Announcement regarding changes to church policy

Our church has been running at a deficit in recent years, a situation that clearly can’t be allowed to continue. In order to balance the books, we’ve had to make some hard choices. But together, by making necessary sacrifices, we can pull through. Although we value church programmes like the mothers-and-toddlers group, our support for members with special needs, hosting the food bank and donation to third-world charities, these activities are not financially viable in times of economic difficulty, and we have regretfully made the decision to bring them to an end. We need to end the culture of dependency and make sure instead that the people who previously benefited from these programmes start doing their share to make the church financially prosperous once more.

In more positive news, we are pleased to announce that we have been able to reduce the amount that we ask our more comfortably-off members to contribute, and that we have awarded the pastor a 112% pay increase, to be phased in over six years.

[Read on to A meta-comment on voting in the election]

47 responses to “Announcement regarding changes to church policy

  1. … and all public statements will be made by partisan hacks using poorly veiled, inapposite allegories.

  2. I don’t understand – are you saying that David Cameron is imaginary?

    ;-)

  3. Oh, I get it, this is the Republican party (Americans). –or– it’s more generally what I expect to see from standard, vanilla, garden variety governmental corruption.

    Furry cows moo and decompress.

  4. Ah, I guess I should have been clearer. The church is the UK. The support for the weakest and most vulnerable members of the community is … the support for the weakest and most vulnerable members of the community. The spending-cuts at the bottom and tax-cuts at the top are the work of the Conservative government (previously in coalition with the valuable handbrake of the LibDems but now free to pursue their agenda unhindered). And the 112% pay increase over six years is of course the 112% increase in the wealth of the UK’s richest thousand families over the last six years.

  5. 1) Rich people provide more tax revenue than poor people – so if the richest people get richer, and assuming their tax is calculated using some sort of, I don’t know, percentage system,the amount of tax revenue they generate will ….. increase. Which means your zero-evidence-based belief community will have more to spend on charitable projects.

    2) What is your alternative? Artificially peg the amount by which rich people can get richer? Venezuela is attempting just that policy at the moment – it seems to be going as spectacularly well as every other time it has been attempted. Or do you want to increase taxation on the rich – beyond a certain threshold your tax income actually drops. See point 1. Rich people have more resources than poor people – they can hide money, take it offshore, relocate or simply make better investments. They will always get richer faster than you can, no matter which broadly centrist party is in power.

    3) Technically David Cameron is the archbishop, the pastor would be your local MP and the people getting richer are actually some or more of your parishioners. Also I suppose the pulpit is Facebook, the church doors are Dover, God is the IMF, the church spire is the NHS and the choirboys are sexual abuse victims. Like always.

    Still, fun analogy :-)

  6. Comparing the wealth of the richest 1000 families now to six years ago is a little bit fraught with hazard. For one thing, at that level of wealth/income, both wealth and income are tremendously correlated with business cycles — when you measure the trough of a major downturn (mid/early 2009) with what is probably near the next peak (now), it is not an apples to apples comparison. There is also churn as families enter and leave the “richest 1000 families” group, and even over six years I would be curious how much there is. (I am not a subscriber to the paper you linked to, so I cannot see their numbers or their underlying data source.)

    If the net worth of a large company’s owner doubles because the company’s stock value doubles during the upswing of a business cycle, is that because of an unreasonable government policy? Does it mean that the government has failed to tax her properly?

    Many people and funds, including pension funds, can defer paying taxes on that kind of gain by holding the stock; do you suggest to change that across the board, or make special rules that target large individual stockholders? If you do the latter, you will probably end up rediscovering what the Soviets and the PLA did about using government force to ensure that no one owns “too much” capital.

  7. Whenever I read these neoliberal arguments, I always think the correct reply would be “rubs off me and sticks to you”. It may not sound terribly intellectual but its pretty accurate.

    Wherever you are on the left/liberal/progressive spectrum, you’re always being told that your problem stems from a hopelessly naïve conception of human nature – you’re unable to accept that people are in essence self-interested and its hopeless to try and change them. Then you hear the counter-plan is to make some people so wealthy that they feel like giving some of that wealth away.

    You’re always told that you’re failing to take the lessons of failed experiments in history, blindly pursuing your ideological fixations against all the evidence. But, in Britain and America at least, we’ve now had thirty-five years of this sort of stuff. Many people voting in the election just gone will not have even drawn a breath before it began. So we should have got some evidence in by now, I’m thinking.

    And the evidence is pretty conclusive. The plan to make everybody wealthier by making rich people richer has in fact only succeeded in making rich people richer. The wealth gap has exacerbated wildly during that time. Anyone paying attention is likely to be asking – if this is working, why isn’t it working?

    Point any of this out and they’ll reply that the experiment has’t got far enough along yet, and anyway life was pretty rough under the Soviet Union. Which is of course exactly the argument the old Stalinists used to make, dismissing any criticism as mere transition pains, soon to disappear as soon as true communism arrived.

    In the Nineties Argentina was embarked on a wholesale privatisation programme and set of austerity measures. Neoliberals cited it as a poster boy to the other “Soviet-style” South American countries, a beacon of hope. In ’98 their economy badly crashed. It was a canary moment. If anyone had picked up on it, we could have changed course and averted the world-wide crash which came less than a decade later. Instead they simply engaged in an Orwellian reversal of narrative, where their former star pupil had brought all these problems on by not embracing free market measures enough.

    In the (recommended) Jacques Peretti documentary ‘The Super-Rich and Us’ one of the things he talks about is “new divine right”, the idea the rich should be seen as inherently superior beings and so shouldn’t be judged by the same morality as the rest of us. Sounds far-fetched? Well take…

    ”Rich people have more resources than poor people – they can hide money, take it offshore, relocate or simply make better investments. They will always get richer faster than you can”

    Try imagine for a moment that said about any other group in society. Politicians saying “there is no point in trying to prevent welfare fraud, if we catch someone making one bogus claim they’ll probably just make another one”. Or the police saying “there is no point in us trying to catch bank robbers, they keep running away”. Perhaps with a neoliberal economist to explain that while some people perceive bank robbery as unfair, this model is outmoded and in fact their actions do contribute to the economy via investment in face masks and getaway cars, and stimulating the flow of currency through celebratory cocaine binges and visits to lapdancing clubs.

    The rich will indeed get rich faster than we can. Its pretty easy for them at the moment, as most of us aren’t getting richer at all. But that misses the essential point that the way they get richer is off our backs.

    Some of us think its about time we did something about that.

  8. As a result of this tithe reduction, church attendance has grown, resulting in a slight net increase in contributions. The church faithful choose to ignore this fact.

  9. “And the 112% pay increase over six years is of course the 112% increase in the wealth of the UK’s richest thousand families over the last six years.”

    So a better analogy would be, “The value of the church has grown 112%.”

    False analogies help nobody. Those who agree with you nod sagely without further thought. Those who disagree and spot the falsehood discard the rest of your argument.

  10. Hi there Gavin! I’m not sure what neoliberal means – I’m guessing it’s some sort of American politics word. However I think I can question a couple of your points. Firstly you suggest after 35 years America and the UK are not better off for ordinary citizens. Well, I’m afraid that’s just complete bollocks. (testicles!). People are quite evidently better off. You would have to be a little bit nuts to suggest otherwise. I don’t think you are of course. More poor people can go on flights to other countries than ever before, life expectancies have increased, material wealth has increased and absolute poverty has decreased. (I’m using the metric of absolute poverty as defined by the IMF and the UN, not the much more contentious one of relative poverty.) Access to technology has increased exponentially in that time. You would have to be irretrievably biased not to see that. A large proportion of the populace, if not all of them, have pocket supercomputers that were only owned by governments 35 years ago. We have internet, hdtv, email, 25 quid computers, entire online libraries. All of human knowledge is available to the masses – it wasn’t 35 years ago.

    You speak as if none of these things have happened and that the gap between rich and poor is the only one that matters. I contend that it is meaningless. Who cares if some people are kings? Why does it matter to you? What matters is that the rest of us aren’t scrabbling around in a feudal economy with no rights, no health care and no vote. We have these things, and big fuck off colour televisions as well.

    “you’re unable to accept that people are in essence self-interested and its hopeless to try and change them. Then you hear the counter-plan is to make some people so wealthy that they feel like giving some of that wealth away” – your words are a profound misrepresentation. I may as well say that everybody on the left is driven by rage, and has no idea how much human progress is predicated on free market economics. I don’t believe that simplistic a summary, it would be unfair to summarise every left-winger in that fashion.

    As an aside – I wasn’t stating that rich people were better than everybody else, only that if you tax them at 90%, you will not get 90% of their income. They have the resources to avoid tax. Lowering the tax rates on the wealthy (they still pay a percentage after all) actually increases tax intake. This has been demonstrated. Find a way to cut this gordian knot, and you will be hailed as the greatest left wing economist of all time. Otherwise the best realpolitik option is to try and find the rough ideal to get the most tax revenue from everybody without damaging growth (ie long term tax revenue).

    But Gavin – if I had to guess it sounds like we may be arguing from different sides of the pond. The sort of centre right economics that many in this country espouse is probably not quite the same as the GOP’s vision over in America.

  11. The best satire is the kind that takes a paragraph or two before you realize what you are reading.

    Tax rates on high incomes and corporate earnings have been way too low for way too long. The US gets its best growth rate when the peak marginal tax rate is about 65%. At least that’s what we’ve learned from the past 100 some odd years of data.

    Maybe things have been better in the UK, but in the US most Americans are worse off than they were in the 1970s. Unless you have an advanced degree, your pay is down. Pensions are rare. There is no job security in any form. Wages are routinely stolen. Hours are unpredictable. There is no overtime pay. It’s easy to wave one’s hands and say ‘Look we have smart phones’, but the basics of jobs, housing and retirement have gotten worse. (I would have added health care, but thanks to Obama I know too many people who can now afford to get their congestive heart failure or diabetes treated, so that has been getting better.)

  12. Rjubber, I’m afraid I got lost as to whether you were American thinking I was British or the other way around. I’m British, incidentally. If you are American then this handy definition of neoliberalism says its a term not commonly used in the States, so I guess you’d be forgiven for not having heard it. It basically means ‘market fundamentalism’, the notion that the market sorts everything out best left to its own devices.

    I’m going to suggest that, if people have pocket computers once previously owned only by governments that this isn’t because individual people are now as well off as governments. I’m going to suggest that the price of these things has fallen as the costs of producing them have fallen. Which isn’t true of everything. For example, the proportion of people’s income spent on fuel has drastically increased, leaving many in fuel poverty. Largely… and you may well be ahead of me here… as a result of privatisation measures which we were originally told would bring the cost of fuel down.

    The point about relative poverty is that the access to things you need to participate in society doesn’t stay at a constant level. In the UK you can now only make a benefits claim on-line, and the unemployed are pushed into applying for work on-line. Not being no-line isn’t regarded as an excuse. And the growing number of people on zero hours contracts are normally told of their shifts by text message. Iif you haven’t got a mobile phone, I’m thinking you probably won’t receive the text message, in which case you probably won’t pick up the shift. Films from the eighties often showed yuppies parading around Wall Street with their brick-size mobiles. But what starts out as a luxury item becomes a necessity. These are just some examples of why relative poverty and the wealth gap, far from being meaningless, are directly important to people’s lives.

    But okay, let’s talk about what you want to talk about – whether people’s income has gone up or down. You say it’s gone up. But one example of someone with whom its gone down would be me, and most of my co-workers. I work in the public sector and our wages have, in real terms, gone down by about a fifth. “Testicles!” is a word I often use when viewing my payslip. We’re not poor, I am not suggesting that we are. But our income has fallen around about the same time as the rich’s has risen.

    Regarding absolute poverty, I’d say a reasonable definiton of the term is not having enough food to eat. And this year the number of users of food banks in the UK topped one million. The same figure was miniscule only five years ago. You could if you wished try to tell people queing at a food bank that they were better off now than before, and that if they thought otherwise they were nuts. But I suspect they might reply with some of the same language that your television’s been using to you. (Yeah, about that. When your television starts swearing at you its probably time to check whether its still under warranty.)

    (Also noteworthy, the biggest group using food banks are victims of the punitive benefits sanctions regime. But the second-biggest group are people in work who still can’t pay the bills or afford to feed themselves. We were told again and again through the election that work was the way out of poverty. But its testicles. Utter testicles.)

    ”I wasn’t stating that rich people were better than everybody else, only that if you tax them at 90%, you will not get 90% of their income. They have the resources to avoid tax”

    Firstly, I’m glad we agree the rich are now kings. (I’d have chosen the less contenious term ‘nobility’, but let’s not quibble.) Secondly, I was making a general reply to various comments left here which all seemed to me to be pointing in the same direction. If you’re specifying that you’re not saying that it’s bad to tax the kings, just that its hard to, then obviously you know your own mind. It means you now openly disagree with several other people who’ve posted, but its your right to disagree with them. But let’s bear a few things in mind:

    – This is analogous to saying “there’s no pointing chasing bank robbers, they drive too fast”.
    – There is little point arguing about whether we should tax the kings or not, or whether its a good or a bad thing. If your’re right it would be like legislating against winter. The option’s not even there so we should just face up to that.
    – You are essentially saying a group of people in society are above the laws the rest of us have to follow. Which obliges you to follow that thought through. You say elsewhere, for example, that we have the vote. Which may be formally true but there’s a whole bunch of people to whom any laws we vote through will not apply. There can’t be divine right and a democracy.

    If you’re saying that parliamentary politics is essentially meaningless, and that its the kings who really call the shots, then actually we agree. However, if you’re saying that things have to be that way then we don’t. After all, that’s what they said about the old kings…

  13. Politicians saying “there is no point in trying to prevent welfare fraud, if we catch someone making one bogus claim they’ll probably just make another one”.

    Thank you Gavin, you make exactly the point I would have made, but you make it much better than I would have. The bowing-and-scraping attitude we as a society have adopted towards the super-rich is not just sickening, it’s completely unjustifiable. Analogy to the Divine Right Of Kings is about right.

    That’s not to say anyone thinks the solution is as simple as “just increase tax rates”. Everyone acknowledges that tax revenue does not increase linearly with rate; that tax avoidance is already a problem and will probably become a worse one as rates increase. Sure. There are problem. So solve the problems. That’s what a government is for.

  14. As a result of this tithe reduction, church attendance has grown,

    That might have happened a while back; but since we had those mugs made up saying “tighter controls on immigration”, we resist allowing people to join our church.

  15. “That might have happened a while back; but since we had those mugs made up saying “tighter controls on immigration”, we resist allowing people to join our church.”

    I was referring to the increase in declared revenue when the tax rate dropped; it was hard to shoehorn it into your analogy.

    I’m not a conservative, but strawman arguments make me angry. Stick to the facts. Substituting analogy for reason is a tool of demagogues.

  16. Pingback: A meta-comment on voting in the election | The Reinvigorated Programmer

  17. I’m sorry to hear that analogy makes you angry, cjp39. I can only assume that you didn’t enjoy Animal Farm or Gulliver’s Travels, and that you consider Orwell and Swift, like me, to be demagogues. At least I’m in good company.

  18. CJP39: There’s not much wrong with using an analogy for stimulating debate. Aye, perhaps the analogy lacks subtlety and I don’t personally agree with the simplistic notions it espouses, but it did trigger us all having a good old natter. An analogy of not overtaxing the rich being equivalent to not chasing bank robbers on the other hand – it’s so superficial I’d need an essay to truly point out the flaws. But life is short :-)

    Gavin: Your ‘reasonable definition’ of poverty is uncertain at best – food banks have become very popular since the recession but that doesn’t equate to the number of people in the country living in absolute food poverty having increased. People will use a competitive resource if available – in global terms we still don’t suffer from poverty, at least not according to externally sourced official figures. Nowhere in Penge or Sunderland equates to anywhere in the Sudan or Ethiopia. Your definition is arguably totally irrelevant. The IMF definition is to me the only one that matters. Otherwise you can simply say anything that fits your hypothesis. But either way, all that would show is that we’ve recently had a recession, not that your hypothesis that we’re all poorer now since the 70s is true.

    You’ve still not addressed disposable income, proportion of income spent on food or fuel, life expectancy (please refute), available technology, holidays or any of the other measures that have demonstrably improved for the vast majority of people in the UK, and the world at large, since the 1970s. You’ve spotted recent trends and made erroneous long term conclusions. The statistics are available. The one you’ve mentioned for instance – food prices; it is true they have increased 12 percent in real terms since the recession (2007)- and are now beginning to drop in real terms, due to competition (budget retailers) and oil prices. Their long term proportional increase since the 1970s however has been negative – in other words households spend less of their income on food and fuel(heating) than their grandparents did. The farming sector, to name just one, has become significantly more productive during that time. Less people work in fields to provide cheaper food for a larger population. Less people do dangerous physical labour than in the 70s and we have more food than back then. The obesity epidemic is affecting people in the food queues as well as everybody else – we all have *spare* food now.

    I don’t wish to denigrate people who struggle to make ends meet and I don’t consider their problems trivial – but I (and the statistics) refute utterly your assertion that we’re worse off now than in the 70s. I would however love to be having this free ranging discussion down the pub – you sound like an interesting chap and even if we didn’t resolve a thing, we could at least get drunk.

    Mike Taylor : It’s not enough to say that there are problems with punitive tax rates affecting revenue and that governments should fix them – they’ve been trying for generations to square this circle. I think if they could they would. The rich are also in many cases linked to job creation, which is yet another part of the problem. For me personally I don’t care about the rich – I don’t waste sleep worrying about footballers with mansions and industrialists with yachts – I just don’t care. They’re a resource – and if we strip-mine them, we lose out on long term revenue. I would like the vast majority of people to get richer, not the rich get poorer. Our job should be to find out where that line is, and leave it there. Just because governments *should* be there to solve problems doesn’t mean they magically can, especially as the state isn’t all powerful, the civil service is a flawed mechanism, and also because governments are actually there to reflect popular desire, prejudice and ideology as much as they are there to fix problems. For what it’s worth however your church analogy has stimulated a fun debate, even if resolution seems unlikely :-)

  19. futilelaneswapper

    The rise of food banks and the increasing numbers of people using them has provoked me to start investigating the issue, because the phenomenon doesn’t appear to square with the fact that considerably more employed people pay no tax at all now than 5 years ago. On the face of it, it would appear that the poorest among us (at least those who have jobs) should be better off, so why the sharp rise in food bank use over the same timeframe?

    One of our friends helps to run a food bank and I intend finding it more from her soon; in the meantime I have learned the following:

    – Nobody needs to be “food poor” in the UK. Supermarkets throw away mountains of perfectly usable food every day. Some of it finds its way into food banks. Most goes into landfill.

    – The gov’t doesn’t track food bank stats and doesn’t intend to

    – Almost all usage data comes from the Trussel Trust (no reason to think its not reliable)

    – Some people claim that increased use of food banks is simply a matter of supply and demand. There are more of them, so people will use them, even if they have alternatives because they are a “free good”

    – You can’t just rock up to a food bank. You need to be referred by Social Services.

    – Access is limited in the most part to 3 “visits” per year.

    – Benefit sanctions (e.g. because not actively looking for work) that involve temporary suspension of benefits are the main reported cause why people need to resort to food banks.

    – The second most cited reason is income instability/hiatus: e.g. there is often a period of time between taking up a job and receiving the first pay cheque, when a person has no income. (I don’t know why: I’d assume benefits would continue until you were being paid, but perhaps not). It would seem reasonable to suppose that being on a zero-hours contract would also contribute to income instability.

    – Not all food banks agree with the views of the director of the Trussel Trust (i.e. that they are a shame on society). For example the director of the Oxford food bank has this to say: http://www.telegraph.co.uk/foodanddrink/10517718/Food-banks-the-unpalatable-truth.html

    There’s a lot to unpick.

  20. An analogy of not overtaxing the rich being equivalent to not chasing bank robbers on the other hand – it’s so superficial I’d need an essay to truly point out the flaws.

    Well, rjubber, I think Gavin’s bank-robber analogy is better than you paint it here. You missed out a step. The argument we hear is that if we increase taxes on the top 1%, then they will find ways to avoid them, so there’s no point trying. To me, that does seem very close to saying that there is no point to trying to prevent obviously wrong behaviour. In effect, we’re conflating what we should do with what we’re able to do. Hmm. Perhaps I should make a separate post on this. (For avoidance of doubt: I do agree that getting in more tax revenue from the rice is more complicated than just raising the top tax rate. But that surely has to be part of the equation, n’est-pas?

    In global terms we still don’t suffer from poverty, at least not according to externally sourced official figures. Nowhere in Penge or Sunderland equates to anywhere in the Sudan or Ethiopia.

    Please tell me this is merely a rhetorical flourish? We are members of G8. We are ranked somewhere between 24th and 27th in the world for GDP per capita, depending on which set of figures you go with. We can aim a little higher than “not as bad as Sudan”. Seriously, if that is the standard you set for “poverty” in the UK, then we are simply operating in different moral universes and have nothing to say to each other.

    For me personally I don’t care about the rich – I don’t waste sleep worrying about footballers with mansions and industrialists with yachts – I just don’t care.

    Neither do I. But I do care about the millions of people in poverty, and the thousands who are actually dying, because the money that the super-rich are hoarding is not being redistributed. That’s what it’s all about. Not equality for the sake of it, but enough equality that everyone has enough.

    I would like the vast majority of people to get richer, not the rich get poorer.

    So here, at least, we are in full agreement.

  21. On the face of it, it would appear that the poorest among us (at least those who have jobs) should be better off, so why the sharp rise in food bank use over the same timeframe?

    Thanks, Vince, it’ll be interesting to see what you come up with regarding food-banks. But to address this core point: the obvious explanation is that it makes little difference whether you have to pay tax on your first £10,600 if you’re not even earning that much. Or if your job is a zero-hours contract that this week pays you nothing, or an insufficient amount.

  22. “I’m sorry to hear that analogy makes you angry, cjp39.”

    But…I didn’t say that analogy makes me angry?

  23. Technically, that is correct. You said “strawman arguments make me angry. […] Substituting analogy for reason is a tool of demagogues”. But it seemed pretty clear to me that you were calling my analogy a strawman argument, so by syllogism …

  24. Technically correct. The best kind of correct.

    Your analogy was a strawman, yes. I don’t have a problem with analogies, unless they’re used to hide a false argument (demagoguery). That was not what Orwell and Swift did. (Also, you may be playing the same game, but I think you need a bit more practise before you can consider yourself in their company.)

  25. So. You feel that my analogy is a strawman, and strawmen make you angry. But … you dispute that my analogy made you angry?

  26. futilelaneswapper

    FWIW, I am convinced that zero hours contracts cover a multitude of sins and are a prime enabler of fudged employment statistics. For example in 2014 the ONS estimated that 1.4 million people were on ZHCs that provided /some/ income, with a further 1.3 million on contracts that provided no income whatsoever (no hours worked). Every one of these people will be marked as “employed”, even those who did no work.

    ZHCs may be appropriate in cases where work is expected but seasonal (e.g. fruit-picking) or if they are managed fairly (McDonald’s seems to ensure that work schedules are pre-arranged with staff). In such cases, they can offer certain benefits over purely casual labour, such as Health Insurance. They might suit students and pensioners, but because of the one-sided nature of such contracts, people who are looking for permanent work are on a very sticky wicket if that’s all their putative employee is offering.

    Interestingly, their legality has also been questioned in the courts. [This judgement](http://www.bailii.org/uk/cases/UKSC/2011/41.html) in 2011 found that where the contract did not provide equality of bargaining power, its terms may be void under UK law.

  27. Ah, I see. You wrote “…that analogy makes you angry”, not “…that *my* analogy makes you angry”, and then inferred that I must not have liked some other famous analogies as a consequence. Both of those I dispute. Your analogy made me angry, though, yes. The doctor tells me I’ll live, though.

    https://xkcd.com/386/

  28. I see, cjp39 — it’s just my analogy that makes you angry, because in some way you’ve not specified you feel that it’s not a good one. (Surely it can’t just be that I spoke of increasing the pastor’s salary by 112% rather than his total wealth? Or can it be that that’s all it would take to fix it for you?)

  29. Vince, I had no idea that ZHCs were being abused so badly that 1.3 million people who had no work are now counted as unemployed. Can that really be true? Do you have a link to back it up?

    I don’t necessarily disagree that there may be some circumstances where ZHCs are appropriate and defensible, but surely seasonable fruit-picking doesn’t come under that heading. Isn’t that better handled by a short-term but full-time (or otherwise fixed-hours) contract?

  30. Just to paint a clear picture, I don’t like analogies either. They’re like a suit of clothes which never fits, like a coat of paint which never adheres properly to the wall, they’re…
     
    Oh, hang on, wait…

    Rjubber said:

    ”You’ve still not addressed disposable income, proportion of income spent on food or fuel”
     
    Yes, if only I’d thought to say something about fuel poverty.
     
    ” The one you’ve mentioned for instance – food prices”
     
    Um, no. Fuel prices. I mentioned fuel prices.
     
    ””The obesity epidemic is affecting people in the food queues as well as everybody else – we all have *spare* food now.”
     
    This is another ‘common sense’ thing people repeat because it sounds superficially plausible, which is actually wrong. We have all become used to the obesity epidemic being blamed on the bingeing chavs. But the primary cause of obesity is poor quality food, not over-eating.
     
    “The lowering in the quality of our diet and the lowering in the quality of our health are not coincidences… We are not getting bigger and sicker because we are eating a lot of food. We are becoming hormonally ‘clogged’ and losing our natural ability to burn fat from eating the wrong quality of food. The further the quality of our calories has gotten from the high-quality sane food we ate for 99.8 percent of our history, the bigger and sicker we have become.”
    (Whole article here)
     
    ” I don’t wish to denigrate people who struggle to make ends meet and I don’t consider their problems trivial”
     
    Glad to hear it. And yet then you say…
     
    “People will use a competitive resource if available”
     
    …which is of course a paraphrase of Iain Duncan Smith’s claim that people use food banks because they are there. This isn’t just preposterous, it’s actually impossible. As Futlielaneswapper says later in the comments, in the majority of cases you need a referral before you can use a food bank. Look at the Trussell trust document I linked to earlier.
     
    And then we get…
     
    ” in global terms we still don’t suffer from poverty… Nowhere in Penge or Sunderland equates to anywhere in the Sudan or Ethiopia.”
     
    Um, what Mike said. If you’ve resorted to arguments like this and still can’t see what’s wrong with what you’re saying, then I can only reply that I don’t think that matters any more. Because everyone else will.

    Futllelaneswapper (who I gather may be known to his mum as ‘Vince’) says:

    ”I’d assume benefits would continue until you were being paid, but perhaps not”

    It’s not. The first seven days of the claim are deemed not to count, you have to claim for them but then don’t get paid for them. If you don’t make your claim until those seven days are up, you just go unpaid for the next seven days. (Until recently it was three. I’ll leave you all to guess who changed it.) Irrespective of this, there can also be long delays in people receiving their benefits.

    Also, a problem for a lot of people is that almost all jobs now pay monthly. Traditionally, more poorly paid jobs would pay out weekly, but it’s cheaper to administer one monthly payment than four or five weekly ones. People living on low but at least fortnightly benefits payments suddenly have to wait a whole month for their next lot of cash. Getting a job can empty your pockets, at least in the immediate term.

    But worst of all is that people in frequent short-term employment get it from both ends, endlessly working a short while, setting up another claim, and so on. (Though you are officially exempt from the seven-day rule if you last claimed within twelve weeks.)

    In addition, a big problem for people nowadays is underemployment. They’re in work but can’t get the hours they need, so are reliant on haphazardly paid top-up benefit payments. A significant  section of people who use food banks are in this position. This overlaps with low rates of pay and with zero hours contracts, but isn’t always the same thing. It’s likely to get worse because the Tories are talking about subjecting these people to the same punitive sanctions regime. It’s a classic case of blaming the victim, accusing people who can’t get more hours of refusing to take them up.

    Mike Taylor said:

    ” I do agree that getting in more tax revenue from the rice is more complicated than just raising the top tax rate.”

    Mike Taylor, you have sushi on the brain.

  31. “Surely it can’t just be that I spoke of increasing the pastor’s salary by 112% rather than his total wealth? Or can it be that that’s all it would take to fix it for you?”

    I think the entire second paragraph would need to go, then, sure, why not? I mean, the government’s not a church, so it’s an odd metaphor, but it’s basically fine. I much prefer your previous, fact-based posts on the subject, but hey, it’s your blog.

  32. Mike Taylor, you have sushi on the brain.

    LLOL!

    It’s true!

  33. cjp39, I wonder if this is the core issue in our disagreement:

    The government’s not a church, so it’s an odd metaphor.

    The government is not a church, no. But it has a lot in common, or at least it ought to have. A good church is run for the benefit of the poorest people inside it and those outside. A good government should also be run for the benefit of the poorest people in the country it governs. That’s what it’s for. If our goal were merely to make the rich, richer, we wouldn’t need a government for that. Basic human nature will take care of it.

    Basically, a government is supposed to be there to put a brake on the crasser, more selfish side of human nature. Which is why it’s particularly disappointing when we instead have a government that encourages and even celebrates that side of human nature.

  34. futilelaneswapper

    @gavinburrows Actually my mum never calls me ‘Vince’, always ‘Vincent’, and I and my five siblings are not allowed to refer to her in the vocative as ‘Mum’, but must use one of ‘Mother’ or ‘Mater’. Same story goes for my father as well. So we simply call them Matrix and Patrix as a result. Which they seem to like. Odd, but there you go :)

  35. “The church is not a government, no. But it has a lot in common, or at least it ought to have. ”

    Fuller response when I get to a keyboard; for now, a rhetorical question (based on the slight misquote above…): Do you think a church should compel its richer members to donate? What powers of compulsion should it have?

  36. A church is not in a position to compel anything — that is part of where this analogy (like all analogies) is imperfect. But a lot of churches will make it clear that the better-off members are, shall we say, graciously invited to chip in more than less well-off members.

    The point here is about how governments (and churches) should behave.

    How they are actually, in practice, able to behave is properly a separate question, which really deserves a separate post.

  37. “A lot of churches will make it clear that the better-off members are, shall we say, graciously invited to chip in more than less well-off members.”

    How about a widow with two children and no income living in an expensive property? Would they be, shall we say, graciously invited to sell that house and move to something cheaper in a different part of the district? That way, a wealthy banker can buy it and the proceeds be given to the church to distribute to the poor.

  38. You’re not going to be able to nail me down to making specific policies about who should and shouldn’t be required to do what. Rushing to such policies without proper consultation and cogitation is a big part of what got the previous government into the mess we’re now suffering.

  39. “You’re not going to be able to nail me down to making specific policies about who should and shouldn’t be required to do what. Rushing to such policies without proper consultation and cogitation is a big part of what got the previous government into the mess we’re now suffering.”

    That’s wise. If only Labour agreed with you. Sadly, the exact scenario I mention was part of their manifesto pledge. Again.

    You see, conflating income with wealth leads to exactly this mistake. In your Church analogy, if the value of the church building doubles, (a) it’s nothing to do with church policy, it’s simply a function of how valuable land and buildings are; (b) the church can only realise that value by selling their building. Then what? You have no church.

    How about stocks and shares? Well, they represent ownership of a company. They are not income. If I am to realise some of that value, I need to find someone else willing to buy my stake in the company. Suppose we institute a tax on the absolute value of the shares a person holds; let’s say 5%, for argument’s sake. To pay that tax, I need to sell 5% of my shares. But who to? Whomever is going to buy it will need to be confident they will get significantly more than 5% return per year. How will they get that? Selling the shares? That’s just a Ponzi scheme. The only other ways to make money on shares are (a) dividends; (b) getting 50% of the shareholders to agree to sell the company’s assets and disband it. With a 5% annual tax, companies will need to guarantee 5% a year dividends, or be shut down. Or, and this is more likely, the value of the shares will just collapse to a small multiple of the existing dividend, and you get a fraction of the tax revenue you were expecting (plus a wave of redundancies as investors can no longer justify holding shares in long-term bets).

    Interestingly, you get the same returns by just taxing the dividends. Which, it turns out, we already do.

    What about the argument that all this wealth is wasted on the rich? That they don’t need another boat, so the money is wasted? Well, if it’s stocks and shares, the money doesn’t really exist. It’s an accounting fiction, representing the real value of having enabled a company of men and women to engage in productive work by providing them with tools, food, houses, etc. It only makes money if the value of the company rises above what it was when it was started, meaning it’s produced goods or services that actually benefit people. That increase is kind of like income, so perhaps we should tax that, instead of the absolute value? Oh, guess what? We do. And that’s a tax on a tax, since the company’s profit, which led to the increased value, is taxed. (Wages, on the other hand, are deducted from profit and so only income tax is applied.)

    How about that proverbial boat? Surely we can tax that? Ignore the fact we already taxed the income that pays for it. I mean, it’s definitely a luxury. We don’t want it to be illegal, but it should be more expensive than, say, food, or giving money to the poor, right? Well, naturally. And, indeed, it is. Taxes aplenty are heaped up on that boat. Food, on the other hand, is even exempt from VAT. And charitable giving is *retroactively exempt from income tax*. That’s right; if you choose to be philanthropic with your money, the value to the charity is exactly the same as if the government had taxed you and donated on your behalf. The only thing missing is coercion. Huh. Sounds like a church, actually.

    I assume you made the mistake of conflating wealth and income because you haven’t thought about it much. I assume you continued in the same error after it had been pointed out to you before because it’s still new to you, as you admit, and it takes a while to sink in. Politicians don’t have that excuse. Every politician who talks about wealth not income is cynically manipulating you.

    Now, let’s figure out how to apply income tax to tax evaders—something every party is committed to—and stop wasting time pretending taxing paper wealth is a solution.

  40. Thanks, cjp39, for this long and thoughtful response. As a matter of historical fact, I elided the distinction between the pastor’s salary and wealth in the original post just to make the whole thing more streamlined — so it would read better. But while I understood clearly that they are different things, I had not appreciated quite how significant that difference can be for policy purposes.

    Here’s the one place where I disagree with you:

    What about the argument that all this wealth is wasted on the rich? That they don’t need another boat, so the money is wasted? Well, if it’s stocks and shares, the money doesn’t really exist.

    It sees to me — and do point out if I’ve missed something — that the wealth is as real as what people do with it. If it just sits in banks (as indeed is generally the case) then it does nothing, and so in some sense is not real. But if that some money were instead redistributed to people who need it, then they would spend it and consequently it would be real.

    In fact, if anything this is an argument for the redistribution of wealth. Because if wealth owned by the super-rich is not real and wealth spent by regular people is, then redistribution of wealth is actually the de novo creation of wealth, which is self-evidently a good thing. (Or, to put it another way, it undoes the destruction of wealth that occurs when billions are salted away in bank accounts, doing nothing.)

    Finally: “Now, let’s figure out how to apply income tax to tax evaders—something every party is committed to”. Here, I think we can all agree.

    Will you still agree if I extend it to tax avoiders?

  41. “If it just sits in banks (as indeed is generally the case) then it does nothing.”

    Banks don’t generally hold much currency; they will invest it in bonds, stocks, mortgages, etc. Let’s take a look at them.

    If I hold a one hundred pound bond issued by the UK government, that means my one hundred pounds has been taken by the government and spent. It may have paid a public sector worker, gone to the poor, or landed in the pocket of one of the fat cats who financed Labour’s disastrous private/public initiatives. At any rate, that £100 has already done something. I hold only an IOU.

    Mortgages are similar; the money has been spent on a house, and I hold only an IOU, plus rights to repossess if a repayment is missed. The money, if money there is, is “tied up” in the property. It’s providing a family with a place to live.

    Stocks are much more complicated, as the revenue stream they provide is so hard to model, and executing a hostile takeover to unlock the value of their holdings is hard. But if we grossly oversimplify, and take the concrete example of a brick manufacturer, then the value of the shares lie in the buildings owned, the kilns, the raw materials paid for but not yet used, the bricks produced but not yet sold, any cash held to put towards future costs, and (less tangibly) the future revenue streams predicted for the company. Again, there is no money here to give to the poor. It’s just IOUs and ownership.

    As an aside, let’s get hypothetical, and assume the bank *does* keep a whole stack of fivers in a vault somewhere. Is that money “lost”? Weirdly, no. The government can just print more, and in fact there are inflation-based mechanisms in place that should accomplish that, in the long-term. And it’s the government who gets the benefit of that money. So in the long term, even *burning money* is like paying extra tax. There is even a theory that money only has value in the first place because governments require taxes be paid with it.

    Banks aren’t that stupid, though. Wealth doesn’t just sit in banks, never “does nothing”. It gets invested. Redistributed to people who need it (though, of course, not charitably—they must promise to pay it back, with interest). Then it gets taxed.

    If you’ll permit me another aside, let’s suppose for a moment we *do* want to tax wealth sitting in banks. Let’s make it a one-off levy, so we don’t need to worry about long-term instability. Heck, let’s go further, and see if we can avoid people noticing entirely. How might we do it? Well, we could just turn up with a bunch of guns, demand 5% of the wealth, leave an IOU in its place, and hope the bank doesn’t tell anyone. We’re the government, we’re good for IOUs, though we call them “gilt-edged bonds”, because “IOU” sounds a bit childish. We go spend the money, boom, levy levied. Can we be subtler about it, though? I mean, guns. Someone might complain. How about if we just force banks to buy our bonds via legislation? And instead of letting on that’s it’s a levy, we could claim it’s actually for the benefit of the banks! Hahahah…Oh, wait, we’ve already done that: http://en.wikipedia.org/wiki/Basel_Accords

    “Will you still agree if I extend it to tax avoiders?”

    Yes, except defining when tax avoidance is bad (e.g. avoiding VAT by mailing books from an island) and when it is good (e.g. avoiding tax by giving to charity) is difficult and contentious, and even though I know what you mean and you know what I mean, it’s the internet, and it’s simpler just to say “tax evaders” and forestall the trolls.

    “Thanks, cjp39, for this long and thoughtful response.”

    My pleasure. Thank you for your stream of thoughtful posts on this blog, and for engaging with me on this one.

  42. Well, once more you’ve given me a lot to think about, including plenty that I’m not really competent to think through to the point of holding an opinion. Thank you.

    I have only one significant question to offer in response. Isn’t it the case that most of the ultra-rich keep their money in offshore accounts precisely in order to avoid the kinds of taxation you’re alluding to? And is it not the case the money held in this way really is lost to our economy?

    Actually, I have one more question: where do you think the money has gone?

    (When I finish the new five-part series on what happened in the election, I really must write a post where I try to disentangle how much money we could get from the very rich from how much money we should try to get from them. I don’t think either half of that equation is very simple.)

  43. Pingback: A final thought on the election | The Reinvigorated Programmer

  44. “Isn’t it the case that most of the ultra-rich keep their money in offshore accounts precisely in order to avoid the kinds of taxation you’re alluding to? And is it not the case the money held in this way really is lost to our economy? Where do you think the money has gone?”

    It’s helpful to remember the burning money observation: since we can print money, long-term it’s never truly lost. To see the impact, we should probably look shorter-term.

    I assume by “offshore accounts”, you mean the technique of evading income and capital gains tax by not declaring them, and relying on the inability of the exchequer to catch you out. (If not, let me know.) Short-term, that means money that should have gone straight to the government is instead invested in assets. Let’s break that down a bit:

    (1) UK bonds: As discussed, sort of like tax. However, it gets to the government more slowly (via higher demand for future bond issues). Also, bonds have poor returns, so won’t make up much if any of a high-yield offshore investment.

    (2) UK stocks. Effort is invested in profitable industry instead of the common good, and hence the money is “lost”, that is, not used the way the democratically-elected government (and hence, to some approximation, the UK population) wants.

    (3) UK mortgages: same as 2.

    (4) Non-sterling investments. To buy these, pounds must be exchanged for a foreign currency; let’s assume rubles, for sake of argument. This competes with all other GBP/RUB trades, effectively driving up the cost of all Russian goods (primarily gas, as I understand it). The money is thus “lost” by driving poor people further into fuel poverty, and enabling the Kremlin’s foreign and domestic policies. Other currencies will have different impacts.

    So the loss caused by tax evasion via offshore accounts is primarily short-term damage, plus a similar future impact when capital gains tax (assuming gains were made) would have been applied. And it’s principally in the form of enabling the wrong kind of activities: building roads and skyscrapers in Moscow rather than London. Or killing Georgian civilians rather than Iraqi ones.

  45. “And is it not the case the money held in this way really is lost to our economy?”

    Should have returned to this. In the case of foreign investment, yes, it’s lost. The initial investment, plus all the follow-on activity of feeding workers, etc. that we call the fiscal multiplier is lost. Long-term, though, it will stabilise.

    In the case of domestic investment, there is no economic loss (give or take the fiscal multiplier changing), but democracy is thwarted.

    Either way, definitely bad.

  46. Thanks, Chris — very helpful once more.

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