When the proportion of income tax paid by the top 1% rises and its aggregate contribution to the Exchequer increases by £8 bn then the onus of proof falls on the doubters.
Avery, we all know that if you could prove the opposite you'd have gotten the yellow boxes out by now. Their absence is all the proof I need.
Neil
You have to be a Midlands Misanthrope to get your own personalised yellow box.
I suspect that @AFNeil did not include the tax take for the 50 pence rate in 10/11 because it is lower than for 11/12 and 12/13. Brown announced the increase a year in advance, so allowing bonuses, commissions etc to be brought forward; in the same way that for 12/13 they were deferred as Osborne announced the reduction a year in advance. Anyway, I am sure that Avery can find that 10/11 figure for us pretty swiftly.
We’ve reached a funny old world in politics. We have two competing economic philosophies:
A: We will be responsible with the national finances. You may not do as well as you hoped but we will not go bankrupt and you are more likely to have a job. We will support the private sector and push for limited good regulation.
B: Screw tomorrow – let’s PARTAY! We will borrow and spend and damn the consequences. We will support the public sector and our union buddies and regulate the shit out of everything. The shit will not ultimately hit the fan – we promise!
What does it say about human intelligence, morality and self preservation that the B parties of the world do so much better than the A? Some countries have no A party to vote for!
France is becoming Greece. Greece is becoming Argentina. Argentina is becoming Venezuela. Venezuela is becoming Zimbabwe. There is a global overdose of bad governance. Miliband and Balls are promising a confident step down this route. Motherf&^%$ers! 1/3 or more of the British people seem inclined to vote for them! Double mother*&^%)@s.
the 50bp debate shows to me how for labour, dogma is the more important than outcome.
Why oppose a 45p rate if its raising more cash for public services than a 50p rate?
There is no evidence to support the contention that 45p rate raises more money than a 50p rate would. Who is being dogmatic now?
The OBR's view was that a 50% rate raised £100m more - so just rounding error
So worth doing, then.
No. Forecast revenues generally only includes the direct impact on income tax and National Insurance receipts.
That is the[ estimate] exclude[s] second-round effects such as reduced VAT from reduced expenditure by those affected, and wider macro-economic effects. These second-round effects are taken into account in the overall tax forecast. Similarly, the costings do not take account of any additional Capital Gains Tax revenue that may result in future from individuals substituting away from income that is taxed at the additional rate to capital gains, or the longer term increase in income tax on pensions that would have resulted from increased pension contributions.
The secondary economic benefits of a lower tax rate are almost certain to far exceed the very small amount of additional direct revenues.
The question for Balls is how is he going to fund his folly.
Interesting aspect of the polling above is that people tend to think Labour are doing this to target the rich rather than to raise money, but are hugely supportive of it anyway.
There is huge appetite out there for the rich to take a bit more of the pain, people just don't see them doing their bit, quite the opposite.
When the proportion of income tax paid by the top 1% rises and its aggregate contribution to the Exchequer increases by £8 bn then the onus of proof falls on the doubters.
Avery, we all know that if you could prove the opposite you'd have gotten the yellow boxes out by now. Their absence is all the proof I need.
Neil
You have to be a Midlands Misanthrope to get your own personalised yellow box.
No. Forecast revenues generally only includes the direct impact on income tax and National Insurance receipts.
Come on, Avery. I think the OBR went as far as it could in knocking down the static estimate of the impact from billions down to hundreds of millions. They gave it all they had!
That 100m extra revenue, by the way, would be £3.5bn were it not for the "behavioural response" of the super-rich.
"behavioural response" being another way of saying "tax avoidance".
So raise the tax, and crack down harder and harder on tax avoidance, seems to be the message.
In fairness to George O he is taking measures to reduce tax avoidance and evasion, something I can't remember the name of but actually works kind of thing... Hmm - I think whoever forms the next Gov't will continue that good work. And Labour didn't get to grips with tax avoidance/evasion in their previous administration.
It's a re-run of Ed's energy price freeze masterstroke.
The more Tories and their super-rich mates and donors bluster and whine, the more it sets the agenda, and the better for Labour as they are on the right side of the argument.
I suspect it might end up the same way, eventually leading to Cameron and Osborne coming out with some watered-down version of their own, some sort of tokenistic land tax or summat.
That's right. Three days of broadsides (and counting) by the Tories and the super-rich is much, much better than people vaguely saying "Yeah, whatever" and changing the subject (which is probably what most people on £150,000+ actually DO say). Let's argue about it for months, like the energy freeze.
The much bigger announcement yesterday was Balls promising a revenue surplus by 2020, and a reduced debt as a proportion of GDP*
He cleverly left himself room to borrow for capital investment, a wise and smart move since governments can borrow cheaply and would normally expect to make a return on such investments.
Yes the press has fallen for the wheeze and focused on the 50p policy – small beer at the best of times, yet, as you say, a move that puts the Conservatives on the side of whining billionaires.
*Nothing like the same thing as a reduced national debt, despite what Avery would try and have us believe.
Could 50p tax for Lab be a bit like immigration / benefits for Con?
ie Strong immigration / benefits policies are popular on their own but give impression of "Nasty Party" so may actually be negative for Con.
Ditto 50p tax is popular on its own but may give impression that Lab is high tax OVERALL (ie not just 50p) which may then be negative for Lab.
Broad point is that people vote on general impression - not individual policies.
I think you might be on to something. I think a difference is perceived between a party wanting to pursue a policy because they think it is necessary, if regrettable, and for the general good, and between a party wanting to pursue a policy for ideological reasons, because they enjoy doing so.
In Labour's example they would need to argue that they saw the tax increase as a regrettable but necessary step to balance the country's finances, and one that they would seek to reverse when conditions allowed them to do so. Unfortunately for them they have a few supporters who wish to tax the rich enough to make them squirm, and this has the danger of creating the wrong impression.
The other problem for Labour is that there is no evidence that the tax increase would help the country's finances. All available evidence suggests the contrary,: that fewer high earners will pay less tax, both proportionally and in absolute terms, as a result of a rate hike.
Even Balls has admitted that the deficit won't be lowered by raising the tax. His justification is that it is popular amongst Labour's core vote.
So not a regrettable but necessary tax, but a regrettable and unnecessary additional cost.
Balls didn't say that – at least not in his extended interview with Marr yesterday. What he did say was that he didn't know how much it would raise – the only truthful answer as we don't know how many people will qualify for the tax/take steps to avoid it until we get there. But I think he expects it to reduce the deficit somewhat, albeit not by a massive amount.
It was actually a pretty good interview by Balls – you should watch it.
Chris Leslie said £3bn. I think we should be able to take that as an official view from Labour.
In Neil world someone paying more tax than the year before must be "getting richer"
If lower rates do not yield more than higher rates, then George Osborne must be insane. Why else would he have risked dreadful publicity by cutting the top rate in the teeth of a huge austerity drive?
While we dont have the proof after the event we do know that Osborne himself expected that reducing the rate to 45p would lose money. This is because that is what underpinned his red book for that budget (the OBR estimated that it would cost hundreds of milllions).
You may like to call George Osborne insane for doing it anyway, I couldnt possibly comment.
What is certainly a lie is people saying that he did it to raise money - we know he expected it to lose money.
The OBR estimate is £100m, not "hundreds of millions"
We’ve reached a funny old world in politics. We have two competing economic philosophies:
A: We will be responsible with the national finances. You may not do as well as you hoped but we will not go bankrupt and you are more likely to have a job. We will support the private sector and push for limited good regulation.
B: Screw tomorrow – let’s PARTAY! We will borrow and spend and damn the consequences. We will support the public sector and our union buddies and regulate the shit out of everything. The shit will not ultimately hit the fan – we promise!
What does it say about human intelligence, morality and self preservation that the B parties of the world do so much better than the A? Some countries have no A party to vote for!
France is becoming Greece. Greece is becoming Argentina. Argentina is becoming Venezuela. Venezuela is becoming Zimbabwe. There is a global overdose of bad governance. Miliband and Balls are promising a confident step down this route. Motherf&^%$ers! 1/3 or more of the British people seem inclined to vote for them! Double mother*&^%)@s.
A person earning £200,000 per year would see his/her annual take home pay decrease from £116,000 to £114,500 were the 50 pence tax rate to be reintroduced. I am afraid that whatever you may believe this does not represent screwing tomorrow.
What does it say about human intelligence, morality and self preservation that a lot of wealthy people cannot see that and instead seek to portray themselves as victims? It's pretty unedifying to be honest.
In Neil world someone paying more tax than the year before must be "getting richer"
If lower rates do not yield more than higher rates, then George Osborne must be insane. Why else would he have risked dreadful publicity by cutting the top rate in the teeth of a huge austerity drive?
While we dont have the proof after the event we do know that Osborne himself expected that reducing the rate to 45p would lose money. This is because that is what underpinned his red book for that budget (the OBR estimated that it would cost hundreds of milllions).
You may like to call George Osborne insane for doing it anyway, I couldnt possibly comment.
What is certainly a lie is people saying that he did it to raise money - we know he expected it to lose money.
The OBR estimate is £100m, not "hundreds of millions"
The rate was reduced for more than one year, Charles. So hundreds of millions is perfectly accurate.
the 50bp debate shows to me how for labour, dogma is the more important than outcome.
Why oppose a 45p rate if its raising more cash for public services than a 50p rate?
There is no evidence to support the contention that 45p rate raises more money than a 50p rate would. Who is being dogmatic now?
The OBR's view was that a 50% rate raised £100m more - so just rounding error
So worth doing, then.
Not necessarily - the message that Britain is an attractive place to do business is worth a lot but can't be quantified. If only a few multinationals based their HQ here as a result then the tiny cost of the lower tax rate is easily offset.
That 100m extra revenue, by the way, would be £3.5bn were it not for the "behavioural response" of the super-rich.
"behavioural response" being another way of saying "tax avoidance".
So raise the tax, and crack down harder and harder on tax avoidance, seems to be the message.
In fairness to George O he is taking measures to reduce tax avoidance and evasion, something I can't remember the name of but actually works kind of thing... Hmm - I think whoever forms the next Gov't will continue that good work. And Labour didn't get to grips with tax avoidance/evasion in their previous administration.
No harm in cracking down on avoidance and evasion and having a 50 pence tax rate, of course. We should combine Tory and Labour policies on this.
IIRC when Lawson brought in the 40% rate there was in fact a substantial increase in tax take. Some of this, pace Neil, was because the economy was booming at the time so a lot more money was being made. But what was equally significant was that at 40% complicated and challengeable tax avoidance was simply not worth it.
As the rate goes above 40% I think you will see a considerable reversion to previous unproductive behaviour. We also have a tax system, thanks largely to Gordon Brown, that is unbelieveably complicated and full of holes. So we have simple tax avoidance by becoming a company, getting paid in dividends rather than wages and avoiding both employers and employee NI, absurdly generous treatment of capital gains making converting money into a capital gain instead of income very attractive, entrepreneurial based tax reliefs which have been abused to create "losses" that reduce the tax bill etc etc.
When you have such gaping holes in the system and you increase the pressure by increasing the base rate it seems inevitable to me that tax avoidance will increase, probably by enough to make sure no additional income is raised. So what is the point? It is very likely, if empirically hard to prove, that having a higher tax rate makes attracting inward investment into this country more difficult. Ireland would be yet another example (on corporate taxes) of the international competition for lower taxes and the advantages of being competitive.
So what we have is a spite tax. A desire to be seen to hurt the better off even if it does not raise any more money for services and might make growth marginally more difficult. And 60% of the population agree with this? We are doomed.
That 100m extra revenue, by the way, would be £3.5bn were it not for the "behavioural response" of the super-rich.
"behavioural response" being another way of saying "tax avoidance".
So raise the tax, and crack down harder and harder on tax avoidance, seems to be the message.
Deciding whether to invest in the UK or in a competing tax jurisdiction cannot, even with a requisite stretch of a lefty's imagination, be classed as "tax avoidance".
"Michael Fabricant @Mike_Fabricant 1m "How the hell can we be taken seriously as a future Gov't when we keep taking crap decisions on the economy?" a Shadow Cab member tells me.
Michael Fabricant @Mike_Fabricant 3m Humungous row now developing in Labour over 50% tax plan. Maybe popular but making same mistake as the French just been told by Lab Shad Cab"
All going off in the Tory Party HQ. Cameron upset Labour has out manouvered him by saying "they will make his chums pay more". Can cut the atmosphere with your butlers knife a minster tells me
GilesJones @ Toryinsiderhonest 4m
Cameron has fallen out with Gideon and Lynton, jolly hockey sticks everywhere, wanting to know why he is always last to know about Labour policy. Also wants to know why someone in Tory HQ has hid the booklet "How to turn on your leccy when the fuse trips" a minister tells me
We’ve reached a funny old world in politics. We have two competing economic philosophies:
A: We will be responsible with the national finances. You may not do as well as you hoped but we will not go bankrupt and you are more likely to have a job. We will support the private sector and push for limited good regulation.
B: Screw tomorrow – let’s PARTAY! We will borrow and spend and damn the consequences. We will support the public sector and our union buddies and regulate the shit out of everything. The shit will not ultimately hit the fan – we promise!
What does it say about human intelligence, morality and self preservation that the B parties of the world do so much better than the A? Some countries have no A party to vote for!
France is becoming Greece. Greece is becoming Argentina. Argentina is becoming Venezuela. Venezuela is becoming Zimbabwe. There is a global overdose of bad governance. Miliband and Balls are promising a confident step down this route. Motherf&^%$ers! 1/3 or more of the British people seem inclined to vote for them! Double mother*&^%)@s.
A person earning £200,000 per year would see his/her annual take home pay decrease from £116,000 to £114,500 were the 50 pence tax rate to be reintroduced. I am afraid that whatever you may believe this does not represent screwing tomorrow.
What does it say about human intelligence, morality and self preservation that a lot of wealthy people cannot see that and instead seek to portray themselves as victims? It's pretty unedifying to be honest.
Fine. But 1% of income tax payers already fund over 30% of the total take. The top 10% most of the rest. How much of anyone's salary is it moral to take? That the state takes more of someone's earnings than they themselves do is just wrong. Your argument is relative and has no limit therefore. Why not tax the rich at 75%? Or 90%? (If not, why not?) At what point does Paul's desire to have Peter's money become theft?
In Neil world someone paying more tax than the year before must be "getting richer"
If lower rates do not yield more than higher rates, then George Osborne must be insane. Why else would he have risked dreadful publicity by cutting the top rate in the teeth of a huge austerity drive?
While we dont have the proof after the event we do know that Osborne himself expected that reducing the rate to 45p would lose money. This is because that is what underpinned his red book for that budget (the OBR estimated that it would cost hundreds of milllions).
You may like to call George Osborne insane for doing it anyway, I couldnt possibly comment.
What is certainly a lie is people saying that he did it to raise money - we know he expected it to lose money.
The OBR estimate is £100m, not "hundreds of millions"
The rate was reduced for more than one year, Charles. So hundreds of millions is perfectly accurate.
convention, unless you are G. Brown, is to cite annual figures.
Im still wondering why George Osborne risked an enormous amount of political capital to cut the top rate.
The story at the time was that he wanted 40p but but would have blunted it with moves towards a mansion tax? Dave insisted on 45p as a compromise. Whatever - it was an absolute polling disaster. Which suggests that reversing it might be a polling success.
In Neil world someone paying more tax than the year before must be "getting richer"
If lower rates do not yield more than higher rates, then George Osborne must be insane. Why else would he have risked dreadful publicity by cutting the top rate in the teeth of a huge austerity drive?
While we dont have the proof after the event we do know that Osborne himself expected that reducing the rate to 45p would lose money. This is because that is what underpinned his red book for that budget (the OBR estimated that it would cost hundreds of milllions).
You may like to call George Osborne insane for doing it anyway, I couldnt possibly comment.
What is certainly a lie is people saying that he did it to raise money - we know he expected it to lose money.
The OBR estimate is £100m, not "hundreds of millions"
The rate was reduced for more than one year, Charles. So hundreds of millions is perfectly accurate.
convention, unless you are G. Brown, is to cite annual figures.
I was perfectly clear in what I said and it remains accurate.
We’ve reached a funny old world in politics. We have two competing economic philosophies:
A: We will be responsible with the national finances. You may not do as well as you hoped but we will not go bankrupt and you are more likely to have a job. We will support the private sector and push for limited good regulation.
B: Screw tomorrow – let’s PARTAY! We will borrow and spend and damn the consequences. We will support the public sector and our union buddies and regulate the shit out of everything. The shit will not ultimately hit the fan – we promise!
What does it say about human intelligence, morality and self preservation that the B parties of the world do so much better than the A? Some countries have no A party to vote for!
France is becoming Greece. Greece is becoming Argentina. Argentina is becoming Venezuela. Venezuela is becoming Zimbabwe. There is a global overdose of bad governance. Miliband and Balls are promising a confident step down this route. Motherf&^%$ers! 1/3 or more of the British people seem inclined to vote for them! Double mother*&^%)@s.
A person earning £200,000 per year would see his/her annual take home pay decrease from £116,000 to £114,500 were the 50 pence tax rate to be reintroduced. I am afraid that whatever you may believe this does not represent screwing tomorrow.
What does it say about human intelligence, morality and self preservation that a lot of wealthy people cannot see that and instead seek to portray themselves as victims? It's pretty unedifying to be honest.
What does it say about Labour who had a 40p rate for all but a few months from 1997 to 2010 that they suddenly think it's 'fair' to have 50p now. Nowt to do with economic intelligence methinks. It's back to class war and the politics of envy.
"Michael Fabricant @Mike_Fabricant 1m "How the hell can we be taken seriously as a future Gov't when we keep taking crap decisions on the economy?" a Shadow Cab member tells me.
Michael Fabricant @Mike_Fabricant 3m Humungous row now developing in Labour over 50% tax plan. Maybe popular but making same mistake as the French just been told by Lab Shad Cab"
All going off in the Tory Party HQ. Cameron upset Labour has out manouvered him by saying "they will make his chums pay more". Can cut the atmosphere with your butlers knife a minster tells me
GilesJones @ Toryinsiderhonest 4m
Cameron has fallen out with Gideon and Lynton, jolly hockey sticks everywhere, wanting to know why he is always last to know about Labour policy. Also wants to know why someone in Tory HQ has hid the booklet "How to turn on your leccy when the fuse trips" a minister tells me
Pray, compouter, what is a "butler[']s knife"?
I think your source must have meant a butter knife, a deliberately blunt instrument metaphorically similar to the Shadow Chancellor of the Exchequer.
"Phone for the fish knives, Norman As cook is a little unnerved;"
HMRC revenues from top taxpayers: 2011/12: £41.3bn (50% rate); 12/13: £41.6bn (50%); 13/14: £49.36bn (45% top rate).
That's proof that the rich are getting richer not proof that 45p raises more than 50p would. As I'm sure you know.
Unless you run two parallel economies identical bar the tax rate you wont get any better evidence than that.
By the GE there will be 3 data points at the 45p rate..
Hollande is carrying out the parallel test.
The France experience is probably the only thing holding back Ed and Ed from a 75p+ rate...
Miliband and Balls are only interested in gaining power,they have no other motivation.Hollande's 75% hate tax was successful from their amoral point of view in that he won power. They may well follow even further in the foot-steps of their maître.
We’ve reached a funny old world in politics. We have two competing economic philosophies:
A: We will be responsible with the national finances. You may not do as well as you hoped but we will not go bankrupt and you are more likely to have a job. We will support the private sector and push for limited good regulation.
B: Screw tomorrow – let’s PARTAY! We will borrow and spend and damn the consequences. We will support the public sector and our union buddies and regulate the shit out of everything. The shit will not ultimately hit the fan – we promise!
What does it say about human intelligence, morality and self preservation that the B parties of the world do so much better than the A? Some countries have no A party to vote for!
France is becoming Greece. Greece is becoming Argentina. Argentina is becoming Venezuela. Venezuela is becoming Zimbabwe. There is a global overdose of bad governance. Miliband and Balls are promising a confident step down this route. Motherf&^%$ers! 1/3 or more of the British people seem inclined to vote for them! Double mother*&^%)@s.
A person earning £200,000 per year would see his/her annual take home pay decrease from £116,000 to £114,500 were the 50 pence tax rate to be reintroduced. I am afraid that whatever you may believe this does not represent screwing tomorrow.
What does it say about human intelligence, morality and self preservation that a lot of wealthy people cannot see that and instead seek to portray themselves as victims? It's pretty unedifying to be honest.
What does it say about Labour who had a 40p rate for all but a few months from 1997 to 2010 that they suddenly think it's 'fair' to have 50p now. Nowt to do with economic intelligence methinks. It's back to class war and the politics of envy.
I'd say it has more with changing fiscal circumstances over their term in government.
We’ve reached a funny old world in politics. We have two competing economic philosophies:
A: We will be responsible with the national finances. You may not do as well as you hoped but we will not go bankrupt and you are more likely to have a job. We will support the private sector and push for limited good regulation.
B: Screw tomorrow – let’s PARTAY! We will borrow and spend and damn the consequences. We will support the public sector and our union buddies and regulate the shit out of everything. The shit will not ultimately hit the fan – we promise!
What does it say about human intelligence, morality and self preservation that the B parties of the world do so much better than the A? Some countries have no A party to vote for!
France is becoming Greece. Greece is becoming Argentina. Argentina is becoming Venezuela. Venezuela is becoming Zimbabwe. There is a global overdose of bad governance. Miliband and Balls are promising a confident step down this route. Motherf&^%$ers! 1/3 or more of the British people seem inclined to vote for them! Double mother*&^%)@s.
A person earning £200,000 per year would see his/her annual take home pay decrease from £116,000 to £114,500 were the 50 pence tax rate to be reintroduced. I am afraid that whatever you may believe this does not represent screwing tomorrow.
What does it say about human intelligence, morality and self preservation that a lot of wealthy people cannot see that and instead seek to portray themselves as victims? It's pretty unedifying to be honest.
Fine. But 1% of income tax payers already fund over 30% of the total take. The top 10% most of the rest. How much of anyone's salary is it moral to take? That the state takes more of someone's earnings than they themselves do is just wrong. Your argument is relative and has no limit therefore. Why not tax the rich at 75%? Or 90%? (If not, why not?) At what point does Paul's desire to have Peter's money become theft?
I agree there is a judgement to make. As a top rate taxpayer, 50 pence seems reasonable to me given the current situation we are in. The top 1% can afford to pay a little bit more. The howling is unseemly, as are implied threats to leave the country, statements that hard work is being disincentivised (!!!) and ludicrous lamentations relating to "human intelligence, morality and self preservation".
We’ve reached a funny old world in politics. We have two competing economic philosophies:
A: We will be responsible with the national finances. You may not do as well as you hoped but we will not go bankrupt and you are more likely to have a job. We will support the private sector and push for limited good regulation.
B: Screw tomorrow – let’s PARTAY! We will borrow and spend and damn the consequences. We will support the public sector and our union buddies and regulate the shit out of everything. The shit will not ultimately hit the fan – we promise!
What does it say about human intelligence, morality and self preservation that the B parties of the world do so much better than the A? Some countries have no A party to vote for!
France is becoming Greece. Greece is becoming Argentina. Argentina is becoming Venezuela. Venezuela is becoming Zimbabwe. There is a global overdose of bad governance. Miliband and Balls are promising a confident step down this route. Motherf&^%$ers! 1/3 or more of the British people seem inclined to vote for them! Double mother*&^%)@s.
A person earning £200,000 per year would see his/her annual take home pay decrease from £116,000 to £114,500 were the 50 pence tax rate to be reintroduced. I am afraid that whatever you may believe this does not represent screwing tomorrow.
What does it say about human intelligence, morality and self preservation that a lot of wealthy people cannot see that and instead seek to portray themselves as victims? It's pretty unedifying to be honest.
What does it say about Labour who had a 40p rate for all but a few months from 1997 to 2010 that they suddenly think it's 'fair' to have 50p now. Nowt to do with economic intelligence methinks. It's back to class war and the politics of envy.
I'd say it has more with changing fiscal circumstances over their term in government.
You are a nice man, Neil.
Fiscal circumstances suddenly changing 57 days before an election Brown knew he would lose?
We’ve reached a funny old world in politics. We have two competing economic philosophies:
A: We will be responsible with the national finances. You may not do as well as you hoped but we will not go bankrupt and you are more likely to have a job. We will support the private sector and push for limited good regulation.
B: Screw tomorrow – let’s PARTAY! We will borrow and spend and damn the consequences. We will support the public sector and our union buddies and regulate the shit out of everything. The shit will not ultimately hit the fan – we promise!
What does it say about human intelligence, morality and self preservation that the B parties of the world do so much better than the A? Some countries have no A party to vote for!
France is becoming Greece. Greece is becoming Argentina. Argentina is becoming Venezuela. Venezuela is becoming Zimbabwe. There is a global overdose of bad governance. Miliband and Balls are promising a confident step down this route. Motherf&^%$ers! 1/3 or more of the British people seem inclined to vote for them! Double mother*&^%)@s.
A person earning £200,000 per year would see his/her annual take home pay decrease from £116,000 to £114,500 were the 50 pence tax rate to be reintroduced. I am afraid that whatever you may believe this does not represent screwing tomorrow.
What does it say about human intelligence, morality and self preservation that a lot of wealthy people cannot see that and instead seek to portray themselves as victims? It's pretty unedifying to be honest.
What does it say about Labour who had a 40p rate for all but a few months from 1997 to 2010 that they suddenly think it's 'fair' to have 50p now. Nowt to do with economic intelligence methinks. It's back to class war and the politics of envy.
I'd say it has more with changing fiscal circumstances over their term in government.
Nonsense - if the issue is revenue as opposed to politicking then this proposal will do less than nothing to improve the revenue take. and you know it. For me - a pensioner the measures to raise the personal allowance to £10000 have made a huge impact on my net income. We hear nothing from Labour on this and I suspect won't until it's too late.
On the subject of the proposed energy price freeze, can any one point me at the law that allows HMG to tell a company how much to charge for their goods/services?
Presumably Labour would have to write such a law and have it passed by Parliament, via the normal procedures.
Can you point me to an existing statute that would prevent them from doing so?
No I can't, I was just pondering the practicalities of HMG introducing a price freeze. Still if HMG setting the price of energy is such a good idea I wonder if there wouldn't be merit in widening the scope of the legislation to include all prices.
the 50bp debate shows to me how for labour, dogma is the more important than outcome.
Why oppose a 45p rate if its raising more cash for public services than a 50p rate?
There is no evidence to support the contention that 45p rate raises more money than a 50p rate would. Who is being dogmatic now?
The OBR's view was that a 50% rate raised £100m more - so just rounding error
So worth doing, then.
Not necessarily - the message that Britain is an attractive place to do business is worth a lot but can't be quantified. If only a few multinationals based their HQ here as a result then the tiny cost of the lower tax rate is easily offset.
The marginal rates for the very top remain lower than those for parents earning £50-£60k. Presumably the introduction of the Child Benefit Tax will also trigger an exodus from these shores, due to businesses being concerned that middle-managers will pay too much tax on their earnings?
We’ve reached a funny old world in politics. We have two competing economic philosophies:
A: We will be responsible with the national finances. You may not do as well as you hoped but we will not go bankrupt and you are more likely to have a job. We will support the private sector and push for limited good regulation.
B: Screw tomorrow – let’s PARTAY! We will borrow and spend and damn the consequences. We will support the public sector and our union buddies and regulate the shit out of everything. The shit will not ultimately hit the fan – we promise!
What does it say about human intelligence, morality and self preservation that the B parties of the world do so much better than the A? Some countries have no A party to vote for!
France is becoming Greece. Greece is becoming Argentina. Argentina is becoming Venezuela. Venezuela is becoming Zimbabwe. There is a global overdose of bad governance. Miliband and Balls are promising a confident step down this route. Motherf&^%$ers! 1/3 or more of the British people seem inclined to vote for them! Double mother*&^%)@s.
A person earning £200,000 per year would see his/her annual take home pay decrease from £116,000 to £114,500 were the 50 pence tax rate to be reintroduced. I am afraid that whatever you may believe this does not represent screwing tomorrow.
What does it say about human intelligence, morality and self preservation that a lot of wealthy people cannot see that and instead seek to portray themselves as victims? It's pretty unedifying to be honest.
What does it say about Labour who had a 40p rate for all but a few months from 1997 to 2010 that they suddenly think it's 'fair' to have 50p now. Nowt to do with economic intelligence methinks. It's back to class war and the politics of envy.
I'd say it has more with changing fiscal circumstances over their term in government.
You are a nice man, Neil.
Fiscal circumstances suddenly changing 57 days before an election Brown knew he would lose?
Why did GO leave it a year to bring in the 45 pence rate? Is it, perchance, because if he had done it immediately the take from top rate payers would have decreased significantly? Or is it because governments these days do normally leave it a year before the tax changes they announce come into play?
My judgment is that nobody should pay 50% tax. Nobody. The intelligence and morality comment was directed primarily at those governments which pursue policies that will, for sure, screw up a country. Chavez died a billionaire. How smart or moral has a few decades of Peronist socialism been for Argentina. No doubt the French political class and the Enarques are all very comfortable. But is their governance of France moral? I say it is not. The stronger the state the weaker the country.
We’ve reached a funny old world in politics. We have two competing economic philosophies:
A: We will be responsible with the national finances. You may not do as well as you hoped but we will not go bankrupt and you are more likely to have a job. We will support the private sector and push for limited good regulation.
B: Screw tomorrow – let’s PARTAY! We will borrow and spend and damn the consequences. We will support the public sector and our union buddies and regulate the shit out of everything. The shit will not ultimately hit the fan – we promise!
What does it say about human intelligence, morality and self preservation that the B parties of the world do so much better than the A? Some countries have no A party to vote for!
France is becoming Greece. Greece is becoming Argentina. Argentina is becoming Venezuela. Venezuela is becoming Zimbabwe. There is a global overdose of bad governance. Miliband and Balls are promising a confident step down this route. Motherf&^%$ers! 1/3 or more of the British people seem inclined to vote for them! Double mother*&^%)@s.
A person earning £200,000 per year would see his/her annual take home pay decrease from £116,000 to £114,500 were the 50 pence tax rate to be reintroduced. I am afraid that whatever you may believe this does not represent screwing tomorrow.
What does it say about human intelligence, morality and self preservation that a lot of wealthy people cannot see that and instead seek to portray themselves as victims? It's pretty unedifying to be honest.
What does it say about Labour who had a 40p rate for all but a few months from 1997 to 2010 that they suddenly think it's 'fair' to have 50p now. Nowt to do with economic intelligence methinks. It's back to class war and the politics of envy.
I'd say it has more with changing fiscal circumstances over their term in government.
You are a nice man, Neil.
Fiscal circumstances suddenly changing 57 days before an election Brown knew he would lose?
Why did GO leave it a year to bring in the 45 pence rate? Is it, perchance, because if he had done it immediately the take from top rate payers would have decreased significantly? Or is it because governments these days do normally leave it a year before the tax changes they announce come into play?
He commissioned a report on the fiscal impact of the cutting the top rate, SO.
It would have been wrong for him to have prejudiced an independent analysis and evidence based report.
He commissioned a report on the fiscal impact of the cutting the top rate, SO.
It would have been wrong for him to have prejudiced an independent analysis and evidence based report.
Osborne prefers fact to fantasy.
And yet he still cut the rate despite knowing it would reduce his projected tax take. Osborne prefers to have the facts and then make the boneheaded decision anyway.
@thelastboyscout - I note that the end of the last thread you posted a comment saying that I expected the Labour VI to drop over 50% tax. For the record, I did not say that and do not expect any immediate change in party VIs, which I think will remain broadly stable until the Euros in May. I do expect the Tories to close the gap with Labour over the summer and autumn, however. If Labour still have regular polling leads by Christmas, then and only then will I start to question my current belief that we're on course for another hung parliament with a Tory lead in seats.
We’ve reached a funny old world in politics. We have two competing economic philosophies:
A: We will be responsible with the national finances. You may not do as well as you hoped but we will not go bankrupt and you are more likely to have a job. We will support the private sector and push for limited good regulation.
B: Screw tomorrow – let’s PARTAY! We will borrow and spend and damn the consequences. We will support the public sector and our union buddies and regulate the shit out of everything. The shit will not ultimately hit the fan – we promise!
What does it say about human intelligence, morality and self preservation that the B parties of the world do so much better than the A? Some countries have no A party to vote for!
France is becoming Greece. Greece is becoming Argentina. Argentina is becoming Venezuela. Venezuela is becoming Zimbabwe. There is a global overdose of bad governance. Miliband and Balls are promising a confident step down this route. Motherf&^%$ers! 1/3 or more of the British people seem inclined to vote for them! Double mother*&^%)@s.
A person earning £200,000 per year would see his/her annual take home pay decrease from £116,000 to £114,500 were the 50 pence tax rate to be reintroduced. I am afraid that whatever you may believe this does not represent screwing tomorrow.
What does it say about human intelligence, morality and self preservation that a lot of wealthy people cannot see that and instead seek to portray themselves as victims? It's pretty unedifying to be honest.
What it says is that the Labour Party persist in believing that actions don't have consequences - that because you're only taking a little bit more, only regulating a little bit more, only placing a few extra impositions, no-one's behaviour is going to change, and everyone will contribute happily to the Greater Good As Set Out By The Labour Party. Of course it's only a little extra tax, and of course ALL high earners aren't going to leave or stop earning - but enough will that an impact will be felt.
Those advocating this tax fail to realise the large degree to which a lot of high earners can choose how much they work, and how much they earn. They don't have to think of themselves as victims to have an impact - they just have to decide that, given that the government's going to take half of it, on balance, they're not going to bother slogging their guts out for the next few weekends for the benefit of an extra £20k that the government will take half of. It doesn't matter whether they think the extra tax is a worthwhile contribution to society or merely a spite tax; suddenly, the amount of income the country generates is going to drop.
Tim Shipman (Mail)@ShippersUnbound47 secs IFS says Balls' argument that rich paid £10bn more in 50p yrs was based on projections not actual returns
Tom Newton Dunn@tnewtondunn3 mins Ouch. IFS verdict on 50p: "There is little additional evidence to suggest it would raise more than was estimated by HMRC back in 2012".
Tim Shipman (Mail)@ShippersUnbound3 mins IFS appear to have dropped a gentle torpedo into Ed Balls' fleet of arguments for 50p tax rate
Also important for social cohesion that ordinary people think the richest are contributing to society, paying their fair share, which clearly isn't the case at the moment.
The 50p rate alone won't fix that, but it's a step in the right direction.
The richest 1% of earners contribute around 28% of income tax. This actually went up when the 50p rate was dropped to 45p. How much more of a share would it have to be for this to be 'fair'?
the 50bp debate shows to me how for labour, dogma is the more important than outcome.
Why oppose a 45p rate if its raising more cash for public services than a 50p rate?
There is no evidence to support the contention that 45p rate raises more money than a 50p rate would. Who is being dogmatic now?
The OBR's view was that a 50% rate raised £100m more - so just rounding error
So worth doing, then.
Not necessarily - the message that Britain is an attractive place to do business is worth a lot but can't be quantified. If only a few multinationals based their HQ here as a result then the tiny cost of the lower tax rate is easily offset.
The marginal rates for the very top remain lower than those for parents earning £50-£60k. Presumably the introduction of the Child Benefit Tax will also trigger an exodus from these shores, due to businesses being concerned that middle-managers will pay too much tax on their earnings?
Benefit claimants should try this argument. "Cut benefits and we'll just play the system more"
I'm sure Tories would accept that argument as readily as they accept it from the super-rich.
When you earn over £150,000 per year you have a number of options available to you to play the system, Hugh.
When you sit on a sofa all day, funded by an ESA transfer, watching the Kyle show while pretending to be incapacitated and fearing every knock on the door might be a nice man from ATOS, then your options are limited.
In Neil world someone paying more tax than the year before must be "getting richer"
If lower rates do not yield more than higher rates, then George Osborne must be insane. Why else would he have risked dreadful publicity by cutting the top rate in the teeth of a huge austerity drive?
While we dont have the proof after the event we do know that Osborne himself expected that reducing the rate to 45p would lose money. This is because that is what underpinned his red book for that budget (the OBR estimated that it would cost hundreds of milllions).
You may like to call George Osborne insane for doing it anyway, I couldnt possibly comment.
What is certainly a lie is people saying that he did it to raise money - we know he expected it to lose money.
The OBR estimate is £100m, not "hundreds of millions"
The rate was reduced for more than one year, Charles. So hundreds of millions is perfectly accurate.
convention, unless you are G. Brown, is to cite annual figures.
I was perfectly clear in what I said and it remains accurate.
Nope, utterly misleading. Health spending in England is about £500bn.
True - over 5 years - but the annual budget is c.£100bn.
But at the moment, the best evidence we have still suggests that raising the top rate of tax would raise little revenue and make, at best, a marginal contribution to reducing the budget deficit an incoming government would face after the next election.
the 50bp debate shows to me how for labour, dogma is the more important than outcome.
Why oppose a 45p rate if its raising more cash for public services than a 50p rate?
There is no evidence to support the contention that 45p rate raises more money than a 50p rate would. Who is being dogmatic now?
The OBR's view was that a 50% rate raised £100m more - so just rounding error
So worth doing, then.
Not necessarily - the message that Britain is an attractive place to do business is worth a lot but can't be quantified. If only a few multinationals based their HQ here as a result then the tiny cost of the lower tax rate is easily offset.
The marginal rates for the very top remain lower than those for parents earning £50-£60k. Presumably the introduction of the Child Benefit Tax will also trigger an exodus from these shores, due to businesses being concerned that middle-managers will pay too much tax on their earnings?
Middle managers don't make the decisions about where to locate! Sad, but that's the way of the world. (For what it's worth I think the current CB system is bollox. I'd probably limit it to 2 kids and leave it like that. Nice and simple).
@thelastboyscout - I note that the end of the last thread you posted a comment saying that I expected the Labour VI to drop over 50% tax. For the record, I did not say that and do not expect any immediate change in party VIs, which I think will remain broadly stable until the Euros in May. I do expect the Tories to close the gap with Labour over the summer and autumn, however. If Labour still have regular polling leads by Christmas, then and only then will I start to question my current belief that we're on course for another hung parliament with a Tory lead in seats.
So it's yet another post of the "this will damage Labour... but erm will make no impact on its vote" variety?
Also important for social cohesion that ordinary people think the richest are contributing to society, paying their fair share, which clearly isn't the case at the moment.
The 50p rate alone won't fix that, but it's a step in the right direction.
Quite right, Mr Hugh. The 50p rate should only be a starter for those rich buggers making more than £52K. Then the tax rate should go up in increments of 10P of tax for each £20k of income. Then rich buggers who earn more than £144k p.a. would really be paying their fair share for once.
Fraser's obviously not spoken with PB's Neil as he knows.
And you've obviously not understood anything I've posted about this!
But the fact is you are straining to do some explaining and, as you (should) know, when you're explaining you're losing.
You are on the wrong side of public opinion over this. The polls show it and they showed it when Osborne first cut the rate. Instead of lashing out at those of us who are trying to help you just deal with it.
There's only one true thing you can say about the 50p tax, for now: it's caused furore and a ruckus within both the Tory and the Labour parties at the same time.
It says quite a lot about both our politics and politicians.
What they say is that depending on the elasticity of behaviour it either earned £700m a year for the Treasury or cost £600m a year. We don't know and we won't ever know.
IMHO that is good enough. The idea that you should increase a tax on income (as opposed to a harmful substance like tobacco) not knowing for sure that it will increase the tax take really is for the birds, or the Eds, take your pick.
On the big news of the day, the BBC did plug Rufus' campaign too and despite noting they'd read his blog, missed his claims about Cameron and Hunt wanting to kill children.
Fraser's obviously not spoken with PB's Neil as he knows.
And you've obviously not understood anything I've posted about this!
But the fact is you are straining to do some explaining and, as you (should) know, when you're explaining you're losing.
You are on the wrong side of public opinion over this. The polls show it and they showed it when Osborne first cut the rate. Instead of lashing out at those of us who are trying to help you just deal with it.
Neil, you've had a wretched afternoon. Your credibility is in the Blanchflower gutter.
There's only one true thing you can say about the 50p tax, for now: it's caused furore and a ruckus within both the Tory and the Labour parties at the same time.
It says quite a lot about both our politics and politicians.
I think Tories are quite united in wanting to cut the rate and Labour seems quite united in wanting to raise it (you'll always find people willing to say different if you dangle a microphone in front of them). The public, right now, seems to have sided with Labour on this point.
Fraser's obviously not spoken with PB's Neil as he knows.
And you've obviously not understood anything I've posted about this!
But the fact is you are straining to do some explaining and, as you (should) know, when you're explaining you're losing.
You are on the wrong side of public opinion over this. The polls show it and they showed it when Osborne first cut the rate. Instead of lashing out at those of us who are trying to help you just deal with it.
Neil, you've had a wretched afternoon. Your credibility is in the Blanchflower gutter.
After Avery earlier that's the *second* nicest thing anyone has ever said to me on pbc!
Personally I'd have a personal allowance of £35k, and a 100% tax rate after that. I'll set up the account forthwith for all the tax proceeds to head into
Labour's 50% tax rate is just the same as the CON "control the immigrants". Both aim to be crowd pleasers with their core bases but both are based on faulty economics.
The Tory attack on Balls would carry more weight if there was more analysis of detrminental economic impact of their immigration rhetoric.
He commissioned a report on the fiscal impact of the cutting the top rate, SO.
It would have been wrong for him to have prejudiced an independent analysis and evidence based report.
Osborne prefers fact to fantasy.
And yet he still cut the rate despite knowing it would reduce his projected tax take. Osborne prefers to have the facts and then make the boneheaded decision anyway.
Neil
My reading of the Treasury report leads me to different conclusions from those you have reached.
It is really a case of all hard cost/benefits being near equal then the soft and consequential benefits rule the day.
I really hope Osborne triumphs on this one as I really don't relish the thought of trawling through the academic literature to kill yet another false meme.
After a week of destroying the myths that George hasn't met his 2010 borrowing forecasts and that he planned to eliminate the defiicit by shifting debt onto households, a man needs a good rest.
Shouldn't we all be feeling the soft benefits of tim's sojourn by now?
There's only one true thing you can say about the 50p tax, for now: it's caused furore and a ruckus within both the Tory and the Labour parties at the same time.
It says quite a lot about both our politics and politicians.
I think Tories are quite united in wanting to cut the rate and Labour seems quite united in wanting to raise it (you'll always find people willing to say different if you dangle a microphone in front of them). The public, right now, seems to have sided with Labour on this point.
Wrong again - the cut has happened, that's history.
The debate now is on the merits or not of raising it in 2015. I say it's a crap move and purely for politics and not economics, as indeed was the first time it came in as Labour's toxic present last time.
I would happily pay a 50p tax rate as I've never earned anything remotely like £150k a year.
But that's why there's two different camps. And also why young people nowadays think they're badly off. It's what you get used to.
Alternatively, you could call it getting spoiled.
As a solicitor I used to always wind up my senior partner, who specialised in tax affairs, that one of my life's ambitions was to pay CGT. Still haven't managed it.
I don't earn £150K most years so I am not affected by this highest rate but the cheque I will figuratively write in a few days will include about £1K reimbursing HMT for my CB for my youngest (we stopped CB for his sister when she was 16 despite the fact she is still at school) and I am getting very little personal allowance. So my taxes have gone up considerably. And quite right too. This country is broke.
My reading of the Treasury report leads me to different conclusions from those you have reached.
But it cant have led you to a conclusion that was different from " yet he still cut the rate despite knowing it would reduce his projected tax take" because that it is what actually happened.
@thelastboyscout - I note that the end of the last thread you posted a comment saying that I expected the Labour VI to drop over 50% tax. For the record, I did not say that and do not expect any immediate change in party VIs, which I think will remain broadly stable until the Euros in May. I do expect the Tories to close the gap with Labour over the summer and autumn, however. If Labour still have regular polling leads by Christmas, then and only then will I start to question my current belief that we're on course for another hung parliament with a Tory lead in seats.
So it's yet another post of the "this will damage Labour... but erm will make no impact on its vote" variety?
No. I don't think it will damage or benefit Labour in VI, for now. I do think it will help the Tory funding problem and provide plenty of resources for the election campaign. I also think it will help provide clear attack lines for the Tories to exploit as the election campaign starts to ramp up in earnest in September. I believe if will only start to 'yield fruit' in VI as we head through the autumn.
Any facts or figures to back that up or should we just rely on your assertion? I'm pointing to the current polling and what happened in the wake of the budget when the rate was cut. What are you basing your opinion on?
Individual employers need to spell out to their staff what the Labour tax proposal could mean for their company. We saw the power of the left dissolve when the Grangemouth employers made it clear it was their way or redundancy. Time for the gloves to come off.
Labour is the business hating party and benefits loving party. Tories need to keep hammering that message home.
Any facts or figures to back that up or should we just rely on your assertion? I'm pointing to the current polling and what happened in the wake of the budget when the rate was cut. What are you basing your opinion on?
I'm interested in the speech of a Shadow Chancellor saying he wants to raise it to 50p again and whether that's a good thing for the economy or not - you can broaden it out as much as you wish politically but the IFS shows it's got little to do with credible deficit reduction.
Let's hear about the hard choices of taking away the Winter Fuel Allowance from the wealthy next as part of this touch plan.
He commissioned a report on the fiscal impact of the cutting the top rate, SO.
It would have been wrong for him to have prejudiced an independent analysis and evidence based report.
Osborne prefers fact to fantasy.
And yet he still cut the rate despite knowing it would reduce his projected tax take. Osborne prefers to have the facts and then make the boneheaded decision anyway.
Neil
My reading of the Treasury report leads me to different conclusions from those you have reached.
It is really a case of all hard cost/benefits being near equal then the soft and consequential benefits rule the day.
I really hope Osborne triumphs on this one as I really don't relish the thought of trawling through the academic literature to kill yet another false meme.
After a week of destroying the myths that George hasn't met his 2010 borrowing forecasts and that he planned to eliminate the defiicit by shifting debt onto households, a man needs a good rest.
Shouldn't we all be feeling the soft benefits of tim's sojourn by now?
Osborne clueless as ever. Wasting his time debating imaginary dividing lines rather than doing anything tangible.
I see our good friends at RBS are taking another £3bn charge for assorted misdemeanors. Maybe if George had stopped arguing about loose change he could have tackled some of our more entrenched problems.
This is your point and illustrates the tokenism of it
Tim Shipman (Mail)@ShippersUnbound9 mins IFS makes clear Balls tax pledge is political not economic choice. Twitter reaction suggests he got the public mood right if not the numbers
the 50bp debate shows to me how for labour, dogma is the more important than outcome.
Why oppose a 45p rate if its raising more cash for public services than a 50p rate?
There is no evidence to support the contention that 45p rate raises more money than a 50p rate would. Who is being dogmatic now?
The OBR's view was that a 50% rate raised £100m more - so just rounding error
So worth doing, then.
Not necessarily - the message that Britain is an attractive place to do business is worth a lot but can't be quantified. If only a few multinationals based their HQ here as a result then the tiny cost of the lower tax rate is easily offset.
The marginal rates for the very top remain lower than those for parents earning £50-£60k. Presumably the introduction of the Child Benefit Tax will also trigger an exodus from these shores, due to businesses being concerned that middle-managers will pay too much tax on their earnings?
Middle managers don't make the decisions about where to locate! Sad, but that's the way of the world. (For what it's worth I think the current CB system is bollox. I'd probably limit it to 2 kids and leave it like that. Nice and simple).
Very wise. I have no idea why the government chose this route, which is a bureaucratic nightmare (and costly!) and looks as if it may lead to large amounts of non-payment. I like your idea - just don't apply it retrospectively, or do, but with plenty of notice.
We’ve reached a funny old world in politics. We have two competing economic philosophies:
A: We will be responsible with the national finances. You may not do as well as you hoped but we will not go bankrupt and you are more likely to have a job. We will support the private sector and push for limited good regulation.
B: Screw tomorrow – let’s PARTAY! We will borrow and spend and damn the consequences. We will support the public sector and our union buddies and regulate the shit out of everything. The shit will not ultimately hit the fan – we promise!
What does it say about human intelligence, morality and self preservation that the B parties of the world do so much better than the A? Some countries have no A party to vote for!
France is becoming Greece. Greece is becoming Argentina. Argentina is becoming Venezuela. Venezuela is becoming Zimbabwe. There is a global overdose of bad governance. Miliband and Balls are promising a confident step down this route. Motherf&^%$ers! 1/3 or more of the British people seem inclined to vote for them! Double mother*&^%)@s.
A person earning £200,000 per year would see his/her annual take home pay decrease from £116,000 to £114,500 were the 50 pence tax rate to be reintroduced. I am afraid that whatever you may believe this does not represent screwing tomorrow.
What does it say about human intelligence, morality and self preservation that a lot of wealthy people cannot see that and instead seek to portray themselves as victims? It's pretty unedifying to be honest.
How has our economy performed since the tax reduction to 45%?
Why would you want to put that at risk and be like France
High tax never ever works despite all the moral arguments for it. Labour have put this policy forward for their own political reasons not for the betterment of the country. They will do anything to get back into power no matter the damage they will do to the country.
Why not increase the tax to 99%, that would be popular, these people clearly do not deserve their own money that they have earned.
Without incentive the economy will not grow. Its a human nature thing.
The proportion of tax paid by a group is irrelevant it's determined their relative wealth. The rich are getting richer so they can afford to pay more. Tories love that metric of course
My reading of the Treasury report leads me to different conclusions from those you have reached.
But it cant have led you to a conclusion that was different from " yet he still cut the rate despite knowing it would reduce his projected tax take" because that it is what actually happened.
Neil, we don't know that. What we know is that the tax take from the highest paid increased by about £8bn in the year the tax cut was introduced. Is it possible it might have increased even more without the tax cut? Possible but unlikely.
Caveats.
The figures were distorted by bonuses being deferred from the earlier tax year. The earnings of our better paid have been increasing far more than the rest of us. There is this elasticity thing.
The question I would put to Labour supporters (and you given the position you have taken on this) is does this matter? Would they support a higher rate for the best paid in our society even if it did not raise more tax? I think a significant number would because they are concerned about inequality and some would because hating the rich is easier than thinking or accepting responsibility for your own actions.
I take a more logical position (I would say that wouldn't I). If it could be shown that there would be a clear and significant increase in tax from the increase I would not be against it, at least until the deficit was eliminated. But if it cannot then it is the wrong thing to do. The evidence is at best inconclusive. QED.
My reading of the Treasury report leads me to different conclusions from those you have reached.
But it cant have led you to a conclusion that was different from " yet he still cut the rate despite knowing it would reduce his projected tax take" because that it is what actually happened.
Not proven, Neil.
Income shifting will have affected both 2012/13 and 2013/14 tax receipts.
Fiscal drag will have increased 150K plus tax payers (but not by a vast amount).
The economic recovery will probably have boosted income per head in this group (an assumption which needs challenging).
Behavioural changes involving tax residency figures need to be analysed.
We won't really have reliable figures until the end of this fiscal year, but I suspect that a number of interest groups will publish in advance.
And all this just address the direct impact on income tax and NI revenues.
We still need someone to test the academic consensus on TIE against the current UK environment.
What is certain though is that the aggregate tax receipt figures and ratios have improved following the lowering of the tax.
What we don't know for sure is why.
But the prima facie evidence is with Osborne on this one. Until proven otherwise he can just rely on the headline stats.
Yes, we do know that - I said it reduced his "projected" tax take. Which it did.
When it comes to whether this matters - cutting the rate to 45p resulted in one of the most significant poll shifts over this entire parliament so for those betting on the outcome of the next GE I would suggest it absolutely does matter.
Yes, we do know that - I said it reduced his "projected" tax take. Which it did.
When it comes to whether this matters - cutting the rate to 45p resulted in one of the most significant poll shifts over this entire parliament so for those betting on the outcome of the next GE I would suggest it absolutely does matter.
It's absolutely proven, Avery. It's in black and white. Whatever about what actually happened we know for a *fact* that the projections of tax revenue were reduced. I know you know this so I am presuming you simply misinterpreted my post.
The proportion of tax paid by a group is irrelevant it's determined their relative wealth. The rich are getting richer so they can afford to pay more.
Haven;t just about everybody who works also got much richer over the last 40 years? (except the last few, when living standards have undoubtedly fallen back...??)
And yet, according to Fraser Nelson, the bottom 50% have never contributed less to the tax take.
He commissioned a report on the fiscal impact of the cutting the top rate, SO.
It would have been wrong for him to have prejudiced an independent analysis and evidence based report.
Osborne prefers fact to fantasy.
And yet he still cut the rate despite knowing it would reduce his projected tax take. Osborne prefers to have the facts and then make the boneheaded decision anyway.
Neil
My reading of the Treasury report leads me to different conclusions from those you have reached.
It is really a case of all hard cost/benefits being near equal then the soft and consequential benefits rule the day.
I really hope Osborne triumphs on this one as I really don't relish the thought of trawling through the academic literature to kill yet another false meme.
After a week of destroying the myths that George hasn't met his 2010 borrowing forecasts and that he planned to eliminate the defiicit by shifting debt onto households, a man needs a good rest.
Shouldn't we all be feeling the soft benefits of tim's sojourn by now?
Osborne clueless as ever. Wasting his time debating imaginary dividing lines rather than doing anything tangible.
I see our good friends at RBS are taking another £3bn charge for assorted misdemeanors. Maybe if George had stopped arguing about loose change he could have tackled some of our more entrenched problems.
Good afternoon, Mr Brooke.
Where have you been?
You left ar without the security of reinforcement!
Judging from what's been posted Neil, it was the OBR reduced the projections. That's not the same as saying Ossie himself thought the take would go down is it?
He commissioned a report on the fiscal impact of the cutting the top rate, SO.
It would have been wrong for him to have prejudiced an independent analysis and evidence based report.
Osborne prefers fact to fantasy.
And yet he still cut the rate despite knowing it would reduce his projected tax take. Osborne prefers to have the facts and then make the boneheaded decision anyway.
Neil
My reading of the Treasury report leads me to different conclusions from those you have reached.
It is really a case of all hard cost/benefits being near equal then the soft and consequential benefits rule the day.
I really hope Osborne triumphs on this one as I really don't relish the thought of trawling through the academic literature to kill yet another false meme.
After a week of destroying the myths that George hasn't met his 2010 borrowing forecasts and that he planned to eliminate the defiicit by shifting debt onto households, a man needs a good rest.
Shouldn't we all be feeling the soft benefits of tim's sojourn by now?
Osborne clueless as ever. Wasting his time debating imaginary dividing lines rather than doing anything tangible.
I see our good friends at RBS are taking another £3bn charge for assorted misdemeanors. Maybe if George had stopped arguing about loose change he could have tackled some of our more entrenched problems.
Good afternoon, Mr Brooke.
Where have you been?
You left ar without reinforcements.
Currently in Ulster enjoying the Mediterranean climes and cafe lifestyle. I haven't been able to poke you with a stick much as I'm caught up in family things. However I've been enjoying Cameron's sudden conversion to the Brooke recovery programme. What with import substitution last week and red tape this week it can only be a matter of time until he gets round to bank and tax reform. What a shame it's all about 3 years too late.
Yes, we do know that - I said it reduced his "projected" tax take. Which it did.
When it comes to whether this matters - cutting the rate to 45p resulted in one of the most significant poll shifts over this entire parliament so for those betting on the outcome of the next GE I would suggest it absolutely does matter.
Neil, it is absurd to rely on a projection (especially a Treasury one) when the numbers are in. I accept that the numbers are difficult to interpret but what we have is a Chancellor who chose not to accept certain advice because he thought he knew better. The weight of the evidence is that he probably did.
On the political implications I agree 100% and said so at the time.
Neil, it is absurd to rely on a projection (especially a Treasury one) when the numbers are in.
The projection gives us an insight into Osborne's mind - he was willing to lose revenue to cut the rate. We know that because that's what he did when faced with the projections at the time. Even if we could tell anything from the data (and I dont think we can) it is all hindsight that Osborne didnt have at the time.
The counter factual of the actuality is never truly knowable though (and not in this case), whereas the counter factual of the projection in this case is...
the 50bp debate shows to me how for labour, dogma is the more important than outcome.
Why oppose a 45p rate if its raising more cash for public services than a 50p rate?
There is no evidence to support the contention that 45p rate raises more money than a 50p rate would. Who is being dogmatic now?
The OBR's view was that a 50% rate raised £100m more - so just rounding error
So worth doing, then.
Not necessarily - the message that Britain is an attractive place to do business is worth a lot but can't be quantified. If only a few multinationals based their HQ here as a result then the tiny cost of the lower tax rate is easily offset.
The marginal rates for the very top remain lower than those for parents earning £50-£60k. Presumably the introduction of the Child Benefit Tax will also trigger an exodus from these shores, due to businesses being concerned that middle-managers will pay too much tax on their earnings?
Middle managers don't make the decisions about where to locate! Sad, but that's the way of the world. (For what it's worth I think the current CB system is bollox. I'd probably limit it to 2 kids and leave it like that. Nice and simple).
Very wise. I have no idea why the government chose this route, which is a bureaucratic nightmare (and costly!) and looks as if it may lead to large amounts of non-payment. I like your idea - just don't apply it retrospectively, or do, but with plenty of notice.
I wouldn't apply it retrospectively... not sure what notice allows you to do. Sell the kids?
Comments
A: We will be responsible with the national finances. You may not do as well as you hoped but we will not go bankrupt and you are more likely to have a job. We will support the private sector and push for limited good regulation.
B: Screw tomorrow – let’s PARTAY! We will borrow and spend and damn the consequences. We will support the public sector and our union buddies and regulate the shit out of everything. The shit will not ultimately hit the fan – we promise!
What does it say about human intelligence, morality and self preservation that the B parties of the world do so much better than the A? Some countries have no A party to vote for!
France is becoming Greece. Greece is becoming Argentina. Argentina is becoming Venezuela. Venezuela is becoming Zimbabwe. There is a global overdose of bad governance. Miliband and Balls are promising a confident step down this route. Motherf&^%$ers! 1/3 or more of the British people seem inclined to vote for them! Double mother*&^%)@s.
DH's article is not about the economics - more about the spite flowing from the frothing mouths of Ed and Ed ..
That is the[ estimate] exclude[s] second-round effects such as reduced VAT from reduced expenditure by those affected, and wider macro-economic effects. These second-round effects are taken into account in the overall tax forecast. Similarly, the costings do not take account of any additional Capital Gains Tax revenue that may result in future from individuals substituting away from income that is taxed at the additional rate to capital gains, or the longer term increase in income tax on pensions that would have resulted from increased pension contributions.
The secondary economic benefits of a lower tax rate are almost certain to far exceed the very small amount of additional direct revenues.
The question for Balls is how is he going to fund his folly.
The much bigger announcement yesterday was Balls promising a revenue surplus by 2020, and a reduced debt as a proportion of GDP*
He cleverly left himself room to borrow for capital investment, a wise and smart move since governments can borrow cheaply and would normally expect to make a return on such investments.
Yes the press has fallen for the wheeze and focused on the 50p policy – small beer at the best of times, yet, as you say, a move that puts the Conservatives on the side of whining billionaires.
*Nothing like the same thing as a reduced national debt, despite what Avery would try and have us believe.
What does it say about human intelligence, morality and self preservation that a lot of wealthy people cannot see that and instead seek to portray themselves as victims? It's pretty unedifying to be honest.
As the rate goes above 40% I think you will see a considerable reversion to previous unproductive behaviour. We also have a tax system, thanks largely to Gordon Brown, that is unbelieveably complicated and full of holes. So we have simple tax avoidance by becoming a company, getting paid in dividends rather than wages and avoiding both employers and employee NI, absurdly generous treatment of capital gains making converting money into a capital gain instead of income very attractive, entrepreneurial based tax reliefs which have been abused to create "losses" that reduce the tax bill etc etc.
When you have such gaping holes in the system and you increase the pressure by increasing the base rate it seems inevitable to me that tax avoidance will increase, probably by enough to make sure no additional income is raised. So what is the point? It is very likely, if empirically hard to prove, that having a higher tax rate makes attracting inward investment into this country more difficult. Ireland would be yet another example (on corporate taxes) of the international competition for lower taxes and the advantages of being competitive.
So what we have is a spite tax. A desire to be seen to hurt the better off even if it does not raise any more money for services and might make growth marginally more difficult. And 60% of the population agree with this? We are doomed.
All going off in the Tory Party HQ. Cameron upset Labour has out manouvered him by saying "they will make his chums pay more". Can cut the atmosphere with your butlers knife a minster tells me
GilesJones @ Toryinsiderhonest 4m
Cameron has fallen out with Gideon and Lynton, jolly hockey sticks everywhere, wanting to know why he is always last to know about Labour policy. Also wants to know why someone in Tory HQ has hid the booklet "How to turn on your leccy when the fuse trips" a minister tells me
Especially if, as has been argued by the left, he could have made more leaving it where it was.
And don't give me the sixth-form 'rich friends' bullsh8t.
No serious politician would think he could remain in power by helping his rich friends over millions of voters.
http://order-order.com/2014/01/27/dear-nick-please-stop-him-before-someone-else-is-abusedtape-proves-downing-street-received-hancock-warning-in-11/#comments
This is really getting quite serious for Clegg now.
http://rboatright.blogspot.co.uk/2013/03/comparing-england-or-uk-murder-rates.html
What does it say about Labour who had a 40p rate for all but a few months from 1997 to 2010 that they suddenly think it's 'fair' to have 50p now. Nowt to do with economic intelligence methinks. It's back to class war and the politics of envy.
I think your source must have meant a butter knife, a deliberately blunt instrument metaphorically similar to the Shadow Chancellor of the Exchequer.
"Phone for the fish knives, Norman
As cook is a little unnerved;"
Fiscal circumstances suddenly changing 57 days before an election Brown knew he would lose?
Any ideas why, if it was just a political elephant trap, Osborne and Cameron stumbled right into it?
My judgment is that nobody should pay 50% tax. Nobody. The intelligence and morality comment was directed primarily at those governments which pursue policies that will, for sure, screw up a country. Chavez died a billionaire. How smart or moral has a few decades of Peronist socialism been for Argentina. No doubt the French political class and the Enarques are all very comfortable. But is their governance of France moral? I say it is not. The stronger the state the weaker the country.
It would have been wrong for him to have prejudiced an independent analysis and evidence based report.
Osborne prefers fact to fantasy.
Seems more likely he was saying his haircut was like Richard III to me, but then again Im biased
http://samedifference1.com/2014/01/27/ukips-godfrey-bloom-asks-disabled-student-are-you-richard-iii/
Those advocating this tax fail to realise the large degree to which a lot of high earners can choose how much they work, and how much they earn. They don't have to think of themselves as victims to have an impact - they just have to decide that, given that the government's going to take half of it, on balance, they're not going to bother slogging their guts out for the next few weekends for the benefit of an extra £20k that the government will take half of. It doesn't matter whether they think the extra tax is a worthwhile contribution to society or merely a spite tax; suddenly, the amount of income the country generates is going to drop.
Tim Shipman (Mail)@ShippersUnbound47 secs
IFS says Balls' argument that rich paid £10bn more in 50p yrs was based on projections not actual returns
Tom Newton Dunn@tnewtondunn3 mins
Ouch. IFS verdict on 50p: "There is little additional evidence to suggest it would raise more than was estimated by HMRC back in 2012".
Tim Shipman (Mail)@ShippersUnbound3 mins
IFS appear to have dropped a gentle torpedo into Ed Balls' fleet of arguments for 50p tax rate
When you sit on a sofa all day, funded by an ESA transfer, watching the Kyle show while pretending to be incapacitated and fearing every knock on the door might be a nice man from ATOS, then your options are limited.
But don't get upset. Help is here for both.
George will help the former.
IDS is onto the latter.
True - over 5 years - but the annual budget is c.£100bn.
But at the moment, the best evidence we have still suggests that raising the top rate of tax would raise little revenue and make, at best, a marginal contribution to reducing the budget deficit an incoming government would face after the next election.
Full demolition of the twin Edded folly here:
http://www.ifs.org.uk/publications/7066
Just like they were during Osbrowne's omnishambles trying to defend it.
That turned out well for them, didn't it?
The PB tories are always wrong. The PB tories never learn.
Harry Cole@MrHarryCole5 mins
What was it that Balls always says about listening to the IFS?
Fraser Nelson@FraserNelson22 mins
IFS says no one can be certain about effect of cutting 50p tax rate but it could have "actually raised about £600m"
Quite right, Mr Hugh. The 50p rate should only be a starter for those rich buggers making more than £52K. Then the tax rate should go up in increments of 10P of tax for each £20k of income. Then rich buggers who earn more than £144k p.a. would really be paying their fair share for once.
But that's why there's two different camps. And also why young people nowadays think they're badly off. It's what you get used to.
Alternatively, you could call it getting spoiled.
But the fact is you are straining to do some explaining and, as you (should) know, when you're explaining you're losing.
You are on the wrong side of public opinion over this. The polls show it and they showed it when Osborne first cut the rate. Instead of lashing out at those of us who are trying to help you just deal with it.
It says quite a lot about both our politics and politicians.
What they say is that depending on the elasticity of behaviour it either earned £700m a year for the Treasury or cost £600m a year. We don't know and we won't ever know.
IMHO that is good enough. The idea that you should increase a tax on income (as opposed to a harmful substance like tobacco) not knowing for sure that it will increase the tax take really is for the birds, or the Eds, take your pick.
Not much news sense there...
http://www.bbc.co.uk/news/uk-25900089
The Tory attack on Balls would carry more weight if there was more analysis of detrminental economic impact of their immigration rhetoric.
My reading of the Treasury report leads me to different conclusions from those you have reached.
It is really a case of all hard cost/benefits being near equal then the soft and consequential benefits rule the day.
I really hope Osborne triumphs on this one as I really don't relish the thought of trawling through the academic literature to kill yet another false meme.
After a week of destroying the myths that George hasn't met his 2010 borrowing forecasts and that he planned to eliminate the defiicit by shifting debt onto households, a man needs a good rest.
Shouldn't we all be feeling the soft benefits of tim's sojourn by now?
http://blogs.spectator.co.uk/coffeehouse/2014/01/why-ed-balls-is-deceiving-us-about-his-plans-and-the-50p-tax/
The debate now is on the merits or not of raising it in 2015. I say it's a crap move and purely for politics and not economics, as indeed was the first time it came in as Labour's toxic present last time.
I don't earn £150K most years so I am not affected by this highest rate but the cheque I will figuratively write in a few days will include about £1K reimbursing HMT for my CB for my youngest (we stopped CB for his sister when she was 16 despite the fact she is still at school) and I am getting very little personal allowance. So my taxes have gone up considerably. And quite right too. This country is broke.
Everyone on PB is eating nuts today.
Labour is the business hating party and benefits loving party. Tories need to keep hammering that message home.
Let's hear about the hard choices of taking away the Winter Fuel Allowance from the wealthy next as part of this touch plan.
I see our good friends at RBS are taking another £3bn charge for assorted misdemeanors. Maybe if George had stopped arguing about loose change he could have tackled some of our more entrenched problems.
Tim Shipman (Mail)@ShippersUnbound9 mins
IFS makes clear Balls tax pledge is political not economic choice. Twitter reaction suggests he got the public mood right if not the numbers
Why would you want to put that at risk and be like France
High tax never ever works despite all the moral arguments for it. Labour have put this policy forward for their own political reasons not for the betterment of the country. They will do anything to get back into power no matter the damage they will do to the country.
Why not increase the tax to 99%, that would be popular, these people clearly do not deserve their own money that they have earned.
Without incentive the economy will not grow. Its a human nature thing.
Caveats.
The figures were distorted by bonuses being deferred from the earlier tax year.
The earnings of our better paid have been increasing far more than the rest of us.
There is this elasticity thing.
The question I would put to Labour supporters (and you given the position you have taken on this) is does this matter? Would they support a higher rate for the best paid in our society even if it did not raise more tax? I think a significant number would because they are concerned about inequality and some would because hating the rich is easier than thinking or accepting responsibility for your own actions.
I take a more logical position (I would say that wouldn't I). If it could be shown that there would be a clear and significant increase in tax from the increase I would not be against it, at least until the deficit was eliminated. But if it cannot then it is the wrong thing to do. The evidence is at best inconclusive. QED.
Income shifting will have affected both 2012/13 and 2013/14 tax receipts.
Fiscal drag will have increased 150K plus tax payers (but not by a vast amount).
The economic recovery will probably have boosted income per head in this group (an assumption which needs challenging).
Behavioural changes involving tax residency figures need to be analysed.
We won't really have reliable figures until the end of this fiscal year, but I suspect that a number of interest groups will publish in advance.
And all this just address the direct impact on income tax and NI revenues.
We still need someone to test the academic consensus on TIE against the current UK environment.
What is certain though is that the aggregate tax receipt figures and ratios have improved following the lowering of the tax.
What we don't know for sure is why.
But the prima facie evidence is with Osborne on this one. Until proven otherwise he can just rely on the headline stats.
When it comes to whether this matters - cutting the rate to 45p resulted in one of the most significant poll shifts over this entire parliament so for those betting on the outcome of the next GE I would suggest it absolutely does matter.
Are you betting on it Neil
Haven;t just about everybody who works also got much richer over the last 40 years? (except the last few, when living standards have undoubtedly fallen back...??)
And yet, according to Fraser Nelson, the bottom 50% have never contributed less to the tax take.
Where have you been?
You left ar without the security of reinforcement!
I am happy with my book for the next GE
(Though I suspect most punters who have been here since the heady days immediately after the last GE all are.)
Judging from what's been posted Neil, it was the OBR reduced the projections. That's not the same as saying Ossie himself thought the take would go down is it?
On the political implications I agree 100% and said so at the time.