The costings simply do not add up. Take the income tax. This is the one that everyone is focussing on even though it is only supposed to be £6.4bn of the total required. Recent evidence of the 45%/50% rate of tax implies it didn't actually make much difference to the total tax take. Part of the reason is people tax planning, legally and legitimately, as well as more dodgy practices. The lower the tax rate the less likely people are to worry about these. Corporation tax is even less predictable and will definitely raise proportionately less. There is even more room for tax planning with global groups. A lower tax rate encourages groups to allocate profit to UK. I am fairly open to nationalisation in some respects but anyone who remembers what it was like in 70's will be very sceptical. I shouldn't think any new trains had been bought for years; whereas there has been a lot of investment in rolling stock in recent years. Personally I think it can be done better by improving their targets. It strikes me biggest problem is line capacity. Everyone would like a better NHS but it is a bottomless drain as medical science improves and more of us get older. Goodness knows what it will be like when us baby boomers hit the time we all need care. One thing is for certain though is it won't be helped by taking the money out of the economy and reducing future growth or inward investment. This manifesto is a shambles
"This manifesto is a shambles, because rich people know how to cheat"
The most striking thing about targeting those on £80k+ (which only represents a small % of the population) is the disdain it demonstrates towards those who aspire to doing so someday (a far larger % of the population, even a majority I might guess).
There's always been a certain irony in the fact that 'Labour' is the party for those that don't work....
I don't earn more than 80k and the idea that the tax changes would put me off from striving to get up to that level is laughable.
The bit you miss is the further up the ladder and in general terms the more you earn the more stressful life becomes. You get to a point where 'the next step up' isn't worth it if the tax take is too high.
I know what you're trying to say but stress is someone working for £11k and not having any fecking food in the cupboard to give the kids breakfast.
We can all start worrying about not filling jobs paying £150k a year plus when there's nobody applying and I don't see that time coming any time soon.
I turned down the next job up, but you are right someone else took it (my old boss), he's now on indefinite leave with stress!! I'm not kidding!!
Having little or no money and not knowing where you are going to find the money to put food on the table for your children is I think at least as stressful as earning a lot and getting stressed because of it.
Why we look up to the latter and down on the former is a matter of human nature. It's also a reason why our society is prevalent with greed and self interest at the expense of anybody else. As I see it there is no drive to change this sad state of affairs.
By most measures I would be described as pretty damn rich (right place right time - no more than that and I'm no better than anyone else because of it) but I've never looked down on anyone on the basis of how little they earn - and I've certainly looked down on some very, very rich people, but not because they were rich.
Re: the bolded bit above - I would agree as a generalisation - and I can easily point a finger at the primary cause. It wasn't always like that.
Had to skip a few pages but an alert from my good friend @Dippenhall has dragged me back in.
On privatization. I think it is really important to revisit the nature and effectiveness of privatized utilities. I think it is right for Labour to target railways and water in this respect.
There was a bloke in Thatcher's earliest cabinet ( John Moore?) who said that the success test would be if privatization created competition, which in turn delivered better service.
Right then. Has anyone recently tried the competitive alternative to South Eastern Trains? Or how much better does the competitive water to that supplied by Thames Water taste? Epic fail there, I submit.
In the case of railways it is the ludicrous type of privatization that is the main problem. @Dippenhall cites the German model. He presumably thinks Deutsche Bahn is a private company. Well it is , but who is the largest shareholder? the German State, with 93%. DB retains both the infrastructure and the core intercity network. Why? because Germany understands that a smooth, super fast intercity network is essential to keep that country moving and doing business. There are private operators on the edges of the network, sometimes with quite large chunks, and they keep DB on their toes, but if you want to get from Frankfurt to Jever, as I did a while back, you don't have to worry about multiple ticket prices of different operators. The ticketing system is national and transparent.
I have no idea how the Germans do their water, but it surely is a key natural asset too. How can you possibly introduce competition into water? And if you can't, where is the benefit? It surely is a key strategic resource which should be in our hands. i was going to say in State hands. But of course water, like most of our energy, is now in State hands. The French State.
I am glad Labour have put this on the agenda. Nobody is happy with all aspects of any party's manifesto ( except the Ukippers pre 23 June, I suppose) , but these proposals on re-nationalization give me renewed resolve to vote for the excellent Clive Efford on June 8th.
Hi Prague,
re the 'south eastern trains competition' - is it not the competition for when the franchises are renewed that he was referring to rather than have more than one choice of train to take ?
The point being, why would this change be considered a show of disdain to those with 'the audacity to have drive and ambition' when there is already a much higher marginal rate of tax for those with taxable earnings that fall below the £123k threshold. Surely, if this was a factor then a policy with the same effect is already in practice.
If you thought your income would be permanently stuck between £100k and £121k then it probably would!
If I thought my income would be permanently stuck between £100k and £121k I'd be FUCKING ECSTATIC! Jesus Christ do you people ever really listen to yourselves? That's roughly 4 times the national average salary, more than 6 times what someone doing 40 hours a week on minimum wage gets, more than 15 times the very highest rate of ESA (sickness benefit) and 26 times the highest rate of JSA (unemployment benefit). All this whining about possibly having to pay a bit more to fund the infrastructure and public services of the country that have helped you to be able to progress in the way that you have is pathetic. So you may have to cut back on the occasional luxury? Try explaining how hard done by you'd be to the disabled people who've lost funding for their carer or their mobility vehicle or are struggling to get the right level of ESA, the nurse who's trying to care for too many patients at once due to gaps in the staffing rota, or the teaching assistant who's about to lose her job due to education cuts. I doubt you'd get very much sympathy.
Think you missed the point but glad you got that off your chest.
The costings simply do not add up. Take the income tax. This is the one that everyone is focussing on even though it is only supposed to be £6.4bn of the total required. Recent evidence of the 45%/50% rate of tax implies it didn't actually make much difference to the total tax take. Part of the reason is people tax planning, legally and legitimately, as well as more dodgy practices. The lower the tax rate the less likely people are to worry about these. Corporation tax is even less predictable and will definitely raise proportionately less. There is even more room for tax planning with global groups. A lower tax rate encourages groups to allocate profit to UK. I am fairly open to nationalisation in some respects but anyone who remembers what it was like in 70's will be very sceptical. I shouldn't think any new trains had been bought for years; whereas there has been a lot of investment in rolling stock in recent years. Personally I think it can be done better by improving their targets. It strikes me biggest problem is line capacity. Everyone would like a better NHS but it is a bottomless drain as medical science improves and more of us get older. Goodness knows what it will be like when us baby boomers hit the time we all need care. One thing is for certain though is it won't be helped by taking the money out of the economy and reducing future growth or inward investment. This manifesto is a shambles
"This manifesto is a shambles, because rich people know how to cheat"
The costings simply do not add up. Take the income tax. This is the one that everyone is focussing on even though it is only supposed to be £6.4bn of the total required. Recent evidence of the 45%/50% rate of tax implies it didn't actually make much difference to the total tax take. Part of the reason is people tax planning, legally and legitimately, as well as more dodgy practices. The lower the tax rate the less likely people are to worry about these. Corporation tax is even less predictable and will definitely raise proportionately less. There is even more room for tax planning with global groups. A lower tax rate encourages groups to allocate profit to UK. I am fairly open to nationalisation in some respects but anyone who remembers what it was like in 70's will be very sceptical. I shouldn't think any new trains had been bought for years; whereas there has been a lot of investment in rolling stock in recent years. Personally I think it can be done better by improving their targets. It strikes me biggest problem is line capacity. Everyone would like a better NHS but it is a bottomless drain as medical science improves and more of us get older. Goodness knows what it will be like when us baby boomers hit the time we all need care. One thing is for certain though is it won't be helped by taking the money out of the economy and reducing future growth or inward investment. This manifesto is a shambles
"This manifesto is a shambles, because rich people know how to cheat"
...or just work less
Why would they work less?
Being in a higher tax bracket still means you take home far more money than lower brackets.
The costings simply do not add up. Take the income tax. This is the one that everyone is focussing on even though it is only supposed to be £6.4bn of the total required. Recent evidence of the 45%/50% rate of tax implies it didn't actually make much difference to the total tax take. Part of the reason is people tax planning, legally and legitimately, as well as more dodgy practices. The lower the tax rate the less likely people are to worry about these. Corporation tax is even less predictable and will definitely raise proportionately less. There is even more room for tax planning with global groups. A lower tax rate encourages groups to allocate profit to UK. I am fairly open to nationalisation in some respects but anyone who remembers what it was like in 70's will be very sceptical. I shouldn't think any new trains had been bought for years; whereas there has been a lot of investment in rolling stock in recent years. Personally I think it can be done better by improving their targets. It strikes me biggest problem is line capacity. Everyone would like a better NHS but it is a bottomless drain as medical science improves and more of us get older. Goodness knows what it will be like when us baby boomers hit the time we all need care. One thing is for certain though is it won't be helped by taking the money out of the economy and reducing future growth or inward investment. This manifesto is a shambles
"This manifesto is a shambles, because rich people know how to cheat"
...or just work less
Why would they work less?
Being in a higher tax bracket still means you take home far more money than lower brackets.
....in my view, when tax rates reach levels which are akin to expropriation (say when your take-home is less than 50%) then sufficient numbers of those who are no longer working because they 'need' the money will simply work less or not at all (thus offsetting the extra inflows from those who continue as they were).
Bear in mind many (most?) of the highest earners are not employees on fixed contracts but effectively self-employed (eg. firm partners, actors, musicians, TV stars, sportspeople etc.). Entrepreneurs/business owners can simply leave money in their business and not dividend it out.
Even those who are employees might consider retiring early, rather than taking the 6.32am from East Grinstead for another few years only to give the government at least half of what they earn.
The costings simply do not add up. Take the income tax. This is the one that everyone is focussing on even though it is only supposed to be £6.4bn of the total required. Recent evidence of the 45%/50% rate of tax implies it didn't actually make much difference to the total tax take. Part of the reason is people tax planning, legally and legitimately, as well as more dodgy practices. The lower the tax rate the less likely people are to worry about these. Corporation tax is even less predictable and will definitely raise proportionately less. There is even more room for tax planning with global groups. A lower tax rate encourages groups to allocate profit to UK. I am fairly open to nationalisation in some respects but anyone who remembers what it was like in 70's will be very sceptical. I shouldn't think any new trains had been bought for years; whereas there has been a lot of investment in rolling stock in recent years. Personally I think it can be done better by improving their targets. It strikes me biggest problem is line capacity. Everyone would like a better NHS but it is a bottomless drain as medical science improves and more of us get older. Goodness knows what it will be like when us baby boomers hit the time we all need care. One thing is for certain though is it won't be helped by taking the money out of the economy and reducing future growth or inward investment. This manifesto is a shambles
"This manifesto is a shambles, because rich people know how to cheat"
...or just work less
Why would they work less?
Being in a higher tax bracket still means you take home far more money than lower brackets.
....in my view, when tax rates reach levels which are akin to expropriation (say when your take-home is less than 50%) then sufficient numbers of those who are no longer working because they 'need' the money will simply work less or not at all (thus offsetting the extra inflows from those who continue as they were).
Bear in mind many (most?) of the highest earners are not employees on fixed contracts but effectively self-employed (eg. firm partners, actors, musicians, TV stars, sportspeople etc.). Entrepreneurs/business owners can simply leave money in their business and not dividend it out.
Even those who are employees might consider retiring early, rather than taking the 6.32am from East Grinstead for another few years only to give the government at least half of what they earn.
In your view maybe, but people have studied it and found that higher tax rates do not cause people to work less. People continue to work exactly the same when tax rates are higher.
The costings simply do not add up. Take the income tax. This is the one that everyone is focussing on even though it is only supposed to be £6.4bn of the total required. Recent evidence of the 45%/50% rate of tax implies it didn't actually make much difference to the total tax take. Part of the reason is people tax planning, legally and legitimately, as well as more dodgy practices. The lower the tax rate the less likely people are to worry about these. Corporation tax is even less predictable and will definitely raise proportionately less. There is even more room for tax planning with global groups. A lower tax rate encourages groups to allocate profit to UK. I am fairly open to nationalisation in some respects but anyone who remembers what it was like in 70's will be very sceptical. I shouldn't think any new trains had been bought for years; whereas there has been a lot of investment in rolling stock in recent years. Personally I think it can be done better by improving their targets. It strikes me biggest problem is line capacity. Everyone would like a better NHS but it is a bottomless drain as medical science improves and more of us get older. Goodness knows what it will be like when us baby boomers hit the time we all need care. One thing is for certain though is it won't be helped by taking the money out of the economy and reducing future growth or inward investment. This manifesto is a shambles
"This manifesto is a shambles, because rich people know how to cheat"
...or just work less
Why would they work less?
Being in a higher tax bracket still means you take home far more money than lower brackets.
....in my view, when tax rates reach levels which are akin to expropriation (say when your take-home is less than 50%) then sufficient numbers of those who are no longer working because they 'need' the money will simply work less or not at all (thus offsetting the extra inflows from those who continue as they were).
Bear in mind many (most?) of the highest earners are not employees on fixed contracts but effectively self-employed (eg. firm partners, actors, musicians, TV stars, sportspeople etc.). Entrepreneurs/business owners can simply leave money in their business and not dividend it out.
Even those who are employees might consider retiring early, rather than taking the 6.32am from East Grinstead for another few years only to give the government at least half of what they earn.
Well thank god your view is complete rubbish. look at Sweden as an example.
The costings simply do not add up. Take the income tax. This is the one that everyone is focussing on even though it is only supposed to be £6.4bn of the total required. Recent evidence of the 45%/50% rate of tax implies it didn't actually make much difference to the total tax take. Part of the reason is people tax planning, legally and legitimately, as well as more dodgy practices. The lower the tax rate the less likely people are to worry about these. Corporation tax is even less predictable and will definitely raise proportionately less. There is even more room for tax planning with global groups. A lower tax rate encourages groups to allocate profit to UK. I am fairly open to nationalisation in some respects but anyone who remembers what it was like in 70's will be very sceptical. I shouldn't think any new trains had been bought for years; whereas there has been a lot of investment in rolling stock in recent years. Personally I think it can be done better by improving their targets. It strikes me biggest problem is line capacity. Everyone would like a better NHS but it is a bottomless drain as medical science improves and more of us get older. Goodness knows what it will be like when us baby boomers hit the time we all need care. One thing is for certain though is it won't be helped by taking the money out of the economy and reducing future growth or inward investment. This manifesto is a shambles
"This manifesto is a shambles, because rich people know how to cheat"
...or just work less
Why would they work less?
Being in a higher tax bracket still means you take home far more money than lower brackets.
....in my view, when tax rates reach levels which are akin to expropriation (say when your take-home is less than 50%) then sufficient numbers of those who are no longer working because they 'need' the money will simply work less or not at all (thus offsetting the extra inflows from those who continue as they were).
Bear in mind many (most?) of the highest earners are not employees on fixed contracts but effectively self-employed (eg. firm partners, actors, musicians, TV stars, sportspeople etc.). Entrepreneurs/business owners can simply leave money in their business and not dividend it out.
Even those who are employees might consider retiring early, rather than taking the 6.32am from East Grinstead for another few years only to give the government at least half of what they earn.
There may well be unintended additional consequences. Senior doctors and GPs for example have already been hit hard by the Tories reduction to the Lifetime Allowance for pensions. (With any money over and above becoming taxable.) It might be that doctors aged 50+ would really not like a reduction to their pension rights and a further tax on their salary. So, if Labour did get in, expect a big increase in the shortage of experienced doctors. My own GP retired recently for this very reason. Then guess what, after a three-month break, he's back in the surgery on a new NHS contract. I guess this manipulation of the system is a bit of a bummer for NHS budgets. I believe the NHS are now paying him a pension and a salary but perhaps that's better than him not being there at all or doing reduced hours?
The costings simply do not add up. Take the income tax. This is the one that everyone is focussing on even though it is only supposed to be £6.4bn of the total required. Recent evidence of the 45%/50% rate of tax implies it didn't actually make much difference to the total tax take. Part of the reason is people tax planning, legally and legitimately, as well as more dodgy practices. The lower the tax rate the less likely people are to worry about these. Corporation tax is even less predictable and will definitely raise proportionately less. There is even more room for tax planning with global groups. A lower tax rate encourages groups to allocate profit to UK. I am fairly open to nationalisation in some respects but anyone who remembers what it was like in 70's will be very sceptical. I shouldn't think any new trains had been bought for years; whereas there has been a lot of investment in rolling stock in recent years. Personally I think it can be done better by improving their targets. It strikes me biggest problem is line capacity. Everyone would like a better NHS but it is a bottomless drain as medical science improves and more of us get older. Goodness knows what it will be like when us baby boomers hit the time we all need care. One thing is for certain though is it won't be helped by taking the money out of the economy and reducing future growth or inward investment. This manifesto is a shambles
"This manifesto is a shambles, because rich people know how to cheat"
...or just work less
Why would they work less?
Being in a higher tax bracket still means you take home far more money than lower brackets.
....in my view, when tax rates reach levels which are akin to expropriation (say when your take-home is less than 50%) then sufficient numbers of those who are no longer working because they 'need' the money will simply work less or not at all (thus offsetting the extra inflows from those who continue as they were).
Bear in mind many (most?) of the highest earners are not employees on fixed contracts but effectively self-employed (eg. firm partners, actors, musicians, TV stars, sportspeople etc.). Entrepreneurs/business owners can simply leave money in their business and not dividend it out.
Even those who are employees might consider retiring early, rather than taking the 6.32am from East Grinstead for another few years only to give the government at least half of what they earn.
In your view maybe, but people have studied it and found that higher tax rates do not cause people to work less. People continue to work exactly the same when tax rates are higher.
There are obviously economists who argue the opposite based on the Laffer Curve.
One also needs to consider wage inflation - given talented people (generally the better paid) have negotiating power, they will likely demand higher salaries/contracts to offset the tax impact.
To use an example which will no doubt rile some, when the regulators clamped down on bank bonuses the banks were forced to ratchet up fixed salaries to compensate.
The costings simply do not add up. Take the income tax. This is the one that everyone is focussing on even though it is only supposed to be £6.4bn of the total required. Recent evidence of the 45%/50% rate of tax implies it didn't actually make much difference to the total tax take. Part of the reason is people tax planning, legally and legitimately, as well as more dodgy practices. The lower the tax rate the less likely people are to worry about these. Corporation tax is even less predictable and will definitely raise proportionately less. There is even more room for tax planning with global groups. A lower tax rate encourages groups to allocate profit to UK. I am fairly open to nationalisation in some respects but anyone who remembers what it was like in 70's will be very sceptical. I shouldn't think any new trains had been bought for years; whereas there has been a lot of investment in rolling stock in recent years. Personally I think it can be done better by improving their targets. It strikes me biggest problem is line capacity. Everyone would like a better NHS but it is a bottomless drain as medical science improves and more of us get older. Goodness knows what it will be like when us baby boomers hit the time we all need care. One thing is for certain though is it won't be helped by taking the money out of the economy and reducing future growth or inward investment. This manifesto is a shambles
Why do you say spending, or investment or whatever the name of it is, is taking money out of the economy? if money sits in a bank in the cayman Islands, or Sir Phillip Greens fleet of boats, then I can see how that would be money out of the economy. However taking £100 off me and buying a police officers uniform isn't what I see as taking money out of the economy but churning it round a bit.
The costings simply do not add up. Take the income tax. This is the one that everyone is focussing on even though it is only supposed to be £6.4bn of the total required. Recent evidence of the 45%/50% rate of tax implies it didn't actually make much difference to the total tax take. Part of the reason is people tax planning, legally and legitimately, as well as more dodgy practices. The lower the tax rate the less likely people are to worry about these. Corporation tax is even less predictable and will definitely raise proportionately less. There is even more room for tax planning with global groups. A lower tax rate encourages groups to allocate profit to UK. I am fairly open to nationalisation in some respects but anyone who remembers what it was like in 70's will be very sceptical. I shouldn't think any new trains had been bought for years; whereas there has been a lot of investment in rolling stock in recent years. Personally I think it can be done better by improving their targets. It strikes me biggest problem is line capacity. Everyone would like a better NHS but it is a bottomless drain as medical science improves and more of us get older. Goodness knows what it will be like when us baby boomers hit the time we all need care. One thing is for certain though is it won't be helped by taking the money out of the economy and reducing future growth or inward investment. This manifesto is a shambles
"This manifesto is a shambles, because rich people know how to cheat"
...or just work less
Why would they work less?
Being in a higher tax bracket still means you take home far more money than lower brackets.
....in my view, when tax rates reach levels which are akin to expropriation (say when your take-home is less than 50%) then sufficient numbers of those who are no longer working because they 'need' the money will simply work less or not at all (thus offsetting the extra inflows from those who continue as they were).
Bear in mind many (most?) of the highest earners are not employees on fixed contracts but effectively self-employed (eg. firm partners, actors, musicians, TV stars, sportspeople etc.). Entrepreneurs/business owners can simply leave money in their business and not dividend it out.
Even those who are employees might consider retiring early, rather than taking the 6.32am from East Grinstead for another few years only to give the government at least half of what they earn.
Well thank god your view is complete rubbish. look at Sweden as an example.
....if you ignore all of the wealthy Swedes who made their fortunes outside the country!
Anyhow, as I've argued on a different thread the Scandinavians have a fairly unique social contract which works for them for various historical reasons.
Whether it's because or despite of this social contract, their 'starting point' today is much better than ours (in short they're richer/more productive countries).
Watch the link I posted a few posts ago. It covers this nonsense. The real madness is to squeeze people with no money!
Just because you argue that about the Swedes it doesn't make you right.
...but they're not being squeezed - prior to the 2010 general election, the tax-free personal allowance was £6,475 and now it's £11,500! Meanwhile it's been removed completely from the 'rich' (those earning >£120k or so).
Looked at another way, before the 2010 general election the top 10% of earners paid 55% of the total income tax take and now they pay 59% - in nominal terms, this is an increase from £85bn to £101bn.
Before you claim it's because the top 10% have been growing their incomes faster, in fact before the 2010 general election they took home 31.6% of total income and today it's 29.1%.
I know it is just under 20 minutesish, there are much longer ones, but can I invite people to watch this? It isn't a party political broadcast but a Canadian TV interview with one of the world's top ecomomists. Taking money way from people who haven't got any money will never be a solution - it defies logic that it can be. It isn't about hitting people who earn £300k a year, but they do have money, even if you tax them by a few extra percentage points. And they will spend it, as what is the point of having money if you don't spend it! If you believe in austerity, you should watch it to confirm your belief that your veiw is correct.
It is about the size of the economy that matters, not the size of the debt!
The costings simply do not add up. Take the income tax. This is the one that everyone is focussing on even though it is only supposed to be £6.4bn of the total required. Recent evidence of the 45%/50% rate of tax implies it didn't actually make much difference to the total tax take. Part of the reason is people tax planning, legally and legitimately, as well as more dodgy practices. The lower the tax rate the less likely people are to worry about these. Corporation tax is even less predictable and will definitely raise proportionately less. There is even more room for tax planning with global groups. A lower tax rate encourages groups to allocate profit to UK. I am fairly open to nationalisation in some respects but anyone who remembers what it was like in 70's will be very sceptical. I shouldn't think any new trains had been bought for years; whereas there has been a lot of investment in rolling stock in recent years. Personally I think it can be done better by improving their targets. It strikes me biggest problem is line capacity. Everyone would like a better NHS but it is a bottomless drain as medical science improves and more of us get older. Goodness knows what it will be like when us baby boomers hit the time we all need care. One thing is for certain though is it won't be helped by taking the money out of the economy and reducing future growth or inward investment. This manifesto is a shambles
"This manifesto is a shambles, because rich people know how to cheat"
...or just work less
Why would they work less?
Being in a higher tax bracket still means you take home far more money than lower brackets.
....in my view, when tax rates reach levels which are akin to expropriation (say when your take-home is less than 50%) then sufficient numbers of those who are no longer working because they 'need' the money will simply work less or not at all (thus offsetting the extra inflows from those who continue as they were).
Bear in mind many (most?) of the highest earners are not employees on fixed contracts but effectively self-employed (eg. firm partners, actors, musicians, TV stars, sportspeople etc.). Entrepreneurs/business owners can simply leave money in their business and not dividend it out.
Even those who are employees might consider retiring early, rather than taking the 6.32am from East Grinstead for another few years only to give the government at least half of what they earn.
In your view maybe, but people have studied it and found that higher tax rates do not cause people to work less. People continue to work exactly the same when tax rates are higher.
There are obviously economists who argue the opposite based on the Laffer Curve.
One also needs to consider wage inflation - given talented people (generally the better paid) have negotiating power, they will likely demand higher salaries/contracts to offset the tax impact.
To use an example which will no doubt rile some, when the regulators clamped down on bank bonuses the banks were forced to ratchet up fixed salaries to compensate.
Yes, there are economists who argue otherwise, but the Tories are trying to discredit as naive those that don't. Top economists. Have the debate, but not in the dismissive way the Tories want you to have it. And seeing as austerity hasn't worked, why not try something that has!
Labour has made the steps it has needed to. The next step is to wheel out the economists - fight against the discreditors. Show people this is sensible rather than crazy economics. It is difficult because people don't get it. Not because they understand alternative economic theories, but because they don't understand any economic theories. Selfish rich people will never vote Labour, but they are not the target. It is an incredible challenge and Diane Abbot isn't going to be able to deliver it - the country needs a crash economics lesson - then it is one view against another rather than loonies against prudent realists!
The costings simply do not add up. Take the income tax. This is the one that everyone is focussing on even though it is only supposed to be £6.4bn of the total required. Recent evidence of the 45%/50% rate of tax implies it didn't actually make much difference to the total tax take. Part of the reason is people tax planning, legally and legitimately, as well as more dodgy practices. The lower the tax rate the less likely people are to worry about these. Corporation tax is even less predictable and will definitely raise proportionately less. There is even more room for tax planning with global groups. A lower tax rate encourages groups to allocate profit to UK. I am fairly open to nationalisation in some respects but anyone who remembers what it was like in 70's will be very sceptical. I shouldn't think any new trains had been bought for years; whereas there has been a lot of investment in rolling stock in recent years. Personally I think it can be done better by improving their targets. It strikes me biggest problem is line capacity. Everyone would like a better NHS but it is a bottomless drain as medical science improves and more of us get older. Goodness knows what it will be like when us baby boomers hit the time we all need care. One thing is for certain though is it won't be helped by taking the money out of the economy and reducing future growth or inward investment. This manifesto is a shambles
"This manifesto is a shambles, because rich people know how to cheat"
...or just work less
Why would they work less?
Being in a higher tax bracket still means you take home far more money than lower brackets.
....in my view, when tax rates reach levels which are akin to expropriation (say when your take-home is less than 50%) then sufficient numbers of those who are no longer working because they 'need' the money will simply work less or not at all (thus offsetting the extra inflows from those who continue as they were).
Bear in mind many (most?) of the highest earners are not employees on fixed contracts but effectively self-employed (eg. firm partners, actors, musicians, TV stars, sportspeople etc.). Entrepreneurs/business owners can simply leave money in their business and not dividend it out.
Even those who are employees might consider retiring early, rather than taking the 6.32am from East Grinstead for another few years only to give the government at least half of what they earn.
In your view maybe, but people have studied it and found that higher tax rates do not cause people to work less. People continue to work exactly the same when tax rates are higher.
There are obviously economists who argue the opposite based on the Laffer Curve.
One also needs to consider wage inflation - given talented people (generally the better paid) have negotiating power, they will likely demand higher salaries/contracts to offset the tax impact.
To use an example which will no doubt rile some, when the regulators clamped down on bank bonuses the banks were forced to ratchet up fixed salaries to compensate.
Yes, there are economists who argue otherwise, but the Tories are trying to discredit as naive those that don't. Top economists. Have the debate, but not in the dismissive way the Tories want you to have it. And seeing as austerity hasn't worked, why not try something that has!
I'm sure they will have the debate in the coming weeks....
With regard to austerity, I would argue it has barely started given the continued gaping hole in the finances but globally there is a consensus emerging that fiscal policy should take over some of the burden from monetary policy/QE (ironically led by Trump).
It's a fine balance though - long-term interest rates are indeed extraordinarily low but governments and central banks need to maintain credibility when issuing even more debt.
The Remainers who live and die by EU statistics might like to review the EU's official report on the Financial Activity Tax proposals.
Labour supporters will cheer on the idea of taxing the financial services, yet the EU Commission concludes that a Financial Activity Tax reduces GDP and is unpredictable in terms of revenue generation. Here are some extracts from an Annex to a few hundred pages of their analysis:-
Before presenting some rough revenue estimates, a general remark on the quality of tax revenue estimates for new tax instruments should be made. Estimating revenue changes when reforming existing taxes is already a difficult task since behavioural changes due to tax rate or base changes are often difficult to predict. Estimating revenue for taxes that would be newly introduced and that – at least to a certain extent – have the goal to change market behaviour and structure is not feasible without a high degree of uncertainty. …….. Moreover, notwithstanding the often substantial projected receipts, the consequences of governments increasing their reliance on this relatively volatile sector for their revenues should be considered carefully. Note also that in both cases the collection of these revenues comes at a cost in terms of a decrease in GDP decrease, which influences the tax revenue generated by other taxes. A financial activity tax is shifted onto loan interest rates. This increases capital costs for firms and lowers investment and the capital stock4 and reduces GDP. The loss in GDP is predominantly generated by a reduction of investment. The ratio of the GDP loss to revenues raised is 2.4 in the case of a financial activity tax but only 0.4 in the case of a bank levy, suggesting that the bank levy may be a more efficient revenue generating instrument.
Again Remainers saying we can't risk the City being harmed and losing business to Europe cheer on the plan to deliberately harm the City and lose business to New York.
Statistics also show that as Corporation tax has been reduced since 2010 the inward investment to the UK has increased by 44%. The trend is to cut corporation taxes in other countries, not increase it as foreign investments will simply go where the best return on capital can be found.
The Budget 2013 projections showed that a 50% tax rate on earnings over £150k would yield £100m of additional tax revenue. The manifesto does number crunching ignoring the likely behavioural changes as taxes rise.
So very appealing policies but little prospect of generating the revenue to fund the spending. The result is likely to be an increase in the National Debt that our children and grandchildren will bear. I assume no Remain voters will vote Labour, the potential risk of the economy suffering are doubled in comparison to the risks of Brexit.
Why would anyone vote for a manifesto which all the financial experts say will damaging the economy if the new revenue streams from tax don't materialise? Leaping into the dark and all that...
For every high earner in this country willing to quit their job or do less hours because of minor changes in tax there are dozens equally able people willing to take their place. Not sure the whinging of a very small portion of the most well-off should be guiding our economic policy.
The costings simply do not add up. Take the income tax. This is the one that everyone is focussing on even though it is only supposed to be £6.4bn of the total required. Recent evidence of the 45%/50% rate of tax implies it didn't actually make much difference to the total tax take. Part of the reason is people tax planning, legally and legitimately, as well as more dodgy practices. The lower the tax rate the less likely people are to worry about these. Corporation tax is even less predictable and will definitely raise proportionately less. There is even more room for tax planning with global groups. A lower tax rate encourages groups to allocate profit to UK. I am fairly open to nationalisation in some respects but anyone who remembers what it was like in 70's will be very sceptical. I shouldn't think any new trains had been bought for years; whereas there has been a lot of investment in rolling stock in recent years. Personally I think it can be done better by improving their targets. It strikes me biggest problem is line capacity. Everyone would like a better NHS but it is a bottomless drain as medical science improves and more of us get older. Goodness knows what it will be like when us baby boomers hit the time we all need care. One thing is for certain though is it won't be helped by taking the money out of the economy and reducing future growth or inward investment. This manifesto is a shambles
"This manifesto is a shambles, because rich people know how to cheat"
...or just work less
Why would they work less?
Being in a higher tax bracket still means you take home far more money than lower brackets.
....in my view, when tax rates reach levels which are akin to expropriation (say when your take-home is less than 50%) then sufficient numbers of those who are no longer working because they 'need' the money will simply work less or not at all (thus offsetting the extra inflows from those who continue as they were).
Bear in mind many (most?) of the highest earners are not employees on fixed contracts but effectively self-employed (eg. firm partners, actors, musicians, TV stars, sportspeople etc.). Entrepreneurs/business owners can simply leave money in their business and not dividend it out.
Even those who are employees might consider retiring early, rather than taking the 6.32am from East Grinstead for another few years only to give the government at least half of what they earn.
In your view maybe, but people have studied it and found that higher tax rates do not cause people to work less. People continue to work exactly the same when tax rates are higher.
There are obviously economists who argue the opposite based on the Laffer Curve.
One also needs to consider wage inflation - given talented people (generally the better paid) have negotiating power, they will likely demand higher salaries/contracts to offset the tax impact.
To use an example which will no doubt rile some, when the regulators clamped down on bank bonuses the banks were forced to ratchet up fixed salaries to compensate.
Yes, there are economists who argue otherwise, but the Tories are trying to discredit as naive those that don't. Top economists. Have the debate, but not in the dismissive way the Tories want you to have it. And seeing as austerity hasn't worked, why not try something that has!
I'm sure they will have the debate in the coming weeks....
With regard to austerity, I would argue it has barely started given the continued gaping hole in the finances but globally there is a consensus emerging that fiscal policy should take over some of the burden from monetary policy/QE (ironically led by Trump).
It's a fine balance though - long-term interest rates are indeed extraordinarily low but governments and central banks need to maintain credibility when issuing even more debt.
It has started - ask the poor
I am not against paying back debt - you have to do it - just do it when you are growing and rolling in it! When Blair got in spending went up and the debt was reduced - until the GLOBAL credit crunch and the need to bail out the bankers at massive cost.
Those on £80k will be £400 a year worse off!!!!! Not £4k, £400!
I don't think you've got that right. If you earn £80k you'll pay no more tax than now. Even £81k you'll only pay an extra 5% on the £1k over £80k i.e. £50.
Comments
Re: the bolded bit above - I would agree as a generalisation - and I can easily point a finger at the primary cause. It wasn't always like that.
re the 'south eastern trains competition' - is it not the competition for when the franchises are renewed that he was referring to rather than have more than one choice of train to take ?
Being in a higher tax bracket still means you take home far more money than lower brackets.
Bear in mind many (most?) of the highest earners are not employees on fixed contracts but effectively self-employed (eg. firm partners, actors, musicians, TV stars, sportspeople etc.). Entrepreneurs/business owners can simply leave money in their business and not dividend it out.
Even those who are employees might consider retiring early, rather than taking the 6.32am from East Grinstead for another few years only to give the government at least half of what they earn.
In your view maybe, but people have studied it and found that higher tax rates do not cause people to work less. People continue to work exactly the same when tax rates are higher.
My own GP retired recently for this very reason. Then guess what, after a three-month break, he's back in the surgery on a new NHS contract. I guess this manipulation of the system is a bit of a bummer for NHS budgets. I believe the NHS are now paying him a pension and a salary but perhaps that's better than him not being there at all or doing reduced hours?
One also needs to consider wage inflation - given talented people (generally the better paid) have negotiating power, they will likely demand higher salaries/contracts to offset the tax impact.
To use an example which will no doubt rile some, when the regulators clamped down on bank bonuses the banks were forced to ratchet up fixed salaries to compensate.
Anyhow, as I've argued on a different thread the Scandinavians have a fairly unique social contract which works for them for various historical reasons.
Whether it's because or despite of this social contract, their 'starting point' today is much better than ours (in short they're richer/more productive countries).
Just because you argue that about the Swedes it doesn't make you right.
Looked at another way, before the 2010 general election the top 10% of earners paid 55% of the total income tax take and now they pay 59% - in nominal terms, this is an increase from £85bn to £101bn.
Before you claim it's because the top 10% have been growing their incomes faster, in fact before the 2010 general election they took home 31.6% of total income and today it's 29.1%.
(all above figures from UK govt/HMRC)
Labour has made the steps it has needed to. The next step is to wheel out the economists - fight against the discreditors. Show people this is sensible rather than crazy economics. It is difficult because people don't get it. Not because they understand alternative economic theories, but because they don't understand any economic theories. Selfish rich people will never vote Labour, but they are not the target. It is an incredible challenge and Diane Abbot isn't going to be able to deliver it - the country needs a crash economics lesson - then it is one view against another rather than loonies against prudent realists!
With regard to austerity, I would argue it has barely started given the continued gaping hole in the finances but globally there is a consensus emerging that fiscal policy should take over some of the burden from monetary policy/QE (ironically led by Trump).
It's a fine balance though - long-term interest rates are indeed extraordinarily low but governments and central banks need to maintain credibility when issuing even more debt.
Labour supporters will cheer on the idea of taxing the financial services, yet the EU Commission concludes that a Financial Activity Tax reduces GDP and is unpredictable in terms of revenue generation. Here are some extracts from an Annex to a few hundred pages of their analysis:-
Before presenting some rough revenue estimates, a general remark on the quality of tax revenue estimates for new tax instruments should be made. Estimating revenue changes when reforming existing taxes is already a difficult task since behavioural changes due to tax rate or base changes are often difficult to predict. Estimating revenue for taxes that would be newly introduced and that – at least to a certain extent – have the goal to change market behaviour and structure is not feasible without a high degree of uncertainty. …….. Moreover, notwithstanding the often substantial projected receipts, the consequences of governments increasing their reliance on this relatively volatile sector for their revenues should be considered carefully.
Note also that in both cases the collection of these revenues comes at a cost in terms of a decrease in GDP decrease, which influences the tax revenue generated by other taxes.
A financial activity tax is shifted onto loan interest rates. This increases capital costs for firms and lowers investment and the capital stock4 and reduces GDP. The loss in GDP is predominantly generated by a reduction of investment.
The ratio of the GDP loss to revenues raised is 2.4 in the case of a financial activity tax but only 0.4 in the case of a bank levy, suggesting that the bank levy may be a more efficient revenue generating instrument.
Again Remainers saying we can't risk the City being harmed and losing business to Europe cheer on the plan to deliberately harm the City and lose business to New York.
Statistics also show that as Corporation tax has been reduced since 2010 the inward investment to the UK has increased by 44%. The trend is to cut corporation taxes in other countries, not increase it as foreign investments will simply go where the best return on capital can be found.
The Budget 2013 projections showed that a 50% tax rate on earnings over £150k would yield £100m of additional tax revenue. The manifesto does number crunching ignoring the likely behavioural changes as taxes rise.
So very appealing policies but little prospect of generating the revenue to fund the spending. The result is likely to be an increase in the National Debt that our children and grandchildren will bear. I assume no Remain voters will vote Labour, the potential risk of the economy suffering are doubled in comparison to the risks of Brexit.
Why would anyone vote for a manifesto which all the financial experts say will damaging the economy if the new revenue streams from tax don't materialise? Leaping into the dark and all that...
I am not against paying back debt - you have to do it - just do it when you are growing and rolling in it! When Blair got in spending went up and the debt was reduced - until the GLOBAL credit crunch and the need to bail out the bankers at massive cost.