Wednesday, February 4, 2009

And nothing for the workers…..

Savers: Alistair Darling says Budget to cut tax on pensioners' savings income

If you don't vote this is what you get, pandering to the pressure groups. 40% of people support 60%!! The Babyboomers haven't retired en-mass yet!! Don't buy a house unless you want to be a slave to the greedy generation for the next 25yrs!

Posted by matt_the_hat @ 09:52 AM (2161 views)
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33 thoughts on “And nothing for the workers…..

  • I would be surprised if the tax rate for ordinary savers is reduced. Perhaps a slight reduction of tax for pensioners might be considered – coupled with a move to raise the state pension age to 75.

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  • mark wadsworth says:

    1. I’d rather pay 40% tax on 5% or 6% interest than 0% tax on 1%, FFS. The government has taken away 4% or 5% gross income and now wants to make up for it with an 0.2% tax rebate? And don’t get me started on the bl**dy Tories.

    2. State pensions and house prices are both giant Ponzi schemes. I have no objection to some sort of Citizen’s Pension (redistribution from the working age to the elderly) but how about chucking in Land Value Tax – a bit of redistribution from the home-owners (who, if pensioners, are living off other people’s taxes*, and are sitting on massive windfall gains due to chronic undersupply “all hail the Hallowed Greenebelt!”) to tenants or potential FTBs?

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  • “coupled with a move to raise the state pension age to 75” – this move will not effect the boomer generation though it will be timed so the next generation have to clear up the debts (mess) left behind.

    Democracy is only a good thing if you are in the majority!

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  • What savings income? Given that savings rates are going to 0 (the government’s priority is propping up the housing bubble…), any percentage is still zero.

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  • At 1% interest you need interest from savings of £14,000 to pay your tv licence.
    At 1% interest you need interest from savings of £150,000 to pay typical Council Tax (£1500 pa)

    [email protected]!

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  • Everything MUST be sacrificed to save the housing dream. Is it their intention to persuade anyone with savings that housing is the only place to be in order to generate any income? “Save save save” they once told us….. “NOW BUY HOUSING STOCK” or we will pay no interest or even worse, with rampant inflation, we will take all your hard earned money…. Great Britain…. my ar$e…

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  • 2. mark wadsworth said…1. ”I’d rather pay 40% tax on 5% or 6% interest than 0% tax on 1%”

    Me too. But whether you are for or against such a move depends on how long you anticipate interest rates will remain at such low levels, and whether the situation would be reversed when rates increase.

    I’m surprised the gummint haven’t reconsidered the retrospective £600K+ ‘death duty’ joint allowance with house prices predicted to fall by +/- 40%. Perhaps that is on the cards (after the next election).

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  • mark wadsworth says:

    * I forgot to add “Go on, take the money and run”.

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  • Why don’t my posts to this site ever get shown?

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  • Not just pensioners, but everyone. No Income Tax on the first 10k annual income.Followed by tax bands on each additional 5k up to 50k.
    After which I’m sure they will look after earners anyway.
    Introduce Land value Tax. Ban banks from issuing mortgages to FTBs and guarantee low IR charges to them. Allow banks to issue mortgages at minimum 50% deposit and extortionate interest rates on 2nd and more properties.The first property cannot be used as a guarantee against subsequent property purchases.

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  • stillthinking says:

    The average deposit account returns 1% but currently inflation is at ~3.2%, so the pensioners are losing money. That aside, given that they are on low incomes they are dealing with food inflation at ~9%.

    Basically, “record low interest rates” doesn’t do justice to the fact that, however, you cut it, they are looking at a negative ~5% yoy for their cost of living.
    In 4 years 20% of their capital is gone (against what they need to buy), but they are unable to offset this against falling property prices (‘cos old and on their way out so to speak). Worse is to come.

    The UK government is appropriating savings for political purposes i.e. to disguise and wriggle out of debt obligations. If the cold snap hadn’t been so short old people would have died in an attempt to keep fuel costs down. Harsh reality intrudes into New Labour’s collective dream.

    Changing the tax is equivalent to moderating the interest rate by social grouping, they have been so stingy that they will avoid the natural consequence to move your savings to your aged parent’s account.

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  • happy mondays says:

    As wolfie smith say’s, ” come the revolution brothers ” But we know that leads to another vested interest party in power, we need, as someone once told me, A revolution of the mind! another way of thinking, maybe an evolutional step…..

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  • Plato @10…
    “Allow banks to issue mortgages at minimum 50% deposit and extortionate interest rates on 2nd and more properties.The first property cannot be used as a guarantee against subsequent property purchases”.

    You’ve got my vote fella…. What are your eyebrows like?

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  • stillthinking says:

    To put it another way, state pension is about £62 pounds per week, but a can of boiled tomatoes costs ~£1. If you were living on less than £10 a day probably your whole budget is directed to food, washing essentials. Washing powder ~£5, spaghetti, a supposedly cheap standy £1 a pack. Forget going out. Forget a TV. Buying a new pair of trousers requires a bit of starving…

    They are squeezed too much IMO.

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  • mark wadsworth says:

    @ Plato “No Income Tax on the first 10k annual income.Followed by tax bands on each additional 5k up to 50k.”

    I agree on £10k personal allowance (which is what pensioners get, as it happens), but not on banding.

    For a given total tax take, a lower earner always benefits more from an increase in the personal allowance. So it is better to have a higher personal allowance and a flat income tax rate (the lower the better from my point of view, others may disagree). Richer people in bigger homes would pay relatively mroe in LVT anyway, so it all evens out.

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  • bluebeach …………..Like Darling’s but human.

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  • mark wadsworth ……….. Thanks mark w. Your sums are better than mine…….”Whatever’s fair” I say.

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  • It’s a little off topic, but I predict that the next rate cut along with a ramping up of quantit … erm, money printing will precipitate a collapse in sterling within two months.

    Not much we can do about it, I don’t think.

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  • you can still get 3-4% with some savings account that offer a 12month bonus.
    people need to shop around.
    i am earning an average of 3.15% on all my savings accounts.
    I would rather be earning that small ammount than losing a fortune every day, like those mugs who invested in property.
    keep smiling people 😉

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  • landofconfusion says:

    “If you don’t vote this is what you get, pandering to the pressure groups.”

    But according to some on here it’s my fault for voting. Anyway, most retirees vote Tory so Liebour’s not losing much by staving them to death.

    19. sold out said…
    “I would rather be earning that small ammount than losing a fortune every day, like those mugs who invested in property.”

    I’ve stopped saving now and gone completely over to equities. When they mature my bonds will go the same way unless IR’s improve in the meantime.

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  • mark wadsworth says:

    @ plato, it’s one of those quirks of maths.

    If you want to work out how much tax and NI a higher rate taxpayer pays, you can do it slavishly and mathematically with tables, or you can use an online calculator or you can just knock off £13,500 and times the result by 41%.

    If I were a lower earner on £10k or £15k or £20k I would much rather have a £13,500 personal allowance and pay 41% on the rest than have a £6k allowances and pay 30% on the rest.

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  • @ Browneconomy

    Email those nice webmasters for a password, and use it on every post you make (the key symbol).
    You’d get instant posts

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  • 2 tudorian @ 22

    be careful though….they can be removed…..

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  • Progressive rates of taxation help to reduce the inequalities that have grown so large over recent years. It doesn’t make sense for someone earning 40K to pay the same marginal rate of taxas someone earning 40M. And with all the loopholes that can be exploited by the rich, the lowest paid end up contributing most to the tax take. As for the argument that the rich contribute that much extra wealth, I hope that has been laid to rest for good.

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  • welcome back nooneo aka shining wit.

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  • sold out:
    How many alter egos have we got here? Perhaps someone should write a textual analysis program to pick out these proliferating doppelgangers. Or are these reincarnations after the webmaster spake?

    (Saw a solitary post from planning4acrash the other day. Am I hallucinating?)

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  • 9. Browneconomy said…Why don’t my posts to this site ever get shown?

    I ask the same question.

    This site has become a mouthpiece for a group of opinionated, self important people who talk a lot of hot air.

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  • mark wadsworth says:

    @ Letthemfall “the lowest paid end up contributing most to the tax take”

    Probably true. So what’s wrong with a £13,500 personal allowance and a flat tax rate of 41%? Lower earners would benefit enormously, higher rate taxpayers would be no better or worse off.

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  • mark w

    Well, for one thing, a couple earning 30k between them would pay almost no tax whereas a family where one parent works and earns 30k would pay a very high rate of tax on most of their earnings. The household income is the same so why should one family pay so much more tax ? This is nothing new – our tax system penalises parents who choose to raise their children rather than stick them in a creche – but high personal allowances make it much worse.

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  • mark w: That wouldn’t address the issue of the relatively lightly taxed high earners who I think should be taxed more heavily in the interests of a fairer society. Removing the fiddles and dodgy tax havens would help a lot too.

    luckyjim: Agree with you there. This country has always had a poor taxation system (and others) from the point of view of kids, although at least GB introduced child tax credits.

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  • mark wadsworth says:

    Luckyjim, Letthemfall.

    That is a good point. Couples should be taxed jointly (or non-working spouse entitled to income support, same thing mathematically), that would fix that problem. That’s also in the MW manifesto of course.

    As to loopholes, the maddest biggest single tax break that benefits high earners is tax relief for pensions – all of which disappears in commissions and profits, so that’s going straight out of the window when I’m in charge. There aren’t really any other big ones (in terms of cost to Exchequer, although they could all do with being scrapped).

    Which leaves us plenty of scope to reduce the flat tax rate to 30% or so, no exemptions, no excuses.

    The point I was making is that a high personal allowance (especially if transferable between spouses) helps the low earner much more than a reduction in basic rate of tax.

    In extremis, you’d have a £30,000 personal allowance and a 100% rate above that (or whatever)

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  • 17. plato said…bluebeach …………..Like Darling’s butt ~~~ human.
    eyes open

    down it goes

    shut

    what a difference a t makes

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