You, Sir Socialist, are insane. If you are disgusted by capitalism then move to a country that supports your outlandish ideals. Please stop destroying my Constitution by spewing your venom of envy and disdain. Income redistribution as a working force in government is a fallacy. Your entire view appears to be encompassed by one friend who got a leg up on you and your jealousy has eaten you alive for decades now. I am sad for you sir. Please, seek counsel.

Kristin Lee

You ignore that a Japanese senior executive has huge social status. Absolutely massive (as well as a huge expense account).

You cannot look at “equality” solely on the basis of money income. I’d have thought that was a fairly uncontroversial idea on the left….which then means that you cannot determine Japan’s equality or inequality purely by income. The status that comes with being a CEO of a major Japanese firm doesn’t really translate well into English terms. Think House of Lords plus sucessful striker for a Premiership team and you’re beginning to get close.

Why is it the Japanese car manufacturers have been so successful over the last 20 years while only paying their top people 30 times what the average worker earns, and yet American car manufactures like General motors have paid their top people 400-500 times what the average worker gets paid?

Gm certainly wasted their money on their CEO’s. But then if you believe the myth that you have to pay huge wages to get the best people you will end up with the egg on your face. Not that the Ceos mind as they have already gone elseware with their ill gotten gains.

Does no-one ever wonder why no-one else on earth – including those nice people in France where health outcomes are so much better – has gone down this route?

Health insurance for all – yes, of course.
State monopoly on provision – no thanks.”

Except plenty of countries have health care similar to the NHS e.g. Italy, Spain.

And it’s silly to suggest there is no “State monopoly on provision” under health insurance. There certainly is in France. Who do you think provides most of the insurance?

I guess you’ve never heard of feudalism then?

I suppose it works as a sort of a bluff-caller, doesn’t it. No-one’s going to say “No, I don’t want poor people to be taxed less”, but they may well feel entitled to say (for example) “I don’t want to pay for the NHS because it doesn’t work, and here are the reasons why in all these reports”. Tax reform is much more of a no-brainer, morally speaking. When the Lib Dems announced their raising the 0% threshold to £10k a while back, Guido turned up on LDV and said we’d have his vote if he had a vote (though I think it might have been the accompanying CGT provisions more than the threshold thing). I’m still trying to work out whether we should be flattered or alarmed

Does no-one ever wonder why no-one else on earth – including those nice people in France where health outcomes are so much better – has gone down this route?

Health insurance for all – yes, of course.
State monopoly on provision – no thanks.

Sorry, but the law of diminishing returns applies here.

Health and education might be legitimate areas for state intervention and additional compulsory taxation because of the requirement for universal provision, but not all services fall into that category, so there has to be strict limits on the application of the principle.

There also needs to be strict scrutiny on the value-for-money provided by public services, otherwise the taxpayer starts to be seen as a bottomless resource for the state to plunder at the expense of individual needs – as this current Labour govt has.

Additionally, though, any tax reform also needs to consider the interaction with the benefits system – which I’d have thought would make it considerably more complex?

It wasn’t in the slightest a major attempt at reform. Gordon Brown said it was, that does not make it so. All it did was cut out the 10p band, decrease the 22p band, and knock out one of the most workable and fair pieces of tax law the Conservatives ever produced, viz the stepped-rate Capital Gains Tax, reducing all rates on gains to 18%, where they had been 10/20/40% depending on your earnings. Well, of course all that’s going to make the poor worse off. So obviously you don’t do any of that. That is a controllable outcome – the tax system is not some wild beast with unpredictable behaviour that you throw a reform at and hope for the best. It is completely possible to do calculations to predict how certain changes will affect certain groups (and yes, Brown did them, but went ahead anyway).

More generally on reform, the bits of tax law that are well known, like bands, rates and allowances, are pathetically simple. Even the central rules of the capital gains tax calculation can be taught in five minutes. The legislation that takes time to create and reason, and is hardest to unpick, is not the calculation legislation – it’s the provisions for reliefs, exceptions and special cases. That’s where tax accountants can do their stuff (I often notice people referring darkly to “clever tax lawyers”. Believe me, they ain’t that clever! ) That’s the stuff, for the most part, that needs a whole new approach. Any fool can mess with tax bands on income tax and CGT, but that a million miles away from “major reform of the system”. It’s merely one of the easiest things you’d do as part of root and branch reform.

@94 Yes, the biggest single determinant of educational outcomes is parental aspiration. This has been known for some time but it’s not a statistic you’ll hear bandied about on the left because it undermines the case for comprehenisve education and supports selective/grammar school education.

@ 95 So what ? If anything that’s an argument against the huge overhead the state adds to education even before a teacher opens his/her mouth. The quality of teachers, the equipment, and the size of the class make relatively little difference to outcomes (see above). I went to a grammar school with classes of around 36 to one teacher (the days before teaching assistsnts were deemed necessary) , the difference was kids who on the whole wanted to learn and teachers who were allowed to control the class…………..

SAMPLE BIAS ALERT!!! – if someone’s paying to have their kids educated privately, they’re someone who places a high value on education, who’ll support their kids’ learning efforts, make them do their homework and back up their teachers’ criticisms, and who is very unlikely to be at the bottom of the income distribution.

Posssibly, yes. As in without those services provided by the state, we would all pay a lot less tax and be able to pay for those services to be provided privately and to a higher standard.
In practice this probably isn’t true for health, as the USA shows, but for education it certainly is, with even relatively cheap private education outperforming almost all public provision. The NI pension model is a busted flush, but I wouldn’t trust the stock market either, so probably a score draw overall.

As a general principle surely it’s obvious that equality sucks downwards, otherwise everyone in soviet russia would have been as rich as Abramovich and everyone on the planet would be a raving communist. People don’t support capitalism because they are uncaring or nasty, but because socialism has been demonstrated not to work, making capitalism the “least worst” socio-ecomonic system.
In simple terms if you spread limited resources more evenly, they are going to be spread thinly. The left really need to understand that resources are limited, otherwise socialism would have worked.

At the moment, I am rather persuaded by the fact that the book’s been out for about six months, and you’re the first person I’ve come across (from the Economist upwards/downwards, depending on your perspective) who has cast doubt on its conclusions.

Whether the thesis is mistaken is one thing. What I’m certain of is that they haven’t proved it. I’m still tracking down where they got their statistics from (the reference section is appalling) but there are so many glaring errors that I’m seriously considering writing up a full scale criticism of their methods and logic. If I can find the energy and time that is.

One of the problems is, I think, that they’re both epidemiologists. That means that they have no understanding of how the economic statistics they use are calculated. For example, at one point they claim that the US poverty rate is 12% and isn’t that appalling? Well, perhaps, but they don’t realise that that is the poverty rate “before” the impacts of the tax and benefit system. US poverty statistics are presented completely differently than those of other countries which are “after” the impact of the tax and benefit systems. So you cannot simply compare the raw US poverty figures with those of, say, Sweden (there are other differences as well which make them entirely unreliable as comparisons).

The vast majority of the book is based upon two sets of statistics. Inequality between countries and inequality between US states. As I say, I’m still trying to track down their sources for these but I strongly suspect that the US state figures are before tax and benefits….and yes, each state does have different tax and benefit policies over and above the Federal ones. They say that their international numbers are adjusted for tax and benefit but I’m not sure….as I say, I’m trying to track it down. Certainly, most of the UN/World Bank/Luxembourg Income Study numbers are not but perhaps they’ve found a subset that are.

I’m sure it’s possible to pick holes in the book, but do you really think that the entire thesis is mistaken? Even if you entirely remove Japan from the equation, it seems to me that there’s a very strong case.

I don’t think we disagree on anything substantive here (and apologies if my tone in the earlier post implied otherwise).

I’ve written a fair amount about the need for tax cuts, e.g. http://don-paskini.blogspot.com/2008/04/fairer-taxes.html or http://don-paskini.blogspot.com/2009/04/budget-priorities.html

But I’m not as optimistic about you about the advantages of prioritising tax reform. For example, any “revenue neutral” way of changing the current tax system by getting rid of tax credits is going to leave a lot of poor people worse off. The changes which I suggested would involve spending billions more on tax credits.

It’s worth remembering the fate of the last major attempt at reforming the tax system, which left millions more poor people better off than the ones who lost out – the 2007 budget which is rightly remembered as a disgraceful betrayal by the Labour government.

I believe Joseph Rowntree wasa Quaker. Perhaps it is time the JR Foundation re-learnt and re-aquired the skills of the early Quakers and then promoted them , there would be less in-equality.