Why do we care more about benefit ‘scroungers’ than billions lost to the rich?
theguardian.com
theguardian.com
1: http://www.nytimes.com/2003/01/12/opinion/the-triumph-of-hop...
It turns out that 12 percent of the population will find themselves in the top 1 percent of the income distribution for at least one year. What’s more, 39 percent of Americans will spend a year in the top 5 percent of the income distribution, 56 percent will find themselves in the top 10 percent, and a whopping 73 percent will spend a year in the top 20 percent of the income distribution.
https://www.nytimes.com/2014/04/20/opinion/sunday/from-rags-...
When you're looking at the "rich," income doesn't tell you very much, since most "rich" peoples' wealth exists in (and continues to accrue via) non-income vehicles.
If you earn a high income for only a few years, you won't have the extensive advantages (tax havens, etc) of the truly wealthy, and you certainly won't have all of the hereditary wealth squirrelled away into offshore accounts and invested into capital that's busy appreciating.
> Although 12 percent of the population will experience a year in which they find themselves in the top 1 percent of the income distribution, a mere 0.6 percent will do so in 10 consecutive years.
When you ask someone whether they will one day be in the top 1%, I don't think they are interpreting that question as "will you be there for a brief moment?" The question implies some level of permanence. So 38.4% are fooling themselves.
You attribute that to false optimism, but where's the actual evidence?
Here's a more recent article, backed by empirical studies (you can buy the books if you wan't to): https://www.aei.org/publication/evidence-shows-significant-i... .
And the standard point that Thomas Sowell has been making for decades:
An absolute majority of the people who were in the bottom 20 percent in 1975 have also been in the top 20 percent at some time since then.
This fixation/hatred towards the 1% or 0.1% is really not something most people I know care about, at all. They may not articulate it this way, but they don't see the economy as a zero sum game. They don't see Steve Jobs making billions as something that keeps them from making tens or hundreds of thousands, or even millions if they were fortunate.
I dunno, that's pretty sad. Maybe I'm showing my age, but that used to be the expectation, not the dream. The American Dream is (or used to be) extraordinary economic mobility--making it big. How far we've slid where now the American Dream is merely "a decent life".
https://en.wikipedia.org/wiki/American_Dream
>For many in both the working class and the middle class, upward mobility has served as the heart and soul of the American Dream, the prospect of "betterment" and to "improve one's lot" for oneself and one's children much of what this country is all about. "Work hard, save a little, send the kids to college so they can do better than you did, and retire happily to a warmer climate" has been the script we have all been handed.
Essentially, the American Dream is the idea that hard work and dedication will result in a better life for yourself and your children. It has nothing really to do with "making it big."
I lived in soviet block as a kid and everyone had this defeated attitude which is such a contrast to american optimism. Although, things are changing in America now, more and more people feel hopeless and defeated here too.
If you 'make it' (produce something that brings great worth to society) first then you're welcome, IMO, to use a little more than your fair share of resources. You don't get to do it the other way around as the majority of Western society appears to be doing (other regions maybe are too, I don't have an informed view on them).
The problem is that it's not true. A majority will never be rich, and a disappointingly high number of people will only ever barely scrape by.
Do you really think most people are unaware of this basic fact?
If my child wants to be a billionaire, should I say "Sweetie, you probably won't be a billionaire, so don't get your hopes up." Or should I say "it'll be tough, almost impossible, you'll need to work hard, study hard, be smart, etc."? I know which lesson I'd prefer to give.
It's fine to strive to achieve as much as possible and earn a bunch of money, but the core of the issue highlighted by that quote about "temporarily embarrassed millionaires" is a sort of class-affinity with the rich that is unwarranted for most people.
Likewise for the very poor. I hope to never be very poor, but I still wouldn't vote for systems that mistreat or exploit them. This is not because I'm trying to protect myself in the circumstances that I become destitute, but because I think morality requires the consistent application of principles to people regardless of their economic wealth.
― Ronald Wright, A Short History of Progress
Commonly misattributed
Perhaps we should consider that those without means have little expectation that they will be able to successfully extract favor from an organization that doles out trillions for broken fighter jets that are intended to kill people of color in distant lands.
The bottom 10% are wealthier than the top 10% were 100 years ago.
I think most people just have this plan of working hard until 65. They're deeply unhappy with this. They sacrifice joy, comfort, relationships, and family to live this dream of survival. They value others who suffer similarly.
Benefit scroungers have some level of comfort without the hard work.
I don't even tell people I live comfortably freelancing anymore because people have such a negative perception of it. I may work 20 hours a week at double the effort but all people see is that I'm being lazy for not doing a full 40 hour week.
Whereas people have this perception of a rich person working weekends, waking up at 4 AM, getting divorced to make their company work. And so people empathize more with the corrupt rich.
However, looking at the simple finances of it (because that's what actually impacts public services) tax evasion is about 30 times bigger a problem than benefit fraud.
I think that's a reasonable explanation, but I don't understand how anyone would think all it takes to get filthy rich is hard work.
I find that especially hard to understand relatvie to the UK society (which the article is about), where there's still a class of hereditary rich people (e.g. the queen, who I think owns the largest amount of property in the country, though I might be wrong). On top of that, the culture reveres people who "made it" without any particular merit- like entertainment stars.
If they want to identify a parasite class in society, they should be looking up, not down.
Seperating ourselves into contributors and scroungers is self deception at every level. It makes it impossible to set tax or benefit levels that people will consider "fair". Everyone feels a sense of grievance and gets to be angry at other groups. Greate for pushing a political agenda!
But I wouldn't describe any of them as particularly hard-working.
That's feel-good nonsense.
But when a faceless corporation we've never heard of hides umptillions in a place we've never heard of, somehow the impact is lost. Ask an average joe on the street the difference between a million, a billion and a trillion and you will be answered with shrugs. We don't see how that money flows from one holding company to another and we fail to connect that to the broader economy, and this illusion has been perpetuated by hidden class of venal, remorseless, well-educated and very smart mercenaries beholden by law and their shareholders to accumulate every last speck of capital.
This state of affairs is not new in America- Kurt Vonnegut recognized the phenomenon 50 years ago https://www.goodreads.com/quotes/158414-america-is-the-wealt...
Scroungers are just taking and draining the system even if it's a "smaller" amount.
> less than half (48%) thought that legal tax avoidance was “usually or always wrong”.
> By contrast, more than 60% of Britons believe it is “usually or always wrong” for poorer people to use legal loopholes to claim more benefits
I think there are two reasonably simple explanations here:
First, I don't know what a legal loophole to claim more benefits is - either you qualify for a given payment, or you don't. Perhaps I'm not paying attention, but I don't recall having heard much debate on legal benefits loopholes, just regular fraud. There's a risk that some portion of respondents heard "fraud", even though the question was about legal loopholes.
The other factor is that there is a significant moral difference between arrangements for paying less tax on money that you legitimately earned, and arrangements to receive more money that you didn't, but which are provided to you to help you become your situation is considered precarious.
Yes, there are people (legally) receiving unreasonable amounts of income that they didn't "earn", in many cases from public budgets, directly or indirectly, through various kinds of cronyism. This, not which rate of tax is paid on such income, is unethical, basically a crime, but I believe that the way to deal with it, is in a first class way, not through the tax code.
Isn't that the point? People see tax avoidance but don't see it as fraud; people see legal benefit maximisation and see it as fraud.
> First, I don't know what a legal loophole to claim more benefits is - either you qualify for a given payment, or you don't.
A benefit claimant's benefit is paid by the secretary of state for the department for work and pensions. That person is obviously busy, so they employ decision makers who sit in benefit centres across the UK.
There's no way to interact directly with a decision maker. You can only ever interact with them via forms and postal letters, and those letters and forms go through an intermediary.
A decision maker looks at the details of the person's claim. They apply the various acts, statutes, statutory instruments, and case law to the person's claim. All that law is scattered across various places, and so decision makers have a couple of handy guide books.
These are available online.
https://www.gov.uk/government/collections/decision-makers-gu...
https://www.gov.uk/government/publications/advice-for-decisi...
The advice for decision making is for:
> DWP decision makers now use Advice for decision making (instead of the DMG) for decisions that involve:
> Universal Credit
> Personal Independence Payment contribution-based Jobseeker’s Allowance and contribution-based Employment and Support Allowance for people who are eligible for Universal Credit
I think all the rest use the decision makers guide.
Have a look at the guide. Have a look at the page numbers listed in each volume. The decision makers guide is 14,000 pages (fourteen thousand) long. And there's no index.
It's impossible for ordinary people to work out if they're really entitled or not to a benefit. And the quality of decision making is, frankly, piss poor.
https://www.theguardian.com/commentisfree/2017/oct/30/stagge...
here's a judge from a first tier appeal panel saying the decision making is terrible: https://sirhenrybrooke.me/2017/11/08/poor-decision-making-pe...
So, a legal benefit loophole might be a skilled benefits adviser who helps claimants make claims by helping them fill in the forms and gather evidence, and then helps them attend the independent medical assessments, and then helps them write the letter for mandatory reconsideration and then follow up with an appeal.
And so the survey accidentally, implicitly ends up comparing "legal tax avoidance" with "benefits fraud" which is apples to oranges. If the questions instead had been "working with your accountant to minimise you tax liability in legal ways" vs. "working with your benefits advisor to make sure you receive the benefits you legally qualify for", I suspect the result would have been different.
If you want to write the article the author actually did, the more relevant question would probably have been "tax fraud" vs "benefits fraud". I'd be curious to know what those numbers are.
Focusing on the "scroungers" is a way to hate what you are afraid of becoming, or what you sacrifice to avoid.
The money is coming from somewhere. It may be free to you, but it's someone else's money.
If someone proposed a policy where everyone who makes under $1M gets a free sandwich, that everyone who makes over $10M pays for, the only people who sensibly should be against it are people who make over $10M or people who think they might one day make over $10M. Nobody else would ever have to pay for it--why would they be against it?
It's the flaw in democracy that I'm surprised has taken this long to come about. People are inherently greedy, as you are pointing out, and will generally vote for whatever candidate will benefit them the most. They don't care about how it will effect the economy or where the money would come from, just that they get it. And with how hard it is to remove entitlements once they're passed, it's a constant snowball.
How would this be a bad thing?
I agree it's harder to criticize a benefit when you receive it, but people still do that all the time.
There's plenty of lost nuance in this view, but if you try to empathize with people who feel this way - it's not hard.
The reality is we have had a rather rabid right wing press for some time, this has led to some people having a distorted view on these things. There was a survey recently which asked people how much is lost to benefit fraud, the answer people gave was 25% when the reality is 0.7%. I don't know about the costs but I can imagine you couldn't get lower than that without spending more than the return.
I try and empathise with their attitudes but I don't want it affecting policy.
Also quite apart from fraud there are peversely generous incentives for people not to work, and thus we end up with the spectacle of multiple generations having never worked, and having no intention to do so.
Multiple generations never having worked: very rare, this is a common piece of anti-benefit propaganda that's rarely rooted in fact. https://www.jrf.org.uk/report/are-cultures-worklessness-pass...
There is no test for having worked your whole life needed to get an old age pension. Unemployment benefit claimants get a National Insurance stamp.
Isn't there? I think that you need to have shown at least 10 years of national insurance contributions to get the pension: https://www.gov.uk/new-state-pension/your-national-insurance...
Granted, 10 years is not "your whole life", but there is a test.
You may get National Insurance credits if you can’t work - for example because of illness or disability, or if you’re a carer or you’re unemployed.
No there are not, and claiming such shows how ignorant you are of the current benefit system.
Name one situation where someone is better off on benefits.
Generally speaking, the complaints tend to be tribal oriented. I wouldn't be surprised if tribal-type attitudes are involved in the Guardian poll (eg a sample person might think tax loopholes as themselves sneaking in less taxes, but might think of benefit loopholes as others stealing money that comes out of their pocket.)
The thing is that, though, I feel that a lot of these people actually do care about the "billions lost to the rich" too. With this recent round of populism, there indeed has been a strong "anti-elite" sentiment. Unfortunately, too often, the "anti-elitism" is masked in the same sort of tribalism that typically fuels a lot of anti-benefit outrage, so it's not necessarily focused (MHO) on the right places that it should be. But it's there.
The 'scroungers' however are draining real resources for nothing apparently in return. Not that they can provide anything because there aren't sufficient jobs for them.
In other words they are not 'scroungers', they are just the 1 in 20 people who can't get a job under neo-liberalism because it requires about 5% permanently unemployed to control inflation.
What we do get annoyed about are the 'idle rich'. Those who appear to get their money 'for nothing' the same as the 'scroungers' and then flaunt it by buying expensive stuff.
There is no reduction in public service capability by the rich having vast sums of money 'offshore'. The government is never short of money - as they demonstrate everytime somebody they don't like needs bombing, or a set of new nuclear submarines need purchasing.
How someone got their money is irrelevant, but it's much better for the economy that they spend it, even on garbage, than let it sit in a brokerage account. Every person with a trust fund spending $400k on an Aston Martin is sustaining (not creating) jobs and distributing wealth to some degree.
Generally it isn't - because that tilts the economy towards producing goods and services that are wanted rather than those that are needed. Trickle down has been shown over the last 30 years to be largely a myth.
For example if you have public healthcare and private healthcare and there is a shortage of doctors then the wealthy "crowds out" the public healthcare system by purchasing private healthcare. Essentially they are using their wealth to jump the queue. Like the 'priority queue' at a theme park.
What about the externalities of destruction of the environment due to consumption?
Who has the authority to define what is needed?
Assuming you're in favour of a modern democracy, rather than a technocracy, an epistocracy, or the wild west.
> Assuming you're in favour of a modern democracy, rather than a technocracy, an epistocracy, or the wild west.
This argumentation is pettifoggery.
Very often on the asset side of a foreign central bank which they then use to discount into their own currency (hi China)
Even low and zero interest savings accounts are used by banks to back loans.
So for example, when someone buys gold or bitcoin, they are isolating that money from the productive economy. When they buy a share of a business, they are participating in the financial backing of that business (they generally aren't actually directly contributing to the business, but the business can do some types of business against its value on the stock market).
Only if banks have more lending opportunities than deposits, and that hasn't really been the case, (depending on which country we're discussing) since the crisis.
No. The loans are made out of nothing. Saving is the end of the loan process, not the beginning. That has been made clear by the Bank of England. http://www.bankofengland.co.uk/publications/Documents/quarte...
I suspect what parent is talking about is the rentier class that has grown substantially in the UK over the last decade. 10% of the population now own at least one rental property.
Also these people need to answer what they think about infrastructure bonds, which is more or less the same as renting a home.
This isn't buying land and building homes, it's about people leveraging their existing housing to out bid people just looking for a home.
This has led to the age of a first time buyer reaching 32 and left many people with a precarious housing situation.
So yes, there is something wrong with it.
Obviously military expenditure is a problem, but so are effective corporate tax rates of 2% and the 0.01% storing vast sums of wealth in brokerage accounts.
This is why it doesn't matter (to the government-owned bridges at least) what some number in a brokerage account shows.
https://theintercept.com/2017/10/03/donald-trumps-disgusting...
The problem is US politics, not the US dollar.
http://beta.latimes.com/opinion/op-ed/la-oe-kelton-pony-for-...
There is a reduction. The U.S. government runs at a deficit. Thus money is borrowed and thus interest is paid on the borrowings. This reduces public service capability since the government's borrowing capacity is finite. Plus this borrowing is in some sense a robbing of future generations.
There has never been a time in the last 150 years in which unemployment was 0%. What does having a percent of the population unemployed have to do with neo-liberalism?
Here's an explanation of how things actually work, from an actual economist: http://beta.latimes.com/opinion/op-ed/la-oe-kelton-pony-for-...
This is a strawman. While technically correct, it's completely ignoring the fact that NEW money entering that 'offshore' state is taxed extremely low and is thus in fact draining the system.
Religious conservatism is the haunting fear that someone, somewhere is getting something they don't deserve.
Also it’s clearly just meant to be a witty statement and not to be taken as a formal definition.
>"Based on my interactions with conservatives in the U.S. who are religious [...]"
This strongly implies you only find the given characteristic, greed, amongst the religious subset of conservatives.
I was thus enquiring so as to establish whether, for example, you found all those without religion to be devoid of greed. You strongly implied it was only non-religious conservatives who were immune to greed; do you care to comment on those who aren't conservative, do you find the same result.
Of course my question was loaded: I expect your position to be based primarily on prejudice rather than science but would be happy to be corrected.
FWIW I'm not religious, not conservative, not USAmerican, but am often greedy.
When I say that religious conservatism is the haunting fear that someone, somewhere is getting something they don't deserve, I am defining a characteristic of the set of people who are religious conservatives. That set of people may have other characteristics and, here's the important thing, the set of people who have the haunting fear that I described is itself not described. Other people may have this same haunting fear and not be religious conservatives. I have merely posited that the set of religious conservatives is a subset of the set of people with the aforementioned haunting fear. A Venn diagram may be useful.
If I had said that one has the haunting fear if and only if they are a religious conservative then you'd be correct in your interpretation. But I did not say this. I did not make any claims about non-relgious conservatives or any other group. Therefore any conclusion on what I believe about these other groups is not logically supported by what I wrote.
Again, clearly the statement was merely an attempt at wit and not meant to be taken literally. It's hyperbole.
Now if you did like Mohammed-bin-Salman and paraded with the most brazen tax evaders payment morale at the top would increase quickly.
Perhaps there is something deeper and there is research between tax revenue and suicide due to being found fit for work, but they didn't cite any research - anyone seen any?
If you say "so and so company avoided paying 1 billion in taxes so all of us will have to pay it instead" that means nothing to them.
When someone claims that extra £30 a week we feel it's our money because we can visualise it in our minds.
When a rich person finds a way to not pay tax, it feels more like it's their money to begin with and it is taken from them, and we ourselves wouldn't like to lose out on millions.
I think this is it. Even being on benefits in the first place is considered scrounging by some.
I'd much rather see someone on minimum wage manage to get a free medical card than someone making £100k a year find a way to avoid paying tax on their holiday home. I find it hard to believe I'm in the minority.
UK gov has been cutting disability benefit, but it turns out they've been underpaying by maybe 0.5 billion.
If the poor don't trust the government, even the poor will agree that the rich should pay less taxes.
I really believe that's how things lead to anarchy.
This article is basically just hating on the rich people.
I think it's rather easy to understand what this author is puzzled by: people want to keep their money. If you've earned your money and you want to keep it, I can empathize with you. If you think you deserve to take other people's money, I can't empathize with you.
Do you "empathize" with the person referred to as "PH" there? Why not?
If you think about it actually more reason to hate on free loaders. They cause tragedies like this.
We know this from the number of people who are working and claiming benefit. (I think these now outnumber people not working and claiming benefit).
For how long do they claim benefits?
This could actually be a bad sign.
But people in work who do over sixteen hours per week and who are claiming eg working family tax credits are not free-loading.
This is one of the mechanisms that's designed to get people back into work. There's a benefit cap in place, and that cap is removed if you work more than 16 hours per week.
There are some very strange situations in the UK at present - for example when a person would actually be worse off by going out to work, or when someone's (viable) career plan involves having a child in order to get a house and benefits.
Given my political views I'm consoled by the fact that the level of welfare spending is unsustainable in the long term. The UK is already going deeper into the red every month, despite supposed austerity.
Is this actually possible? People claim it happens a lot, but without being specific on what they mean. Note that most UK visas involve "no recourse to public funds" https://www.gov.uk/government/publications/public-funds--2/p...
> the level of welfare spending is unsustainable in the long term
Reducing this means either an expansion of employment in run-down areas like Blackpool, or reducing benefit levels and hoping that people die quietly.
http://www.ucl.ac.uk/news/news-articles/1117/161117-austerit...
>Reducing this means either an expansion of employment in run-down areas like Blackpool, or reducing benefit levels and hoping that people die quietly.
Not reducing means that the country eventually goes bankrupt. And then there won't be any benefits for anyone at all, will there? To put it another way, if your principle holds true, why don't we just increase benefits until they are 100% of the economy?
http://www.housing-rights.info/02_4_EEA_workers.php#housing-...
https://www.gov.uk/government/news/new-rules-to-stop-migrant...
There are other ways of closing the gap, such as addressing tax avoidance. It's not that the UK is a poor country, but it's an increasingly unequal one. And a lot of the Crown dependencies operate as tax havens.
You honestly think that tax avoidance is the cause of the deficit?
Point is, it's not an either or. Let's follow up whatever ways we can find of eliminating the deficit - it's still utterly shameful and wrong that someone should be able to get themselves pregnant and be supported by the state in relative comfort whilst someone that has paid in for decades is refused housing. Your defence is to avoid addressing this and instead deflect by talking about generalities.
> "get themselves pregnant"
I hadn't realised there was such a problem with parthenogenesis among women in this country, that pregnancies were happening without men being involved at any point.
So, what's your solution? Mandatory abortions? Divorce ban? Women with babies in homeless shelters? Living in cardboard boxes on the street? What's an acceptable fatality rate for the children in this scenario?
I'm talking about specifics, the extremely brutal ones of what exactly is required for people to remain healthy in these circumstances.
A person presents at the benefit office holding a baby. She is homeless. What specifically should the response of the system be? What questions to ask? Why? What outcomes are acceptable?
THIS DOES NOT HAPPEN.