also, can anyone explain to me what an "aggregate tax burden" means? I can't find it anywhere...

"@ TGM, but do you think individual income tax should be greatly increased?"

Nope

If I am going to go for a forced-taxation model, I'd say have a flat-rate national income tax (with an allowance of about £10k pa) to cover the military, embassies & national security (at a rate of about 25-30% the current rate in the UK), and a locally imposed sales tax to cover for county courts, policing etc. I envisage a VAT rate of about 5%

@spyman's post on page 1: Spyman, in my system, as I pointed out, not working is one of the stupidest things you can do, because if everyone stops working, everyone will eventually die. That is what will keep people working.

I am not familiar with UK's tax structure.
Did you mean that the flat-rate should be 25-30 percent of income? or 25-30 percent of the current tax rate/bracket (I have no idea what the current rate is)?

The revenue should be 25% of the current revenue. That means an income tax rate of the order of 5-10%

@TGM,
Do you think money is best spent by corporations or by individuals?

There is no way to make a judgement between the two. Individuals buy end products, whilst companies buy inputs and capital. However it is true that all taxation is paid for by individuals, which is why the corporation tax is a tax on individuals just as much as any other.

but isn't it true that corporations (as opposed to individuals) most generally employ people since corporations are taxed based on gross income (net sale minus cost of sales).

If the individual's tax rate is low, a corporation's executive/president/ceo/majority shareholder/decision maker etc.., has little incentive to reinvest the gross income back into the company (hiring, buying, researching more) and more incentive to take money out of the corporation as salary or dividends.

So that in terms of increasing economic prosperity (which I think comes from the most amount of money switching hands at a faster rate), that money best serves the general public in a corporation's hands rather than in the bank accounts of the individuals that own the corporation.

"So that in terms of increasing economic prosperity (which I think comes from the most amount of money switching hands at a faster rate)"

So if you and I get the Bank of England to issue us with a case of £50 notes totally, say, £1 million, and we spend our time passing it back and forth between us, we become more prosperous?

Economic prosperity is based on an ever increasing amount of production.

I agree, my simplistic approach was insufficient. My money switching hands, I didnt mean money for money, I meant money for goods, goods for money (goods coming from production).

Economic prosperity is based on an ever increasing amount of production.

and that isn't a fallacy ??? It certainly isn't possible for ever unless we keep finding new worlds somewhere in outer space that want to buy from us.

It's the production that matters. With valuable goods, the "money switching hands" will come, but the production that matters. Trade is good because it spreads the goods out in a more optimal way, but the way to improve things is not to arbitrarily encourage more trade- you cannot improve there- but to encourage more production of stuff *to* trade.

Looking at GDP, aggregate demand and so on covers up what the driving forces of an economy are.

"Economic prosperity is based on an ever increasing amount of production.

and that isn't a fallacy ??? It certainly isn't possible for ever unless we keep finding new worlds somewhere in outer space that want to buy from us."

Let me correct myself to "ever increasing economic prosperity"

Secondly, not within a reasonable timescale to look at in economics. At present, human innovation is such that we can continually increase production, by improving on the goods.

Demand is not pre-existent either, it is a consequence of production of goods.

so if we have the prosperity debate sorted out (which I agree with TGM about), let us return to my previous question about whether money best serves citizens in the hands of corporations or in the hands of the owners of those corporations.

@largeham - Thank you for recognizing my contribution.

If "P", then "Q"( where P = no regulation of financial industry, and Q = economic collapse).
The formal error in logic is when one derives, not "P", therefore not "Q" from this.

@largeham - any comment? I've responded to your query.

Woah, this gone far overnight (if it looks like I'm online, I'm not always, it's just like that. I don't bother logging out because no one else is likely to log on here). True, but I'm currently studying economics, have talked to my teacher and done a bit of research, and it is quite fair to say that the deregulation by conservative policies played a large part. However, I would not say that they are the entire cause of the whole debacle, such problems are inherent in the system.

@TGM
I am not saying that governments must be the provider of health, education and infrastructure. The critical role of government is to ensure that they are provided to all. Delivery could be private sector, public sector or a mixed system.

You mention Singapore, which is a great example of what is possible. They have a universal healthcare system where government ensures affordability, largely through compulsory savings and price controls, while the private sector provides most care. The Singapore government has also done much to ensure the success of the economy through favourable tax rates for region head offices, good roads, airport and telecoms, excellent education (including adopting the simplified Chinese script used in China) and so on. However, there is a downside to this: Singapore is practically a one-party state under the control of the Lee family (the current PM is son of the first, Lee Kuan Yew, and was appointed Deputy PM when his father stepped down) whilst political opponents are harassed and if I was writing this in Singapore I would probably end up in court for defamation.

Singapore is no haven in any respect, but it does at least show that private supply of healthcare works.

However, I do not support the system they have. Compulsory savings and price controls are fundamentally immoral.

There is a reason for price controls and regulation of healthcare...it is because healthcare isn't something that works well in a free market. How much would you pay to save your son/dsughter/wife/self? Would you go into debt for the rest of your life? America has a lot of bankruptcies caused by our medical system, and that is with government intervention on some level.

Any private supplied system will need to be regulated. As it is right now, I am not sure any system for providing healthcare is working. Healthcare is becoming too expensive the whole world over. The cost is out of control, and if it doesn't calm down soon only very controlled systems will survive and they will, most likely, be using old technology.

I want the ten minutes I just spent reading this thread back.

1 - if you want to use crappy websites to demonize views you do not share, it's simplicity in itself to do so. That works the other way as well - just because the author of a website is a rambling idiot does not necessarily mean the views he holds are wrong, it simply means he's a rambling idiot

2 - "in my system, as I pointed out, not working is one of the stupidest things you can do, because if everyone stops working, everyone will eventually die. That is what will keep people working. "

You're making a fundamental error - again - that has been pointed out to you before. There is no mechanism to force compliance, and one person dropping out of the labor force to be a drain is not going to kill the system. The problem comes when a large number decide to be that "one person". Eventually the productive members - farmers, for example - get sick of providing for the leeches, and stop producing a surplus.

People in general don't work for "the good of society". When you start working, *you* won't work for "the good of society" - or do you plan to give any surplus income to charity?

I'm not going to bother writing a dissertation on how pricing is an efficient means of supplying information to the economy as a whole. If you believe that people are willy nilly going to work their asses off for no discernible reason when working 60% as hard will still get them the same level of reward, you're delusional.

Since we've already beaten this particular dead horse, I've very little motivation to repeat the arguments. You can believe what you want to believe - but if you 'believe' that people are going to sign up for the suicide pact you're suggesting, you better think again. And get an education so you can contribute to society while you're at it.

Why so harsh, Stratagos? Sure conservative man's thesis is flawed but at least he has opened them up to criticism by posting them on the forum. It is a good way to learn (conservative man is a teenager).

... opened his ideas to criticism, that is.

Singapore's mean IQ is 108. Hard to generalize from that.

Then again Stratagos is right. Conservative Man you might consider reading about the Free Rider Problem
http://en.m.wikipedia.org/wiki?search=Free+rider+problem

@spyman: A couple reasons my response may come across as overly harsh

1 - I'm currently fighting off the flu. Tossing cookies is bad enough when you're at home, but when you're 1000 miles from home it really sucks

2 - I just finished two 'rage' commentaries the night before, and the inner snark isn't something that I can just shove down once it's been let loose

3 - I find simplistic solutions to complex issues to be.... annoying. I recently read a quote that was attributed to Kissinger. To summarize: "There are no problems in the world, there are only dilemmas. Dilemmas cannot be solved, only survived"

To me, people who propose 'solutions' to problems without bothering to either consider the consequences of their proposal or dismiss/ignore criticism without considering it are *just as responsible* for not making the hard choices as those who stick their heads in the sand and pretend there is no problem at all.

Are there problems in the current economic system? Absolutely! Are they likely to have serious negative consequences down the road in the absence of reform? You bet. Is turning the planet into a socialist paradise with no prices and no motivation to work hard a 'solution'? Yeah *RIGHT* - if the problem is overpopulation and you want to kill off a huge chunk of the planet sure, why don't you do that.

The biggest commonality I've seen in the vast majority of the half assed 'reforms' I've seen is that the people who are making the suggestion benefit more than society as a whole. Personally, as a person who makes an above average income, I would be better off with lower tax rates - but *as someone who cares about the long term health of my country*, I accept that taxes will *have* to rise to pay off our debts, even if we jump up the rates before the inevitable - and by 'inevitable' I mean "we can't pay for it now and the Chinese aren't going to subsidize us forever" - reduction in government expenditures. And that means both military and entitlement spending.

So I find the "For each according to his abilities, for each according to his needs" to be as stupid as the "tax everyone but me, cut spending on everything except for those things I like, and while you're at it make sure people who do things I don't' like can't do it any more" crowd.

As a parent I accept the inevitable, and since my society is bent on going straight to the crapper fiscally, all I can do is take steps to protect my family from the inevitable chaos. Past a certain point "society" can go straight to hell - if 50.1% of the voters continue to elect people who will give them bread and circuses, my willingness to sacrifice for the 'common good' goes out the window and it falls back on 'defend the pack'.

“There is a reason for price controls and regulation of healthcare...it is because healthcare isn't something that works well in a free market.”

The main reason is special interests who have an opportunity to lobby, be it concern groups that receive government funded, parents etc. who are naturally prone to bias from their own situation, or, more often, big businesses that benefit from the barriers to entry that are provided.

“ How much would you pay to save your son/dsughter/wife/self? Would you go into debt for the rest of your life? America has a lot of bankruptcies caused by our medical system, and that is with government intervention on some level.”

The Government’s intervention massively increases the cost of healthcare, by, for instance, stopping the selling of healthcare across state lines, having the FDA adding to the cost of medicine, not to mention delaying its release, etc.

“Any private supplied system will need to be regulated.”

Why need it be regulated by government in a top down fashion? I’m all in favour of keeping practices good, regulating if you will, but bottom up, by the consumer.

“ As it is right now, I am not sure any system for providing healthcare is working. Healthcare is becoming too expensive the whole world over. The cost is out of control, and if it doesn't calm down soon only very controlled systems will survive and they will, most likely, be using old technology.”

This is misunderstanding the nature of healthcare. It is a superior good, so as people become wealthier, they spend more money on it, as has happened. If the price of healthcare were really going up, rather than the availability of advanced procedures, the price of individual treatments would be going up. It is not.

"The main reason is special interests who have an opportunity to lobby, be it concern groups that receive government funded, parents etc. who are naturally prone to bias from their own situation, or, more often, big businesses that benefit from the barriers to entry that are provided."

So, get rid of patents?

"The Government’s intervention massively increases the cost of healthcare, by, for instance, stopping the selling of healthcare across state lines, having the FDA adding to the cost of medicine, not to mention delaying its release, etc."

Healthcare can be sold across state lines. Health insurance cannot, which is different. If you are putting health insurance with healthcare...ok, but strange. Health insurance companies add costs to all medical procedures through overhead of profits and bureaucracy. Should we eliminate that?

The drug companies better be doing the testing the FDA requires, or you are playing Russian Roulette with any drug you take. Who is to say what it does? Drug companies spend a lot on marketing and outreach to doctors to get people to use their stuff. That is nuts, if that is the path you are advocating. No testing, no barriers to entry, and lots of marketing?

"Why need it be regulated by government in a top down fashion? I’m all in favour of keeping practices good, regulating if you will, but bottom up, by the consumer."

That is great, in a system with perfect information, like a theoretical free market. In the real world, it works pretty poorly. How are you supposed to find out anything about the doctors or treatments? We can have a big Kudzu for doctors, I guess. Which would still be pretty poor information. You are kind of stuck in the theoretical. It is often hard to get good information on the differences between operating systems, and there aren't many of those.

"This is misunderstanding the nature of healthcare. It is a superior good, so as people become wealthier, they spend more money on it, as has happened. If the price of healthcare were really going up, rather than the availability of advanced procedures, the price of individual treatments would be going up. It is not."

The usual treatment for things is having the price go up. Cancer treatments have gone way up. Because of patents, most technology is 17-20 years old, before it becomes cheaper, and very outdated. On top of that, going off the no regulation system, with litigation for poor doctors, which we aren't even close to, but has caused doctors to prescribe MRI and CAT scans for everything, just to make sure they are covered.