As the October general election looms, States Members appear to be in a state of frenzy.
The media has reported anouncements of candidates (some sitting members) intention to stand for (re)election, with many of them announcing not a single policy of theirs, but simply who they are. Personality politics is obviously far more important than the vacuous inanity of policy debates.
Some States Members who are frustrated with how things have gone over the past electoral term have formed a political alliance (definitely not a party). They're meeting regularly, discussing policy positions, potential ministerial posts to aspire to and scope for collaboration. But, as I've said, it's definitely not a party, that would be ridiculous. Such an alliance sees members on the left of Jersey politics siding with others on the libertarian far-right in a very confused conglomeration. Oh, by the way, it's definitely not a party! (Get the point yet?)
Most curiously, the Treasury Minister, Senator Philip Ozouf, has been out of the island since the Budget revealed a potential deficit of £95m over 3 years, and barely a peep has been heard from him since. He's gone to France, presumably to get some economics lessons from the Francois Hollande government.
They're even turning on each other in St Mary, where Deputy Le Bailly (who can't seem to workout whether he is a parliamentarian or a glorified councillor) has announced he is to challenge Constable Juliette Gallichan for her job.
Rumours are being shared every day in the States building and there is certainly a tension in the air.
Throughout all of this, Reform Jersey are ploughing along and things couldn't be better for us.
Our Equality Parade was a humongous success. At it's peak around 500 people coming together, in one of the largest demonstrations in years, to support a cause that is at the heart of what most decent ordinary Jersey men and women want for their island.
By running stalls in town and knocking on doors in our constituencies we've signed up hundreds of people to the electoral register. St Helier, I am told, has never had more people registered to vote.
We are currently organising our candidates for an announcement in the next few weeks. We have a really interesting and diverse bunch with a variety of backgrounds, but all of whom are committed to making Jersey politics work better for the people of Jersey and with the passion for principles of social and economic justice that has been sorely missing from government policy for too long.
As a result of being the most overtly organised force in Jersey politics (there are more organised groupings, but they do so covertly, and therefore undemocratically) Reform Jersey is now facing further scrutiny. Some of which is justified, some of which is motivated by fear and some is just to antagonise us.
We have not produced a manifesto yet, as we haven't hit the election yet, but our first leaflet has announced some of our key policies -
- Ending abuse of zero-hours contracts
- Introduction of a 'living wage'
- Free GP visits
- Updating out employment protection law to a 21st Century standard
- Ending rampant population growth
- Fairer Income Tax system where high earners contribute more
- Lifting the Social Security cap on high earners so they pay the same rate as everyone else
- Opposing increases in GST
- Reforming the States electoral system to have one type of elected member in equal sized constituencies.
- Reforming the justice system to improve access to legal aid and introduce an independent prosecution service.
Is this as comprehensive as it needs to be? Absolutely not. But it's not a manifesto. More detail will be published closer to the election.
A criticism we have gotten by the usual right-wing detractors is that we're typical barking mad Trotskyites who promise outragous things (like saying sick people shouldn't have to pay to see a doctor like 65m people get in the UK) without a word on how to pay for it. I've even been accused of being a Communist by Grouville's John Dix twice, which I take as a sign we are doing something right.
This, of course, disregards two of our bullet points that very clearly show that we have targeted areas to raise revenue.
The meat is not on the bones yet, but it will be.
Our members have demonstrated that they have the initiative to put together packages to achieve this end. An example of a previous attempt by Deputy Southern can be read here - http://www.statesassembly.gov.je/AssemblyPropositions/2011/28055-14746-1422011.pdf#search=p.23/2011
(Note - this is simply what has been suggested before as a way forward and will not necessarily be exactly the figures that Reform Jersey suggests)
The exact figures aren't on the table right now, but when have voters ever been given a fully costed and comprehensive policy guide at all, let alone over two months before the election?
As a geeky politico, I read every election manifesto in 2011 and our leaflet (which isn't a manifesto remember) contains more substance than probably 70% of those and certainly far more substance than anything put out by declared candidates in the upcoming election so far, who are simply hoping to bank on their name counting for something. So of all declared candidates so far, Reform Jersey has clearly demonstrated itself to be the most credible and it is the other candidates that should be interrogated hardest.
It has never been clearer that something in Jersey politics needs to change and a different approach to government is needed.
Despite the current state of our finances, Senator Ozouf was able to magic up £3.5m to buy Plémont. This proves something I have said in the States several times now that many of the things we do not get in Jersey, that citizens of other civilised countries are given as of right, is not out of finantial necessity but out of political choice.
We have a government that does not have as it's top priority to provide services to islanders to make their quality of life better.
Whilst the Chamber of Commerce and some business commentators want the government to slash public spending (despite the fact that this wil do nothing to help the economy grow and may actually cause greater unemployment) and offer fewer services to Islanders, there is another way.
In today's JEP, Peter Body made the point very well -
Well said Peter!
A fews day ago myself and Deputy Tadier wondered into the Farmers Inn in St Ouen for a couple of drinks (as one must do from time to time to discover the new and innovative ways the St Ouennais are driving the island forward).
After we'd managed to convince one local there that we aren't gay (apparently if you stand up for gay rights, that must make you gay), we had a really good conversation with the other locals there who were actualy quite excited about Reform Jersey and the different ideas we are putting forward.
I felt quite bad for them that they won't have a choice for a local Reform Jersey candidate in St Ouen because we aren't targetting that constituency, but they will still have their Senatorial candidates.
Jersey is not the conservative society that some suggest. We are broadly a progressive and social democratic comunity, but without a government that reflects it.
In October the people of this island have a choice - it's Reform Jersey or the Business As Usual Party.
The choice could not be more obvious.
Sam
Sam,
ReplyDeleteAs a supporter of any intelligent new party to kick out the feudal dinosaurs, I am all for change. What is alarming is your statement that you are not comtemplating slashing spending on the out of control public sector.
Take the public sector wage bill, can you seriously believe that £350 million per year, on an island of 45 square miles is required or affordable ? How about the continued beautification of ( St Aubins and Cheapside comes to mind ) streets and changing the avenue costing millions. How about the endless States members Jollies, or oil painting or parties ? How about all the highly paid arms length quango's managing the paid managers of states departments or wanting to waste taxpayers money on building office blocks, and other hair brained schemes ?
Public expenditure is out of control, so increasing taxes and s/security further, without cutting wasteful and unnecessary expenditure will not solve anything. It may even make matters worse for the islanders under the control of a tax and spend Government.
Boatyboy.
Boatyboy,
DeleteThere are things in this comment that I definitely don't disagree with. You forgot on your list the £200k on the fantasy film (always worth pointing that one out in an election year!)
Nobody would deny that the States engages in a lot of wasteful projects, pays certain people far too much and ends up messing up things that end up costing us a lot of money to rectify.
We all want that to stop, but I would hope that it goes without saying.
The point I'm making is that the aim isn't "reduce spending" the aim is "cut waste" and the effect of cutting waste will be saving money, which we can decide whether we reallocate on something worthwhile or not.
If you just say "reduce spending" and set targets to that effect, if you miss some waste, or it turns out there isn't as much waste as you thought, you'll end up making the shortfall by cutting services, which is what I'm concerned about.
Services must be protected and, where necessary, enhanced.
The headline story in the JEP yesterday was that Firefighters were going to have to do the jobs of Paramedics if they were too busy. To me that is unacceptable and needs to be resolved. But that means spending money. The alternative to not spending more money there means one day someone will die because we sent someone unqualified to see them in an emergency because the qualified paramedics were busy attending someone with a less serious problem.
I mentioned above that Monty and I went to the Farmers the other day. We got chatting to some nurses there who were incredibly concerned at the terms, conditions and pay that newly recruited nurses had to put up with which mean that we are really struggling to recruit nurses because they'd be better off working in the UK instead.
The fact is in Jersey we don't benefit from a huge amount of services that others in Europe take for granted. If we want some of those, we need to pay for them.
I completely agree that we need to get rid of waste. But the starting point is "let's cut waste" not "let's cut spending" because the latter will result in unintended consequences that will hurt Jersey people.
I have to agree with Boatboy on some of this. I have seen some abomnibal wastage in my time.
ReplyDelete'time to time to discover the new and innovative ways the St Ouennais are driving the island forward' see http://st-ouennais.livejournal.com/
ReplyDeleteBoatyBoy,
ReplyDeleteI wholeheartedly agree. The Reform Party has only ever talked of spending, and raising taxes to cover it. I don't want taxes to rise, and believe spending is way out of order.
Better the devil you know I think in this case. The Reform Party has not sold themselves well on the economic agenda - fine, all happy about their social agenda (to an extent), but my concern is principally on the economy and unemployment and reducing taxes.
I have an OK salary, and our household income is just under £100k, and what I read of the Reform Party is that they regard me as rich!!!! That I should pay more in taxes! Sorry, but VERY worried about the extent they will become a political force and do hope people consider their policies in detail before blindly voting for their agenda....
Martin
We're called Reform Jersey, not the Reform Party.
Delete"Our equality parade" ....Weren't you claiming you hadn't politicized it. Now it's apparently your parade, the LBGT community must feel hoodwinked. Also, your sudden new focus on economics (undoubtedly as a reactionary rebuttal of critics) is a dangerous move. It is conspicuously apparent that no one in your party really has that much of a clue about finance or economic strategy, not on a truly analytical level anyway. I doubt many people would feel comfortable with you controlling the 100s of millions of pound under Jersey's system. You seem to want to criticise business deals with other countries on the basis of moral grounds, while lambasting Jersey to UK representatives, yet keep all the monetary flow which derives from these relationships. If Reform Jersey gained a majority (and embodied the one party rule Nick seem's to enjoy condemning) then I have no doubts that Jersey's finance would be in turmoil very quickly.
ReplyDeleteThis is one of those comments I referred to above that are purely to antagonise. This is John Dix league. There is not one word of intelligent argument in this.
DeleteYes, we can call it "our equality parade" because we were the ones who organised it for goodness sake. We're not going to call it somebody else's. Good grief man!
As for whether we have no ability to look at these things on an analytical level - you obviously didn't click on the link I provided to an earlier proposition based on tax projections, rates and application.
Countries around the world have tax systems that extract more from their most wealthiest citizens and include a variety of different rates. But in Jersey when you suggest that the 20% should be periodically re-evaluated and perhaps higher rate bands introduced, you're treated as a heretic.
This is the backwards, insular political attitude that Jersey must be rid of if we are to progress.
Oh, and our policy on finance is that we want a modern, dynamic and ethical finance industry. If you think they have something to worry about with those principles, then what does that tell us you think of Jersey finance?
Hi Sam. Consider removing the threshold (Lower Earnings Monthly Limit) of social security payments too. This has always caused an awful lot of problems for those on low incomes who have low or variable hours.
ReplyDeleteCurrently, the situation is this:
Upper Earnings Monthly Limit (UEL) £12,964 per month (at 2%)
Standard Earnings Monthly Limit (SEL) £3,918 per month (at 6%)
Lower Earnings Monthly Limit (LEL) £824 per month (6%)
Currently, the minimum wage (per hour) is £6.63. Consider the plight of someone on the minimum wage but who is either on a zero hours contract or on fixed hours less than the "normal" 35 or 40 hours. If on minimum wage, to reach the level where payment is supplemented from general taxation (£824/month), one would have to work 124.28 hours a month or approximately 28 hours a week which in our current economic situation means that there are many people who rarely reach the "threshold" amount and therefore do not get their contributions "topped up" from general taxation revenues to the maximum amount payable (ignoring the 2% rate for simplicity), which is worked out as that paid by someone on a salary of £3918 a month (£47,016 per year = approx £904 a week).
My own position is that I have two part time jobs which are under eight hours a week and therefore SS contributions are not payable but I also have two "zero hours" type jobs, one of which pays SS and the other doesn't. These two are at above minimum wage (£8/hr and £7/hr) but my earnings that are visible to SS do not generate enough hours per month to reach the threshold (as it happens, my total wages earned rarely reach that level anyway). I therefore regularly receive the nasty letters from SS demanding a huge amount of money to top up the hole in my contributions.
The system also discriminates in favour of those with "standard" 9-5, 35/40hrs a week, 52 weeks with 4 weeks holiday type jobs and heavily against those with variable jobs. An anomaly of the present system is that people who are forced or choose to work fewer than 28 hours a week (or who may be working longer hours for several employers, some of whom don't want to pay their contributions) get widely different demands from the SS department. Imagine a part-time lawyer on £150 an hour. He would only have to work around 6 hours a month (18 hours a quarter) to get his SS contributions fully topped up by the taxpayer. Someone in a job paying minimum wage with variable hours may work 250 hours one month, 100 the next and 85 in the final month. Averaged over the quarter, they are doing 145 hours a month - which would be enough, even on minimum wage, to get contributions fully topped up but what actually happens is that they only get one month's contributions topped up and have to suffer a "hole" in their contributions record for the other two months, which will affect their benefits and eventual pension.
I note your "not the manifesto" idea to abolish the ceiling on SS. Has anybody figured out if all the lawyers, accountants and civil servants etc paying a flat 6% of their income would cover the costs of abolishing the threshold system? It's also worth considering completely abolishing SS contributions (employers would cheer) and funding pension funds, sickness/disability benefits etc entirely out of general taxation revenues. Vastly simpler and more progressive.
Some interesting ideas here, thank you.
DeleteI had a mate who studied for a law degree long distance over here, whilst working 3 days a week. He was highly responsible and was able to get a degree, paying his whole way through without state support and came out without a single penny of debt. Great for him. He was earning enough money to pay SS contributions, but wasn't earning enough to benefit from them if something happened to him. He could have had an accident or gotten very sick and would have only got very basic support in that time, which would have jeopardised his education, despite how responsible he had been. So there is definitely room for improvement there.
On abolishing SS and doing it all from Income Tax - it's an interesting idea. Obviously income tax would have to rise a lot to reach the shortfall.
I seem to remember reading something about a policy in the UK to abolish National Insurance (can't remember who suggested it, might have even been UKIP).
The benefit of having SS is that the money it raises is ring-fenced for specific services and can't be used for whatever Senator Ozouf decides. Though, the definition of "ring-fenced" appears to be ignored by this States Assembly, so who knows.
I forgot to mention that because of my current personal situation, I am 60 and only have a lifetime contributions record of 80%, so my eventual pension will be affected. I am also no longer eligible for sickness benefit owing to my visible income not reaching the SS threshold for the past year or so
ReplyDeleteAn interest analogy for your to ponder.
ReplyDeleteShould somebody earning £ 200,000 be forced to pay more for a loaf of bread, of which they will only eat half, than somebody earning £ 30,000 per year, who will eat the whole thing ?
Re: Anon "An interest analogy for your to ponder"
ReplyDeleteYou are referring to the consequences of my idea that someone on an extreme income, such as 200k, woukd only get back in benefits, pension etc sums as if they had contributed to thec curent ceiling level of about £47k a year. You are implying, with your analogy of bread, that this is unfair. You are further implying that anyone should only get out of the system what they put in. In which case as any people earning under 47k a year, probably the vast majority of wage earners, are getting a subsidy from the tax payer, then you must believe that that is unfair to the 200k+ types. You imply that anyone whose lifetime average wages are under 47k should get a reduced old age pension in perpetuity.
Bear in mind that the very existence of such a disproportionately large number of 200k+'ers in Jersey (and 11k'ers) has driven up the price of property to practically unaffordable levels to most not on those extreme incomes; it has also made property owning/renting to those who can afford it affordable with difficulty. The price of property, commercial rents etc is all driven by this single factor of us having such a high proportion of very high earners here, which has a direct and pernicious influence on the high cost of living over here for everyone else
A
With all due respect, you seem to be imposing an awful lot of your own prejudice on that analogy that wasn't intended. It didn’t relate directly to Social Security per se, more to the broader range of services that are offered by the Government and which we finance through taxation.
ReplyDeleteIt is not so much that the person earning £ 200K should be entitled to enhanced benefits from the system (or that somebody earning a lower income should be entitled to less). Indeed, the reality is that because these higher earners are likely to pay for private healthcare/ private education etc.., they would actually tend to derive less benefit from the overall system than somebody who did not pay for these things (and was therefore more reliant on state provision).
Ultimately everybody in this island is entitled to the same range of services and benefits, but we expect higher earners to pay far more for those entitlements simply because they can afford to do so. Reform’s proposition is that we tax these individuals more, when it is they who, because of the disproportionate manner in which incomes are distributed, are ultimately paying the vast majority of tax anyway. Whether this is right or wrong, it is a fact. It’s very easy to suggest taxing these individuals more, but there are consequences to enforcing a disproportionate charge on higher incomes.
Ultimately if we need to meet an income tax shortfall of £ 100 Million, it would seem preferable to meet that requirement with 1,000 new wealthy residents paying £ 100,000 in tax each, than 100,000 new residents each paying £ 1,000 tax each. If that’s not the case, and we begin to take actions that would discourage that type of wealthy resident (or indeed encourage those already paying these sums to leave), that is a consequence. There are a finite number of people in the world with very high incomes, and other jurisdictions will be quick to pick up on any moves this island takes to increase their tax burden disproportionately.
The cost of housing and high cost of living are indeed an unfortunate consequence of economic success, and the island being a pleasant place to live. But if we are to artificially interfere in the property market, to provide housing to the less fortunate, we have to take money off of one person, in the form of taxation, in order to finance that subsidy. Which brings us back to increasing taxation again with a focus on those earning the most.
I understand the frustrations expressed in your comment, and if we could push the reset button and return to a time when affordable housing was available to all, the population was smaller , and life was more egalitarian, maybe we would all be happier. But do you believe that the vast public sector which has grown fat on the island’s economic success would willingly downsize in proportion ? We unfortunately have a government that have expanded in proportion to our rising income over recent decades, that seems incapable of cutting its cloth to our reduced level of tax revenue. Thank god there are very high earners who are paying more than their fair share (in real money, not as a percentage of their earnings) for a range of services they might never use. Let’s not persuade them to go elsewhere, or dissuade others from joining them.
Absolutely agree with everything you say. However the Reform Party don't realise that due to many people in Jersey living in households of relative high incomes, means we feel worried when groups like the Reform Party espouse socialist bygone policies, when they don't understand the exact points you raise above.
DeleteWe're called Reform Jersey, not the Reform Party.
DeleteIf you consider it a "socialist bygone policy" to say that the highest earners in Jersey could afford to pay a little bit more than 20% (when a Conservative UK government has a top rate of over double that) or free GP visits (when a Conservative UK government has safeguarded that) then it just shows that you aren't serious.
There is nothing socialist about those policies. They're basic things that are completely uncontroversial anywhere else in Europe. It's just in Jersey that we have people determined to keep the standard of living down for our poorest and determined to protect those who already have everything they need. What do you get out of that? Are you one of those massive high earners?
The various points I made (I am Anon 16.28) don't necessarily come from a 'left', 'right' or any label you care to ascribe to them, perspective. Hopefully they just raise points for people to consider.
DeleteI understand the social benefits of Reform's propositions. It would indeed be a positive for everybody to have things like free GP visits, however as the UK is encountering at the moment, the free GP system is creaking at the seams, and much of this problem seems to be down to people's ambivalence about actually attending appointments simply because they are free. But of course, along with a higher minimum wage, higher pensions, higher employment and the like, it would be good to have.(I’m also not sure whether the UK have free prescriptions such as we do, so maybe there is an element of swings and roundabouts here)
I am uncomfortable about justifying raising tax rates on certain individuals just because the UK (or any other place) have higher rates for those same people. Simply taxing people more because other places do so seems a little arbitrary, and sends out a message that the island discriminates against the wealthy by charging them more (in percentage terms, they already do so in monetary terms) than lower earning residents. This is a problem of perception, especially for those considering Jersey as place to live. I’m not aware of any other countries that have justified tax rises simply because other countries have higher rates for that same individual.
I’m also not certain that using the UK as an economic model we should ascribe to is ideal. Successive governments (both left and right) and played the game of meeting the difference between their spending policies, and what they can actually afford, by issuing huge amounts of debt, and, as the ongoing economic crisis around the world has, and is showing, eventually the bills arrive and everybody, but especially those at the lower end of the social scale, suffer.
I appreciate Reform’s role in asking for enhanced social provisions, and whether it is by intent or not, they have positioned themselves as representing a demographic that would be primarily the beneficiaries of these enhanced provisions, rather than the demographic who would pay the bills for those enhanced services. If they can attract a sufficient number of votes to gain representation enough to enact through some of their propositions, the island will become a different place in years to come. For some it will be more positive, for some less positive.
Reform should remember however that they do not own the moral imperative. Damning people by suggesting they are trying to keep the standard of living down for the poorest is neither helpful, nor accurate. Other than the odd sociopath, everybody wants a better, fairer society. There are consequences to every change we decide to make, and both sides of the political debate might be viewed by electors with a little more respect if they would acknowledge, or at least demonstrate, that they have considered these consequences.
One other question please Sam. What rate of tax would Reform propose be charged, at what rate of income would this become chargeable, and how much extra revenue have you calculated would be raised by your proposals ?
"Successive governments (both left and right) and played the game of meeting the difference between their spending policies, and what they can actually afford, by issuing huge amounts of debt, and, as the ongoing economic crisis around the world has, and is showing, eventually the bills arrive and everybody, but especially those at the lower end of the social scale, suffer"
DeleteOn this bit of your comment, at least, we are absolutely singing from the same song sheet. Beyond the obvious debt is also structural debt embedded as an inherent part of the exponential growth model that has done pretty well for humanity for a couple of hundred years. Sadly it has now reached its use-by date as the limits to conventional growth get ever closer.
A
You do not seem to have acknowledged that the very presence in Jersey of such a disproportionately high number of extreme wage earners loads the dice against middle to low income earners by increasing the local cost base. Any business that has to compete with outside businesses is put at a commercial disadvantage by the high cost base of doing business in Jersey - wages, ground rents, property purchase, shopfitting etc.
DeleteThis high cost base is a direct consequence of the much larger number of high wage earners/UHNW individuals in Jersey. Anybody who has to buy from local sources also suffers the consequences of this high cost base and that includes the middle, low and desperately struggling sectors of our society. Who are, numerically, the majority.
You do not seem to have considered that if we did not host these high earners any more, that you have alerady suggested are only tied to Jersey by naked monetary concerns, that after a period of disruption our economy might settle down to a more sustainable pleasant one for the majority.
If these people are truly so shallow that they would up sticks and clear off at a moment's notice of having to pay more tax from their vast discretionary income, so the disparity between their discretionary income and that of someone struggling on the lowest income and proportionately the highest costs might shrink from ∞:1 to 0.75 x ∞:1, then we just might have a better social ambience here if they slung their collective hooks.
Wrong Deputy - whether intentional (lie) or lack of knowledge I don't know, but I will try and clear things up. However if it is a lie, then you will continue to ignore my brief education for you.
ReplyDelete1. The UK has a much higher infrastructure requirement than does Jersey, in addition the infrastructure requirement at some extents is shared equally. In Jersey we do not have this extent, nor do we have politicians being paid what they are being paid. Therefore to compare UK tax levels of higher earner's to Jersey is a nonsense.
2. Higher earner in Jersey have a much lower 'footprint' than does the UK, therefore by having 20% on £200k (£40k) versus 20% on £20k (£4k), which they are privately insured, and have less reliance on many of what others in the society does, I find the £36k differential one whereby the higher earner contributes to a broader social contribution. To go to your end by taxing a higher income earner even more will result in what happened in France. They move, with the States loosing out of the additional £36k. Careful what you wish for. Remember, those on the £200k can easily relocate their business. I know - I have done it myself in the past before retiring.
It is widely accepted to those with experience, to tax higher earners more than lower earners IS a Socialist policy.
I am very concerned that the Reform Party is going to be a disaster for this island, and I will be personally providing funds to those with opposing policies from the Socialist Agenda of the Reform Party in those areas they run candidates.
"It is widely accepted to those with experience, to tax higher earners more than lower earners IS a Socialist policy."
DeleteThe only thing required to believe that is not experience but ignorance.
Virtually every political movement that exists in the west (excluding the barking mad UKIP type beliefs) accepts that flat taxes are morally unacceptable and that progressive taxation is the only sound way to tax income.
The only disagreement is over what extent the rates and bands go.
It is not a socialist policy, it is common sense.
The Cold War is over. Ditch this McCarthyite nonsense. It just looks ridiculous.
Has no-one ever challenged your oh so conventional Jersey thinking before? Perhaps you might understand the points I was making better if you realised that a more realistic way to view the relative size of incomes is to split them into two (to keep it simple) parts. Essential spending and discretionary spending. To someone on minimum wage and/or variable hours, virtually all of their income goes on essential spending: food, heating basic accomodation etc. The amount left over for discretionary spending is relatively small or non-existent.
ReplyDeleteIn the case of an extreme earner, their expenditure on truly essential spending is not that much greater - maybe they buy really expensive ketchup (©barenakedladies) and their accomodation is somehat more luxurious (but really, these two should also be put partially into the discretionary spending category because they are not a true need). What they have left over for discretionary spending is proportionately much greater. In fact, discounting essential spending and looking at the easy spending money left over at the end of the week or month, the relative "fun money" available to the extreme earner, versus those just scraping by, is not a simple comparison of total incomes which might show a 14:1 ratio but a truer comparison might show a 200:1 or even approaching ∞:1 ratio.
It is becoming realised that the overall "happiness/contentment" of society is very strongly linked to the disparity in incomes between largest and smallest. The more extreme the differential, the more stress there is.
Your main point seems to be that the ultra high earners are doing us a favour by paying the lion's share of the tax. You imply that it would be even better for Jersey if we had a lot more. I am pointing out that is likely to be far from the truth, because of the full consequences of any such move.
A
Anon at 13:15
DeleteAGREE! Until such times as those on the higher incomes have much greater ease with which to relocate. Those on lower incomes/investments have less ability to move to a lower taxed jurisdiction. People will move very easily if they are priced out if it gets too ridiculously taxed. Upwardly mobile will move like the other comment above.
Deputy Mezec and other Reform Party candidates (like Deputy Tadier) seem to want to tax the high income earners MORE than others, so that they leave. This will mean far fewer tax pounds will be raised.
As they experienced in the UK, reduce the TOP tax rate and more pounds will be recovered.
Usually the Socialists don't like to admit the truth, because it goes against their BIG STATE objective, but it is the truth. Thankfully in Jersey the majority of voters I believe understand this. I also will be donating to individuals with the smarter economic sense in the upcoming election.
People are not solely motivated by money. It's a bit of convenient myth to fool the public that if taxes go up, all the rich people will leave. Some will but who needs those extremely shallow people anyway? Maybe other rich people who don't like those selfish types will then come here, who knows?
DeleteYour point about trivial rich people leaving is ignorant of history anyway. Prior to this insane free movement of global capital, which has created a gigantic "assets based on debt" bubble and driven the global economy to stratosheric and unsustainable levels of debt, there existed something called the "dollar premium" which acted as a brake on people moving capital outside of the country to save a few pennies on tax etc. This acted to prevent financially piratical types from frustrating the policies of government and thereby shafting the rest of the society they had made their money from.
For the record, no more comments will be published referring to the "Reform Party". No such party exists.
DeleteThe idea that rich people will flock out of Jersey because their tax rate goes up a few percent is just fanciful.
As it happens, their tax has gone up before anyway. GST affects them too (albeit negligibly) and there was no evidence of them leaving. Raising their income tax by a negligible (to them) amount will have the same result.
But what I want to ask those that oppose raising taxes on high earners is this -
Who should be targeted instead?
The poorest who have already been shafted by GST or the middle who have already been shafted by 20 means 20?
Why are you so intent on making life worse for every other islander except the ones who are most able to take the hit and still be very comfortable?
I obviously don't have your level of knowledge, and I'm failing to understand where discretionary and essential spending comes into this discussion.
ReplyDeleteIf you have lots of income, you have the capacity for lots of discretionary spending. If you have a low income, you have less capacity for discretionary spending. I understand that. So your argument appears to be that the wealthy should subsidise the discretionary spending of the less wealthy ?
I also understand that the extent of disparity between the 'haves' and 'have nots' in society results in differing levels of discontent. So your argument again appears to be that the wealthy should support the less wealthy in order to make everybody happier ?
The reality is that the ultra high earners do us all a favour by paying the lion's share of tax. How else would you describe the fact that the majority benefit from this inequity ?
My point stands that it would be better be for the island as a whole in terms of overall cost (infrastructure, school, social services, police, health etc) if we were to import 1000 people paying
£ 100,000 each in tax than 100,000 paying £ 1,000 each ? I realise that you might find this unpalatable, and it would contribute to greater income disparity, but perhaps you would care to assess whether the unhappiness associated with greater income disparity would compare to the decline in living standards associated with importing another 100,000 people ?
"I'm failing to understand where discretionary and essential spending comes into this discussion"
DeleteIt's quite simple. The presence of a disproportionate number of extreme earners in Jersey raises the cost base for everyone, thus those who are paid very little, who are already struggling to get by, find it yet harder to get by. If, as you suggest, your solution is to import yet more extreme earners to fill a revenue shortfall that is at least partly down to the activities and demands of such extreme earners anyway, it seems like a circular and self defeating strategy to me
Sorry, didn't quite explain the reason for the discretionary/essential income thing. I'll ask a question. Which individuals are the only source of revenues which can be used to fund the greater good and essential services? Clearly those whose life activities accumulate a surplus - of food, capital, jelly beans, whatever. Those with a surplus are those who have discretionary income to spend on things which aren't essential to life. Those without - living on the breadline - have no discretionary income so cannot be used a source of revenue without driving them to even closer to starvation and ruin.
DeleteObviously this means that the only rational, reasonable source for revenues is those with discretionary income - those who have a surplus beyond essential requirements. Clearly the more surplus they have, the more they have a responsibility to cough up the funds. When we are taking about people with huge surplus/discretionary income their responsibility must be greater. If they are taxed more in percentage terms than middle to low earners why is that problem? Because of the gigantic size of their discretionary income, even after higher tax rates they will still have much more discretionary income left than most so will still be "ahead" if that is important to them.
An Anon raised the "lower the top tax rates and you will get more revenues" meme. This is a bit deceptive and simplistic, like most of the economic argunments we here from Ozouf and co. It rests on the idea that extreme earners will all go to extreme lengths, employing clever but morally challenged lawyers and accountants to "avoid" tax. Firstly, not all extreme earners do. Do you know the relative percentages of tightwads versus socially responsible extreme earners? Secondly, the effect on received revenues also depends on no action being taken by government to controlw or eliminate the activities of the aforemetioned morally challenged "avoidance facilitating" types.
It seems in recent years, since the 2008 near financial armageddon, that we are seeing a lot more international government energy increasingly being focussed on at least controlling some aspects of the avoidance industry. Thus the argument that decreasing the top tax rate should result in increased revenues is looking even more unsound than it did originally. The more extreme earners are prevented from avoiding their social responsibilities by their employment of "Masters of the Universe" financial magicians, the more revenues we will have.
In recent years, Ozouf and co have taken to parroting the convenient view that Jersey's activities are great for the UK because they create jobs, funnel capital toward the UK etc. They say this like it is a really good thing! Actually, Jersey funnels capital toward the City of London and creates jobs there - which is a bit of a different kettle of fish. The City is probably the biggest tax haven'ish organisation on the planet and played an enormous part in the insane financial shenanigans that led to the near melt-down in 2008 and has left us in a semi-perpetual recession nowadays in which those with little or no discretionary income, who contributed least to the melt-down, have the greatest burden imposed on them by the selfish and irresponsible greed of those with more money than sense, whether economic or moral.
The anonymous at 19:00 needs to stand for election. We need more politicians able to explain economics in the terms you've used above.
DeleteOne point that hasn't been made is that it's actually good for economies for those on the bottom with less discretionary spending ability to be brought up because they spend a much higher proportion of their incomes in the local economy, instead of the high earners who will spend far more outside their jurisdiction of residence.
The trickle-down economics of lowering taxes on the rich just doesn't cut the mustard anymore.
As Keynes probably didn't say - "Capitalism is the astonishing belief that the nastiest motives of the nastiest men somehow or other work for the best results in the best of all possible worlds.”
It's just not a rational position to say that if you let the rich get a bigger slice of the pie, the poorest might be able to get some bigger crumbs.
Some may be confused by the term discretionary income. It is similar to but not the same as disposable income. "Discretionary" refers to the situation when someone has satisfied their basic needs and has surplus money/income left over. They have discretion as to what they spend that on, because there is nothing real or essential forcing them to spend it. Non-discretionary income refers to when somebody is forced to spend such income on food, heating, transport, accomodation because not spending it is not an option - should the person wish to continue living, which is the "forcing" mentioned previously.
DeleteDisposable income, of course, is a somewhat softer concept being what is left over when an inidividual has spent their income on what they want, not just what they need.
BTW, I'm moderately right wing with a touch of liberal dem but I despair at the petty misrepresentation and cherry picking of economics that we hear locally from the Ozouf party. I'm the sort of Lib/Conservative who would really like everyone to do well. Locally, we see all too many of those whose policies seem to suggest that they believe that it is not enough that they and their social group succeed, others must fail
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in my 47 years living on this planet,majority in this island I can't say my quality of life has improved by having rich people live here.Having rich people live here also attracts other not rich people looking to make more money than they can back home.Which means too many people on one small rock with inadequate social services.It wasn't always like this,in a time not so long ago when the main industry was agriculture and tourism life for local people was far more pleasant.Since Jersey decided it was 'big' and a global player in finance with offices around the world,i can't say my quality of life has improved if anything its got worse because of high cost of accomadation and low and middle earners having to compete with a never ending stream of low cost immigrants which the high earners want to do their garden,look after their kids build their houses etc.I think the reason the States is having a big push on trying to get the mega wealthy here is because of the failure of the 0/10 tax system which quite simply doesn't work and is one of the reasons we have GST,which incidently hits the poorest harder.So its all linked and really is a case of the rich get richer the poor get poorer.As a side note I remember Ozouf having a report done on the pros and cons of having 11K's living here.He refused to have it made public instead choosing to highlight the best bits.Maybe you could dig out this study Sam and enlighten us.
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