Peter wrote:
Is there any evidence that the way UK ATCOCAS (air traffic services outside controlled airspace) is set up is related to the UK tax system?
I don’t think so, but the inference is that the system is privatised because the tax take is insufficient to support a nationalised system. I don’t subscribe to this theory, nor the idea that we are a particularly low-tax country.
DavidJ wrote:
I should have been more precise. Yes, income taxes aren’t hugely different, but the French pay colossal social security contributions (and in return they have great benefits).Tax on £25k, £40k, £100k
Fair point, they do pay much more social security and they get good benefits – but I see no reason at all to provide unemployment benefits up to EUR 6k a month! That must be a killer.
The Guardian article must be taken with a pinch of salt though (as always with the Guardian, as it is hardly unbiased). It doesn’t give detail on social security contributions in other countries, just gives some high % and says they pay much more than us. Clearly the French do not actually pay 25% social security on their entire salary – there will be upper and lower limits and all sorts of other stuff. It is also bizarre that when they do the sample numbers, the UK one is just income tax and the French one is income tax plus social security!
One would need more hard data, probably payslips of people on similar money in the two countries, to make a valid comparison and determine whether there was enough of a difference to fundamentally affect the level of services (of all sorts) that citizens can expect.
Graham wrote:
It is also bizarre that when they do the sample numbers, the UK one is just income tax and the French one is income tax plus social security!
Eh? No, it’s not. The sample figures include our N.I., which is just another word for social security.
Check their workings:
Graham wrote:
Clearly the French do not actually pay 25% social security on their entire salary – there will be upper and lower limits and all sorts of other stuff.
Yes, but no. A sizeable part of French social security mandatory pay-ins have no upper limit. Some do, but not an overwhelming majority (by rate). In France, you even pay social security “contributions” on non-work income (dividends, capital gains, etc), although these “contributions” don’t actually increase your payout rights, the way a salary does. They even (used to? not sure they have stopped) take social security contributions from non-resident people (that have no social security right in France) on French-source income, in blatant violation of the European Directive on social security (which says you can be forced to participate in only one country’s social security system, and lays out rules which one).
Graham wrote:
I see no reason at all to provide unemployment benefits up to EUR 6k a month! That must be a killer.
I see reasons. People with higher incomes will also have higher fixed costs that they cannot adjust down when losing their job, like mortgage, running subscriptions with minimum time left, etc. You do want to encourage that, since that’s what makes the economy run. Also, their savings won’t be in a form that they can tap into easily / fast, since they’ll invest rather than save. Again, that’s something one wants to encourage, since that’s what makes the economy run. If the higher income went only into liquid savings (instead of expenses – which are another person’s income, and an additioanl tax income for the state – and investments), the economy would suffer (but OTOH, the State would extract more seigniorage…).
So providing unemployment (and other) benefits to a level that follows people’s general lifestyle makes very much sense. It allows everybody to coast periods of involuntary unemployment without loosing their home. It is also fair, since these people contributed higher insurance premiums (mandatory social security pay-ins). It enhances the financial safety of everyone and thus their bargaining power with employers, their willingness to change jobs, even to consider starting a business instead of looking for another job.
Graham wrote:
One would need more hard data, probably payslips of people on similar money in the two countries
Yes :)
their bargaining power with employers
In France? 
DavidJ wrote:
Eh? No, it’s not. The sample figures include our N.I., which is just another word for social security.Check their workings:
Salary caculator
Sorry, I think I misunderstood. It was the way they wrote under the French one “this looks like loads but includes social security too” sort of implying that the other ones didn’t.
Anyway I think the issues we experience in the UK are mostly the result of poor policy rather than there not being as much tax revenue as there might be.
lionel wrote:
People with higher incomes will also have higher fixed costs that they cannot adjust down when losing their job, like mortgage, running subscriptions with minimum time left, etc.
Sorry, I don’t buy that.
Any salaried person who manages their money properly should keep a buffer of X months non-discretionary outgoings where X represents a combination of your attitude to risk, how highly leveraged you are and how easy it is to find work in your sector.
If you mortgage and bills are higher, you need to keep more in reserve. That much is obvious to me.
Sure, you can stimulate the economy by providing such generous benefits that no-one needs to save any money but I don’t think that is a good idea because it encourages financial irresponsibility.
Any salaried person who manages their money properly should keep a buffer of X months non-discretionary outgoings where X represents a combination of your attitude to risk, how highly leveraged you are and how easy it is to find work in your sector.
Yes, exactly, but only sensible people do that. Most people just live for the day. It is staggering how close to the line many live. Here is one of many other links. Set this against the UK average wage and it is obvious the problem is not the lack of incoming money (i.e. “poverty” etc) but rather a willingness to blow away what comes in fully and very quickly.
I doubt it is that different outside the UK, with some notable exceptions.
It is also independent of income. There are “bankers” on 7 digit incomes who do the same. They lose their job and the Ferrari has to be sold immediately. Kids extricated from private schools. Terrible hardship for the family 
For the time being, relying mostly on a salary to make monthly expenses and fund retirement savings, I keep about 6 months cash reserve on hand, or slightly more, combined with assets that. could be sold during that six months, as might or might not be required. I cannot conceive of looking for somebody to give me money because I can’t cover monthly cash flow for a while – the prospect of doing so, and the personal mismanagement that it would represent, would drive me to change the situation.
