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TGP

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About TGP

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  1. Not even going to offer an explanation why FFS ? If there is there anything wrong with the analysis I have presented on this thread, I'd like to hear what it is. No, it's much more realistic to measure it in grams of yellow metal. Thats the ticket ! Ever try to buy your groceries at the supermarket in grams of gold ? Yours, TGP
  2. Is that link from the same site that was running with "Germany pulls from Euro's, re-intoroduces DM, this Friday" story ? I tell you what, show me the DM..... and I'll beleive their latest wheeze. Yours, TGP
  3. Thats true. Perhaps a lot more people are consuming (i.e. actuually using up) the commodity. Perhaps a lot LESS of the commodity is being produced. In both circumstances people may speculate on an upward trend in prices without it being a bubble. Crucially, for gold however, there is no such fundamental driving the increase in price..... only sentiment that the price will continue increasing..... that is pretty much the definition of bubble. Yes, there is. But there is NOT investment in every speculation ! So, you can say "Buying gold to make watches is BOTH investment and speculation"...... but you CANNOT say "Buying gold to hold it in anticipation of future higher prices is BOTH investment and speculation" it isn't. It is ONLY speculation. Yes it is a transwfer of wealth but it is not a zero sum game as specuilation is. Investment means that the seller can gain wealth from it AND the buyer can gain wealth for the deal. The additional wealth is that "value added" by the investor when he turns the gold into gold watches. It enables him to be better off for his investment AND the watch purchaser to be better off for his investment. HOWEVER.... Speculation is Zero Sum...... For you to make $500 speculating on gold it is neccessary that another person LOSE (or at least forego) that $500 speculating on gold. For that other person to make $500 it is neccessary that you lose (or forego)$500. Lets say the market starts at $500.... then goes to $1500..... then drops to $500 again. You buy at $500. Then you sell at the peak where someone has to pay $1500 to buy it off you, unbeknownst to them at the height of the market. They then lose as it drops to $500. You made $1000. Well done. But ONLY at the expense of some other poor chump who lost $1000 buying at the peak. By engaging in speculation you are in effect betting that you can outwit the other guy. That you, through you superior knowledge and intelligence, can "get" that $1000 out of HIS pocket..... and he is so un-knowledgable and dumb that you will successfully do this that HE will buy at peak while YOU buy at market lows (when he, foolishly, cuts his losses to sell it again). Now. In a worlds where ALL other gold investors have manifest advantages over amateur investors..... they have better information, they have better understanding of the market, they can move gold quicker, they are not bound by personal exigencies into buying/selling at the wrong points...... it is naive to assume that amateur speculators are consistently going to "get the money out of" the professionals. Or at least, they are unlikely to do so on average. On average, the amateurs are going to be on the "losing money" side of the trade. If for no other reason than if the bottom falls out..... and the professional sends his electronic request to dump his stock the moment he receives his high-speed feed from reuters......... and you, upon reading this in the next days papers, mail back your gold bar asking for a valuation and payment on it's worth...... who do YOU think is going to get out at the top of the elevator and who is going to get out once it has already hit the bottom of the shaft ? For you to be able to buy a bar of gold today.... someone else must be selling it.... you think it will go up, he thinks it will go down..... why do the goldbugs seemingly always assume that they MUST have got the better end of the stick on this deal ? The high likilihood is.... being amateurs..... they didn't. ESPECIALLY if they bought anywhere near a historic peak. Yours, TGP
  4. You are misreading their bargaining power...... it's not taking their idle bodies elsewhere... It is that if they do not receive benefits.... and do not have jobs.... then they will become criminals out of neccessity. The problem for the politico's is massively rising property crime rates are bad for them, and the rise in costs in policing and prisons outweigh the benefits saved. Cutting benefits for the idle does not equal "lower expenditures".... it equals "the same or slightly higher expenditures + a huge crime problem the politicians get blamed for not doing enough about".... there is no positive payoff for them. The only way to GET a positive payoff is to make loud noises about "being tough" reap the benefit from that.... then, under the table, let the idle benefit claimants off the hook. Yours, TGP
  5. No it isn't. What he described there is "speculation" the act of purchasing an item in the hope it will rise in value and you can sell it at the higher value. You are speculating that the value will rise. That is different from investment. Investment is purchasing an item in the hope that by combining it with other items (chiefly labour and raw materials) you can create NEW items that you will sell in the hope that the new items created cover the cost of the investment. Buying gold to hold is speculation. Buying gold in order to build gold watches from it and sell the watches is investment. Investment creates wealth. Speculation does not, it just moves wealth from unsuccessful speculators to successful speculators in a zero sum fashion. The goldbugs are essentially just betting that they are smarter than the average speculator. IMHO they are unlikely to be so, being largely conspiracy theory led amateurs in a world of extremely well informed professionals. I wish them the best of luck in beating those odds, but I won't be joining them. Yours, TGP
  6. No. But a) No-one is printing "as much money as they like" only limited amounts of money The consequence of that is a little inflation, not a state collapse. And it's NOT your next door neighbour telling you it's a "new paradigm" you have to fear. Frankly your next door neighbour wouldn't know what a paradigm was if one bit him on the a*se...... it's the market guru's saying it's a "new paradigm" (like your Jim Sinclair) you have to watch out for, while your next door neighbour tells you he's "bought a bit of gold as it seems like I good idea, doesn't it ?" Frankly, I can see both happenning. Thats not to say I think the bottom's going to fall out today..... but as RedAlert says, gold is a safe place in times of trouble, and as soon as things calm down it will go through the floor. This is going to cause our resident goldbugs and gold conspirqcy theorists problems. Simply because hanging out on HPC and GoldSites will give you the impression "things are still crazy" for far longer than the large holders of gold will beleive so because HPC/GoldSites/EconomicConspiracyTheorySites of the type you seem to subscribe to are such paranoid sources of information....... so you'll KEEP sucking up the fear stories while readers of saner news sources relax, and sell their gold.......practically guaranteeing (in red alerts analogy) that the people who read/believe the general views on HPC/GoldSites/etcetc, and subscribe to the "mad max theology" are the ones still in the lift when the cable snaps. Yours, TGP
  7. AH, So we're at the part of the Gold Bubble where you are having it patiently explained to you that it's a "new paradigm". You have SEEN the most famous graph on this site haven't you ? Can I hear the first threads of the cable snapping ? Lol. Yours, TGP
  8. Whats the line ? "Many estate agents are perfectly honest and upstanding people. Unfortunately, the majority of estate agents get the rest of us a bad name". Yours, TGP
  9. Well, you can include some kind of "insurance premium" for risk of failure in the yearly cost of avoidance to cover that. Not neccessarily a formal insurance contract, but some kind of "reserve fund" equivalent. The question would then be "Are you saying the costs of avoidance + insurance premium are higgher than 25% of income" ? They aren't......certainly not with the uber-rich you are talking about due to their far lower marginal costs of avoidance. The guy trying to avoid 20k down at an income of £120k, he has very high marginal costs. So maybe there you could get him to drop avoidance with a cut to 25k. The guy trying to avoid £100m on a £400m income ? Forget it. There is no way HIS costs of doing so, including such an insurance reserve fund, comes to £100m. Yours, TGP
  10. Oh, I see...... you are proposing that....... Taxes remain as they are. 40% from 40k 50% from 150k Then they go DOWN to 25% from £300k onwards. Lol. Thats even MORE ludicrous than what I THOUGHT you were proposing. The people you are proposing cutting are the ones with the HIGHEST incentive to ignore your tax cut, and the LOWEST marginal costs of doing so. The amount of people who would "come in from the cold" and stop avoiding is next to 0. So..... You expect a man earning £100m ...... to say "I will pay £25m in tax, even though for the cost of £5m I could avoid all of it, leaving me £20m in the red". Yet you also beleive in rational markets. So, First......Why would a rational "revenue maximiser" reduce his yearly take home income by 20% ? Second, in order to make this work at 25% ... you'd have to assume that the cost of avoidance was higher than 25%. Can you show me any evidence that the cost of avoiding £100m in tax is as high as £25m ? Or the cost of avoiding £1m in tax is as high as £250k ? Finally, how could this POSSIBLY produce as much revenue as pursuing the loopholes used by these very high incomes aggressively at 50% ? You'd only need to close loopholes equivalent to HALF those who would come in from the cold to make this MORE worthwhile, as thats next to 0..... closing very few loopholes would bring in more money.... and, incidentally, be highly politically viable. Yours, TGP
  11. Lol, It just so happens that I am arguing that cutting my taxes will raise more money. This is pure pragmatism. I haven't done any sums. I have no idea if it WILL raise revenues. But cut my taxes.....out of pragmatism. Whatsmore (because someone just did them) I now know that WHEN YOU DO THE SUMS they show that revenue would go down, even in ludicrously optimistic scenarios, and by a very large amount (roughly 20% or so of all current IT revenue) nevertheless I must recommend OUT OF PURE PRAGMATISM you should cut my taxes in order to increase revenues. Message Ends. Yours, TGP
  12. No, TGP does get it........ BogBursh is making up off the top of his head, with no evidentary backup, and in the face of all historical evidence, the idea that "If only they'd drop all our tax rates to 25% we'd all stop avoiding and the govt. would earn more". That would be fine....... if even on your ludicrous assumptions the sums added up. Look......The 40% tax rate and above provides 66% of Income tax revenue. So, dropping it to 25% would drop fully 27.5% of all current income tax revenue (if no one extra paid up). Right ? We've lost 27.5% of total revenue from the people "actually paying" right now (or £41.25bn of the £150bn total) Now.... can we make up that £41.25bn ? Well you are proposing taxing all the avoiders who come forward at 25%. So we've got to take 27.5% of all current revenue out of a 25% tax. So multiply that £41.25bn by 4..... £165bn of income must be being currently avoided and these guys must come forward. That much is NOT BEING AVOIDED. Not even close to that much. The HMRC estimate is £10bn of taxes (and so £25bn of income roughly) is being avoided, total..... roughly 15% of the amount needed to make these sums work. Even assuming they are out by 100-200% and the "real" figure is 30-45% of the amount we'd need still wouldn't make it work. And that assumes, generously, that your 25% rate prompts EVERYONE to come forward and volunteer to pay tax. The fact is........ If I earn $100m a year....... and I can avoid that 25% tax for the cost of £10m a year in accountants fees, keeping me £15m in the black by avoiding, then I'm still going to avoid it. So thats an unrealistic assumption in any case. A 25% tax rate WILL NOT prompt EVERY avoider to come forward. People WILL avoid tax given the opportunity....... and the fact that the fees to do so are lower than the tax saved. You really think Rupert Murdoch is going to think "25% is fair, call off the accountants. I'll pay 25%" is he b*llocks. "He's going to say, well.... is it worth it ?" and they'll reply "Carry on avoiding and you'll take home an extra £25m this year than you would if you paid up" and he's going to reply "Fine, lets keep avoiding then". Once you factor THAT in...... that your massive tax cut will probably only cut avoidance in half, if that, rather than 100%.... well, THEN it's a HUGE loser. On these sums.... Most Generous Scenario (HMRC is out by 200% on their estimate of hidden income, all 100% of tax avoiders come in) HMRC would lose ...... £22.5bn a year. Generous Scenario (HMRC is out by 100% in their estimate of lost revenue, 80% of tax avoiders come in) HMRC would lose ...... £31.25bn a year. Realistic Scenario (HMRC is out by 50% in their estimate of lost revenue, 60% of tax avoiders come in) HMRC would lose ...... £35.5bn a year. Pessimistic Scenario (HMRC is dead on in their estimate of lost revenue, 50% of tax avoiders come in) HMRC would lose ...... £38bn a year. Tax figures came from this article (total tax figures) and this one (amount of tax avoidance). Sorry Bogbrush...... but even on very optimistic assumptions....... it's a MASSIVE revenue loser. And no amount of you "waving your hands in the air and claiming different" will change that. Yours, TGP
  13. And I'm saying you don't have to "win" in so far as "stop all avoidance"...... All you have to do is stop £1.01 worth of avoidance for every £1.00 you spend closing loopholes/auditing compliance/fighting avoidance. Of course you can never completely win.... but you CAN generate more revenue as long as the equation remains >£1.00 of additional revenue for each £1.00 of costs spent. (particularly as, a fair chunk of each £1 of costs will come straight back as tax revenue too !). No. I don't think we can do that. But we don't need to ALWAYS beat the barrister. All the government needs to do is spend less than £1.01 for each £1.01 of additional tax it recoups. But they don't. That equation you have there assumes...... 1) Every person in an over 25% bracket avoids tax. 2) Every person in an over 25% bracket would entirely STOP spending money to avoid tax at 25% Neither are true. When you factor in 1) Most of the people in an over 25% bracket do not avoid tax 2) Most of those currently avoiding tax would continue to do so at a 25% rate as it is still economically viable for them and 3) A law will shortly pass that makes it very much more difficult for MOST avoiders to refuse MOST of their tax very easily in any case Then your proposal is NOT a revenue generator. Like I said...... I won't argue over whether it's fair, or better, or anything else. You started this argument on the basis that "It WILL generate more money if we do this". I am simply pointing out it will not, it will lower revenue. I'm sure it is. The point remains...... the article I originally posted SHOWS that an increase from 40-50% has generated more revenue. That demonstrated that the laffer curve argument is not operative in the 40-50% band in the UK..... if it WAS the tax increase would have reduced revenues....... as the laffer curve is a smooth curve, that also demonstrates that a 40-30% drop would not generate more than it saved, nor a 30-20% drop and so on. On that basis, your argument is wrong...... CURRENTLY no drop of the tax rate from the current high of 50% would generate more revenue. If it would have done so..... a rise from 40-50% would have dropped revenues, instead they went up. Say.......tommorrow........ we raised rates to 70%, and revenue DROPPED... then that data point would have shown you that, yes, if we dropped rates from 70% to somewhere at or above 50% we would gain money again. As the data actually IS it shows the opposite. Your argument that this would generate more revenue cannot be correct. Yours, TGP
  14. And the soution to THEM is to close the loopholes/do more audits...... NOT to lower the tax rate to 25% IF (as you stated at the start) you need more tax coming in. By lowering the rate... you lose ALL the tax from the "non-avoiders" and probably (given you've just reduced the tax rate 40%) don't recoup enough from the avoiders to replace it. OTOH... if you legislate to close the loopholes and do more audits..... you KEEP the money from the "non avoiders" and add to that additional money as you squeeze out some "avoiders". Your idea of lowering the rate to lower avoidance and so get more tax in....... is like lowering the "qualification" for a murder rap in order to lower the murder rate, and have less criminal activity. Yes, but the ways to do so legally are not infinite. The wheeze of booking income as capital gains is now useless for any 40% rate payers. And it's a wheeze a VERY LARGE NUMBER of them use. Raising the CGT has reduced the "marginal revenue" from such attempts to 0. Some may, in the future, find other tax avoidance outlets..... but some (perhaps many at the lower end of the income scale) will not.... this will flatten the laffer curve. And, as I pointed out from the first article, it's plenty flat enough already for your "argument" that lower rates would mean more revenue is transparent VI b*llocks. Oh Yeah. Thats definitely the best way FOR THEM.... they get to keep the tax they were previously avoiding perfectly legally AND save on fees. Thats very simple. It's NOT the best way to raise revenues however. Revenues will fall because not ALL of them evade ALL of the difference between 25% and 40-50% ALL the time. There is clearly enough that do not..... to make lowering the rate to 25% a huge LOSS of revenue. You can argue that it's a loss of revenue the govt. should accept to be "fairer" as you and other filthy rich people like to define "fair". You can't argue that it wouldn't be a loss of revenue. It would. A MASSIVE loss of revenue. Not least from all the PAYE workers in the 40% bracket who have no option to evade (and whose payments, due to their large numbers, make up the bulk of this portion of the IT revenue). Yours, TGP
  15. Lol, What evidently self-serving b*llocks. Fact is.... the laffer curve isn't steep enough at 50%, your argument doesn't fly. From this years HMRC report ..... link Add in the effect of gradually eroding the personal income tax allowance for people earning more than £100,000 and there is a big increase in the tax take, especially for those at the top end of the scale. Whereas last year higher-rate payers handed over £84bn in income tax to the Revenue (56% of the total), the combined higher and additional rate payers are predicted to pay a total of £92.7bn this year. That is £9bn more than last year and will amount to 66% of the government's total income tax stream this year. I.e. increasing the tax rate has increased the tax take to the tune of approx. 10% (although some of that is fiscal drag at the 40% margin, and more is slightly increased earnings). Obviously the laffer curve is not perfectly flat here..... but it is not so steep, yet, that a reduction in tax rates would boost revenue. Your just hoping someone swallows this B*llsh*t so you get to have lower tax rates. Whatsmore, I'm guessing that .... in the near future.... the laffer curve is about to get a WHOLE lot flatter as the "moving income into the CGT category" becaomes a whole lot less profitable with CGT at 40%, removing one of the primary means accountants have been using to avoid tax. In fact, I think upping the rate would probably still generate more tax..... although, of course, at diminishing returns. Personally, I wouldn't really advocate that. 50% is fine. But lowering it will lower, not raise tax revenues. Yours, TGP
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