministers base income tax policy on what will benefit themselves personally. It's a rather silly idea, especially as the salary for a cabinet minister is £134,565 (the PM earns ever so slightly more). Sure, some of them may have outside earnings that would push their earnings above the £150,000 level at which they begin paying tax at the highest rate. But for "many" of them to be £100,000 a year better off solely because of the reduction in rate from 50% to 45%, they would need to have additional earnings on top of their ministerial salary of £2,015,435 [((134,565 + 2,015,435) - (150,000)) * (50% - 45%)]. Many of them have outside earnings at this level? I just don't believe it.

It's a very lazy sideswipe from a very lazy newspaper. But, because people tend to trust, quote and cite newspapers, it's important that they're responsible enough to get this sort of thing right.

Incidentally, FullFact took Labour to task over their own sloppy use of the "tax cuts for millionaires" trope.

On who bears the burden of benefit cuts

Posted by Christie Malry on January 6, 2013 at 4:09 pm

The Guardian pronounces:

Under George Osborne's benefit cuts, it's the strivers who suffer most

Well, duh. Because it's strivers who get benefits. The rich don't get benefits, so benefit cuts don't hurt them. This is particularly true now that child benefit is withdrawn from households with someone who earns above £50,000 per year.

A proper analysis would require you to consider the impact of tax increases too. And, by Jove, here's one the Treasury did earlier.

Impact of benefit cuts and tax increases by decile

Oh. Looks like the rich bear the burden, not strivers.

Ungrateful twat of the day

Posted by Christie Malry on May 10, 2012 at 9:15 am


On Twitter:

Steven Baxter (stebax): They never show the bit in Secret Millionaire where the benevolent givers write their donations off against tax

One can only hope this is a failed attempt at irony.

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Drivel about social mobility

Posted by Christie Malry on May 2, 2012 at 10:20 am

Britain’s failure means a poor child born in 1970 is less likely to have gone to university than one born in 1958, the MPs say.

Eh? That must be total bollocks, given that the number of university home places now is much, much higher than it was then.

Later in the article, they explain:

In 1981, children from the richest fifth of households were three times more likely than those from the poorest fifth to go to university. By the late 1990s, they were five times more likely to go.

But that's not the same thing at all. Because there are more university places, it's meant that more poor people can go than ever before. The fact that richer people are also more likely to go is irrelevant to the opportunities for the poor.

And we can't let this go:

Studies have shown that while only 42 per cent of parents in the poorest fifth of homes read to their children every day, 78 per cent of those in the richest fifth do so.

Wealthier parents are also more likely to send their children to bed at a regular time. It has led to richer children being more likely to be deemed ‘ready’ for school at three.

These both cost nothing. And it's pretty hard to blame the rich for the poor not reading to their kids or putting them to bed on time.

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Virtually tax free

Posted by Christie Malry on April 11, 2012 at 8:36 am

Politicians and the usual suspects have been ramping up the rhetoric on tax avoidance. Millionaires pay virtually no income tax, we are told. Don't you feel outraged already?

But what does this mean? Apparently, the same source tells us, they have reduced their average tax rate to just 10%.

Now, a millionaire - by definition - earns at least £1 million. And 10% of £1 million is £100,000. The average income tax paid by a millionaire is about four times the average salary. To portray this as "virtually no income tax" is as disingenuous as it is ungrateful. It's also insulting to suggest that the rich aren't generous, when the richest philanthropists are giving a whopping £17 million each to charity.

Perhaps it's the 10% rate people don't like? By way of contrast, it's only once someone earns £16,000 per year that they start paying 10% of their gross income as income tax, because of the personal allowance.

By contrast, to pay £100,000 of income tax with no other deductions would require an annual income of £250,000, which should be pointed out is more than the Chancellor of the Exchequer.

The rhetoric is untrue, unhelpful and deeply ungrateful. The rich pay the lion's share of our income tax take, and it's time the rhetoric reflected that. Currently, politicians are whipping up fury against the rich for political gain. It must stop.

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We aren't the 99%

Posted by Christie Malry on October 24, 2011 at 9:16 am

While certain pundits have celebrated the "We are the 99%" slogan as brilliant, it is beset by problems:

  1. While it's mathematically true that the vast majority of the population, including me and most probably you, are indeed in the 99%, that doesn't automatically give legitimacy to what a small portion of that 99% does in the name of the rest of their brethren. The people who are defiling London's public spaces and poncing off the free wifi at Starbucks don't act in my name. While public opinion is hard to gauge, the comments on this article on the Guardian suggest that, even in a friendly newspaper, there are many - far more than 1% - that totally disapprove of the protests.
  2. There is no consistency over what constitutes the "1%". The term is bandied about to refer to banks, politicians, rich people or any corporation. Given that companies can't vote, it's silly to lump them into the 1%. Particularly as the companies are actually largely owned by us, through our pension funds.
  3. Even though they deny it was down to them, it was a major mistake to stand off against St Paul's, an action that has led to the cathedral's closure. St Paul's is the city's and the country's treasure. It's the landmark that controls so much of London's building development because its sightlines must be protected.  Recently it was refurbished at a cost of some £40 million, to restore it to its past beauty. The protestors would be foolish to presume that the majority in London will tolerate this defilement of such a national institution for that long.
  4. The top 1% contributes a phenomenal amount to our nation's coffers. Looking at direct taxes alone, the richest 1% pays over 25% of all income tax. The current protests against the rich looks very much like an extreme case of sour grapes.
  5. The protestors don't know what they want, other than something "different". They won't be able to get beyond tiny amounts of support until they can define more clearly what they stand for. Their current ideas are totally incoherent and, frankly, bonkers. If they don't decide fast, they will lose all the momentum they have gained. At the moment they look like they may yet end up more inscrutable, more indecisive and more unaccountable than the politicians they want to replace.
  6. The basis of democracy is that it represents everyone. Democracy insists that minorities are protected, even those that did not vote for the ruling party. It's unethical to allow the majority, even an overwhelming majority, to gang up on a minority. And this remains true, even when talking about a minority for which many in the majority may have little sympathy (the super rich). In blaming all our society's woes on "the rich", there are ugly echoes of the hounding of Jews throughout history.