From: halpin@vax.oxford.ac.uk
Newsgroups: uk.misc
Subject: Re: Private Health (was Transport subsidies - Was: Car Parking)
Date: 14 Dec 92 20:14:45 GMT
Distribution: uk
Organization: Oxford University VAX 6620

In article <T6BkVB12w165w@mantis.co.uk>, mathew@mantis.co.uk (mathew) writes:
> halpin@vax.oxford.ac.uk writes:
>> M Holmes (fofp@castle.ed.ac.uk) writes:
>> > If 70% of my current earnings go on taxes (which is my estimate, though
>> > it's probably an underestimate), then without the government taxgrab I'd
>> > be earning 100/30 times as much.
> [...]
>> OK, for the sake of argument, 70% of your gross income goes on tax
>> of one sort or another. 
>> 
>> But your gross income is completely notional: you never see it,
>> it's not what your employer pays for you to work for him, and it is
>   ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
>> not what you would be paid in the absence of tax[grab].
> 
> Sorry, but where does the money come from that the government takes out of my
> wages, if not from my employer?  Are you suggesting that the government gives
> my employer money to give to me, so that they can take it away again?  If so,
> surely that's another excellent argument for reducing the tax grab?

Your gross income exists only on your payslip - it's *notional*, an
accounting device. Your employer pays *more* than that for you to
work for him (Gross + employer's taxes + fringe benefits + coke
machine for the programmers + costs of space + ...) and he'd pay
you something completely different if there were no taxes.

 
>> If you hold everything else constant (impossible, but this is
>> economics :-) ) your "market" wage will fall somewhere between your
>> net and gross wages (plus employer-paid taxes).
> 
> If my employer is paying less tax, and I'm paying less tax, where are you
> suggesting that extra money will disappear to?
> 
>>                                                   And given the
>> disproportion in market power between individuals and companies,
>> it'll probably be closer to your current net wage. (If you work for
>> X pounds now, why should he pay you more after the Propertarian
>> Revolution?)

I'm psychic! I gave the answer before you asked the question :-)
(i.e. he'll get most of the extra money, not you).

>> But without government-provided services, the patterns of costs (to
>> you and your employer) will be different. What your employer gains
>> in taxes he may lose in tolls, and therefore have no extra surplus
>> to pass on in wages
> 
> Look, money doesn't appear from nowhere, nor does it disappear into nowhere. 
> Unless you believe that government is necessarily the cheapest way of
> providing services *and* that it can only provide them if it has a monopoly,
> then there has to be a gain by reducing government.

There will be a probably be a net gain in "efficiency", but not the
70% I (mis- ?) read fofp to suggest as a ballpark figure. There
will be other social costs. (Note the "*may* lose in tolls" above.)

> To put it another way: Yeah, maybe badly-paid computer programmers living in
> Cambridge would suffer temporarily because they are secretly leeching from
> the taxpayer.  I'm willing to take that risk.

I'd like to suggest a correlation between likelihood of benefitting
from a propertarian-type society and support for free-market       
ideology, but that'd be (a) inflammatory and (b) a
less-than-adequate explanation...

Cheers,

Brendan
(whose Netnews reading is down by a factor of c. 10 because of
thesis overload...this explains the delay in replying
 - and who would appreciate an e-mail copy of any followup because
uk.misc can't be a high priority anymore...)

Brendan Halpin                    Email: HALPIN@VAX.OXFORD.AC.UK
Nuffield College                  Phone: +44 865 278642 (work)
Oxford OX1 1NF                                   726758 (home)
United Kingdom                    PGP 2.0 key on request