What is the squeezed middle?

[Sarenco]

Hi BS

Have you ever considered that big corporations are simply legal constructs with officers, employees and shareholders?

The shareholders, in the main, are pension funds that will provide the retirement income for working people. Ultimately, if you increase the tax on those big bad corporations then there will be less money available to pay the employees and the value of their retirement funds will fall.

On the upside, there will be more money rolling into the State's coffers to, you know, pay for the, eh, State (and those that rely on her). Well, until those big bad corporations bugger off to somewhere else, obviously.

What could possibly go wrong?

 

[TheBigShort]

Have you ever considered that big corporations are simply legal constructs with officers, employees and shareholders?

The shareholders, in the main, are pension funds that will provide the retirement income for working people. Ultimately, if you increase the tax on those big bad corporations then there will be less money available to pay the employees and the value of their retirement funds will fall.

This is not a rant!

Yeh, like the value of those pensions funds cannot be wiped out because low corporate tax rates, resulting in massive profits, dont attract greedy parasites.
Much better to leave the lifetime contributions of ordinary people in the hands of 'investment' fund managers - they know best!
I pity the poor suckers being lured into false promises of secure retirement income. They are basically leaving their money at the mercy of a bunch of gamblers - its great if it pays off, but what happens when it all comes crashing down? Oh yeh, dont worry, the big bad State will bail everyone out.

On the upside, there will be more money rolling into the State's coffers to, you know, pay for the, eh, State (and those that rely on her). Well, until those big bad corporations bugger off to somewhere else, obviously.

Ok, it is a rant!

Of course, implied in your comment is that there is a cohort of people, who are so successful, so talented, that any form of State reliance is alien to them.
Fact is, the State is made up of the citizens of the country and I doubt there is anybody, regardless of their stature, who can as much wipe their This post will be deleted if not edited to remove bad language in the morning without the indirect assistance of hundreds, if not thousands of their fellow citizens.
Unless you actually built your own home, unless you sourced all the materials yourself, installed your own toilet, manufactured your own toilet roll, then everytime you drop one, you, me, and the rest, are indebted to all the workers who devised, planned, financed and implemented this system of safe waste disposal.
And thats before you even clothe yourself and have your porridge.
Dont get me started on the public footpaths that you walk on, or the public roads that you use, the public education system, public health services, etc, etc.
But its not even public services that our society is built on. Private companies, producing private goods and services, wholly reliant on the direct and indirect intervention of millions of people in the country and around the world.
In straightforward terms, everything you do, everything you own, everything you know and that has value, has everything to do with the direct and indirect intervention of your fellow citizens.

We could of course decide that high earners deserve tax breaks, because each of them are so worth it.

As a shareholder of a well known airline, I read the Sunday papers last weekend and read how a CEO was eating a fancy breakfast, moaning about this and that (once more!). While thousands of his fellow employees were working, earning a living, providing a service, generating profit, this chap was eating a fancy breakfast! Turns out he is receives a huge income. For what?
As a shareholder, I know who I would want out of there.
But its not just him, the Clerys workers (probably classed now as a burden on the State by some) left high and dry. And only because some highly paid and highly 'talented' people knew how to type up contracts that soooo delivered in their favour!
Such talent! - these type of people need a tax break.

 

[odyssey06]

But those people are not indebted to the others. They paid for those goods services, skills and expertise, and are making their own way in the world.
A country is independent if it is sovereign, trading voluntarily with other nations is a manifestation of that independence, not a reduction in it.
It is in a state of dependency if it cannot sustain itself from its own internal resources and those it can obtain in external trade.

I am not indebted to the doctor who, in the course of the duties that i am paying him for, making use of the wealth of our medical knowledge, carries out a procedure that saves my life.
Anymore than he is indebted to me when he pays for a service online fulfilled on software I designed, using programming languages invented by others.

No man is an island. We are social amimals. Benevolence is an admirable human quality, but we do not rely on the benevolence of others, but their enlightened self interest. Some old wisdom there.

 

[TheBigShort]

I am not indebted to the doctor who, in the course of the duties that i am paying him for, making use of the wealth of our medical knowledge, carries out a procedure that saves my life.
Anymore than he is indebted to me when he pays for a service online fulfilled on software I designed, using programming languages invented by others.

And to get to the point of the medical procedure and the software transaction in the first place, there is an innumerable amount of interactions from an innumerable amount of people, without whom, neither the medical procedure or the software transaction could ever happen.

 

[TheBigShort]

But those people are not indebted to the others. They paid for those goods services, skills and expertise, and are making their own way in the world.

How much did you pay for labourers to build the university so that that professor could teach the engineer who devised the structure of the tunnel built by the labourers so that the medical devices could be transported quicker in the lorries by the drivers to the hospitals, built by the labourers, so that the doctors could perform the medical procedure and, in turn, get paid with cash and lodged in the bank (built by labourers) and secured in the vault and dispensed through the ATM using a software program devised by you?

True, you are not indebted to them, anymore than they are to you. All that ever matters is the direct transaction between individuals and their own self-interest.

 

[odyssey06]

How much did you pay for labourers to build the university so that that professor could teach the engineer who devised the structure of the tunnel built by the labourers so that the medical devices could be transported quicker in the lorries by the drivers to the hospitals, built by the labourers, so that the doctors could perform the medical procedure and, in turn, get paid with cash and lodged in the bank (built by labourers) and secured in the vault and dispensed through the ATM using a software program devised by you?
True, you are not indebted to them, anymore than they are to you. All that ever matters is the direct transaction between individuals and their own self-interest.

All of the above were just doing their job. And one assumes, were paid for it. They were not acting out of any sense of general benevolence, but following their own self-interest. If those labourers had come together at the weekends, and out of their own time, built something for general public to enjoy\benefit from, then I would be indebted to them (not financially, but from a general sense of fellowship).

 

[Purple]

All this does is expose the blatant disregard of working people who generate the economic activity, get taxed for it, in order to fawn at feet of the corporate shareholders.

What a load of biased, emotive clap-trap. People who own businesses, big or small, are no more or less concerned about society and their fellow citizens than anyone else. If you are a share holder then you are a corporate shareholder. Do you expect the employees of the businesses you part own to fawn at your feet? In fact they often own part of the business they work in (it’s encouraged by US companies). In your experience do they fawn at each others feet?

Sure they pay what 30%? on profits, but those profits are enormously boosted by these extremely low corporate tax rates.

It has nothing to do with economic illiteracy, and everything to do with economic policy.

If you want a fair tax system, for all, then this can of worms needs to be opened.

If profits are enormously boosted by lower tax rates then more taxes are raised. That’s a good thing for the state and shows we have the correct taxation policy. Are you suggesting that we raise tax rates, lowering tax take, because we want to somehow punish the success of the company? It would bring corporation tax policy philosophically in line with income tax policy I suppose.

 

[Purple]

Yeh, like the value of those pensions funds cannot be wiped out because low corporate tax rates, resulting in massive profits, dont attract greedy parasites.

What, like the people who buy shares in those companies. Ryan Air shareholders for example?

Much better to leave the lifetime contributions of ordinary people in the hands of 'investment' fund managers - they know best!

I pity the poor suckers being lured into false promises of secure retirement income. They are basically leaving their money at the mercy of a bunch of gamblers - its great if it pays off, but what happens when it all comes crashing down? Oh yeh, dont worry, the big bad State will bail everyone out.

Reading your first two lines I thought you were talking about the State. It is the State which caused the crash to be so bad through their ludicrous taxation and wage policies over a decade and a half.

Of course, implied in your comment is that there is a cohort of people, who are so successful, so talented, that any form of State reliance is alien to them.

Fact is, the State is made up of the citizens of the country and I doubt there is anybody, regardless of their stature, who can as much wipe their This post will be deleted if not edited to remove bad language in the morning without the indirect assistance of hundreds, if not thousands of their fellow citizens.

Unless you actually built your own home, unless you sourced all the materials yourself, installed your own toilet, manufactured your own toilet roll, then everytime you drop one, you, me, and the rest, are indebted to all the workers who devised, planned, financed and implemented this system of safe waste disposal.

And thats before you even clothe yourself and have your porridge.

Dont get me started on the public footpaths that you walk on, or the public roads that you use, the public education system, public health services, etc, etc.

But its not even public services that our society is built on. Private companies, producing private goods and services, wholly reliant on the direct and indirect intervention of millions of people in the country and around the world.

In straightforward terms, everything you do, everything you own, everything you know and that has value, has everything to do with the direct and indirect intervention of your fellow citizens.

You are confusing Society and the State. It’s a common mistake made by socialists but a silly one none the less.

We could of course decide that high earners deserve tax breaks, because each of them are so worth it.

Given that we are not selling hair care products to teenage girls that’s probably not a good basis for how to make discisions.

As a shareholder of a well known airline, I read the Sunday papers last weekend and read how a CEO was eating a fancy breakfast, moaning about this and that (once more!). While thousands of his fellow employees were working, earning a living, providing a service, generating profit, this chap was eating a fancy breakfast! Turns out he is receives a huge income. For what?

As a shareholder, I know who I would want out of there.

Wow, I presume you have sold your shares?

How dare the person primarily responsible for all that success, all those jobs, all that great share price value increase eat an expensive breakfast and share his opinions about how to run a large successful organisation. I mean what would he know about it... oh, wait.

But its not just him, the Clerys workers (probably classed now as a burden on the State by some) left high and dry. And only because some highly paid and highly 'talented' people knew how to type up contracts that soooo delivered in their favour!

Such talent! - these type of people need a tax break.

If you are correct than I presume the Cleary’s employees are taking their highly paid Union leaders to court for being so derelict in their duty to their members?

 

[Purple]

How much did you pay for labourers to build the university so that that professor could teach the engineer who devised the structure of the tunnel built by the labourers so that the medical devices could be transported quicker in the lorries by the drivers to the hospitals, built by the labourers, so that the doctors could perform the medical procedure and, in turn, get paid with cash and lodged in the bank (built by labourers) and secured in the vault and dispensed through the ATM using a software program devised by you?

True, you are not indebted to them, anymore than they are to you. All that ever matters is the direct transaction between individuals and their own self-interest.

Yep, that's society again, not the State.
Oh, and the software, the medical equipment, the design of tunnels, the ATM's the Lorries etc., they were almost all designed and built on other countries and imported by private businesses in the course of trade in order to make a profit. The Tunnel was built by skilled engineers and tradespeople, not Labourers. Same goes for the Lorries and the Medical devices. The engineer who designed the Tunnel was probably educated in another country. We got his or her skill through trade as well. That's capitalism for you; as long at the State is not corrupt it helps all the people in a society.

 

[Purple]

And to get to the point of the medical procedure and the software transaction in the first place, there is an innumerable amount of interactions from an innumerable amount of people, without whom, neither the medical procedure or the software transaction could ever happen.

Yep, that's capitalism and trade right there yet again. Nothing to do with the State.

 

[Delboy]

Burden of running the State more heavily focused on a smaller number of taxpayers
http://www.independent.ie/opinion/c...n-a-smaller-number-of-taxpayers-35126821.html

This year the Department of Finance estimates that all income sources - tax and non-tax revenues - will generate €72bn. That, as it happens, tops the previous record intake in 2007 at the height of the property frenzy.
That this much cash is being raised despite 150,000 fewer people working compared with eight years ago, while the country's population is up by 300,000 over the same period, shows how the burden of running the State has become more heavily focused on a smaller number of citizens....
....The public pay bill will rise next year by €850m compared with this year, equivalent to 42pc of the total spending increase.
That is by far the largest share of the pie. It will bring the total pay bill to over €20.5bn, only €700m below the 2008 peak.
And as if that wasn't eye-catching enough, when one considers that there are now around 30,000 fewer people employed across the public sector compared with 2008, average gross pay this year has already surpassed the bubble-era peak of 2008.

 

[Firefly]

Fact is, the State is made up of the citizens of the country and I doubt there is anybody, regardless of their stature, who can as much wipe their This post will be deleted if not edited to remove bad language in the morning without the indirect assistance of hundreds, if not thousands of their fellow citizens.
Unless you actually built your own home, unless you sourced all the materials yourself, installed your own toilet, manufactured your own toilet roll, then everytime you drop one, you, me, and the rest, are indebted to all the workers who devised, planned, financed and implemented this system of safe waste disposal.
And thats before you even clothe yourself and have your porridge.
Dont get me started on the public footpaths that you walk on, or the public roads that you use, the public education system, public health services, etc, etc.
But its not even public services that our society is built on. Private companies, producing private goods and services, wholly reliant on the direct and indirect intervention of millions of people in the country and around the world.
In straightforward terms, everything you do, everything you own, everything you know and that has value, has everything to do with the direct and indirect intervention of your fellow citizens.

How much did you pay for labourers to build the university so that that professor could teach the engineer who devised the structure of the tunnel built by the labourers so that the medical devices could be transported quicker in the lorries by the drivers to the hospitals, built by the labourers, so that the doctors could perform the medical procedure and, in turn, get paid with cash and lodged in the bank (built by labourers) and secured in the vault and dispensed through the ATM using a software program devised by you?

True, you are not indebted to them, anymore than they are to you. All that ever matters is the direct transaction between individuals and their own self-interest.

All of these points are valid. Luckily for mankind, a method for payment was introduced circa 3000 years ago in a primative format, which gave rise to what we call money. Probably even before that (when bartering was used) a concept called Supply and Demand was used to determine who got paid what. Both have been in existence in various degrees ever since and are used to determine how much the professor above gets paid vis-a-vis the person who laid the footpaths you mentioned above.

If you can come up with a better way than using money and Supply & Demand, please reveal all!

 

[Firefly]

But the lower doesn't get walloped, because he doesnt earn that income.
So the question is, which would you prefer, an income of €33,800 and not get walloped or €33,800+any amount thereafter, but have to pay a higher tax?

What a bogus question! Of course I would prefer the higher income even if I paid more tax. The question is what is the impact of such high taxes having and also is it fair.

Someone earning 100k is far, far more likely to become unemployed that to change jobs to earn €33,800 (unless they want to retrain as a solicitor or something....at which point their income will rise).

Likewise, anyone earning €33,800 per year, unless at the beginning of a "good" career like a solicitor, will also be far, far more likely to become unemployed that to change jobs to earn 100k.

The question is, taking someone who is a professional working in a large organisation (public or private) with 5-10 years experience. They are probably earning somewhere between 50-70k. For that person to increase their income to 100k, they would need to take on a lot of extra work, further study, risks etc etc. If in doing all of this, they would end up earning 100k but paying 40k in tax, would they bother?

Would higher end workers who can earn 100k in the UK be bothered coming here where 40k of their wages would be swiped by the government?

 

[thedaddyman]

When defining the squeezed middle, income is only part of the equation, you also need to look at expenditure

In my case, I live in a rural country town in a bog standard 4 bed semi in a bog standard estate. We have ordinary cars and live an ordinary life. Our combined salary would touch the €100k pa. Are we in the squeezed middle, no, as long as we both have jobs and nothing untowards happen we are comfortable and can and are planning and saving for the future

If we were to move to Dublin however and have the same salary and the same type of house in the same type of estate then the situation would be much different. Our mortgage would be 2.5 to 3 times higher. Our child minding costs would at least double. The costs of things like plumbers, electricians or anything else would be dearer. The cost of eating out, going to the cinema, joining a sports club would all be dearer. Would we survive, probably but would we feel under significant pressure?, definitely

The only real cost to us is that I spend 2-3 hrs a day in my car commuting to Dublin and home. There are costs associated with that but were I to live in Dublin, I'd also have costs on the Luas, M 50 toll or whatever. I would not get anything like the same salary in my area. If anything at best I'd probably half it. Were I to do that and get a job in my area then we'd be then under more pressure then now.

 

[TheBigShort]

Of course I would prefer the higher income even if I paid more tax.

But...

For that person to increase their income to 100k, they would need to take on a lot of extra work, further study, risks etc etc. If in doing all of this, they would end up earning 100k but paying 40k in tax, would they bother?

But...

Of course I would prefer the higher income even if I paid more tax.

 

[Purple]

But...



But...

But... what's your point?

 

[TheBigShort]

All of these points are valid. Luckily for mankind, a method for payment was introduced circa 3000 years ago in a primative format, which gave rise to what we call money. Probably even before that (when bartering was used) a concept called Supply and Demand was used to determine who got paid what. Both have been in existence in various degrees ever since and are used to determine how much the professor above gets paid vis-a-vis the person who laid the footpaths you mentioned above.

If you can come up with a better way than using money and Supply & Demand, please reveal all!

Not sure where you are going with this. The point im making is that some people (quite a lot actually) over value their worth in society. Here is one in todays RTE news,albeit from the US

http://www.rte.ie/news/business/2016/1013/823651-wells-fargo-ceo/

Paid himself $19.1m last year. Which if it happened here, he would, according to some people on this thread be liable for too much tax. That the tax rate imposed on him would be unfair.
On the otherhand, the salaries of the front- line employees and branch managers (ranging from $20,000-$60,000) would need to be taxed more to supplement a cut in this guys tax rate.

This isnt isolated, too many people at the top of their organizations (notwithstanding the hard work and talent generally used to get there) over value their own contribution to the performance of the business they work for. They can do this because they are in control of the wealth created by the business as a whole. They have the final say on how profits, wages increases, bonuses etc are to be divvied up. Invariably, they will take disproportionately a greater share than what they are actually worth.
For this, they should have their taxes reduced!

 

[TheBigShort]

But... what's your point?

But...but...if you want the extra income, you have to work for it.
Clearly some do, clearly some dont. Clearly some people will take the extra income, with the hardwork, regardless of the tax.

 

[TheBigShort]

Yep, that's capitalism and trade right there yet again. Nothing to do with the State.

U
I accept the differential between the State and society but I was only responding to Sarceno who laid claim that there are those who rely on the State.
What your point about capitalism is all about I dont know?
My point is that there are those, through there own position of being in control of the wealth of a corporation will invariably seek to allocate a disproportionate amount of that wealth towards their own private gain.
It has nothing to do with hard working, intelligent people being justly rewarded for their efforts, it has to do with such people who also control the revenues of the corporation.
The notion that one individual is 'primarily responsible' for the success of an airline is simply laughable. For sure, after studying the business model of another American airline, some credit can be given to him for adopting that model and overseeing its implementation. And just rewards are deserved. But without the direct contribution of thousands of employees across all divisions, this plan would never have materialised.
For this, according to you,the workers who earn least should have their taxes increased to facilitate tax cuts who earn most!
You want wages to be kept low, and because they are low, to increase taxes on them!

 

[TheBigShort]

People who own businesses, big or small, are no more or less concerned about society and their fellow citizens than anyone else. If you are a share holder then you are a corporate shareholder.

I know. I am a corporate shareholder.
The point was about the policy makers. The people who make the laws to facilitate maximum benefit for the corporate shareholder to the detriment of working people.