Ethical Subsidies

[JohnD]

I am thinking of saving some money in a cash ISA. This means I will receive the interest tax-free. Would this be unethical, since by avoiding paying the maximum amount of tax, I am reducing the government's income, and therefore taking bread from the mouths of the poor?

 

[echoes]

The government will get their cut one way or another, sooner or later, to be spent wisely on behalf of a grateful nation.

You wouldn't have to look too hard to find a bank which will pay high interest rates to large deposits, subsidised by excessive charges to those with low balances.

 

[JohnD]

So would it me immoral for a wealthy person to accept high interest from a bank, knowing that he was being subsidised by profits taken from the poor?

 

[bernardgreen]

No more un-ethical than a rich person investing in PV solar panels and as a result getting monetary benefit from the hard earned money that poor people are using to pay their electricity.

 

[echoes]

Maybe - especially if the bank could operate to the same profitabilty via other means.
But then healthy banks can make a healthy economy which benefits everyone long term (or so we are led to believe).

 

[JohnD]

Perhaps we should open an Ethics section to discuss examples of unethical behaviour.

Why haven't I seen Ban's tirade against savers yet?

Is it ethical for the National Lottery (largely funded by the hopeless dreams of the poor) to subsidise the recreations of the rich, for example the Royal Opera House?

Is the immorality greater, less, or the same whether the poor are fleeced through taxes, utility bills, or scratchcards?

 

[echoes]

Is it ethical for the National Lottery (largely funded by the hopeless dreams of the poor) to subsidise the recreations of the rich, for example the Royal Opera House?

At least the lottery is a voluntary tax paid disproportionately by the poor, the stupid and the hopelessly optimistic. I sleep easy waiving my unlikely opportunity to become a millionaire every week/day/trip-to-the-newsagents. I have no objection to those that partake though [except when I have to queue up behind them]!

 

[wotan]

Perhaps we should open an Ethics section to discuss examples of unethical behaviour.

Why haven't I seen Ban's tirade against savers yet?

Is it ethical for the National Lottery (largely funded by the hopeless dreams of the poor) to subsidise the recreations of the rich, for example the Royal Opera House?

Is the immorality greater, less, or the same whether the poor are fleeced through taxes, utility bills, or scratchcards?

Where do you get this notion that opera is only for the rich? I love opera, and have been to Covent Garden on several occasions, I am certainly not rich.
It's dangerous to generalize.

Wotan

 

[JohnW2]

I am thinking of saving some money in a cash ISA. This means I will receive the interest tax-free. Would this be unethical, since by avoiding paying the maximum amount of tax, I am reducing the government's income, and therefore taking bread from the mouths of the poor?

Goodness, a thread which is off-topic from the very start

If we're talking financial philosophy/morality, one question to ask is whether it is actually ethical (or even reasonable) for a government to levy tax on the interest earned when one chooses to invest money that has already been subjected to taxation (which is inevitably the case, unless the money was acquired unlawfully!). Put another way, no-one (not even the poor) would benefit if one chose not to invest that already-taxed income.

Kind Regards, John.

 

[Stoday]

Ballet too

The BBC ought to screen all the subsidised operas and ballets.

It's particularly unfair that, in a typical year, several operas get screened, but only one ballet if we're lucky.

 

[Paul_C]

If we're talking financial philosophy/morality, one question to ask is whether it is actually ethical (or even reasonable) for a government to levy tax on the interest earned when one chooses to invest money that has already been subjected to taxation

Or whether it's any more ethical to levy a tax on the money when it's earned, then levy another tax (VAT) when it's used to buy something else.

It's also a question to ask as to how ethical it is to charge a tax on a tax directly. For example, if you import an item which is subject to both duty and VAT, you don't pay each tax separately as the specified percentage of the item's value, but instead the duty is added to the value of the item, then the VAT is levied at the going rate on that total, so you are paying VAT on the duty as well. The same applies to the fuel you pump into your car: First the duty is added (at an extortionate rate), then the 20% VAT is calculated from the total, not just from the original price of the fuel alone.

If you want to look for unethical financial tactics, I think the government will provide numerous such examples.

 

[EFLImpudence]

I am thinking of saving some money in a cash ISA. This means I will receive the interest tax-free. Would this be unethical, since by avoiding paying the maximum amount of tax, I am reducing the government's income, and therefore taking bread from the mouths of the poor?

You've obviously never thought about how the system works.

 

[sparkticus]

The government won't lose out. They will get it all back when you buy a few litres of petrol

 

[JohnD]

You've obviously never thought about how the system works.

I have certainly thought about Ban's objections to subsidies on solar power, which appear to be based on moral or ethical grounds.

I am considering the possibilty that other subsidies might also be unethical.

 

[JohnW2]

Or whether it's any more ethical to levy a tax on the money when it's earned, then levy another tax (VAT) when it's used to buy something else.

It's almost a play on words since, if one accepts that the goverment needs the revenue, and given that the great majority of (taxed) disposable income is spent, then the most likely alternative to VAT would be an 'equivalent' increase in income tax rates (particularly those for higher earners) - probably better, since it would remove all the costs of admninistering VAT. There are obvioulsy potential argumenst about the pros and cons in relation to the differential effects on the 'poor' and the 'rich'.

Tax on investment income is particularly odd in philosophical terms, since it specifically, and only, applies if the return one gets from an investment is in money. If one 'invests' spare capital in, say, fruit trees, farm animals or even (if I dare mention them!) PV panels or wind turbines, then one does not have to pay tax on the ongoing 'return' one gets from the investment (in the form of fruit, meat, milk or electricity), if one only 'consumes' it oneself.

Kind Regards, John.