Reply to post: @Tim Worstall

So, was it really the Commies that caused the early 20th Century inequality collapse?

LucreLout

@Tim Worstall

Maybe we should deliberately lower inequality with very high tax rates and all the rest in order to get us some of that lovely growth of the 1950s and '60s?

I still don't understand the socialist obsession with other peoples money. We could more readily equalise beauty by hitting the pretty with a brick, or applied intelligence by taxing education, or health by a centrally planned diet and exercise regime, and even lifespan could be equalised by euthanisia a-la Logans Run.

I earn my income by legal means, paying all taxes which are due under the system. That I don't spend every penny I earn is more due to budgeting than it is a high income. Just how much of what I earn do socialists feel entitled to, and why? Why do they think I would continue to make the sacrifices I do now, in return for the higher comp, if I'm to see it squandered on other peoples pipe dreams?

Short of a global implementation, which will never happen, I don't see how this could be expected to work without emmigration controls - the best & brightest would simply leave, again. The world is a lot smaller now than it was during the brain drain of the 1970s, and those with the greatest skills and/or wealth are the most mobile.

So, maybe there is something to this strong unions, government management of the economy

The 70s called for a chat. They want their power cuts, lack of service, zero choice, and appaling politically motivated strikes back.

It so happens that the turning point in the 1980s coincides with (1) acceleration of skill-biased technological progress, (2) increased globalisation and entry of Chinese workers into the global labour market, (3) pro-rich policy changes (lower taxes), (4) decline of the trade unions, and (5) end of Communism as an ideology.

Seems to me that the 80s was around the time that education as a route from poverty really got going. Certainly by the late 80s my family had realised this may be the best route for us, and I became the first generation of our clan to graduate university.

Despite Labours paucity of thought concerning pushing 50% of kids into uni [1], it remains true that those graduating a STEM subject will enjoy better than average earnings. It is also around the time the property market began to motor, which is one of the core drivers of wealth differential, particularly as the generation with the greatest property gains is also the generation that had the largest pensions, leaving more of that wealth to be inherited tax free [2].

Those who educate themselves to an above average level, and who's families play the long game regarding property ownership and passing wealth down the generations, will drive "inequality" ever higher. If educating yourself, working hard, investing in your families future, and leaving something to the kids is a bad thing then someone will have to explain that to me, because I don't see it.

[1] Yes, graduates tend to earn more than others but that doesn't mean making everyone a grad will increase everyones income any more than the rampant GCSE grade inflation that continues unabated.

[2] There is no capital gains tax on a PPR, and since most houses fall well below the IHT threshold, there are no gains there. Each generation rolls the inheritance into an ever better PPR until they get to the IHT threshold. Thereafter grannies pad gets left to the next generation below, and so it goes. Eventually you start needing to gift assets and taking proper advice, but by that time your family will have a few million in assets.

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