Until then the interim report's conclusions will have to stand.
I.
...
His final conclusion is almost written in Irish English:
As a result, the upward revision to wages and salaries falls to around £8 billion by 2017-18.
...
My point was that the figures upon which the government is claiming that real pay rose are distorted by the adjustments made to actual earnings as a result of the change in the tax rate. This means that the gross income on which they are basing their figures is distorted by these deferred bonuses and the average increase is therefore said to be higher than it was for the vast majority of the population. The government has then used this average figure to be set against the significant tax cuts enjoyed by the lower paid and, hey presto, we have a real terms increase.
In fact we don't. We have a small number of higher earners who received a significant amount of deferred bonuses (as shown in your Chote quote) and the majority whose earnings were growing much more slowly than the overall average. It amazes me that Labour do not seem to have been numerate enough to point this out. It does not bode well for the likely next government.
I have tried to find the statistics upon which the Government (Cameron in Davos?) is making the claim that Real Household Disposable Income is rising.
I am beginning to suspect that they are not new stats but more a recent analysis of old stats: particularly the RHDI stats released by the ONS in their annual economic reviews.
There will have been a distortion in disposable income between the first and second quarter of the 2013 calendar year caused by deferral of bonuses and income into the new fiscal year, but this distortion would be averaged out by looking at trends across a couple of years.
Do you have a source for the 'Treasury Analysis' from which the press states the Tory claims are derived?
Interesting reaction to the 50p announcement. Can't see why this is such a big deal. The jump from 45p to 50p for salaries over £150k, just doesn't seem like a huge leap. If it were 75p then maybe.The number of people it impacts is minuscule. The symbolic value will win and lose a few votes in equal measure.
It is nether the end nor the beginning of the world.
In order to demonstrate that people will recoil in horror, Scott P quotes the Institute of Directors three times :-).
It merely demonstrates that the business community that Blair/Brown courted so assiduously (prawn cocktail anyone?) have not just been abandoned, but actively scorned by Miliband/Balls
It's a 'brave' strategy, but if it keeps the morale of the troops up, why not?
Why doesn't Balls go for the 75% top rate that has done such wonders for France?
Because the 50% is likely to the left of the Laffer curve while the 75% is likely to the right? For the record, the 75% doesn't apply to individuals I believe, although I'm not entirely clued in on how they sorted it in the end.
Companies that pay wages at that level (E1m?) have to pay an extra social charge.
Even more impressive: I was chatting to a friend of mine a couple of weeks ago. He got a letter at the end of November from the French government (he lives in Paris).
Essentially said:
- You have been assessed as 1 of 3,000 people in France who being asked to make a voluntary contribution to the Treasury - You will be informed about the level of this contribution within the next 10 days. - If you do not make this contribution within 10 days following this letter, it will be deemed to be a criminal action on your part
Ah , so your friend is one of those suspected of evading tax via untaxed accounts held abroad . Such tax evaders are being offered a partial amnesty and lower penalty rates if they voluntarily cough up what they owe .
No - he lives and works in France and pays tax there. But is in the process of moving back to the UK. There is a UK based family trust, but that was in existence before he moved to France.
I am not saying that your friend is evading tax only that the French IR seem to think he may be and are offering him a partial amnesty for making a voluntary payment .
About time Labour made a commitment to bring back the 50p rate. No matter what the media delusionally think (and the "PBTories", god bless you all), most people's reactions would be that's not high enough. There is immense anger out there at the idea that an elite of business-men think it's OK to rip the rest of us off, and threaten to hold us to ransom or to leave the country when we say we want more money from them. Squeals of horror from the super-wealthy, who most people hold responsible for the mess and to be incredibly selfish for being unwilling to take their share of the burden these past few years, will just make such a pledge more popular.
That said, I'm still worried about Balls's completely unnecessary "surplus" pledge. I wish Labour would realise how, in the real world, how little people care about or even really understand the deficit and public finances in general. The reason the general idea of "the country's on the brink of bankruptcy" had such currency for a while is because the news was filled with stories of European countries in dire straits; now that's over, people genuinely think the problem is solved, no matter what the official figures might say, and people genuinely don't believe there is any need for further cuts now that there's no problem anymore. So Balls' pledge unnecessarily pushes an issue, which Labour will always lose on, back to the top of the agenda, when otherwise the public was starting to disregard it. It is a typical Gordon Brown tactic, designed to bamboozle the Westminster pundits for a day without any regard for the huge problems it will create further down the road.
Until then the interim report's conclusions will have to stand.
I.
...
His final conclusion is almost written in Irish English:
As a result, the upward revision to wages and salaries falls to around £8 billion by 2017-18.
...
My point was that the figures upon which the government is claiming that real pay rose are distorted by the adjustments made to actual earnings as a result of the change in the tax rate. This means that the gross income on which they are basing their figures is distorted by these deferred bonuses and the average increase is therefore said to be higher than it was for the vast majority of the population. The government has then used this average figure to be set against the significant tax cuts enjoyed by the lower paid and, hey presto, we have a real terms increase.
In fact we don't. We have a small number of higher earners who received a significant amount of deferred bonuses (as shown in your Chote quote) and the majority whose earnings were growing much more slowly than the overall average. It amazes me that Labour do not seem to have been numerate enough to point this out. It does not bode well for the likely next government.
I have tried to find the statistics upon which the Government (Cameron in Davos?) is making the claim that Real Household Disposable Income is rising.
I am beginning to suspect that they are not new stats but more a recent analysis of old stats: particularly the RHDI stats released by the ONS in their annual economic reviews.
There will have been a distortion in disposable income between the first and second quarter of the 2013 calendar year caused by deferral of bonuses and income into the new fiscal year, but this distortion would be averaged out by looking at trends across a couple of years.
Do you have a source for the 'Treasury Analysis' from which the press states the Tory claims are derived?
I have had the ASHE report open in my browser for a couple of days but it far from addresses the question in dispute up front and there is probably a derivative analysis around.
Still Labour are fighting a losing battle on this as the trends are all pointing to a cross-over having already happened and the positive gap widening during this year.
Provided of course the current rates of growth can be maintained.
Why doesn't Balls go for the 75% top rate that has done such wonders for France?
Because the 50% is likely to the left of the Laffer curve while the 75% is likely to the right? For the record, the 75% doesn't apply to individuals I believe, although I'm not entirely clued in on how they sorted it in the end.
Companies that pay wages at that level (E1m?) have to pay an extra social charge.
Even more impressive: I was chatting to a friend of mine a couple of weeks ago. He got a letter at the end of November from the French government (he lives in Paris).
Essentially said:
- You have been assessed as 1 of 3,000 people in France who being asked to make a voluntary contribution to the Treasury - You will be informed about the level of this contribution within the next 10 days. - If you do not make this contribution within 10 days following this letter, it will be deemed to be a criminal action on your part
Ah , so your friend is one of those suspected of evading tax via untaxed accounts held abroad . Such tax evaders are being offered a partial amnesty and lower penalty rates if they voluntarily cough up what they owe .
No - he lives and works in France and pays tax there. But is in the process of moving back to the UK. There is a UK based family trust, but that was in existence before he moved to France.
I am not saying that your friend is evading tax only that the French IR seem to think he may be and are offering him a partial amnesty for making a voluntary payment .
They sent them to all partners in French based private equity firms
Globalization is/was a robbery and this is the inevitable result. The banksters and their bought politicians looted as much industrial capital as they could from Europe and America and shipped it abroad. That's all it was/is.
This could only work *temporarily* because long-term you can't have 90% industrial capacity in one place and 90% demand in another place. There's no means to pay for it. It could only work while western *credit* lasted. So for 30-ish years the banksters had a sweet thing going where they paid eastern wages, sold at western prices and paid their tax in Monaco but that's it - now it's falling apart as it inevitably would.
The banksters have completely screwed the world economy. Again.
The analogy won't be exact obviously but assuming for the sake of argument that 2008 is this time's equivalent of 1929 but things are falling at half speed due to Bernanke's brakes we'd be around the equivalent of 1931-1932 now - at the Japanese in Manchuria, Italians in Ethiopia type of stage (not necessarily in Europe of course e.g. Arab Spring), coming up to this time's equivalent of the Spanish Civil War (also not necessarily in Europe.
IMO 50% is okay as long as it hits those on more than about 75K a year, and not what I would regard as ordinary middle-class people, which is around 30-50K.
'It is nether the end nor the beginning of the world.'
Agree, we need to be told how much other taxes will be increased,last time round NI was significantly increased instead of income tax & council tax more than doubled under New Labour.
I'm still worried about Balls's completely unnecessary "surplus" pledge. I wish Labour would realise how, in the real world, how little people care about or even really understand the deficit and public finances in general. The reason the general idea of "the country's on the brink of bankruptcy" had such currency for a while is because the news was filled with stories of European countries in dire straits; now that's over, people genuinely think the problem is solved, no matter what the official figures might say, and people genuinely don't believe there is any need for further cuts now that there's no problem anymore. So Balls' pledge unnecessarily pushes an issue, which Labour will always lose on, back to the top of the agenda, when otherwise the public was starting to disregard it. It is a typical Gordon Brown tactic, designed to bamboozle the Westminster pundits for a day without any regard for the huge problems it will create further down the road.
Thanks to the mess made of the public finances by Labour during their thirteen years of fiscal folly, the cost of servicing UK public debt already incurred is currently forecast to be around £77 bn in 2017/18. This amount is over 10% of total managed government expenditure forecast for the same year and will account for a third of social expenditure. It exceeds defence and education expenditure combined.
The interest rate charged on the debt is based on a government pursuing a sound fiscal strategy with firm plans to eliminate the structural deficit with a five year forward period and to generate surpluses which reduce debt thereafter.
If the markets begin to suspect that a future UK government intends to abandon the current deficit and debt reduction plans the inevitable consequence will be a rise in the interest rates charged to the UK to borrow from the international markets. And that means the £77 bn a year debt interest costs rapidly increasing.
Balls's surplus pledge is therefore absolutely critical to avoiding market panic and to preventing Labour economic management policy becoming dismissable on that ground alone.
Now we might not believe Balls is serious about deficit and debt reduction (he was after all Brown's chief economic advisor), but to admit he is not serious in public would be political suicide both for him personally and his party..
Simply put, globalisation has succeeded in making us all richer in absolute terms, but we don't feel happy because it has also created a class of super-rich people who live in a different stratosphere, so we feel worse-off relatively speaking in comparison to them.
"About time Labour made a commitment to bring back the 50p rate. No matter what the media delusionally think (and the "PBTories", god bless you all), most people's reactions would be that's not high enough"
Absolutely, Danny, at one stage not that long ago we had a top tax rate of 19s 6d per £. That was, of course, when we had a government who really knew what they were doing. We should go back to those sorts of rates, maybe bang up the 40% to 50% (people on more than £32k p.a. can easily afford to shoulder a fairer share) and then put in some more progressive tax bands thereafter, say 60% on income over £50k, 70% on income over £80K and so on until we get to magic number of 97.5%. That will teach the rich a thing or two, of course we might need an exit tax and we should set that at 97.5%.
Going back to the tax rates of the forties might also mean we need to re-introduce some other ideas that were prevalent then. Strict food & fuel rationing for a start and, of course, capital controls. We could also get back to a proper planned political economy where the resources needed to run a business (including people) are allocated by the state. It all worked so well I can't imagine why we moved away from it, must have been down to those wicked Tories looking after their rich chums.
What's gonna happen in China (same as Japan in the 90s) and why it illustrates one of the flaws in the western banking model (and also how it doesn't matter who's running the flawed model whether corporate gangsters, kieretsu or a commie state.)
1. Bank lending can be either: a) worthwhile investment b) worthless investment (asset bubbles and consumer lending)
2. With fractional reserve bankstering the amount of lending is decided by: savings x capital ratio
ergo the problem is there's no link between the capital ratio and the ratio of worthwhile to worthless investment
Example A country has ten million savings and a capital ratio of 10 = 100 million to lend, so far so good, but what if there's only 40 million of worthwhile investment? The other 60 goes into worthless investment.
The capital ratio needs to be a throttle but isn't and if the capital ratio is too high you'll get endless boom and bust cycles.
The actual throttle value needs to relate to whatever you think determines the ratio of worthwhile to worthless investment. I think it's the rate of innovation so the capital ratio should go up and down based on: (low) default churn level + current rate of innovation.
Say the default capital ratio was 4 -someone invents the steam engine so the ratio goes up to 10 while it's being rolled out and then drops back to 4 again -someone invents the IC engine so the ratio goes up to 10 while it's being rolled out and then drops back to 4 again -someone invents the fusion power so the ratio goes up to 10 while it's being rolled out and then drops back to 4 again etc
(I think the reason the default capital ratio in the western model is too high is because what is seen as the "normal" level comes out of a period of extremely high innovation in Europe.)
#
China and Japan
Countries that are modernizing have an effectively unlimited amount of worthwhile investment. As they near the end of that process the worthwhile investment tapers off and they need to throttle back their capital ratio. If they don't do that a tidal wave of previously worthwhile lending will go into asset bubbles or consumer lending instead. This is what happened in Japan in the 90s imo and seems like it might be happening in China now.
What's interesting about the Chinese example is even though their bankstering is state run because it's following the flawed western model it's doing the same things except because they're commies their version of a property asset bubble is building empty cities in the desert.
Afternoon all, it would be interesting to see the response of the public if YouGov asked the following question: "If a future Labour government promised to increase the top income tax rate to 50p and this led to the owners of the business you work for closing it down and taking the work abroad, would you support the proposal?" We saw how quickly the "comrades" at Grangemouth did a U-turn when it turned out their union masters were talking through their heads and their employers proved they weren't making idle threats.
Has Balls learned nothing from his hero Hollande's mess in France.
"About time Labour made a commitment to bring back the 50p rate. No matter what the media delusionally think (and the "PBTories", god bless you all), most people's reactions would be that's not high enough"
Absolutely, Danny, at one stage not that long ago we had a top tax rate of 19s 6d per £. That was, of course, when we had a government who really knew what they were doing. We should go back to those sorts of rates, maybe bang up the 40% to 50% (people on more than £32k p.a. can easily afford to shoulder a fairer share) and then put in some more progressive tax bands thereafter, say 60% on income over £50k, 70% on income over £80K and so on until we get to magic number of 97.5%. That will teach the rich a thing or two, of course we might need an exit tax and we should set that at 97.5%.
Going back to the tax rates of the forties might also mean we need to re-introduce some other ideas that were prevalent then. Strict food & fuel rationing for a start and, of course, capital controls. We could also get back to a proper planned political economy where the resources needed to run a business (including people) are allocated by the state. It all worked so well I can't imagine why we moved away from it, must have been down to those wicked Tories looking after their rich chums.
Oddly enough, Attlee's government was a low tax/low spend government by modern standards. Marginal tax rates were enormous, but a married man had to earn twice the average income before he paid income tax, and there was no VAT.
I'm annoyed, but not surprised, that Labour have announced this. Their "trap" worked perfectly in destroying the Tories poll lead in 2012. Why on earth wouldn't they reset it?
Notwithstanding the fixed-term parliament act, a vote of no confidence could bring down an unstable Labour (minority) government within 18 months. Just enough time to pass a budget to re-set the trap before (potentially) the Tories take over again.
Simply put, globalisation has succeeded in making us all richer in absolute terms, but we don't feel happy because it has also created a class of super-rich people who live in a different stratosphere, so we feel worse-off relatively speaking in comparison to them.
90% supply in one place and 90% demand in another place cannot work long-term. It could only last until the credit ran out.
Simply put, globalisation has succeeded in making us all richer in absolute terms, but we don't feel happy because it has also created a class of super-rich people who live in a different stratosphere, so we feel worse-off relatively speaking in comparison to them.
90% supply in one place and 90% demand in another place cannot work long-term. It could only last until the credit ran out.
Someone mentioned that Labour's 10p tax rate would make people currently not paying tax start doing so again.
Or perhaps 10p is what you pay after your tax free allowance, thus cutting bills even further? Yes, I'm sure that's right.....
Anyway compare and contrast. Labour propose cutting tax for the low paid - unaffordable say the Tories. But we can afford to keep taxes lower for the fabulously paid say the Tories. I'm not sure the Tories can simultaneously resist tax cuts for the poor and tax increases for the rich and get away with a message that they understand normal people and their views on life. For all that some insist Oik is some great political tactician and Balls not, it does seem to be Ed(s?) setting the traps not the other way round.
Before VAT there was Purchase Tax, which could be as high as 100%, IIRC. That was of course on the wholesale value of the goods. It was only on goods, of course, not services.
This is a smart political move by Balls, if a shitty economic one. Labour are on course to win and have a real bash at true lefty spending once again.
The economic downside can be almost eliminated if the 50p rate band only kicks in a high level (6 figure salaries). That would yield all of the electoral gain but not too much revenue loss.
The unspoken alternative to all of this extra taxation is of course for the govt not to spend like a drunken sailor.
Tax cuts, spending cuts (real ones, not the current pretendy stuff) and money in your pocket. What's not to like (unless you want your tattoos removed by the NHS)
Afternoon all, it would be interesting to see the response of the public if YouGov asked the following question: "If a future Labour government promised to increase the top income tax rate to 50p and this led to the owners of the business you work for closing it down and taking the work abroad, would you support the proposal?" We saw how quickly the "comrades" at Grangemouth did a U-turn when it turned out their union masters were talking through their heads and their employers proved they weren't making idle threats.
Compare and contrast the two sides of your question: 1. Unions fighting to increase wages and protect working conditions for normal people. Awful union bully boys throwing their weight around making threats to disrupt a business. They should be ignored. 2. Top executives whose salaries have exploded to a hundred times their average worker's salary threaten to close the entire business and sack everyone (apart from themselves) in protest at having to pay slightly more tax. Captains of business, sensible chaps whose actions should be applauded.
And you wonder why people are sick of the status quo....
Someone mentioned that Labour's 10p tax rate would make people currently not paying tax start doing so again.
Or perhaps 10p is what you pay after your tax free allowance, thus cutting bills even further? Yes, I'm sure that's right.....
Anyway compare and contrast. Labour propose cutting tax for the low paid - unaffordable say the Tories. But we can afford to keep taxes lower for the fabulously paid say the Tories. I'm not sure the Tories can simultaneously resist tax cuts for the poor and tax increases for the rich and get away with a message that they understand normal people and their views on life. For all that some insist Oik is some great political tactician and Balls not, it does seem to be Ed(s?) setting the traps not the other way round.
You are almost certainly wrong, as unless the 10p band was almost negligible it would cost far more than the rise from 45p to 50p to would raise (assuming it even raises anything). You'd be giving almost every tax payer in the country quite a large tax cut.
My guess is that the 10p band will have some major caveats.
Someone mentioned that Labour's 10p tax rate would make people currently not paying tax start doing so again.
Or perhaps 10p is what you pay after your tax free allowance, thus cutting bills even further? Yes, I'm sure that's right.....
Anyway compare and contrast. Labour propose cutting tax for the low paid - unaffordable say the Tories. But we can afford to keep taxes lower for the fabulously paid say the Tories. I'm not sure the Tories can simultaneously resist tax cuts for the poor and tax increases for the rich and get away with a message that they understand normal people and their views on life. For all that some insist Oik is some great political tactician and Balls not, it does seem to be Ed(s?) setting the traps not the other way round.
You are almost certainly wrong, as unless the 10p band was almost negligible it would cost far more than the rise from 45p to 50p to would raise (assuming it even raises anything). You'd be giving almost every tax payer in the country quite a large tax cut.
My guess is that the 10p band will have some major caveats.
You're confusing politics with economics. The Balls 10p/50p combo is excellent politics. That it will almost certainly reduce the tax take is neither here nor there for lefty voters. Never forget - there are plenty of votes in ruining a country.
"IMO 50% is okay as long as it hits those on more than about 75K a year, and not what I would regard as ordinary middle-class people, which is around 30-50K. "
Simply put, globalisation has succeeded in making us all richer in absolute terms, but we don't feel happy because it has also created a class of super-rich people who live in a different stratosphere, so we feel worse-off relatively speaking in comparison to them.
90% supply in one place and 90% demand in another place cannot work long-term. It could only last until the credit ran out.
What is credit, MrJones?
In this context it's the confidence of the new producers in their customer's ability to repay based on those customer's historical ability to repay - but not taking into account their historical ability to repay was based on the industrial capital that is being looted and transferred. Once that sinks in and confidence in ability to repay declines then either the new producers switch to domestic demand very fast or the whole system collapses.
Afternoon all, it would be interesting to see the response of the public if YouGov asked the following question: "If a future Labour government promised to increase the top income tax rate to 50p and this led to the owners of the business you work for closing it down and taking the work abroad, would you support the proposal?" We saw how quickly the "comrades" at Grangemouth did a U-turn when it turned out their union masters were talking through their heads and their employers proved they weren't making idle threats.
Compare and contrast the two sides of your question: 1. Unions fighting to increase wages and protect working conditions for normal people. Awful union bully boys throwing their weight around making threats to disrupt a business. They should be ignored. 2. Top executives whose salaries have exploded to a hundred times their average worker's salary threaten to close the entire business and sack everyone (apart from themselves) in protest at having to pay slightly more tax. Captains of business, sensible chaps whose actions should be applauded.
And you wonder why people are sick of the status quo....
Work has gone off-shore, because people, ordinary people, chose to buy cheaper products from abroad.
When you bought your car, did you make sure it was made in the UK? Or were you happy to feather the nest of the international capitalist in order to save a few quid?
One does wonder if a political party could be created that Peter Hitchens could ever bring himself to support. Unless he set it up and ran it. Even then I'm not sure.
Support for punitive taxes on the rich is proportional to how much people think the rich actually pay i.e. if they think they only actually pay half then to them 50% is only really 25%.
So could be an interesting Ukip gamble here: something like 40% should be the maximum on general principle but at the same time more enforcement on making sure rich people like BBC wallahs can't fiddle it.
Bit of a gamble in the current climate admittedly.
"IMO 50% is okay as long as it hits those on more than about 75K a year, and not what I would regard as ordinary middle-class people, which is around 30-50K. "
I assume you earn 60K?
That's the way it is. The "rich" are people who are better off than me. Whether or not they've worked harder than me, they must subsidise me because that's fair. I shouldn't pay more for lazy people with less than me. Why should I? That's not fair.
"IMO 50% is okay as long as it hits those on more than about 75K a year, and not what I would regard as ordinary middle-class people, which is around 30-50K. "
I assume you earn 60K?
I long for a time when the debate focuses on what core services the government needs to provide, and in what form, and then how much money would be necessary for that - leading to the government making its case for taxation to match it accordingly.
The one at the moment seems to focus on how much money can be credibly and sustainably wrung out of taxpayers (at whatever level) It depresses me.
Smart politics but I thought they'd announced it ages ago. It does put the LDs in a spot as their party conference voted - just- to keep the 45p rate. I imagine this would be an easy concession in a Lib/Lab discussion.
As Paul_mid_Beds says the more radical step would have been to go for the mansion / land value tax, instead of just reversing back to the status quo on an issue it's known the parties disagree on.
Lab policy is to introduce a Mansion Tax as well as reverting to the 50p rate.
"A challenge for the Tories is that whilst there maybe an argument that lowering tax rates increases the overall tax take this is a hard one to get across. It is hard to see political slogans based on the “Laffer curve” resonating."
One poster showing that the last Labour Government took away the 10p tax from the lowest earners before they increased the top rate of income for 57 days. And while comparing this Government removing the lowest earners out of taxation altogether while consistently taxing the top rate of earners more than Labour ever did over the whole term of this Parliament.
"IMO 50% is okay as long as it hits those on more than about 75K a year, and not what I would regard as ordinary middle-class people, which is around 30-50K. "
I assume you earn 60K?
I long for a time when the debate focuses on what core services the government needs to provide, and in what form, and then how much money would be necessary for that - leading to the government making its case for taxation to match it accordingly.
The one at the moment seems to focus on how much money can be credibly and sustainably wrung out of taxpayers (at whatever level) It depresses me.
"IMO 50% is okay as long as it hits those on more than about 75K a year, and not what I would regard as ordinary middle-class people, which is around 30-50K. "
I assume you earn 60K?
I long for a time when the debate focuses on what core services the government needs to provide, and in what form, and then how much money would be necessary for that - leading to the government making its case for taxation to match it accordingly.
The one at the moment seems to focus on how much money can be credibly and sustainably wrung out of taxpayers (at whatever level) It depresses me.
"IMO 50% is okay as long as it hits those on more than about 75K a year, and not what I would regard as ordinary middle-class people, which is around 30-50K. "
I assume you earn 60K?
I long for a time when the debate focuses on what core services the government needs to provide, and in what form, and then how much money would be necessary for that - leading to the government making its case for taxation to match it accordingly.
The one at the moment seems to focus on how much money can be credibly and sustainably wrung out of taxpayers (at whatever level) It depresses me.
Mr. Royale,
You will go to the bad fire if you believe that the sole purpose of tax is, or even should be, to raise the money HMG needs to provide essential services for the subjects of HMtQ.
Sounds like a less artful version of @IDS_MP to me. The '_MP' in both cases makes it particularly suspect, and the fact that @EdBallsMP is a verified account.
"IMO 50% is okay as long as it hits those on more than about 75K a year, and not what I would regard as ordinary middle-class people, which is around 30-50K. "
I assume you earn 60K?
I long for a time when the debate focuses on what core services the government needs to provide, and in what form, and then how much money would be necessary for that - leading to the government making its case for taxation to match it accordingly.
The one at the moment seems to focus on how much money can be credibly and sustainably wrung out of taxpayers (at whatever level) It depresses me.
Exactly. Very well put.
Yep agree 100%
Thanks.
@HurstLlama - I feel like I've been there for years already.
Ed Balls @edbaIIs_mp It was a Labour government who stopped the boom and bust cycle. You can trust us to balance the books. #fab14
Utterly unbelieveable!
That must be a spoof account?
No his official twitter account which I follow from time to time. One of several fantasy tweets he has put out today and no doubt will be lionised by the Observer and other leftie Sunday papers.
@taffys I've heard it will both raise and lower revenue.. so I'm inclined to think it won't make much difference.
The IFS was pretty damning just now on Chris Leslie's claim that the OBR believed the increase from 45% to 50% would raise £3bn. (he called it "disingenuous" on Radio4).
He also said that Labour had previously claimed that the rise from 40% to 50% would raise £2.6bn, so it doesn't seem credible that a rise from 45% to 50% would raise more than a rise twice as large.
That's pretty strong stuff from an organisation that is pretty neutral politically.
That is not going to fly with the public. Even if it is true that lower taxes bring in higher revenues (and the stats which "prove" that are dubious to say the least), it just seems too counterintuitive, and if it's counterintuitive, the public aren't going to believe it. And no amount of government bar charts will change their minds. Simple as that.
How does it work for (relatively) wealthy people like me, then, who agree that the fair thing is for those of us reaping high rewards from our economic system to subsidize public services for those on lower incomes?
@taffys I've heard it will both raise and lower revenue.. so I'm inclined to think it won't make much difference.
The IFS was pretty damning just now on Chris Leslie's claim that the OBR believed the increase from 45% to 50% would raise £3bn. (he called it "disingenuous" on Radio4).
He also said that Labour had previously claimed that the rise from 40% to 50% would raise £2.6bn, so it doesn't seem credible that a rise from 45% to 50% would raise more than a rise twice as large.
That's pretty strong stuff from an organisation that is pretty neutral politically.
But I never said it would raise revenue, I just said it is doubtful whether it would drop it...
Conhome is asking how Labour would fund it though - which implies it would decrease tax revenue. That is as debateable as saying it would increase it.
This is purely political argument I think - it neither drops revenue as the Conservatives claim nor raises it as Labour claim. It is economically neutral, it might up tax revenue a smidgen at the expense of overall GDP - but I think the overall effect is gnat's farts at the edges.
Where exactly is the maxima of the laffer curve anyway ? It is a point hotly debated - the estimates seem to vary anywhere between 30ish and 70ish %.
Mr. L, you say 'obvious', but unless it's a very small band (and even then) it'll cost an absolute fortune.
Agreed. But they'll do it somehow.
For starters they will cut the 40% threshold so high earners don't benefit.
Remember this Government has raised the PA massively more than inflation. Labour will revert to inflation rises in PA - which will be approx £200 per year.
In contrast the PA rose £1,335 this year - ie £8,105 to £9,440.
Portsmouth Council Lib Dems have put two fingers up to Clegg.
Hancock cannot officially be a member of the Lib Dem Group on the Council since his membership of the party has been (belatedly) suspended (by Clegg). But regardless of that, the Lib Dem Group of councillors are quite content for him to carry on in his previous role on the Council Cabinet, a role which would normally only be taken by a leading member of the Lib Dem Group, as if nothing had happened.
Will Clegg do anything in response? Such as, say, publically criticise their decision? Since the decision was taken yesterday, from the silence it seems that the answer is no.
Portsmouth Council Lib Dems have put two fingers up to Clegg.
Hancock cannot officially be a member of the Lib Dem Group on the Council since his membership of the party has been (belatedly) suspended (by Clegg). But regardless of that, the Lib Dem Group of councillors are quite content for him to carry on in his previous role on the Council Cabinet, a role which would normally only be taken by a leading member of the Lib Dem Group, as if nothing had happened.
Will Clegg do anything in response? Such as, say, publically criticise their decision? Since the decision was taken yesterday, from the silence it seems that the answer is no.
Crick and Channel 4 will be on the case soon, that'll sort em.
Mr. L, you say 'obvious', but unless it's a very small band (and even then) it'll cost an absolute fortune.
Agreed. But they'll do it somehow.
For starters they will cut the 40% threshold so high earners don't benefit.
Remember this Government has raised the PA massively more than inflation. Labour will revert to inflation rises in PA - which will be approx £200 per year.
In contrast the PA rose £1,335 this year - ie £8,105 to £9,440.
You'd barely know it, the Lib Dems should have been crowing this from the rooftops as it was their idea but they have been really silent. The fact that they are stumbling so badly in the opinion polls despite the fact they have made your average basic rate working tax payer better off is telling. It looks like it will be a case of thanks - but here's the door at next GE.
@taffys I've heard it will both raise and lower revenue.. so I'm inclined to think it won't make much difference.
The IFS was pretty damning just now on Chris Leslie's claim that the OBR believed the increase from 45% to 50% would raise £3bn. (he called it "disingenuous" on Radio4).
He also said that Labour had previously claimed that the rise from 40% to 50% would raise £2.6bn, so it doesn't seem credible that a rise from 45% to 50% would raise more than a rise twice as large.
That's pretty strong stuff from an organisation that is pretty neutral politically.
But I never said it would raise revenue, I just said it is doubtful whether it would drop it...
Conhome is asking how Labour would fund it though - which implies it would decrease tax revenue. That is as debateable as saying it would increase it.
This is purely political argument I think - it neither drops revenue as the Conservatives claim nor raises it as Labour claim. It is economically neutral, it might up tax revenue a smidgen at the expense of overall GDP - but I think the overall effect is gnat's farts at the edges.
Where exactly is the maxima of the laffer curve anyway ? It is a point hotly debated - the estimates seem to vary anywhere between 30ish and 70ish %.
I believe HMRC/OBR said that the net cost was about £100m (this was what the IFS bod repeated) - irrelevant in the context and I guess the signalling benefit ("attractive for business") is worth something (although I don't know if that is factored into the HMRC analysis)
There was an analysis of the Laffer Curve at some point. IIRC somewhere around 47/48% was the theoretical maximum.
From my perspective - as a 45% rate payer based on my earned income - I get more irritated about the loss of the personal allowance than about the marginal rate of tax (it tells me that the government regards me as a second class citizen). Additionally, I have a general view that what the marginal rate (income tax + NICs) gets above half my income then the government is being very greedy. 40/45% +2% feels a reasonable contribution to make.
Mr. L, you say 'obvious', but unless it's a very small band (and even then) it'll cost an absolute fortune.
Agreed. But they'll do it somehow.
For starters they will cut the 40% threshold so high earners don't benefit.
Remember this Government has raised the PA massively more than inflation. Labour will revert to inflation rises in PA - which will be approx £200 per year.
In contrast the PA rose £1,335 this year - ie £8,105 to £9,440.
Another mass shooting currently taking place in the NE USA. 3 dead so far according to Sky News
And Mr Farage wants it to be easier for us to have guns
In fairness to Mr Farage, as someone pointed out here a day or two ago (MaxPB?) the evidence about gun control and murder rates is actually far from clear. Nonetheless in terms of public opinion the British electorate are certainly of your view, so it was an interesting move I'll admit.
You'd barely know it, the Lib Dems should have been crowing this from the rooftops as it was their idea but they have been really silent. The fact that they are stumbling so badly in the opinion polls despite the fact they have made your average basic rate working tax payer better off is telling. It looks like it will be a case of thanks - but here's the door at next GE.
Really? It's been repeated millions of times.
I struggle to think of anything which has been stated more often by Con / LD politicians.
Of course that doesn't mean the public knows - because most people don't listen to anything which politicians say.
Mr. L, but isn't the 40% threshold already surprisingly low, as governments haven't wanted to increase it for political reasons?
Sadly, I earn far too little to trouble it, but isn't the threshold around £45,000 or so? A quick google suggests it's only £34,000(ish). Lowering it much more will squeeze the 20% rate into oblivion.
Mr. L, but isn't the 40% threshold already surprisingly low, as governments haven't wanted to increase it for political reasons?
Sadly, I earn far too little to trouble it, but isn't the threshold around £45,000 or so? A quick google suggests it's only £34,000(ish). Lowering it much more will squeeze the 20% rate into oblivion.
You need to add the personal allowance on top. The HMCE site on this is UTTERLY atrocious in making that clear.
Well if Lab goes for rent controls there will be real problems for anyone looking for somewhere to rent.
No sane person is going to allow the Government to confiscate their property.
And that is what rent controls amount to - you are stuck with someone in your property who you can never ever get out and the Council telling you what you can charge them.
Most people will not remember the 1970s and will have no idea what is coming.
Another mass shooting currently taking place in the NE USA. 3 dead so far according to Sky News
And Mr Farage wants it to be easier for us to have guns
In fairness to Mr Farage, as someone pointed out here a day or two ago (MaxPB?) the evidence about gun control and murder rates is actually far from clear. Nonetheless in terms of public opinion the British electorate are certainly of your view, so it was an interesting move I'll admit.
I believe that was myself. MaxPB was oppose dto the idea of liberalising gun laws. I pointed out that whilst it was politically difficult all the evidence is that gun bans do nothing to reduce murder or suicide rates.
Comments
But this does not mention the distortion in earnings either.
It is nether the end nor the beginning of the world.
It's a 'brave' strategy, but if it keeps the morale of the troops up, why not?
That said, I'm still worried about Balls's completely unnecessary "surplus" pledge. I wish Labour would realise how, in the real world, how little people care about or even really understand the deficit and public finances in general. The reason the general idea of "the country's on the brink of bankruptcy" had such currency for a while is because the news was filled with stories of European countries in dire straits; now that's over, people genuinely think the problem is solved, no matter what the official figures might say, and people genuinely don't believe there is any need for further cuts now that there's no problem anymore. So Balls' pledge unnecessarily pushes an issue, which Labour will always lose on, back to the top of the agenda, when otherwise the public was starting to disregard it. It is a typical Gordon Brown tactic, designed to bamboozle the Westminster pundits for a day without any regard for the huge problems it will create further down the road.
I have had the ASHE report open in my browser for a couple of days but it far from addresses the question in dispute up front and there is probably a derivative analysis around.
Still Labour are fighting a losing battle on this as the trends are all pointing to a cross-over having already happened and the positive gap widening during this year.
Provided of course the current rates of growth can be maintained.
Globalization is/was a robbery and this is the inevitable result. The banksters and their bought politicians looted as much industrial capital as they could from Europe and America and shipped it abroad. That's all it was/is.
This could only work *temporarily* because long-term you can't have 90% industrial capacity in one place and 90% demand in another place. There's no means to pay for it. It could only work while western *credit* lasted. So for 30-ish years the banksters had a sweet thing going where they paid eastern wages, sold at western prices and paid their tax in Monaco but that's it - now it's falling apart as it inevitably would.
The banksters have completely screwed the world economy. Again.
The analogy won't be exact obviously but assuming for the sake of argument that 2008 is this time's equivalent of 1929 but things are falling at half speed due to Bernanke's brakes we'd be around the equivalent of 1931-1932 now - at the Japanese in Manchuria, Italians in Ethiopia type of stage (not necessarily in Europe of course e.g. Arab Spring), coming up to this time's equivalent of the Spanish Civil War (also not necessarily in Europe.
'It is nether the end nor the beginning of the world.'
Agree, we need to be told how much other taxes will be increased,last time round NI was significantly increased instead of income tax & council tax more than doubled under New Labour.
This is debated almost daily on here... worth a thread?
Old thinking vs New thinking
http://www.huffingtonpost.co.uk/2014/01/24/ukip_1_n_4657394.html
It's an odd thing to feel 'excellent' about.
Thanks to the mess made of the public finances by Labour during their thirteen years of fiscal folly, the cost of servicing UK public debt already incurred is currently forecast to be around £77 bn in 2017/18. This amount is over 10% of total managed government expenditure forecast for the same year and will account for a third of social expenditure. It exceeds defence and education expenditure combined.
The interest rate charged on the debt is based on a government pursuing a sound fiscal strategy with firm plans to eliminate the structural deficit with a five year forward period and to generate surpluses which reduce debt thereafter.
If the markets begin to suspect that a future UK government intends to abandon the current deficit and debt reduction plans the inevitable consequence will be a rise in the interest rates charged to the UK to borrow from the international markets. And that means the £77 bn a year debt interest costs rapidly increasing.
Balls's surplus pledge is therefore absolutely critical to avoiding market panic and to preventing Labour economic management policy becoming dismissable on that ground alone.
Now we might not believe Balls is serious about deficit and debt reduction (he was after all Brown's chief economic advisor), but to admit he is not serious in public would be political suicide both for him personally and his party..
Good quality field at any rate to check.
Emma Burnell @EmmaBurnell_ 7m
When a young black woman tells us Farage is a breath of fresh air, heckling her shows why our refusal to listen is the problem. #Fab14
Absolutely, Danny, at one stage not that long ago we had a top tax rate of 19s 6d per £. That was, of course, when we had a government who really knew what they were doing. We should go back to those sorts of rates, maybe bang up the 40% to 50% (people on more than £32k p.a. can easily afford to shoulder a fairer share) and then put in some more progressive tax bands thereafter, say 60% on income over £50k, 70% on income over £80K and so on until we get to magic number of 97.5%. That will teach the rich a thing or two, of course we might need an exit tax and we should set that at 97.5%.
Going back to the tax rates of the forties might also mean we need to re-introduce some other ideas that were prevalent then. Strict food & fuel rationing for a start and, of course, capital controls. We could also get back to a proper planned political economy where the resources needed to run a business (including people) are allocated by the state. It all worked so well I can't imagine why we moved away from it, must have been down to those wicked Tories looking after their rich chums.
What's gonna happen in China (same as Japan in the 90s) and why it illustrates one of the flaws in the western banking model (and also how it doesn't matter who's running the flawed model whether corporate gangsters, kieretsu or a commie state.)
1. Bank lending can be either:
a) worthwhile investment
b) worthless investment (asset bubbles and consumer lending)
2. With fractional reserve bankstering the amount of lending is decided by:
savings x capital ratio
ergo the problem is there's no link between the capital ratio and the ratio of worthwhile to worthless investment
Example
A country has ten million savings and a capital ratio of 10 = 100 million to lend, so far so good, but what if there's only 40 million of worthwhile investment? The other 60 goes into worthless investment.
The capital ratio needs to be a throttle but isn't and if the capital ratio is too high you'll get endless boom and bust cycles.
The actual throttle value needs to relate to whatever you think determines the ratio of worthwhile to worthless investment. I think it's the rate of innovation so the capital ratio should go up and down based on: (low) default churn level + current rate of innovation.
Say the default capital ratio was 4
-someone invents the steam engine so the ratio goes up to 10 while it's being rolled out and then drops back to 4 again
-someone invents the IC engine so the ratio goes up to 10 while it's being rolled out and then drops back to 4 again
-someone invents the fusion power so the ratio goes up to 10 while it's being rolled out and then drops back to 4 again
etc
(I think the reason the default capital ratio in the western model is too high is because what is seen as the "normal" level comes out of a period of extremely high innovation in Europe.)
#
China and Japan
Countries that are modernizing have an effectively unlimited amount of worthwhile investment. As they near the end of that process the worthwhile investment tapers off and they need to throttle back their capital ratio. If they don't do that a tidal wave of previously worthwhile lending will go into asset bubbles or consumer lending instead. This is what happened in Japan in the 90s imo and seems like it might be happening in China now.
What's interesting about the Chinese example is even though their bankstering is state run because it's following the flawed western model it's doing the same things except because they're commies their version of a property asset bubble is building empty cities in the desert.
TL;DR
boobs
Has Balls learned nothing from his hero Hollande's mess in France.
Notwithstanding the fixed-term parliament act, a vote of no confidence could bring down an unstable Labour (minority) government within 18 months. Just enough time to pass a budget to re-set the trap before (potentially) the Tories take over again.
http://hitchensblog.mailonsunday.co.uk/2009/11/please-stop-trying-to-get-me-to-endorse-ukip.html
Or perhaps 10p is what you pay after your tax free allowance, thus cutting bills even further? Yes, I'm sure that's right.....
Anyway compare and contrast. Labour propose cutting tax for the low paid - unaffordable say the Tories. But we can afford to keep taxes lower for the fabulously paid say the Tories. I'm not sure the Tories can simultaneously resist tax cuts for the poor and tax increases for the rich and get away with a message that they understand normal people and their views on life. For all that some insist Oik is some great political tactician and Balls not, it does seem to be Ed(s?) setting the traps not the other way round.
The economic downside can be almost eliminated if the 50p rate band only kicks in a high level (6 figure salaries). That would yield all of the electoral gain but not too much revenue loss.
Tax cuts, spending cuts (real ones, not the current pretendy stuff) and money in your pocket. What's not to like (unless you want your tattoos removed by the NHS)
1. Unions fighting to increase wages and protect working conditions for normal people. Awful union bully boys throwing their weight around making threats to disrupt a business. They should be ignored.
2. Top executives whose salaries have exploded to a hundred times their average worker's salary threaten to close the entire business and sack everyone (apart from themselves) in protest at having to pay slightly more tax. Captains of business, sensible chaps whose actions should be applauded.
And you wonder why people are sick of the status quo....
My guess is that the 10p band will have some major caveats.
I assume you earn 60K?
Down load the CrowdsScores app for the latest and fastest info. This is my son's creation and it's miles faster with the news
50/50 i'd say.
When you bought your car, did you make sure it was made in the UK? Or were you happy to feather the nest of the international capitalist in order to save a few quid?
What about when you bought your mobile phone?
So could be an interesting Ukip gamble here: something like 40% should be the maximum on general principle but at the same time more enforcement on making sure rich people like BBC wallahs can't fiddle it.
Bit of a gamble in the current climate admittedly.
Whether or not they've worked harder than me, they must subsidise me because that's fair.
I shouldn't pay more for lazy people with less than me.
Why should I? That's not fair.
The one at the moment seems to focus on how much money can be credibly and sustainably wrung out of taxpayers (at whatever level) It depresses me.
How are labour going to fund it?
One poster showing that the last Labour Government took away the 10p tax from the lowest earners before they increased the top rate of income for 57 days. And while comparing this Government removing the lowest earners out of taxation altogether while consistently taxing the top rate of earners more than Labour ever did over the whole term of this Parliament.
http://www.theguardian.com/law/2014/jan/23/nuisance-and-annoyance-injunctions-abandoned-lords-defeat
It was a Labour government who stopped the boom and bust cycle. You can trust us to balance the books. #fab14
Utterly unbelieveable!
They should then hammer the point that lower tax rate's actually bring in more money!
People then have a choice between effective economic management with the Tories/coalition or spiraling off to the Left with The Ed's.
At least folk will have a choice in 2015 between two very different visions - Will be a fun election.
You will go to the bad fire if you believe that the sole purpose of tax is, or even should be, to raise the money HMG needs to provide essential services for the subjects of HMtQ.
seems to be the real tweet
@HurstLlama - I feel like I've been there for years already.
Probably more accurate and honest than the real account, though.
He also said that Labour had previously claimed that the rise from 40% to 50% would raise £2.6bn, so it doesn't seem credible that a rise from 45% to 50% would raise more than a rise twice as large.
That's pretty strong stuff from an organisation that is pretty neutral politically.
How does it work for (relatively) wealthy people like me, then, who agree that the fair thing is for those of us reaping high rewards from our economic system to subsidize public services for those on lower incomes?
Anyway, it's unsurprising that people want fairer taxes, where fairer equals paying more if you earn more money than the individual in question.
On this 10p rate: is this to be from £10k plus, or from a lower amount up to £10k?
Yeh, the public are stupid.
Typical patronising Islington labour attitude.
I am not a Labour supporter but it is blindingly obvious that no Government is going to cut the PA.
Q: How many people on here realise that the 10p tax rate still exists today?
A: It does! But it only applies to savings income and then only if you don't have earned income which takes you above the threshold.
For 2013/14:
PA = £9,440
Then 10p rate applies on next £2,790 of savings income only
So disappears at £12,230
http://www.hmrc.gov.uk/rates/it.htm#2a
Conhome is asking how Labour would fund it though - which implies it would decrease tax revenue. That is as debateable as saying it would increase it.
This is purely political argument I think - it neither drops revenue as the Conservatives claim nor raises it as Labour claim. It is economically neutral, it might up tax revenue a smidgen at the expense of overall GDP - but I think the overall effect is gnat's farts at the edges.
Where exactly is the maxima of the laffer curve anyway ?
It is a point hotly debated - the estimates seem to vary anywhere between 30ish and 70ish %.
For starters they will cut the 40% threshold so high earners don't benefit.
Remember this Government has raised the PA massively more than inflation. Labour will revert to inflation rises in PA - which will be approx £200 per year.
In contrast the PA rose £1,335 this year - ie £8,105 to £9,440.
Hancock cannot officially be a member of the Lib Dem Group on the Council since his membership of the party has been (belatedly) suspended (by Clegg). But regardless of that, the Lib Dem Group of councillors are quite content for him to carry on in his previous role on the Council Cabinet, a role which would normally only be taken by a leading member of the Lib Dem Group, as if nothing had happened.
http://www.bbc.co.uk/news/uk-england-hampshire-25894167
Will Clegg do anything in response? Such as, say, publically criticise their decision? Since the decision was taken yesterday, from the silence it seems that the answer is no.
NB. Pensioners don't benefit if their earned income is above approx £13k (they get higher PA ) - as earned income is counted first (and taxed at 20%).
There was an analysis of the Laffer Curve at some point. IIRC somewhere around 47/48% was the theoretical maximum.
From my perspective - as a 45% rate payer based on my earned income - I get more irritated about the loss of the personal allowance than about the marginal rate of tax (it tells me that the government regards me as a second class citizen). Additionally, I have a general view that what the marginal rate (income tax + NICs) gets above half my income then the government is being very greedy. 40/45% +2% feels a reasonable contribution to make.
I thought that had been quite well publicised!
Rent controls next!
http://labourlist.org/2014/01/is-labour-now-in-favour-of-rent-controls/
I struggle to think of anything which has been stated more often by Con / LD politicians.
Of course that doesn't mean the public knows - because most people don't listen to anything which politicians say.
Sadly, I earn far too little to trouble it, but isn't the threshold around £45,000 or so? A quick google suggests it's only £34,000(ish). Lowering it much more will squeeze the 20% rate into oblivion.
No sane person is going to allow the Government to confiscate their property.
And that is what rent controls amount to - you are stuck with someone in your property who you can never ever get out and the Council telling you what you can charge them.
Most people will not remember the 1970s and will have no idea what is coming.
http://www.ft.com/cms/s/0/9f4c00ea-0977-11e3-8b32-00144feabdc0.html#axzz2rR33x95B
I'm even further from troubling the higher rate than I thought.
Edited extra bit: off into a storm to walk the hound.