An interesting article I wrote on the reality of the current system.

Still no answers from MattBucks. Has he got something to hide?

MattBucks still hasn't answered my questions.

NAS15840 said:

The idea that a small group of people should work, design, create and invest their time, energy, personal wealth and ability into a system that allows the vast majority to sit around doing nothing is insane, that’s not a country I want to live in. I don’t resent the successful, I strive to work as hard and as smart as they have to reach the best outcome.

In my museum of electrical products I have a Wayfarer 2 bus ticket machine. It is a classic example of how the microprocessor put large numbers of people out of work by enabling bus drivers to issue tickets without a bus conductor. The number of people in the new jobs of designing, developing, and even manufacturing Wayfarer 2 bus ticket machines (they were made in Britain) is far fewer than the number of bus conductors who have been made redundant because of them.

When disruptive technologies are created then it raises the question of what to do with large numbers of redundant bus conductors. Automation on buses in Britain has taken hold but in many other countries bus companies still employ conductors issuing tickets using archaic machines similar to those used in Britain in the 1950s. It is inevitable that they will use microprocessor controlled ticket machines in the future and their bus conductors will also be made redundant.

Bus conductors (in Britain at least) pay income tax but no Wayfarer 2 bus ticket machine has ever paid a penny in income tax.

It is a very naive view to assume that there will always be enough paid employment to go round, or that new jobs created will replace old jobs lost in a 1:1 ratio, when disruptive technologies that make workers redundant advance at a rapid pace.

The economies of the US, Canada, and much of western Europe have experienced a phenomenon known as stagflation for most of the time since 1970 which roughly corresponds to the time when automation began to make inroads into commerce and industry.

NAS15840 said:

The problem at the moment is that we have shrunk the tax base due to ideological reasons, the idea that “poor people” shouldn’t pay tax is an ideological position.

Err but they do pay tax. Council tax, VAT, tax on petrol, tax on fags and booze.

The argument that everybody who earns money through employment should have to pay income tax is an equally ideological position.

Fewer people, in more skilled and more productive rolls, with various types of automation taking over the mundane and inane tasks, where the profit is in knowledge and skills is the way forward.

That's wishful thinking. Remember that skilled jobs can be lost from Britain as well like computer programming outsourced to low wage countries.

The idea that a small group of people should work, design, create and invest their time, energy, personal wealth and ability into a system that allows the vast majority to sit around doing nothing is insane

Unfortunately it's happened. You can't uninvent something.

As an automation engineer myself I am therefore part of this small group.

Yes, it's true that developments in technology mean that there simply won't be enough paid employment to go round in future decade, and that the number of new jobs created will be fewer than the number of old jobs lost.

What exactly does this business of yours do?

Where did you (think you) learned economics from?

As both an engineer and an economist I will assure you that the biggest problem society faces is not climate change, and certainly not terrorism, but unemployment resulting from automation and other developments in technology with the inevitable consequence of a shrinking tax base. The problem is that whilst climate change and terrorism are considered to be issues for governments to tackle, unemployment resulting from automation is deemed to be an issue for individuals to deal with themselves or left to the free market to sort out. The resulting loss of tax revenue has not been given the attention that it really deserves. At the same time companies will emerge on the back of automation that employ only a small number of staff but make enormous profits.

The unemployment problem probably has no workable solutions but there is no way that a tax system designed for a heavy industrial, or even service sector, economy and society will be able to provide governments with the revenue that they need to provide public services on the scale that they currently offer once the effects of automation have made deep inroads. What has happened so far is just the tip of the iceberg.

NAS15840 said:

Allowing people to not pay any tax is a bad thing, it give the impression of "free" and people think free has no cost and often no value. If everyone has contributed then everyone feels a sense of ownership and so cares about things far more.

That's a purely ideological and psychological, not a practical economic, theory.

Successive governments have failed to realise that automation is increasingly making income tax for common folk redundant. Automation is LEGITIMATE tax evasion for companies. Robots and computers which have replaced human workers do not need to pay income tax or NI.

Considering how many jobs WILL be lost to automation in the future then one should sober the thought of how much tax revenue will also be lost along with it.

Something has to change...

One possibility is a complete reform of the tax system away from income tax onto taxation of things like corporate profits, land value, and financial transactions.

I believe that scrapping income tax, or at least having a high tax free allowance of say £40,000, will remove this us vs them attitude between people who work and people who don't work.

NAS15840 said:

I don't really see how the concept that everyone should contribute, rather expecting "someone else" to pay for the things they want has anything do to with a badly managed program to maintain a supply of iron for the war.

Railings for scrap was a propaganda piece intended to increase public morale. The railings were dumped in the Medway estuary but the government knew that if people were prepared to make personal sacrifices for the common good then Britain would stand a greater chance of winning the war.

Your argument that everyone needs to contibute is effectively the same concept of personal sacrifices for the common good.

The current tax system is reliant on an ever decreasing group of people paying for everyone else, the reason we "can't afford" a German or Scandanavian level of state expenditure is because people aren't willing pay their levels of taxation. Either services stay as they are everyone pays in more. The idea that "the rich" can be made to pay for everything is not only daft, it is vindictive and has become part of the politics of envy that defines the British left.

I'm not really sure that you understand economics very well.

It really is futile, if not downright offensive, to tell common folk to pay more taxes whilst multinational companies use tax havens to cheat the exchequer out of billions. Make companies like Sky TV, Google, Amazon, and Facebook pay their share of taxes first before telling the average Joe to.

NAS15840 said:

Interesting and whilst I agree that we do need to look at the way the NHS and social care operate, or how the disability benefit system functions I also think we need to be careful not to throw the baby out with the bathwater. For instance, we’ve been told for almost the last three decades that the NHS was on the brink of collapse unless it got a lot more funding, but it hasn’t collapsed, the problem is that it functions as a system designed to meet the needs of the past, not the present or the future, but being such as sacred cow everyone is scared of complete reform and restructuring of the NHS.

That is indeed true. The NHS is run according to an outdated ideology from the mid 20th century rather than a modern institution providing the services required for today and tomorrow. It is far from a progressiveinstitution and many of its employees are institutionalised so are resistant to change. There are also plenty of undeserving people in senior positions who strive to maintain the status quo to protect their jobs.

Even worse is that the NHS is Britain's unofficial national religion.

The difference is that in Germany or other European countries it’s seen as everybody’s job to contribute, however in the UK over the last decade an attitude of “the rich” should pay for everything. Until the majority of the population accept that they will have to pay more in tax, that it can’t just be paid for by someone else then the current situation will continue.

I disagree with this one. My mother's background is politics and economics. What you have basically subscribed to is the railings for scrap mentality from WW2.