In praise of entrepreneurship and hard work, and people who pay their fair share

In the latest episode of The Seven Days show Iain Dale and  discussed what the phrase “your fair share” meant when relating to paying tax and the often used phrase that the “rich” should pay their fair share.

I used the example that  if the rate of tax you paid was the same for the first pound you earned as the last pound and if you were at a 40% rate, someone earning £100,000 would be contributing £40,000 to the Exchequer. By the same rules if you earned say £20,000 and the tax rate was 20% you would be contributing £4,000.

Simplistic and not wholly accurate figures yes, but to me it shows that if you use the phrase, “your fair share” then people who are seen as high earners actually pay their fair share and then some.

Then that of course brings me onto the subject of my podcasting partner Mr Dale. I have known Iain  since 1997. In that time he has always seemed to be doing about 5 different things at once. Only this week he has started what for some would be a full time job, having a permanent gig on a radio station, combined with running a successful blog, combined with running a publishing company which in itself employs several people, combined with appearing regular on regular media outlets. Some would say that he now has a portfolio career. I would suggest that he works extremely hard and don’t know how he finds enough hours in the day. This isn’t an Iain Dale love in. He has his faults. He supports West Ham for gods sake. But I would find it hard pressed to find evidence from even his worst detractor which would question his work ethic. I have no idea what he  earns. I hop he is handsomely rewarded. But if he is, then he already pays his fair share in tax.

There are many people up and down the country like Iain. They work many hours, and equally important, they who take personal risks. They may have mortgaged their house to back their business. They may have had to put work befor personal relationships. They may be  responsible for employing many people who themselves contribute money to the economy. They are the people who the recovery will be built on.

And do you know what. They already pay their fair share.

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17 Responses to In praise of entrepreneurship and hard work, and people who pay their fair share

  1. raggieroo says:

    A couple of questions:

    Are you implying that a nurse, say, who works (at least) comparable hours, in a highly stressful job, (arguably) contributing more to society, for £16K per year, does not pay their fair share? Do they lack drive, because they are driven to help people rather than to earn lots of money?

    Genuinely curious…

    • operanut1972 says:

      I think the point being made was that the term 'fair' is subjective and why should someone who earns £100k pay almost half their wage in taxes when someone who earns £20k pays a fifth? No where does it say the lower earner is worthless and don't think the author intended it that way!

      It does seem when you use the simplistic tax rate that TR uses that this is grossly unfair!

      • toryradio says:

        And that's why using phrases like "fair share" are dangerous. Its interesting that anyone who lets say earns 20k are always portrayed as being underpaid ad worth much much more but anyone earning 100k are overpaid and cant deserve the salary.

  2. Kay Tie says:

    "Are you implying that a nurse, say, who works (at least) comparable hours, in a highly stressful job, (arguably) contributing more to society, for £16K per year, does not pay their fair share?"

    Are you Whining Like It's 1979? Nurses aren't badly paid, aren't overworked, aren't stressed and (arguably) contribute to society exactly what society will pay them.

    The top 1% of earners in this country pay 25% of all the income tax. How much more would you like them to pay? Half of it? Maybe all of it? When a part of society massively mooches off a tiny minority then (arguably) they could fairly be called parasites.

    • operanut1972 says:

      I would argue with the stress bit of your comment, I know a few nurses and they always seem to be overstretched and this makes it hard for them to do their jobs to the best of their abilities.

  3. keynesianism says:

    Are you a nurse Kay Tie? Is that how you acquire such knowledge of the pay and conditions that nurses enjoy. So market forces always deliver a fair price for labour except perhaps when your employer is a monopolist and dictates terms and conditions to you.

    "The top 1% of earners in this country pay 25% of all the income tax.". Of course the flip side of this is that much of the money and wealth in this country is in the hands of the few. Still fair in your view? Love to see you wipe the backside of a geriatric patient for what nurses earn.

  4. keynesianism says:

    On the tax issue, according to your proposal a richer person will still pay a higher percentage of earnings in tax than a poorer person because of the impact of the tax allowances. Most governments adopt the argument that a progressive income tax system is fairer with the rich paying a higher percentage above certain levels. Of c ourse their accountants will studiously enable them to avoid this in many cases!

  5. keynesianism says:

    Bet you have an accountant!

    • toryradio says:

      I bet I do.

      I bet I earn less money than you also.

      I also bet you hav an ISA like me so we can both avoid paying tax on our savings.

      If we were so virtuous we would give all our money to HMRC….. then again.

  6. keynesianism says:

    People who earn more do not pay as much as a percentage of income when it comes to indirect taxes such as VAT, not an inconsiderable revenue raiser! As a highly regressive tax the policy to increase it to 20% will hit upon the poorer harder come January. I suppose that's fair in your eyes, instead of raising taxes for the rich.

    Incidentally did you mean to say accuntants (Freudian slip?)

    • toryradio says:

      VAT.. isnt that wht Labour were going to increase.

      If you go down that line of being able to afford things M&S should start charging rich people more for a tin of beans.

      Rises in fuel duty are regressive. Id love it to be reduced.

  7. raggieroo says:

    I think it's probably best that I don't go into how I personally would divvy up the tax burden. We could be here all day.

    The main reason I was prompted to comment is that 'fairness' has become such an overused word in politics. Everyone wants it, but no-one can agree what it is. And everyone claims everything they're proposing is 'fair', when, of course, not everyone else will agree and the likelihood is that they are being simplistic.

    …cont'd

  8. raggieroo says:

    …Your statistic that 1% of earners pay a quarter of the income tax means to you that they're paying their fair share. To someone else it will demonstrate the gross inequality of incomes. Your 'moochers' are someone else's disadvantaged. Some people think equality is fair. Some people think a free market is fair. A lot of people believe equality of opportunity is fair, but that's probably because it's as difficult to identify and define as fairness itself.

    I didn't come here to wage class warfare, I just think it aint that simple. Society needs a lot of money to run effectively, (not to mention paying back that pesky deficit) and it has to come from somewhere. Working out the fairest way, that doesn't discourage growth, and that leads to a 'better' society (however you might see it) is just not that easy a task.

    • operanut1972 says:

      No the top 1% of tax payers contribute 25% of all TOTAL tax receipts to HMRC not that they pay 25%

      • raggieroo says:

        Fair enough. I was quoting Kay Tie's statistic – i.e. that "The top 1% of earners in this country pay 25% of all the income tax." – I confess I didn't check it.

        I'm not sure it changes the point I was making substantially, though. The fact that it's such a big percentage of the tax bill – income/total or whatever – does imply that they're earning a vast amount more than everyone else, often multiples of other high earners' salaries. I'm not passing a value judgement on that. But this is a fact, no?

      • operanut1972 says:

        I'll bow to your main thrust, it just goes to show that most of us are like spoiled children crying it's not fair. Fair is to subjective to be used in conjunction with the words taxation. Mainly because to enable someone and give them fairness in an unfair world means taking money from someone who has a surplus and this could be seen as unfair too. Any term used in this arena will be classed as incorrect.

        Equality of tax rates makes the the playing field level, but someone will always have an advantage or disadvantage. Should those who through better chances, better education be taxed on this good fortune? The infant in me says it's not fair that they have so much and I have so little, but the adult in me understands that they have earned it, in the majority of cases.

        Morality says that those who have, are duty bound to help and provide for those that don't. Morality should never be mistaken for fairness and vice versa.

      • raggieroo says:

        "it just goes to show that most of us are like spoiled children crying it's not fair."

        Couldn't agree more. And no system will be seen by everyone as fair.

        Personally, in the terms you set, I guess I veer towards morality above fairness, then. For me, it is about life chances and giving everyone (as far as is possible) chances and choices. It's not about making everyone 'equal' – how boring that would be! – but about giving everyone a fair crack of the whip.

        Perhaps I lack imagination, but I can't see a way of doing that without taxing people who have far more than they need (and in a lot of cases far more than they could ever spend) more highly than those of us that need the bulk of our incomes just to live. I don't begrudge the tax I pay, and to hear millionaires (and billionaires) griping on a few extra percent (paid only on money earnt above £150K, or 6 times the average wage, as I understand it), well, it just sounds a bit petty.

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