Bozo wants to hike National Insurance to pay for social care

[Insane]

1 minute ago, onlooker said:

There are a lot of these lower value estates, so I can well believe that the Govt tax take could be 20 billion. Of course, a lot of poor to middle income beneficiaries would see their inheritance slashed.

" so I can well believe that the Govt tax take could be 20 Billion " That is not quite accounting is it. 

 

[onlooker]

2 minutes ago, Insane said:

" so I can well believe that the Govt tax take could be 20 Billion " That is not quite accounting is it. 

 

I've always been a broad-brush-ideas-man. I leave the details. I'll leave counting the pennies to others.

[bearishonhouses]

On 03/09/2021 at 06:00, spyguy said:

No, there is a NI fund - 

https://www.gov.uk/government/publications/national-insurance-fund-accounts

True, there is such a fund - but the accounts show the fund has approximately net assets of 35 billion pounds. Collections of NI (and benefits) are about 9 billion per month. So, a buffer of perhaps 4 months' payments. 

Given the aging population in the UK, I am not optimistic about there being sufficient funds to pay my pension let alone that of my children.

[bearishonhouses]

6 hours ago, Insane said:

Yes but you are not going to tax them all every year , your only go to tax the estates of those who have died.

I took it that what Slawek was suggesting may be something along the lines: 

total value of property held by over those 65   = 3  Trillion =  3,000B  (I have no idea ow accurate this figure is) 
assume all of these over 65 die by age 100, i.e. 35 years => annual value of property falling into estates = 3,000B/35 = 85B
assuming the value of these assets are subject to IHT at 20% then annual tax raised = 85B * .2 = 17B

 

 

[Money Frugality]

13 hours ago, Mikhail Liebenstein said:

I do genuinely think the UK is now set on a low growth inflationary course - essentially stagflation.  This is why pensioners complain about low income and why the economy isn't generating easy (from low tax rates) tax revenue.

My personal approach is to grt outside this by being heavily invested in non UK equities which are showing growth. Overtime my remaining fixed rate Sterling repayment mortgage will get eaten away and my equity holdings will do well relative to GBP based investments.

And to be honest, the FTSE has gone nowhere in 20 years..., which is why so many UK Pensions are poor...i remember and IFA once telling me to avoid foreign stocks due to the exchange risk...i thought that sounded dumb ignored him.

Back to the FTSE:

https://finance.yahoo.com/quote/^FTSE?p=^FTSE&.tsrc=fin-srch

We are barely above the top of the market from DotCom which is nearly 22 years ago. Factor in the exchange rate, which was more like 1.65 to the Dollar and we are actually down, then take inflation into account and we are down loads.

Agreed with this.. Dumped all UK equities at the last peak… Question being is if eg invested in a fund should it be hedged to gbp or let loose but run the risk of other developed countries being in a similar predicament re inflation or currency devaluation.. 

[Mikhail Liebenstein]

3 hours ago, Money Frugality said:

Agreed with this.. Dumped all UK equities at the last peak… Question being is if eg invested in a fund should it be hedged to gbp or let loose but run the risk of other developed countries being in a similar predicament re inflation or currency devaluation.. 

Well Sterling still seens a little historically weak versus the Dollar, but I somewhar cloud that with the early mid 2000s when it was $2+ to the Pound. Prior to that it was $1.65 for quite a while. But ho back to the 1940s:

Quote

In 1940, an agreement with the US pegged the pound to the U.S. dollar at a rate of £1 = $4.03. (Only the year before, it had been $4.86.)

So it does seem the trend is down.  Longer term, at any moment,  it doesn't matter as to the economy as generally prices/wages adjust, prices are really set  globally with a few exceptions.

But of course for longer term investments it does matter, though a lot of FTSE and other stocks with international earnings run inversley to the exchange rate.

[winkie]

21 hours ago, slawek said:

They should be compensated with some fixed hourly rate equivalent to the state social care cost.    

Should, would or could......those that can pay for their long-term care should pay for it, if they have family that could, would or should care for them because they want to or to help save their inheritance up to them, many people will live a lucky life or not so lucky to not require long-term care, their bodies give up before their minds do, they may die earlier in life......health taxes are there to prevent and cure, to pay for life saving operations and medical procedures.

Those that do not have the money or assets to pay for their long-term social care if their family can't help the state should help them through the taxes we all pay, no person should suffer second class treatment simply because they are not wealthy enough.....the final safety net that is there to provide for the vulnerable.......we are all vlunerable......when the money is gone it is gone, none of us are entitled.

[skinnylattej]

8 hours ago, Insane said:

" so I can well believe that the Govt tax take could be 20 Billion " That is not quite accounting is it. 

 

For this Tory government that statement looks like a detailed account of a well thought out proposal.

[onlooker]

5 hours ago, bearishonhouses said:

I took it that what Slawek was suggesting may be something along the lines: 

total value of property held by over those 65   = 3  Trillion =  3,000B  (I have no idea ow accurate this figure is) 
assume all of these over 65 die by age 100, i.e. 35 years => annual value of property falling into estates = 3,000B/35 = 85B
assuming the value of these assets are subject to IHT at 20% then annual tax raised = 85B * .2 = 17B

 

 

I came at it from a slightly different angle.

Total number of deaths per year in UK - average 550,000

Total value of property in UK - 7.9 trillion (2017 estimate, https://www.zoopla.co.uk/press/releases/total-value-of-british-housing-market-stands-at-trillion/)

Assume all property is owned by adults, and all inheritance is composed of property (I assume cash and shares are liquidated and disposed of or used before death). Assume 40 million adults.

7.9 trillion/40 million x 550,000 = 109billion (total property bequeathed every year)

109 billion x 20% = 21.8 billion tax

Edited September 5, 2021 by onlooker

[slawek]

11 hours ago, Insane said:

You miss understand me , I know people continue to die but taxing their estates at 20% you say will bring in 20 Billion a year , how do you know that ?

Currently Death Duties brings in 5.1 Billion year 2019/2012 that is with people paying 40% on anything over the allowed thresholds. 

Where do you get the figure of 20Billion from by taxing all estates at 20% ? 

Hmm. 

The net assets value of estates is around 100bln pa (in 2019 was 90bln according to HMRC). 20% of 100bln is 20bln. 

https://www.gov.uk/government/statistics/inheritance-tax-statistics-table-124-assets-in-estates-by-range-of-net-estate-and-tax-due

[Mikhail Liebenstein]

Looks like a Tory war has started:

https://www.telegraph.co.uk/politics/2021/09/04/tories-war-idiotic-national-insurance-tax-increase/

[slawek]

2 hours ago, winkie said:

Should, would or could......those that can pay for their long-term care should pay for it, if they have family that could, would or should care for them because they want to or to help save their inheritance up to them, many people will live a lucky life or not so lucky to not require long-term care, their bodies give up before their minds do, they may die earlier in life......health taxes are there to prevent and cure, to pay for life saving operations and medical procedures.

Those that do not have the money or assets to pay for their long-term social care if their family can't help the state should help them through the taxes we all pay, no person should suffer second class treatment simply because they are not wealthy enough.....the final safety net that is there to provide for the vulnerable.......we are all vlunerable......when the money is gone it is gone, none of us are entitled.

I meant they should be paid if the state were obliged to pay.

All depends on the rules when the state should pay. I see at least three cases

1. Universal social care - the state pays all the costs

2. Universal social care with excess - the state pay the costs over some threshold 

3. Mean tested social care - the state pays when someone can't afford. This option can't have many different variants depending what assets are excluded from the test and if children wealth/income is included.  

Edited September 5, 2021 by slawek

[Dorkins]

Just now, Mikhail Liebenstein said:

Looks like a Tory war has started:

https://www.telegraph.co.uk/politics/2021/09/04/tories-war-idiotic-national-insurance-tax-increase/

I suspect this "war" is largely for show so the Conservative party can keep pretending to its voters that it is the party that supports hard work and low taxes while doing exactly the opposite in government. Once they've introduced the policy they will say "well it was a hard fight but we pledged to fix social care and sometimes government is about making those tough choices (to tax the other party's supporters so you can give yours nice things)".

[Mikhail Liebenstein]

4 minutes ago, Dorkins said:

I suspect this "war" is largely for show so the Conservative party can keep pretending to its voters that it is the party that supports hard work and low taxes while doing exactly the opposite in government. Once they've introduced the policy they will say "well it was a hard fight but we pledged to fix social care and sometimes government is about making those tough choices (to tax the other party's supporters so you can give yours nice things)".

Good heavens, the Tory Party being duplicitous?

[slawek]

2 minutes ago, Dorkins said:

I suspect this "war" is largely for show so the Conservative party can keep pretending to its voters that it is the party that supports hard work and low taxes while doing exactly the opposite in government. Once they've introduced the policy they will say "well it was a hard fight but we pledged to fix social care and sometimes government is about making those tough choices (to tax the other party's supporters so you can give yours nice things)".

There is no really a party for younger generations, by this I mean below 50.

Tories votes are mostly old people, Labour is trying get back Red Tories (mostly older ex-workers from North), LD is trying to get some NIMBYs in the South.  

[Si1]

18 minutes ago, Mikhail Liebenstein said:

Looks like a Tory war has started:

https://www.telegraph.co.uk/politics/2021/09/04/tories-war-idiotic-national-insurance-tax-increase/

"

On Saturday night, in a particularly extraordinary intervention, a Cabinet minister said: “Putting up National Insurance would be morally, economically and politically wrong. It kicks in at a low level and there are all kinds of exemptions which benefit the rich. If you get all your income from investments and property you don’t pay a penny but if you work your guts out for minimum wage you get clobbered.

“After all that’s happened in the last 18 months they can’t seriously be thinking about a tax raid on supermarket workers and nurses so the children of Surrey homeowners can receive bigger inheritances. It makes a total mockery of the levelling-up agenda and Red Wallers will be up in arms."

[winkie]

19 minutes ago, slawek said:

I meant they should be paid if the state were obliged to pay.

All depends on the rules when the state should pay. I see at least three cases

1. Universal social care - the state pays all the costs

2. Universal social care with excess - the state pay the costs over some threshold 

3. Mean tested social care - the state pays when someone can't afford. This option can't have many different variants depending what assets are excluded from the test and if children wealth/income is included.  

Any care allowance will never compensate for years unknown loss of time in work, and time missed in a career.

One thing that has to be addressed is Care workers renumeration, it is the pitts, hardly worth working for, many requiring state top-ups which is totally wrong and embarrassing, not a living wage. No wonder there is such a shortage, would you do that job for the money that is paid? and the toll it takes on body and mind...... whilst potentially huge profits for business running the top care homes, built on cheap debt.

Maybe that is the answer borrow to pay for social care......the debt then dies with you.

[Dorkins]

11 minutes ago, slawek said:

There is no really a party for younger generations, by this I mean below 50.

Tories votes are mostly old people, Labour is trying get back Red Tories (mostly older ex-workers from North), LD is trying to get some NIMBYs in the South.  

The ongoing realignment of UK party politics along age lines means it is probably Labour's destiny to become the party of the young, but the GenX politicians running Labour at present are determined to fight against this to the last.

Edited September 5, 2021 by Dorkins

[Dorkins]

6 minutes ago, Si1 said:

“After all that’s happened in the last 18 months they can’t seriously be thinking about a tax raid on supermarket workers and nurses so the children of Surrey homeowners can receive bigger inheritances."

Can't they? This sounds like exactly the kind of policy I would expect a shameless Tory party with no fear of losing the next election to introduce.

Edited September 5, 2021 by Dorkins

[Si1]

1 minute ago, Dorkins said:

Can't they? This sounds like exactly the kind of policy I would expect a shameless Tory party with no fear of losing the next election to introduce.

Agreed

[erat_forte]

9 hours ago, bearishonhouses said:

True, there is such a fund - but the accounts show the fund has approximately net assets of 35 billion pounds. Collections of NI (and benefits) are about 9 billion per month. So, a buffer of perhaps 4 months' payments. 

Given the aging population in the UK, I am not optimistic about there being sufficient funds to pay my pension let alone that of my children.

Your pension will be paid out of the production and work of the younger generation when you are retired. Its a bit of a myth that you save now and that supports you 30 or 40 years down the line.

Pension payments now fund current pensioners. How could it be otherwise? Its just accounting, in the end its food, energy, water, products and services that are what people have to create or deliver while they are working, and what they want to recieve when they are retired.

The big problem is that there will not be enough energy, water, resources or workers to provide for us when we are retired. We are going to be poorer. No amount of accounting can make up the future shortfall in resources and energy and working-age people.

[slawek]

15 minutes ago, Dorkins said:

The realignment of UK party politics along age lines means it is probably Labour's destiny to become the party of the young, but the GenX politicians running Labour at present are determined to fight against this to the last.

Not sure about this. That would be meant Labour partially abandoning its workers party credentials and unions and turning more into a liberal socialist party. This change could be difficult to do.  

Shame the Momentum was focused on Corbyn and old style Labour instead transforming the party into a political vehicle for the young people.

Edited September 5, 2021 by slawek

[Dorkins]

1 minute ago, erat_forte said:

Pension payments now fund current pensioners. How could it be otherwise? Its just accounting, in the end its food, energy, water, products and services that are what people have to create or deliver while they are working, and what they want to recieve when they are retired.

If pension payments were used to create new productive capital there would be more food, energy, services etc in future to share between future pensioners and future workers. Unfortunately UK capitalism gave up on creating new productive capital some time ago and is now solely interested in using capital to bid up the price of existing housing.

[slawek]

11 minutes ago, winkie said:

Any care allowance will never compensate for years unknown loss of time in work, and time missed in a career.

One thing that has to be addressed is Care workers renumeration, it is the pitts, hardly worth working for, many requiring state top-ups which is totally wrong and embarrassing, not a living wage. No wonder there is such a shortage, would you do that job for the money that is paid? and the toll it takes on body and mind...... whilst potentially huge profits for business running the top care homes, built on cheap debt.

Maybe that is the answer borrow to pay for social care......the debt then dies with you.

It is going to be a choice, either do it yourselves and get the allowance or let someone else to care for your parents. Depending on personal circumstances people will make their mind what is the better option. 

The pay and work conditions of social workers is a separate issue. I agree they need to improve. 

 

[Insane]

6 hours ago, bearishonhouses said:

I took it that what Slawek was suggesting may be something along the lines: 

total value of property held by over those 65   = 3  Trillion =  3,000B  (I have no idea ow accurate this figure is) 
assume all of these over 65 die by age 100, i.e. 35 years => annual value of property falling into estates = 3,000B/35 = 85B
assuming the value of these assets are subject to IHT at 20% then annual tax raised = 85B * .2 = 17B

So just rough figures.