Odd that they want to try and get the political benefit from the announcement so early. Perhaps the plan is to call an election before April 2024 and campaign on the basis that Labour would cancel the tax cut?
Anything for anyone under 30 trying to get on the housing ladder?
Nope, no surprises there then.
Tell it to the Bank of England. Interest rates are their domain thanks to Gordon.
You know Robespierre was not on the committee for public security? He did appoint everyone to it, and they had a chat with him regularly, but he didn’t make the decisions, BoE today, and reign of terrors committee for public security were all as independent as the BBC is today.
Odd that they want to try and get the political benefit from the announcement so early. Perhaps the plan is to call an election before April 2024 and campaign on the basis that Labour would cancel the tax cut?
“We had planned a cut to 19% but thanks to our stewardship of the economy I can reveal that this year it will fall to X% [just in time for the election]”.
Torsten Bell @TorstenBell · 1m Replying to @TorstenBell 2024 1p cut to basic rate of income tax. Totally bonkers to be raising National Insurance (on earners) while cutting Income Tax (includes those with other income sources).
What is the possible justification for cutting income tax rate while raising NI rate?
Drives further wedge between taxation of unearned income and earned income. Yet again benefits pensioners and those living off rents at expense of workers
Torsten Bell @TorstenBell · 1m Replying to @TorstenBell 2024 1p cut to basic rate of income tax. Totally bonkers to be raising National Insurance (on earners) while cutting Income Tax (includes those with other income sources).
Rishi Sunak is a paint-by-numbers Chancellor. So obvious there would be a pre-election income tax cut as soon as he announced the NI increase for the NHS.
So pensioners get to keep even more of their income whilst hard working people get taxed more on NI.
Is that right?
The only defensible way to do this is to extend who is caught by NI in the Autumn Budget then, as above move to a merger. Though I’ve always assumed an actual NI/IT merger would never happen because people would see the real tax rates written down, and see how regressive NI is in action.
It strikes me that this is a perfect own goal, but would like to hear from others who understand both the industry and the economics better than I.
Also, it seems, with Shoigu's absence from the public eye, that a major purge is going on in the Kremlin to root out the intelligence leaks and to punish those failing to achieve the impossible in Ukraine.
If the NIC floor is going up by £3,000, doesn't that mean earners between the current threshold and approximately the higher rate tax threshold will benefit net?
That inflation figure means interest rates are going up a lot, am I right?
How high do we expect interest rates to go?
High interest rates and inflation usually are destroyers of governments and chancellors?
Gotta reach 2% soon surely
No you are both wrong wrong. A post covid reboot spike and quick fall does not require interest rate hikes, only stubborn inflation rate not dropping from 3.4 putting pressure on for wage rises will need an increase. It’s not the high inflation peak number, it’s the level it levels off at after the quick drop.
If the NIC floor is going up by £3,000, doesn't that mean earners between the current threshold and approximately the higher rate tax threshold will benefit net?
That inflation figure means interest rates are going up a lot, am I right?
How high do we expect interest rates to go?
High interest rates and inflation usually are destroyers of governments and chancellors?
Gotta reach 2% soon surely
No you are both wrong wrong. A post covid reboot spike and quick fall does not require interest rate hikes, only stubborn inflation rate not following from 3.4 putting pressure on for wage rises will need an increase. It’s not the high inflation peak number, it’s the level it levels off at after the quick drop.
He's doing the polar opposite though, raising one while cutting the other. At this rate they'll be "merged" by IT being abolished and only NI existing eventually.
"Licence rates for those aged between 20 and 29 dropped from 75 to 63 per cent over the same period."
So most people do. And that's the truth, outside cities, car driving is a major factor. Of those 37% who don't drive, many will live in a household with someone who does.
That inflation figure means interest rates are going up a lot, am I right?
How high do we expect interest rates to go?
High interest rates and inflation usually are destroyers of governments and chancellors?
Gotta reach 2% soon surely
No you are both wrong wrong. A post covid reboot spike and quick fall does not require interest rate hikes, only stubborn inflation rate not following from 3.4 putting pressure on for wage rises will need an increase. It’s not the high inflation peak number, it’s the level it levels off at after the quick drop.
The markets expect 2%, as I posted down thread.
Don’t mean it will happen. Probably means it don’t go higher. As I just explained, for it to hit 2% or go higher depends on what inflation levels out at. You sure the markets know? 🙂
Has anyone got any good ideas as to where to hide money, from the ravening Grendel of inflation?
Gold, wine, crypto, cheap property in Moldova?
Shares did very well in Zimbabwe and venezuela hyperinflation. Problem is society was destroyed and you would likely need a gun to go to the supermarket....but your wealth would have been preserved
I think pretty much any hard asset with limited supply and fairly inelastic demand would do over the medium-term. Property, gold, shares in non-frothy goods/service providers would be my suggestion.
If the NIC floor is going up by £3,000, doesn't that mean earners between the current threshold and approximately the higher rate tax threshold will benefit net?
It should be fairly easy to graph this
What as the previous threshold, what's the new threshold - for both NI and IT. What's the NI rate increase ?
I await the full analysis, but I’m kind of meh about this.
I agree that it’s awful that NI increases while IT goes down, but we’ve known for a long time now that the Tories want to reward rentiers rather than wealth creators.
To be honest this just looks like a move the deckchairs around “budget”. The underlying message is tighten your belts and get used to a tough situation for a few more years.
Since the UK has basically been in some form of austerity since the global financial crisis, it’s not a great message…
No emergency budget for defence? Nothing on benefits????
Really not sure about his priorities tbh.
And Rachel Reeves picks up on the lack of additional defence spending. She is right.
I'm not actually sure we need additional defence spending. The problem has been a number of European countries free-riding on the USA. The disparity between Nato/Russia is enormous. The fundamental problem is Russia's nuclear weapons. We should be tightening the noose on sanctions. It seems clear now that Russia will be weakened economically and militarily as a result of this war.
The problem is pensions. I was not aware that MoD pensions come out of their own budget. Far better to have a separate financing for all public sector pensions. If pension costs are going up then real defence spending will go down in spite of the 2% target.
Is the GBP83bn debt interest figure a bit naughty? does it include interest paid on the BoE holdings which (as I understand it) is remitted back to the exchequer?
If the NIC floor is going up by £3,000, doesn't that mean earners between the current threshold and approximately the higher rate tax threshold will benefit net?
It should be fairly easy to graph this
What as the previous threshold, what's the new threshold - for both NI and IT. What's the NI rate increase ?
Increase is for 1.25 percentage points from 12% to 13.25%. Current floor is £9,568, to rise to £12,570.
So pensioners get to keep even more of their income whilst hard working people get taxed more on NI.
Is that right?
Which way do pensioners vote? Which way do workers vote? Of course it is right. For a party solely obsessed with winning elections it is completely sensible to rewards those who vote in higher numbers and the right way.
Torsten Bell @TorstenBell · 1m Replying to @TorstenBell 2024 1p cut to basic rate of income tax. Totally bonkers to be raising National Insurance (on earners) while cutting Income Tax (includes those with other income sources).
You have voters who gave you 80 seat majority and you are looking after them. What’s bonkers about that.
I suppose it is too much to hope that the equalisation of allowances for NICs is a step towards the combination of IT and NI? That would spread the load more fairly.
Comments
Nothing on benefits????
Really not sure about his priorities tbh.
And Rachel Reeves picks up on the lack of additional defence spending. She is right.
@JohnRentoul
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2m
Sunak is stealing his own effing Budget for 2024, promising in advance to cut income tax basic rate from 20p to 19p
Grim prospect for UK taxpayers. Financial repression is the right phrase here.
@TorstenBell
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1m
Replying to
@TorstenBell
2024 1p cut to basic rate of income tax. Totally bonkers to be raising National Insurance (on earners) while cutting Income Tax (includes those with other income sources).
By 2024 I am determined to be shacked up with Kylie.
That is my firm priority. And I commend this statement to the house.
Student loans? Nope
Housing? Nope
Transport? Nope
So once again the share of taxes get ever more burdened upon working people, while those not working get the benefit.
Disgusting. Not what a Conservative government should be doing, not what I believe in and not what I voted for.
Shame on Sunak. 👎
What is the possible justification for cutting income tax rate while raising NI rate?
Drives further wedge between taxation of unearned income and earned income. Yet again benefits pensioners and those living off rents at expense of workers
And so the collapse begins
Is that right?
I don't drive, my energy bills are doubling and my savings are dropping.
What am I supposed to do?
Fiscal drag is gonna destroy Middle English workers.
5 days later Boris Johnson told us all to stay at home.
We really need to start voting, for goodness sake.
I'm so grateful my parents got me on the housing ladder at the age of 21 back in 2000.
Interest rates UP
Energy UP
National Insurance UP
Wages…will they keep pace with inflation?
Even if they do, fiscal drag UP.
https://twitter.com/maxseddon/status/1506617939629334541
It strikes me that this is a perfect own goal, but would like to hear from others who understand both the industry and the economics better than I.
Also, it seems, with Shoigu's absence from the public eye, that a major purge is going on in the Kremlin to root out the intelligence leaks and to punish those failing to achieve the impossible in Ukraine.
The cost of living crisis is now not by 2024
Not a penny extra on benefits
Not a penny extra for retired
A tax rise for everyone via frozen thresholds
Will pay a massive political price of leaving people significantly worse off whilst fucking about with VAT on building materials
A massive mistake by Rishi Sunak. He’s done nothing to avert misery for millions of unwaged and little for the low-waged.
Well said.
Otherwise, vote to kick this lot out at the first opportunity.
https://www.autoexpress.co.uk/car-news/102466/number-of-young-adults-with-driving-licences-falls-by-40-per-cent
He's doing the polar opposite though, raising one while cutting the other. At this rate they'll be "merged" by IT being abolished and only NI existing eventually.
Bonkers
Sunak is Sunk.
Peter Thiel bought $50m of it via Palantir last year, at the time I thought it was a bad bet but now I'm thinking he got in early.
So most people do. And that's the truth, outside cities, car driving is a major factor. Of those 37% who don't drive, many will live in a household with someone who does.
When I started civil service grad scheme my salary was £27k. 10+ years later they offer the same.
Its the primary means of having your own transport for the overwhelming majority of the country, young and old.
When I look around at my mates, the ones with no money worries have wealthy parents or went abroad to work and save some cash.
Exactly, I am paying my landlord's mortgage off.
They live in New Zealand.
It also seems constructed soundly enough not to fall apart or have any mistakes in it.
Simple. Clear. Effective.
2020 - Percentage of 21-29 holding a drivers licence - 72%
https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/1016874/nts0201.ods
Highest it been for 20 years.
"Funding crime, not fighting it" was done better.
What as the previous threshold, what's the new threshold - for both NI and IT.
What's the NI rate increase ?
I agree that it’s awful that NI increases while IT goes down, but we’ve known for a long time now that the Tories want to reward rentiers rather than wealth creators.
To be honest this just looks like a move the deckchairs around “budget”. The underlying message is tighten your belts and get used to a tough situation for a few more years.
Since the UK has basically been in some form of austerity since the global financial crisis, it’s not a great message…
The problem is pensions. I was not aware that MoD pensions come out of their own budget. Far better to have a separate financing for all public sector pensions. If pension costs are going up then real defence spending will go down in spite of the 2% target.
What would they do better ?.
I think I was slightly optimistic, but not much.
So pensioners are 1% better off, those who are working are 1.5% worse off.