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Comment by jbjbjbjb | Hacker News Reader

I think he massively misses the mark. If you look at Britain’s actual problems they’re not due to a lack of tax revenue or “the rich”. People aren’t able to save because their money is spent on housing and energy - both of those are due to poor policy.

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Yeah, the housing market is completely broken.

I feel more optimistic that the energy issue will be solved with a shift to nuclear and renewables.

Housing just seems so hard to fix as so many people have a vested interest in not fixing it.

The purpose of tax is not to raise money to government, but to redistribute wealth. The government prints money to cover the bill of its expenditure. If it issued no taxes, then that burden would fall on all people through inflation, affecting the poor moreso than the rich. Taxes are an issue separate from spending that allows the government to move money down from rich to poor, and in doing so offset the inflationary effects of spending. This is why tax is a solution to rent. Rent is poor people giving money to rich people, and tax allows you to reverse that flow.

That’s just wrong on so many levels. If I look at just one error, inflation doesn’t affect everyone it is a tax on savers ie the rich. Wages and prices go up with inflation (prices by definition), but cash and savings go down in real terms.

Look around, bro. Hard assets get more expensive and return on those assets don’t decline. Thats why studio apartments are $1200/mo in Buffalo, NY. Lol

People with money pretty readily deploy that money into investments that beat inflation.

Sure but rich people also have lots of cash and bonds, at least more than the poor. Poor people don’t have either, their best inflation hedge is borrowing.

Rich folks don’t keep their money in savings accounts. Rather real estate and securities, which scale with inflation.

The global bond market is bigger than the global equity market - look it up. It’s held by someone and it ain’t poor people.

Bonds can respond to inflation in a few ways. Tips, shorter terms. If you locked in a low rate, long term, yes.

You could do floating rate notes too. But fixed rate bonds are by far the largest portion of the bond market and cash on hand is always a big component.

debt goes down in real terms

but "tax on savers ie the rich"

rich normally are rich enough to protect their savings from inflation. e.g. by putting it in an effective monopoly - land or housing (housing is a monopoly if you also are rich enough to have some influence on what / where houses are built / not built)

The purpose of tax is to free resources from the private sector so it can be purchased at non-inflationary prices (as well as driving the currency). The actual financial operations of the UK make it clear that taxes at the national government level are not used for paying for anything, as you rightly point out: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=4890683

Where does all the money they spend on housing & energy go.

Housing and energy could both be dirt cheap and the money would still go to rich people. The problem from a living standards point of view is the cost which is due to a lack of supply. Get the cost down and poor people would be able to save and buy assets and become wealthy.

Buy from who? If costs would be cheap, who would want to sell assets?

If costs would be cheap then the owner bought them for cheap as well so wouldn't need to sell for much to make profits.

The deadlock today comes from people needing to sell for much since they are bound up by massive loans, but that could have been avoided.

> People aren’t able to save because their money is spent on housing and energy

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> Housing and energy could both be dirt cheap and the money would still go to rich people.

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So the working class is being forced to give the wealthy all of their money. On prices set by the wealthy and coupled with policies encouraged by the wealth. And if the wealthy just stopped being so greedy and took a small hit, everything would be fine. And the wealthy aren't the problem?

My problem with “it’s the wealthy” is it is just nebulous and not thought through - typical populist rubbish. Whereas the stuff I’m talking about like the planning and energy infrastructure are very direct and would actually make a difference. We could revisit the green belt, upzone areas in London, set much larger minimum house sizes. We’re miles behind on energy infrastructure and infrastructure is just more expensive here because we allow the cost paperwork to get into the hundreds of millions. If you look at France they have cheaper energy, cheaper homes and more housing supply and much much more people owning second homes. So again it’s not the rich it is our crappy policies.

A fair chunk of the energy spend goes to multinationals and ultimately sovereign wealth funds. The housing goes to rentiers: banks for the most part, but also landlords and other investment entities that are living nicely off the income without having to do very much - parasites in other words.

Ding ding ding. Western governments have spent years on housing and energy policy driven by ideoogical concerns, when a technocratic approach would have been much more productive. Yes, this includes things people may not like, especially environmental or 'social justice' groups.

>Yes, this includes things people may not like, especially environmental or 'social justice' groups.

They tried that before and got The Aberfan disaster, Newgate Prison, and child labor.

"Trust me baby, I've changed!"

In any governance system, there's going to be extremely bad outcomes. In and of themselves, they are not reasons to abandon the systems altogether.

Nonsense. When the gas crisis hit, a lot of people with badly insulated houses (Britain fares quite badly here) were hit very hard and whining while the ones with insulation and solar panels were laughing away. House price is mostly related to taxation and land availability. Local politicians like to constrain land availability to keep their own houses priced up.

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