Net Contributor nonsense
Discussion
Probably a forlorn hope that this won't just become another immigration thread, but am I alone in thinking that the idea of people being or not being "net contributors" to the Economy based only on the tax they pay and the benefits they receive is fundamentally flawed???
I don't see how anyone can calculate the net value of an individual to the national economy without considering the value of the work they do as well as the tax they pay and the benefits they consume?
Consider a worker who receives £100 more in benefits than they pay in tax. By that simple measure, they're a net drain on the economy, so many would wish to deny them entry. What, though, if their employer pays an extra £2k in corporation tax on profits made off that employee's labour. Are they still a net drain, or are they now a net contributor?
Or what of a nursery nurse or care home employee in minimum wage? Sure, there's a high chance that they'll pay less in tax than they receive in benefits, but what if them doing their job frees other people up from caring for children or elderly relatives who then go back to work and pay thousands in tax that might otherwise have been lost?
I totally get people wanting everyone to make a fair contribution, but this flawed partial metric seems like an absurd way of trying to measure that?
I don't see how anyone can calculate the net value of an individual to the national economy without considering the value of the work they do as well as the tax they pay and the benefits they consume?
Consider a worker who receives £100 more in benefits than they pay in tax. By that simple measure, they're a net drain on the economy, so many would wish to deny them entry. What, though, if their employer pays an extra £2k in corporation tax on profits made off that employee's labour. Are they still a net drain, or are they now a net contributor?
Or what of a nursery nurse or care home employee in minimum wage? Sure, there's a high chance that they'll pay less in tax than they receive in benefits, but what if them doing their job frees other people up from caring for children or elderly relatives who then go back to work and pay thousands in tax that might otherwise have been lost?
I totally get people wanting everyone to make a fair contribution, but this flawed partial metric seems like an absurd way of trying to measure that?
The benefits system for the low paid is a way of keeping costs to businesses low and, presumably, keeping up the country's competitiveness. If they were removed, it would be a case of employers having to pay a living wage, or what qualifies for it in government calculations. If a significant number of families were unable to pay for food, heating, rates, clothes, etc, it is unlikely the populace will remain passive.
While use punters are paid low wages, businesses are happy. Why wouldn't they be? They can do what they want with the profits.
While some poor drudge is working away for a pittance, they are contributing.
While use punters are paid low wages, businesses are happy. Why wouldn't they be? They can do what they want with the profits.
While some poor drudge is working away for a pittance, they are contributing.
Kermit power said:
I don't see how anyone can calculate the net value of an individual to the national economy without considering the value of the work they do as well as the tax they pay and the benefits they consume?
Agree. And was thinking about this today.10x people work for a company. They are highly skilled workers, who would be hard to replace and have been at the company for X amount of years. They earn £30k a year, but the owner makes £300k a year profit.
This is what you would call an unequal distribution of wealth, but...this is capitalism and the norm of how a successful business operates.
I don't think the way they are defining a "contributor" is what I would call fair.
swisstoni said:
The term net contributer is usually used to describe economic contribution.
If one wanted to widen it out to consider an individual’s overall contribution to society then the term may well be inappropriate. But that’s not the context in which the term is normally used.
Or more accurately the direct economic contribution to the government really isn’t it? If one wanted to widen it out to consider an individual’s overall contribution to society then the term may well be inappropriate. But that’s not the context in which the term is normally used.
In the example above the 10 employees contribute to the profit of the business which the owner may pay tax on. But the owner takes full credit for it which is too simplistic a view of economic contribution tbh.
It’s a really limited metric with very little actual usefulness.
Dingu said:
swisstoni said:
The term net contributer is usually used to describe economic contribution.
If one wanted to widen it out to consider an individual’s overall contribution to society then the term may well be inappropriate. But that’s not the context in which the term is normally used.
Or more accurately the direct economic contribution to the government really isn’t it? If one wanted to widen it out to consider an individual’s overall contribution to society then the term may well be inappropriate. But that’s not the context in which the term is normally used.
In the example above the 10 employees contribute to the profit of the business which the owner may pay tax on. But the owner takes full credit for it which is too simplistic a view of economic contribution tbh.
It’s a really limited metric with very little actual usefulness.
I think it’s simpler than that. I take it to mean that you, as an individual, pay more money to the exchequer than you cost.
MattsCar said:
Agree. And was thinking about this today.
10x people work for a company. They are highly skilled workers, who would be hard to replace and have been at the company for X amount of years. They earn £30k a year, but the owner makes £300k a year profit.
This is what you would call an unequal distribution of wealth, but...this is capitalism and the norm of how a successful business operates.
I don't think the way they are defining a "contributor" is what I would call fair.
I think something along these lines every time it's brought up.10x people work for a company. They are highly skilled workers, who would be hard to replace and have been at the company for X amount of years. They earn £30k a year, but the owner makes £300k a year profit.
This is what you would call an unequal distribution of wealth, but...this is capitalism and the norm of how a successful business operates.
I don't think the way they are defining a "contributor" is what I would call fair.
It's especially ironic because the people banging on about how few 'net contributors' their are and how so many people are taking more than they put in are usually very enthusiastic capitalists. A socio-economic system designed to abstract/extract away the wealth created by any one individual and put it in the hands of a few.
The system functions - whether you view it positively or negatively - by creating (in pure financial terms at least, which is how this discussion is always framed) a large number of people who create the wealth but don't each keep much of it (the workers), while the owners of the means of production do keep it, as a reward and return for their initial capital risk.
It's literally intended to result with financjal contribution to society (tax) being tilted overwhelmingly onto a few big contributors who have high income and wealth because they capture the lion's share of economic output and capital assets. This is the system working as intended, and is why the more capitalist a country is (or, more accurately, the less equally wealth is distributed within it) the sharper that contributor/taker divide is. It's the pinko commie woke countries that usually have a much more positive and fairer distribution between contributors and takers.
One solution of course is to do something along the lines of "from each according to his ability and to each according to his need", and ensure that incomes, wealth and product are less unequally distributed so the contribution pool becomes broader. But the ones jawjawing about takers and contributors don't like that. They'd rather keep the system and just slash the need for there to be things to contribute to (see: America, 2025).
And this is without getting into the points already raised about how narrow financial [income] tax in/services out views of the situation grossly oversimplify things and neglects social and cultural contributions etc.
swisstoni said:
I think it’s simpler than that. I take it to mean that you, as an individual, pay more money to the exchequer than you cost.
There are many jobs that create little or no value for the nation beyond the personal taxes paid by the employee. There are other jobs that create huge additional value.
Comparing people in those two different categories purely on the taxes vs benefits metric without considering value creation is just completely nonsensical!
What's the opposite of contributer is it taker?
Don't forget the little money this low paid 'taker' has is probably all spent into the economy on food, rent, beer etc. Some of this will include VAT going straight to the government and possibly some other taxes. All the rest will go to businesses we assume are making a profit. And it's the constant flow of money which helps prop up the economy. If these net 'takers' dissappear a big chunk of money going around in the economy dissappears with them.
Don't forget the little money this low paid 'taker' has is probably all spent into the economy on food, rent, beer etc. Some of this will include VAT going straight to the government and possibly some other taxes. All the rest will go to businesses we assume are making a profit. And it's the constant flow of money which helps prop up the economy. If these net 'takers' dissappear a big chunk of money going around in the economy dissappears with them.
Kermit power said:
swisstoni said:
I think it’s simpler than that. I take it to mean that you, as an individual, pay more money to the exchequer than you cost.
There are many jobs that create little or no value for the nation beyond the personal taxes paid by the employee. There are other jobs that create huge additional value.
Comparing people in those two different categories purely on the taxes vs benefits metric without considering value creation is just completely nonsensical!
Then it sounds a lot like someone just wanting to take exception to something.
Kermit power said:
I totally get people wanting everyone to make a fair contribution, but this flawed partial metric seems like an absurd way of trying to measure that?
In a welfare state with a 125bn yearly spending gap, the liberal view as you have proposed can no longer be afforded.Therefore, in the UK's current situation, the net contributor metric is not a flawed metric, it becomes the primary and only metric.
The only thing stopping it becoming so, is statistical illiteracy and political incompetence.
Run a 100bn tax/spend surplus and the view can return to a liberal one.
swisstoni said:
Kermit power said:
swisstoni said:
I think it’s simpler than that. I take it to mean that you, as an individual, pay more money to the exchequer than you cost.
There are many jobs that create little or no value for the nation beyond the personal taxes paid by the employee. There are other jobs that create huge additional value.
Comparing people in those two different categories purely on the taxes vs benefits metric without considering value creation is just completely nonsensical!
Then it sounds a lot like someone just wanting to take exception to something.
Where else would you take serious decisions on such incomplete data?
Carl_VivaEspana said:
In a welfare state with a 125bn yearly spending gap, the liberal view as you have proposed can no longer be afforded.
Therefore, in the UK's current situation, the net contributor metric is not a flawed metric, it becomes the primary and only metric.
The only thing stopping it becoming so, is statistical illiteracy and political incompetence.
Run a 100bn tax/spend surplus and the view can return to a liberal one.
This just shows that you've completely failed to understand the issue. Therefore, in the UK's current situation, the net contributor metric is not a flawed metric, it becomes the primary and only metric.
The only thing stopping it becoming so, is statistical illiteracy and political incompetence.
Run a 100bn tax/spend surplus and the view can return to a liberal one.
Using your logic, Worker A pays £5k in tax and claims £4k in benefits, so they're a net contributor and can stay. Worker B, on the other hand, pays £4k in tax and claims £5k in benefits, so they're a net drain and we want to deny them entry, yes?
Now let me tell you that Worker A is a gardener. If they weren't here, nothing would happen. Some people's gardens might get a bit overgrown before they find another gardener, but that's it. Worker B, on the other hand, is a nursery assistant. She looks after the little children of parents C, D & E who've been able to return to work now that they've got affordable childcare. Between them, they're now paying £28k in taxes and only claiming £2k in benefits.
Which one do you want to keep now in order to reduce the welfare burden?
Kermit power said:
swisstoni said:
Kermit power said:
swisstoni said:
I think it’s simpler than that. I take it to mean that you, as an individual, pay more money to the exchequer than you cost.
There are many jobs that create little or no value for the nation beyond the personal taxes paid by the employee. There are other jobs that create huge additional value.
Comparing people in those two different categories purely on the taxes vs benefits metric without considering value creation is just completely nonsensical!
Then it sounds a lot like someone just wanting to take exception to something.
Where else would you take serious decisions on such incomplete data?
While you are working that out, there has to be some straightforward ways of measuring things, however incomplete they are in isolation.
Kermit power said:
Carl_VivaEspana said:
In a welfare state with a 125bn yearly spending gap, the liberal view as you have proposed can no longer be afforded.
Therefore, in the UK's current situation, the net contributor metric is not a flawed metric, it becomes the primary and only metric.
The only thing stopping it becoming so, is statistical illiteracy and political incompetence.
Run a 100bn tax/spend surplus and the view can return to a liberal one.
This just shows that you've completely failed to understand the issue. Therefore, in the UK's current situation, the net contributor metric is not a flawed metric, it becomes the primary and only metric.
The only thing stopping it becoming so, is statistical illiteracy and political incompetence.
Run a 100bn tax/spend surplus and the view can return to a liberal one.
Using your logic, Worker A pays £5k in tax and claims £4k in benefits, so they're a net contributor and can stay. Worker B, on the other hand, pays £4k in tax and claims £5k in benefits, so they're a net drain and we want to deny them entry, yes?
Now let me tell you that Worker A is a gardener. If they weren't here, nothing would happen. Some people's gardens might get a bit overgrown before they find another gardener, but that's it. Worker B, on the other hand, is a nursery assistant. She looks after the little children of parents C, D & E who've been able to return to work now that they've got affordable childcare. Between them, they're now paying £28k in taxes and only claiming £2k in benefits.
Which one do you want to keep now in order to reduce the welfare burden?
But
Worker A spends all their income on Just Eat, Beer, Costa Coffee and Vaping so 20% goes straight back to HMRC
Worker B on the other hand goes to food banks and walks everywhere so basically spends nothing so they can send all their money back home to whichever 3rd world country of your choice
Now the maths gets more complicated
Kermit power said:
swisstoni said:
I think it’s simpler than that. I take it to mean that you, as an individual, pay more money to the exchequer than you cost.
There are many jobs that create little or no value for the nation beyond the personal taxes paid by the employee. There are other jobs that create huge additional value.
Comparing people in those two different categories purely on the taxes vs benefits metric without considering value creation is just completely nonsensical!
We are not talking about how to measure the contribution that people who live in Britain are making to society. It is accepted that some people do jobs that are necessary for society to function, but that don't pay enough to mean that they put more into the economic system than they take out. We need them.
The trouble is that the numbers are currently imbalanced. We do not have enough people who pay in to balance the amount that we are already paying out to others.
So the argument is that the new people coming here need to be on the paying in side of the equation. Which means that they make this imbalance better rather than worse.
You may disagree, but its a very rational and logical concept.
swisstoni said:
Kermit power said:
swisstoni said:
Kermit power said:
swisstoni said:
I think it’s simpler than that. I take it to mean that you, as an individual, pay more money to the exchequer than you cost.
There are many jobs that create little or no value for the nation beyond the personal taxes paid by the employee. There are other jobs that create huge additional value.
Comparing people in those two different categories purely on the taxes vs benefits metric without considering value creation is just completely nonsensical!
Then it sounds a lot like someone just wanting to take exception to something.
Where else would you take serious decisions on such incomplete data?
While you are working that out, there has to be some straightforward ways of measuring things, however incomplete they are in isolation.
Obviously this would only work for private sectors.
The other argument is that if a nurse saves a life, but is a net deductor? Does that make her someone we don't want in society?
Edited by MattsCar on Thursday 6th February 23:54
Kermit power said:
Carl_VivaEspana said:
In a welfare state with a 125bn yearly spending gap, the liberal view as you have proposed can no longer be afforded.
Therefore, in the UK's current situation, the net contributor metric is not a flawed metric, it becomes the primary and only metric.
The only thing stopping it becoming so, is statistical illiteracy and political incompetence.
Run a 100bn tax/spend surplus and the view can return to a liberal one.
This just shows that you've completely failed to understand the issue. Therefore, in the UK's current situation, the net contributor metric is not a flawed metric, it becomes the primary and only metric.
The only thing stopping it becoming so, is statistical illiteracy and political incompetence.
Run a 100bn tax/spend surplus and the view can return to a liberal one.
Using your logic, Worker A pays £5k in tax and claims £4k in benefits, so they're a net contributor and can stay. Worker B, on the other hand, pays £4k in tax and claims £5k in benefits, so they're a net drain and we want to deny them entry, yes?
Now let me tell you that Worker A is a gardener. If they weren't here, nothing would happen. Some people's gardens might get a bit overgrown before they find another gardener, but that's it. Worker B, on the other hand, is a nursery assistant. She looks after the little children of parents C, D & E who've been able to return to work now that they've got affordable childcare. Between them, they're now paying £28k in taxes and only claiming £2k in benefits.
Which one do you want to keep now in order to reduce the welfare burden?
Worker B is not being paid per se a market rate. Worker B is being paid a depreciated rate courtesy of a deliberately stimulated pool of low skill resource to do jobs that
1) should pay better
2) should therefore pay more tax
3) are not therefore appealing to the unemployed in locale
We end up in a bizarre scenario where what as you note is a high value job is underpaid because market rates suggest that a pool of labour can plug in and work for less. A market distortion.
If caring is the critical future of an aging society the pricing of remuneration has to reflect that. Currently it doesn’t and then you end up in the ludicrous position that these critical workers end up under paid, claiming benefits and soaking up social provision.
By admitting vast numbers of ‘key’ immigrants you are distorting the market and as a result not allowing an equilibrium to take hold. If a job pays well enough eventually the most work shy as well as the genuinely qualified will follow at which point reward and normality results: poor performance is penalised and good performance is rewarded.
That is not where we are now.
The obvious rebuttal is that means that cost of care for example increases: well yes that’s stupendously obvious. We have a 25 year bump to get through where care is just going to get more expensive because we are aging. Perpetuating the pyramid is nonsensical and allowing these idiotic distortions creates mad outcomes where carers are kept in poverty, are a net drain and service is terrible.
Allow the market to work.
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