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Lib Dems Obsession With Personal Allowance

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Was mentioned today in the Financial Times. The latest ploy is for Central Government to no longer take responsibility for the public sector final salaries pension shortfall and put the costs entirely onto the employers (including local councils) to free up money for the final push to a £10,000 tax free personal allowance.

The trouble is the very poorest don't actually pay income tax where as council tax kicks in at a much lower level of income. I fear we are now about to see huge rises in council tax as the final salaries ponzi begins to collapse.

The Lib Dems are now giving the poorest a good head kicking in service cuts etc. and council tax rises to give benefits to tax payers that the very poorest don't even qualify for.

I note Labour have picked up on this theme with some of their questions lately too.

Of course the policy might court favour on this forum, it also hits asset rich boomers who may not pay income tax either. I have to declare an interest here because council tax is a lot bigger outgoing for me than income tax. Perhpas we do get away lightly with taxes on property in this country, if I lived in the state of New Jersey the equivalent council tax would be £6,000 on a £250,000 home. God knows why we think the US is a cheap place to live on here without an NHS to boot.

Edited by crashmonitor

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The trouble is the very poorest don't actually pay income tax where as council tax kicks in at a much lower level of income. I fear we are now about to see huge rises in council tax as the final salaries ponzi begins to collapse.

The Lib Dems are now giving the poorest a good head kicking in service cuts etc. and council tax rises to give benefits to tax payers that the very poorest don't even qualify for.

I note Labour have picked up on this theme with some of their questions lately too.

Of course the policy might court favour on this forum, it also hits asset rich boomers who may not pay income tax either. I have to declare an interest here because council tax is a lot bigger outgoing for me than income tax. Perhpas we do get away lightly with taxes on property in this country, if I lived in the state of New Jersey the equivalent council tax would be £6,000 on a £250,000 home. God knows why we think the US is a cheap place to live on here.

The general view seems to be that the current tax and benefits system means it is generally not worth working unless you can earn at least 40k or so, so this sounds lik a step in the right direction. Working needs to be taxed less.

No?

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The general view seems to be that the current tax and benefits system means it is generally not worth working unless you can earn at least 40k or so, so this sounds lik a step in the right direction. Working needs to be taxed less.

No?

It does make sense from the perspective of making work pay.

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My local council collects the same amount of money in council tax that it spends on adult social care. Now, some of that money goes to the genuinely poor, but a big chunk (most?) of it goes to pensioners sitting on billions of pounds of unearned assets that they wish to gift to their children. I'm really not worried about local councils being forced to pursue more fiscal discipline -- they have plenty of options other than cutting services to the poor.

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Was mentioned today in the Financial Times. The latest ploy is for Central Government to no longer take responsibility for the public sector final salaries pension shortfall and put the costs entirely onto the employers (including local councils) to free up money for the final push to a £10,000 tax free personal allowance.

The trouble is the very poorest don't actually pay income tax where as council tax kicks in at a much lower level of income. I fear we are now about to see huge rises in council tax as the final salaries ponzi begins to collapse.

The Lib Dems are now giving the poorest a good head kicking in service cuts etc. and council tax rises to give benefits to tax payers that the very poorest don't even qualify for.

I note Labour have picked up on this theme with some of their questions lately too.

Of course the policy might court favour on this forum, it also hits asset rich boomers who may not pay income tax either. I have to declare an interest here because council tax is a lot bigger outgoing for me than income tax. Perhpas we do get away lightly with taxes on property in this country, if I lived in the state of New Jersey the equivalent council tax would be £6,000 on a £250,000 home. God knows why we think the US is a cheap place to live on here without an NHS to boot.

The poorest don't pay very much council tax if anything as they rent a room or lived in shared housing.

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The poorest don't pay very much council tax if anything as they rent a room or lived in shared housing.

That all depends.

1) If you live in an HMO, the landlord is liable for the Council Tax, though he will undoubtedly have taken that into account when setting the rent. If you rent a room as a lodger, the householder is liable - same caveat applies.

2) If a group get together and rent a house/flat, they are liable for the Council Tax. The landlord will make damn sure he tells the council who is living there. Unless he's renting out the property on the QT, if which case 1) above applies.

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That all depends.

1) If you live in an HMO, the landlord is liable for the Council Tax, though he will undoubtedly have taken that into account when setting the rent. If you rent a room as a lodger, the householder is liable - same caveat applies.

2) If a group get together and rent a house/flat, they are liable for the Council Tax. The landlord will make damn sure he tells the council who is living there. Unless he's renting out the property on the QT, if which case 1) above applies.

Either way they are paying a fraction (half at most but often a quarter or less) of what the council tax is (depending on how many people live in the HMO).

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Land Value Tax is the way to go, but LibLabToryCon just roll out the mythical grannies huddled over one bar electric fires in their mansions.

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this is all getting so predictable and tedious.

fyi - pensioners pay income tax at the going rate

they also pay council tax at the going rate

not all pensioners are 'asset rich' and they do need a house to live in which they have already paid for over 25 years of a mortgage.

aaaargh :angry:

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It does make sense from the perspective of making work pay.

How about just introduce a living wage and abolish tax credits: why should the UK taxpayer spend mind-boggling sums subsidising the low pay policy of international corporations who then evade (sorry, avoid...) paying tax here?

People tell me that I'm slightly odd...

itsarandomworld

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How about just introduce a living wage and abolish tax credits: why should the UK taxpayer spend mind-boggling sums subsidising the low pay policy of international corporations who then evade (sorry, avoid...) paying tax here?

People tell me that I'm slightly odd...

itsarandomworld

Call me suspicious, but every time the media mentions companies 'avoiding' paying taxes they only ever mention revenues, not profits. You cant tax what doesnt exist.

If not...well, one of the many 'benefits' of the EU. Free movement of labour AND capital.

Most likely though the media omits, deliberately, the only figure of relevance.

As for council tax. Its capped. Its not going to rise. Instead services will be cut until 100% of your council tax goes to paying off long since retired workers.

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Was mentioned today in the Financial Times. The latest ploy is for Central Government to no longer take responsibility for the public sector final salaries pension shortfall and put the costs entirely onto the employers (including local councils) to free up money for the final push to a £10,000 tax free personal allowance.

The trouble is the very poorest don't actually pay income tax where as council tax kicks in at a much lower level of income. I fear we are now about to see huge rises in council tax as the final salaries ponzi begins to collapse.

The Lib Dems are now giving the poorest a good head kicking in service cuts etc. and council tax rises to give benefits to tax payers that the very poorest don't even qualify for.

I note Labour have picked up on this theme with some of their questions lately too.

Of course the policy might court favour on this forum, it also hits asset rich boomers who may not pay income tax either. I have to declare an interest here because council tax is a lot bigger outgoing for me than income tax. Perhpas we do get away lightly with taxes on property in this country, if I lived in the state of New Jersey the equivalent council tax would be £6,000 on a £250,000 home. God knows why we think the US is a cheap place to live on here without an NHS to boot.

Much of it will just go unpaid IMO, time for a re-think on how councils are funded.

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Land Value Tax is the way to go, but LibLabToryCon just roll out the mythical grannies huddled over one bar electric fires in their mansions.

Lib Dems are in favour of LVT.

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Lib Dems are in favour of LVT.

A few years ago they were in favour of replacing even a vague land tax like council tax with yet another tax on productivity, a local income tax.

Frankly I dont think even the Libdems know what they are in favour of.

Theyre the party of localism who want to cede more power to the EU.

Theyre the party of 'science' whilst lobbying for the continuation of barbaric halal practices. Because religious superstition is just so, scientific.

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fyi - pensioners pay income tax at the going rate

Pensioners don't pay NI though, even on wage income. That's a pretty hefty 12% marginal wedge between basic rate pensioners and basic rate workers.

Politicians are obsessed with the income tax threshold because it costs very little to raise it. Every £1k they increase it only costs a couple of hundred quid per basic rate worker per year. In government spending terms this is a rounding error. Politicians assume that thicko proles will interpret raising the threshold by £4k as if the government was giving them thousands of pounds a year tax free (which would be significant). In reality the government is reducing their tax bill by only hundreds of pounds a year, almost all of which is lost in the inflationary noise.

I think Osborne and Alexander have made a huge miscalculation on this policy. They think it's wildly popular and is going to win them millions of votes at the next election, but just ask yourself: how many times have you heard somebody mention the income tax threshold over the dinner table or in the pub? People can feel in their pocket that this policy is not significantly increasing the real value of net wages.

If politicians were serious about cutting the level of taxation on wages they would be knocking pennies off national insurance year after year, but they won't do this because they are ridiculously timid and this policy would cost actual money.

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Was mentioned today in the Financial Times. The latest ploy is for Central Government to no longer take responsibility for the public sector final salaries pension shortfall and put the costs entirely onto the employers (including local councils) to free up money for the final push to a £10,000 tax free personal allowance.

Do you think the elephant in the room is the pensions or the tax allowance?

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Was mentioned today in the Financial Times. The latest ploy is for Central Government to no longer take responsibility for the public sector final salaries pension shortfall and put the costs entirely onto the employers (including local councils)

seems sensible federal politics over the medium term, its effectively turning a federal debt into a municipal,council,cantonal,local (whatever you want to call it) debt which is defaultable

Far too many here looking at the short term implications rather than the longer term

Edited by Maria Gorska

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The general view seems to be that the current tax and benefits system means it is generally not worth working unless you can earn at least 40k or so, so this sounds lik a step in the right direction. Working needs to be taxed less.

No?

frankly even at £40k it's still not worth working if the tax take is so large and being spent badly.

..but what is the solution?

..the socialist method(clowerd-piven strategy) is to overload the system with waifs,strays and neer-do-wells to overload the tax/benefit system,thereby bringing about a change in philosophy and malice towards capital hoarders....but this also includes a period of strife for joe public trying to feed his wife/kids etc who will have to endure riots/burglaries/muggings/starvation etc in order to go down to hell and supposedly bounce back for the collective.

the corporatist solution to clowerd-piven is to conscript all of the above(plus the initiators of said strategy) to become cannon fodder in the new resource-grab....doesn't really matter if they get shot,they were a waste of space anyway, and some of them genuinely were seeking to do the country harm(for the common good of course)...so by that reckoning were also traitors who deserve to swing anyway...no great loss.

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So our total liabilities are 173% of GDP, is that really such a big deal?

GDP is an almost meaningless stat, but if we assume it is somehow accurate and meaningful then it would only take less than 2 years GDP to write off everything, so that would be a 10% rise in taxes for 20 years, or a 20% rise for 10 years

In the 1980s we has a 23% tax cut, so all they have to do is reverse that. 50% >> 60%

In reality no-one is likely to reduce liabilities to zero, but they might go half way 50% >> 55%

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How about just introduce a living wage and abolish tax credits: why should the UK taxpayer spend mind-boggling sums subsidising the low pay policy of international corporations who then evade (sorry, avoid...) paying tax here?

People tell me that I'm slightly odd...

itsarandomworld

How on earth can you "introduce a living wage"?

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