Apr112017

Taxing the rich.

John Redwood MP
image_pdfimage_print

Here’s a surprise. I agree with the three main political parties  in the UK that we have to tax the rich. They are right to say most of the tax has to be paid by those with the higher incomes and with more assets.  All three main parties have been living high on rhetoric about taxing the rich and closing tax loopholes for the last decade, and all three in power have decided to put tax rates up and impose new taxes on the rich. It’s certainly worked. The top 1% of Income taxpayers pay 27.5% of all Income Tax, and the top 25% pay 75% of all Income tax paid.  44% now pay no Income Tax.

Some of this is not  socialism but  commonsense. There’s no point setting out to extract tax revenues from those who have little income and  no assets. Even the steeliest state tax tyrant knows you can’t get money out of those who do not have it in the first place.

The issue between socialism and commonsense is how you tax the rich, and by how much. Socialists want to tax the rich because they do not like them. They do not mind if they tax them beyond the point where they leave the country or to the  point where they are no longer rich enough to pay the extra taxes. Sensible Conservatives want to tax the rich because we want decent public services and understand it is the richer part of the country that has to pay for the bulk of them. We want to tax the rich in ways which will coax the money out of them we need for a decent society, without taxing them so much that they leave, stop investing, decide  not to participate fully in the private sector economy for fear of having to pay more. We believe in the power of aspiration. Many people who start out with no assets and little income aspire to have assets and a decent income. Too much tax can blunt aspiration or thwart ambition.

This poses two questions. What is the right rate for taxing income and consumption of luxuries? Tax at too high a rate and you will collect less revenue and do damage to the productive economy. Tax too high and the marginally ambitious for a better lifestyle will conclude it is too difficult. What is the right balance over taxing things the rich do which are usually thought of as a good if others do it, like buying a home or investing in a pension fund.?

It is clearly right that we will only have a successful economy if the rich share their surplus somehow with those on lower incomes. We rely on the rich to invest in businesses that will employ others, to buy luxury items and services which others supply, to redevelop our cities and build new buildings. If they do not spend and invest enough willingly, the UK economy may be impaired. Germany’s refusal to share her massive surplus with her partners in the Euro shows what misery large scale underspending and underinvestment can create if the rich surplus holder is too cautious.

Taking some of the money off the rich in taxes does ensure more of it is spent, as much of this money is given to people on lower incomes as benefits or in the form of public services free at the point of use. Take too much and you may get the opposite effect, as the rich go elsewhere or adapt their behaviour to an even more cautious private sector pattern. If a relatively well off person feels their tax rate is too high, they may well spend less to conserve what money remains.

In subsequent posts  I will look at what this means for the detail of tax policy on income and assets.

Apr112017

Ten dead in traffic accident in south China

East Asia
image_pdfimage_print

Ten people died and another was injured in a traffic accident Monday night in south China’s Guangxi Zhuang Autonomous Region, local police said.

The accident occurred at about 9 p.m. Monday on an expressway surrounding Nanning, capital city of Guangxi. Four vehicles including three trucks and a car were involved in the crashes.

The injured person has been sent to hospital.

An investigation into the accident is under way.

Apr112017

Expats’ dinner party on Shanghai subway criticized

East Asia
image_pdfimage_print

The photo has drawn criticism online. [Photo/ Eastday.com]

A group of foreign passengers are seen having a “dinner party” on Shanghai’s Subway Line 11 on April 7, 2017. The passengers placed a table in the aisle and held up goblets, eating and drinking wantonly inside the train.

The photo has drawn criticism online, as according to the Shanghai Rail Transit Passenger Code, it’s forbidden to consume food or drinks on subway.

The rule warns passengers that such behavior could affect the normal running of the trains because open liquids could spill over other passengers, and food debris would encourage cockroaches and rats, damaging the fabric and facilities of the subway tunnel.

However, the rules are only for guidance and are not legally binding. There are no specific penalties for violations at present.

Apr112017

Human-AI battle in Go scheduled in May in China

East Asia
image_pdfimage_print

AlphaGo beats South Korean professional Go player Lee Sedol in a game in March, 2016. [Photo/Xinhua] 

It’s been officially announced that AlphaGo will battle with top human Go players including the World No.1 Ke Jie next month in Wuzhen, east China.

Google along with the provincial sports authority in Zhejiang will hold a five-day AI summit in Wuzhen from May 23 to 27.

The event will also feature other Go games between human players with AI such as AlphaGo.

Ke Jie lost to AlphaGo twice previously in online Go games. The AI, using the pseudonym of Master, clinched 60 wins online against many of the world’s top human players, with zero losses.

Google’s AI system AlphaGo gained fame after it scored a landmark 4-1 victory over South Korean Go master Lee Se-dol in a five-round showdown in March 2016.

Go is an ancient board game originating in China, and is a game of strategy with an element of luck.

Apr112017

Press Statement

image_pdfimage_print

PRIME MINISTER:

Thank you, Prime Minister for your welcome. Your hospitality is as warm as it is magnificent. We are very honoured to be here at your invitation.

As you said, our two nations have so much in common. Cricket, of course, but we have a commitment to democracy and the rule of law, and you lead, sir, the largest democracy in the world. Indian historians have often described that India was an improbable democracy but it is the world’s largest. The success you have achieved is the wonder of the world. The largest democracy in the world, shortly to be the largest nation in the world, built out of so much diversity and you’ve achieved this remarkable unity of purpose and defying again skeptics, you’ve delivered a growth rate that is equally the wonder of the world, recognising that opening markets, deregulation, enabling businesses and individuals to pursue their own dreams, their own freedom,  is the way to deliver the prosperity upon which all depends.

Now, Australia has, Prime Minister, the resources and the expertise as we’ve just seen to make a very substantial contribution to India’s growth and development. Spanning education, training, science and innovation, our dynamic and growing knowledge partnership can be truly transformative.

We are already working together to harness the creativity and the drive of our best and brightest minds. Our flagship joint research fund, the Australia India Strategic Research Fund is Australia’s largest with any country.

It has helped our universities, research institutions and companies to solve the practical challenges in critical areas to both countries, including health, food security, and energy, as you’ve noted.

The Deakin-TERI Nanobiotechnology Research Centre, which we just inaugurated, and I might say Prime Minister, having been involved in the technology business in the past, I always approach any live demonstration with great anxiety. In the technology business they talk about the demo-God, which is a malevolent deity which generally makes sure that live online demonstrations don’t quite work, but that was brilliant and I want to say thank you to the Chancellor and Vice-Chancellor of Deakin University for allaying my concerns. So well done.

But this research centre will bring up to 100 researchers together to solve some of the world’s biggest problems in developing biofuels to early detection of crop diseases to improve productivity. And these are practical solutions with commercial prospects for both of our countries.

Likewise there is the potential to work with your government, Prime Minister, as you pursue your ambition to train 400 million Indians over the next few years.

Our world-class skills training system including train-the-trainer courses which are already piloted in five Indian cities can help India build scale quickly and open up opportunities for Australian training providers.

As you noted, more than 60,000 Indian students studied in our institutions in 2016, and I am committed, and we had a very fruitful discussion about this and Prime Minister you gave me a lot of great advice, you have made education and higher education such a passion from your time in Gujarat to now as Prime Minister of India, it was very, very helpful. We will continue to ensure that we provide outstanding opportunities for Indian students and also that Australian students learn more about India by visiting and studying here including through the scholarships and grants supported by my Government’s New Colombo Plan.

Our deepening collaboration on water management is supporting your National Water Policy by improving river basin planning and management, hydrological modelling and sustainable water use.

And I might say the management of water resources in India has been a passion of several prime ministers of Australia including one of our earliest, Alfred Deakin who made a study of the irrigation system in India a particular focus of his as he took learnings from that and set up the irrigation models for Australia.

Our know-how and resources are already partnering with India’s 24×7 Power For All, Smart Cities and Make in India programs, but there is room for further growth.

We’ve worked closely with India to meet our respective requirements for the provision of fuel for India’s civil nuclear program, and we look forward to the first export of Australian uranium to India as soon as possible.

Now, Prime Minister, you recognise that all Indians need access to reliable and affordable energy, and like us, you share a technology agnostic all of the above approach. Pragmatic. That’s exactly how we focus on the issue. So we are pleased to be providing increasing quantities of high quality coal for steel making and increasingly for power generation with advanced super critical technology. Like Australia, India is planning to increase its pumped hydro storage capacity and we look forward to sharing expertise in that vitally important part of the 21st century energy system.

And India, like Australia and many other countries is also advancing solar energy. Indeed, we believe that by next year, about 60 per cent of the world’s solar cells will use technology developed by Australian researchers. Solar energy offers lower cost distributed energy which is of particular importance in the developing world.

So I want to congratulate you, Prime Minister, for your global leadership in establishing the International Solar Alliance and I am very happy to announce that we will join that alliance.

Now, our trading relationship is delivering significant benefits to our respective nations. Last year two-way trade in goods and services was nearly $20 billion, more than double what it was a decade ago. But given the complementarities of our two economies, this is a fraction of the level it could and should be.

Now we are working with India to secure timely conclusion of a quality Regional Comprehensive Economic Partnership, the RCEP, which would provide a significant boost to regional confidence.

We had a very good discussion about the CECA, the Comprehensive Economic Cooperation Agreement between India and Australia and I think it is fair to say that we feel that progress has not been as fast as either of us would like it to be.

And so, as you said, we have asked our, we will ask our chief negotiators to schedule an early meeting to get the process moving. We will ask them to tabulate the areas of ambition where each side is seeking access so that we can see where and to what extent the parties, the negotiators are apart and they will report back to us as soon as possible so that we can keep the focus on delivering the CECA and identifying the areas where more work needs to be done.

But in the meantime, the wheels of industry go on and we are working to identify tangible, commercial opportunities to strengthen two-way trade and investment and this will be a particular focus of my visit to Mumbai later this week.

Finally, as you noted sir, our work together in the strategic and security spheres continues to gain momentum, through regular engagement across all three armed services and high-level talks with our defence ministers and officials.

As Indo-Pacific democracies committed to the rules based international order, we share interests on a broad range of regional and global security issues.

Building on the 2014 Framework for Security Cooperation, I hope that our new MoU on Combatting Transnational Organised Crime including International Terrorism will continue to strengthen this strategic partnership.

It will facilitate closer collaboration on counter-terrorism, cyber-security, people smuggling and human trafficking, money laundering and a tax on critical infrastructure.

And in addition, as you noted, we are working more closely together with our friends and partners in the region, including through the East Asia Summit and the Indian Ocean Rim Association.

In conclusion, thank you Prime Minister Modi for your personal commitment to helping us realise the full potential of the Australia India partnership. With our shared commitment and the passion, the ingenuity, the determination of our two nations, I have no doubt that our partnership will go from strength to strength.

[ends]