"Martyn Hodson" wrote in message
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"Cast_Iron" wrote in message
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Martyn Hodson wrote:
"Cast_Iron" wrote in message
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"Greg Hennessy" wrote in message
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On Sun, 21 Dec 2003 09:11:09 +0000 (UTC), "Cast_Iron"
wrote:


But if you reduce the tax burden surely you encourage
enterprise, which moves more money around the economy
and thus you still get your tax. I am not an economist,
but AFAIK there are still arguments about high vs low
tax . The rich will always provide you with more
revenue per capita as they're spending and earning more
cash.

That was Thatcher's theory, it didn't work.


Oh really ? That explains why the tax take increased by
nearly 50% when the 60% band was abolished.

It also explains why the top 10% of tax payers are now
paying close to 40% of the overall take compared to just
over 20% at the height of so socially equitable rates of
98%.



But they don't spend more cash. Everyone has certain
needs, once those needs are met their surplus cash sits in
the bank or wherever they choose to put it.

but that somewhere can include
direct investment in new business
investment in venture capital orgs
investment in banks, building socieites and other financial
services providers
all of which has a varying effect on job and wealth creation


It can, but the "filter down" effect that your alluding to and Thatcher
espoused didn't happen and hasn't happened yet to any significant
degree.

the 'filter down' effect applies to anyone working for privately owned
company ( in this context, working for a sole proprietor, partnership
co-op or limited company , rather than a state owned or publicily quoted
company)

as without investment from the owner/partners/ shareholders/ co-op members
there would be not business and no ongoign wealth creation would there ?



Perfectly true, that has been happening for many hundreds of years. However,
the dogmatists in the eighties would have had us believe that there was
going to be a sudden and massive increase in the number of businesses being
set up and that within a very short time everyone would be significantly
better off than hitherto. It didn't happen.