UK - Pensioner incomes 'outstrip those of working families'

[The Don]

I simply don't accept the logic. Just because some people do well financially doesn't prevent others from doing well. One family passing wealth down generations has no effect on a poorer family's prospects. You don't make the poor richer by making the more-rich poorer.

You may not accept the logic but empirically that's the way it turns out. Of course there are exceptions at both ends of the spectrum (rich kids who fritter it all away and poor kids who make good), but on average the chances of social and economic mobility are small, and reducing.

One example of this is the "old boy" network that comes from going to a good private school. Not only do you get a pretty good education, but it seems you also get easier access to a top university and in some professions it's who you know rather than what you know.

Of course that's a rather cartoonish example but a more realistic one is that in order to buy a house in a good school catchment area you need a fair chunk of money. Less well off parents end up sending their children to less good schools which handicaps them in the game of life from the start. Now of course you could make all schools "good" but decades of all kinds of education initiatives seem to show that it's not that easy.

 

[lionking]

Any government that tried to introduce inheritance tax in Australia would be out of office for a decade. I don't necessarily oppose it, but the politics are set in stone here.

 

[Darat]

You may not accept the logic but empirically that's the way it turns out. Of course there are exceptions at both ends of the spectrum (rich kids who fritter it all away and poor kids who make good), but on average the chances of social and economic mobility are small, and reducing.

One example of this is the "old boy" network that comes from going to a good private school. Not only do you get a pretty good education, but it seems you also get easier access to a top university and in some professions it's who you know rather than what you know.

Of course that's a rather cartoonish example but a more realistic one is that in order to buy a house in a good school catchment area you need a fair chunk of money. Less well off parents end up sending their children to less good schools which handicaps them in the game of life from the start. Now of course you could make all schools "good" but decades of all kinds of education initiatives seem to show that it's not that easy.

It is not just because the schools are "good", for example: http://www.bbc.co.uk/news/education-38923034

 

[MikeG]

........Now of course you could make all schools "good" but decades of all kinds of education initiatives seem to show that it's not that easy.

It's not been easy, but it has been very successful. Schools are an awful lot better than they were, universally. The ones who achieve at school are the ones who want to achieve, and who have motivated families who understand the value of education............for instance, many first and second generation immigrant families from places with much poorer education systems. It doesn't matter how good the school is if the parents aren't supportive.

I say again, you don't make the under-achievers achieve more by taking stuff away from higher achievers, and any attempt to do so is doomed to fail. This is just the politics of envy.

 

[3point14]

It's not been easy, but it has been very successful. Schools are an awful lot better than they were, universally. The ones who achieve at school are the ones who want to achieve, and who have motivated families who understand the value of education............for instance, many first and second generation immigrant families from places with much poorer education systems. It doesn't matter how good the school is if the parents aren't supportive.

It doesn't matter how supportive the parents are if the schools are dreadful.

I say again, you don't make the under-achievers achieve more by taking stuff away from higher achievers, and any attempt to do so is doomed to fail. This is just the politics of envy.

How do you distinguish this from other taxation? couldn't all taxation be described in such terms? Is all taxation 'the politics of envy'?

 

[The Don]

It's not been easy, but it has been very successful. Schools are an awful lot better than they were, universally. The ones who achieve at school are the ones who want to achieve, and who have motivated families who understand the value of education............for instance, many first and second generation immigrant families from places with much poorer education systems. It doesn't matter how good the school is if the parents aren't supportive.

I say again, you don't make the under-achievers achieve more by taking stuff away from higher achievers, and any attempt to do so is doomed to fail. This is just the politics of envy.

You may say that, but I think you are mistaken.

For example, if there is a fixed budget for education, one way to split that is to share it equally between all pupils. That's "fair" but fails to address the fact that children from underprivileged backgrounds are already operating at a considerable disadvantage. My mother saw that first hand through her 40 year teaching career as a primary and nursery school teacher as both a classroom teacher and as a head teacher.

Well to do parents are able to provide their children with all kinds of advantages including a comfortable home, plenty of food, all kinds of educational support and so on. A much greater proportion of children in very deprived areas are hungry, cold, poorly clothed and in some cases not even socialised or toilet trained. Children like this need a lot more support and the spend per pupil is significantly higher. In effect things are being taken from the better off (I resent the term higher achievers, given the head start I got, I'm probably an under-achiever whereas there may be others for whom basic literacy and staying out of gaol is a triumph) and given to the less well off.

 

[Darat]

It's not been easy, but it has been very successful. Schools are an awful lot better than they were, universally. The ones who achieve at school are the ones who want to achieve, and who have motivated families who understand the value of education............for instance, many first and second generation immigrant families from places with much poorer education systems. It doesn't matter how good the school is if the parents aren't supportive.
I say again, you don't make the under-achievers achieve more by taking stuff away from higher achievers, and any attempt to do so is doomed to fail. This is just the politics of envy.

https://www.theguardian.com/educati...elite-continues-to-take-top-jobs-finds-survey

.... Although just 7% of the population attend independent fee-paying schools, the survey reveals that almost three quarters (71%) of top military officers were educated privately, with 12% having been taught in comprehensive schools.

In the field of law, 74% of top judges working in the high court and appeals court were privately educated, while in journalism, more than half (51%) of leading print journalists went to independent schools, with one in five having attended comprehensive schools, which currently educate 88% of the population.

In medicine, meanwhile, Sutton Trust research says 61% of the country’s top doctors were educated at independent schools; nearly a quarter (22%) went to grammar school and the remainder to comprehensives....​

 

[MikeG]

Why are you talking about private schools? I'm not. Further, the point you seek to make (that private school pupils have a better chance than others of producing top judges, journalists or military officers......and the latter is self-explanatory if you consider how many state schools run cadets) is irrelevant when we're talking about social mobility. Social mobility is the ability of poorer kids to get into higher paying jobs, and that depends on qualifications, and that depends to a large degree on child and parental motivation.

 

[MikeG]

......
Well to do parents are able to provide their children with all kinds of advantages including a comfortable home, plenty of food, all kinds of educational support and so on. A much greater proportion of children in very deprived areas are hungry, cold, poorly clothed and in some cases not even socialised or toilet trained. Children like this need a lot more support and the spend per pupil is significantly higher. In effect things are being taken from the better off (I resent the term higher achievers, given the head start I got, I'm probably an under-achiever whereas there may be others for whom basic literacy and staying out of gaol is a triumph) and given to the less well off.

Jeez, you want the state to toilet train kids? More to the point, you seem to want to financially punish richer parents so that poorer parents will.......what...........toilet train their kids? Really? How exactly will that work? This is getting silly

 

[MikeG]

It doesn't matter how supportive the parents are if the schools are dreadful........

Oh yes it does. A well supported child in a poor school will still out-achieve its peers at that school. But that misses the point of what I was saying. All else being equal, as it generally is these days (ie schools aren't often dreadful), what I said applies.

 

[The Don]

Why are you talking about private schools? I'm not. Further, the point you seek to make (that private school pupils have a better chance than others of producing top judges, journalists or military officers......and the latter is self-explanatory if you consider how many state schools run cadets) is irrelevant when we're talking about social mobility. Social mobility is the ability of poorer kids to get into higher paying jobs, and that depends on qualifications, and that depends to a large degree on child and parental motivation.

In part it depends on qualifications and qualifications depend somewhat on child and parental motivation.

Then again poorly motivated children with ambivalent parents manage to get into the best universities and hence get those qualifications just so long as the school is good enough and has the right contacts.

Social mobility is badly constrained in UK society today.

 

[3point14]

Oh yes it does. A well supported child in a poor school will still out-achieve its peers at that school. But that misses the point of what I was saying. All else being equal, as it generally is these days (ie schools aren't often dreadful), what I said applies.

Can you prove this?

 

[The Don]

Oh yes it does. A well supported child in a poor school will still out-achieve its peers at that school. But that misses the point of what I was saying. All else being equal, as it generally is these days (ie schools aren't often dreadful), what I said applies.

Evidence ?

Doesn't matter how well supported a child is if they are as thick as pig ****.

 

[Archie Gemmill Goal]

Oh yes it does. A well supported child in a poor school will still out-achieve its peers at that school. But that misses the point of what I was saying. All else being equal, as it generally is these days (ie schools aren't often dreadful), what I said applies.

Out achieving your peers is nothing to write home about if your peers are all at the bottom of the distribution.

I wonder what kind of cloistered lifestyle one would need to have to think that all schools are good and that generally these days all else is equal.

 

[MikeG]

........Social mobility is badly constrained in UK society today.

I completely agree, and I would love to see it improve. However, I don't see how removing assets from those who do well is going to help those who don't have such a good start in life. I honestly don't. No one has attempted to make the connection so far, as though the benefits of death duty is some self-evident truth that only needs stating to be proven. Hauling down those above you is no way to a meritocratic society.

 

[3point14]

I completely agree, and I would love to see it improve. However, I don't see how removing assets from those who do well is going to help those who don't have such a good start in life.

I'll give it a go...


It will pay for a much better education for the less privileged.

At the moment, the fortunate have a superior education, access to social networks the unprivileged don't, it is easier for their parents to provide them with support and assistance through their early life, possibly even being able to afford to have only one parent working or to employ a private tutor. They live in a nicer, quieter environment, more conducive to studying and also have the option, as many privileged children do, to take a gap year abroad or to work as an unpaid intern for a year, building up experience. Very few of these options are available to the children of less wealthy parents.

On top of this, those who are already well advantaged by all of the above also can lean on a large inheritance to obviate any mistakes they've made, re-do their education if they've screwed it up or to take the opportunity to live mortgage free.

With all the privileges listed in the first paragraph, do they really need those listed in the second or would that money (that they have not earned) be better spent creating a slightly more level playing field by investing in education for all?

 

[The Don]

I completely agree, and I would love to see it improve. However, I don't see how removing assets from those who do well is going to help those who don't have such a good start in life. I honestly don't. No one has attempted to make the connection so far, as though the benefits of death duty is some self-evident truth that only needs stating to be proven. Hauling down those above you is no way to a meritocratic society.

It helps by providing increased funding for the types of things which help to increase social mobility, welfare, healthcare, education, social services and so on. It's not a matter of "hauling down those above you" as you claim but rather getting those who are most able to pay to do their part and to attempt to level the playing field so that your antecedents' wealth isn't the most important factor in where you yourself place in the income and wealth strata - as is currently the case.

 

[Archie Gemmill Goal]

I completely agree, and I would love to see it improve. However, I don't see how removing assets from those who do well is going to help those who don't have such a good start in life. I honestly don't. No one has attempted to make the connection so far, as though the benefits of death duty is some self-evident truth that only needs stating to be proven. Hauling down those above you is no way to a meritocratic society.

If you have a goal of improving wealth inequality and social mobility then you are fighting an uphill battle against compound interest if you don't look at ways to address asset ownership.

Of course there's much more than just wealth at work. There is a huge amount of social capital at work which means that even if you took all the wealth of the poor tomorrow they would probably have it back in a decade or two. The game is rigged from the start.

 

[MikeG]

It helps by providing increased funding for the types of things which help to increase social mobility, welfare, healthcare, education, social services and so on. It's not a matter of "hauling down those above you" as you claim but rather getting those who are most able to pay to do their part and to attempt to level the playing field so that your antecedents' wealth isn't the most important factor in where you yourself place in the income and wealth strata - as is currently the case.

So more income for the state is the only goal of the tax, in your view. The removal of assets from the better off isn't an end in itself. OK, that sounds altogether more reasonable. This would be satisfied by other means of increasing the tax take, then, such as increasing income tax. Agreed? All the social mobility problems would be solved if we increased education spending such that we were at the head of every per-capita comparison amongst the industrialised nations. Is that your claim?

Why the fixation on inheritance tax, then, which has never raised more than a pittance*?

* ETA 0.2% of GDP at their peak, is the best figure I can find in a quick search.

 

[Newtons Bit]

Doing some investigoogling:

In the tax year 2013/14, the total tax revenue of the UK was £590B. The inheritance tax netted £3.4B, or 0.5% of total revenues.

You guys might have had some fabulously rich people at one point. But either they've figured out how to hide their wealth from the tax man, or the wealth is mostly gone now.