Thursday, March 13, 2014

Don’t expect anything to be paid for by Boomers or landowners…

UK faces 'crippling' tax rises and spending cuts to fund pensions and healthcare

"Britain faces tax rises within two years equivalent years to more than 17pc of GDP, says Institute of Economic Affairs" “We have never been in a situation like this before. It is quite possible that we will not find our way through without serious social breakdown and/or mass emigration of the most mobile and productive people,” said Mr Booth." Land is not mobile but then again neither are pensioners so expect a futile attempt to pay for this c*ck up to be made via taxing the productive economy...

Posted by mombers @ 11:35 AM (2591 views)
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14 thoughts on “Don’t expect anything to be paid for by Boomers or landowners…

  • stillthinking says:

    I seek out gloomy economic news but sometimes that damn Torygraph goes a step too far.

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  • mark wadsworth says:

    The good news is, once we’ve all been crippled by these tax rises, we can all claim Incapacity Benefit and get our rent and mortgages paid by Timmy Taxpayer 🙂

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  • Even more paying for the baby boomers by everyone under 40.

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  • Based on ‘research’ by the dubious charity IEA free-market think tank pushing the usual low tax, small government agenda on behalf of their billionaire US paymasters?

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  • There is talk of merging Income Tax and NI into one which could potentially (IMO) catch a lot more people in the Tax “net”

    Mr Wadsworth your thoughts on this one please ?

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  • mark wadsworth says:

    Jack C, it is a great idea.

    NI means that the effective basic rate of tax is actually about 40% but on non-wage income it is 20%.

    So if they averaged it out over all types of income, the required rate to get the same revenue would be 35% or something, so workers would pay a bit less. ‘self-employed’ would pay a bit more and landlords and pensioners would pay quite a bit more.

    Or they could just have three basic rates of tax – 40% for wages, 29% for self-employed, 20% for interest income (ha!) and 18% for landlords (who get the 10% wear and tear deduction). At least that would ram up what sort of priorities the UK government has.

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  • MW – thanks for the input. I had a feeling “pensioners would pay quite a bit more”

    Lets see if this idea gets beyond the talking shop !

    Hope all is well with you and your family

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  • Boomers and landowners have money trapped in the UK. They will get stuffed

    Entrepreneurs and businessfolk have their cash stashed around the globe, often on warm islands.

    People on benefits who are too hung over to turn up for processing will get their benefits stopped, first off for a few weeks, then longer.

    The UK has been living beyond its means for a few years now. Read Dom Frisby’s book on life after the state (Amazon).

    Tax sugar – get rid of fatties and save the NHS millions of wasted money – I’ll leave you chaps to fight over where the tax money goes…

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  • @alan – what type of sugar are you going to tax? You may as well go the full hog and up VAT on food to 75% or tax all carbohydrates.

    It’s about time people took responsibility for their own health.

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  • Mark Wadsworth ,

    Is the distinction between “employERS contributions” and “employEES contributions” , to both N.I. and pensions anything more than a sleight of hand ?

    Isn’t it just designed to befuddle innumerate people ?

    I don’t like the idea of combining N.I. and income tax for the reason that it makes N.I. part of taxation rather than a hypothecated premium for the welfare state and state pension .

    Legitimising the abusive use of N.I. as if it was general taxation would just pave the way for reclassification of the state pension as a benefit rather than an entitlement .

    relative to employed aren’t you just perpetuating this myth that “employers contributions” to both N.I. and secondary pensions are

    I think you have got it wrong about different tax rates for employed an self employed .

    Merging N.I. and income tax just legitimises the abuse of a supposed premium

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  • mark wadsworth says:

    Striebs,

    The distinction between Ee’s and Er’s is of course sleight of hand.

    Apart from that, you appear to have fallen for every single lie in the politicians’ book.

    1. NI is not hypothecated for anything, never has been, never will be. It is just a tax which happens to raise enough money to cover about HALF the total cost of welfare and the NHS.

    2. How is that “abusive”? You get twice as much back for your NIC as it costs you (apart from the fact that you are paying the difference with your income tax, VAT etc).

    3. The state pension IS a benefit, it’s unemployment benefit for old people. That doesn’t make it a bad thing or a good thing, that’s just what it is.

    4. I have got it exactly right about different tax rates for basic rate employees and basic rate self-employed or else I wouldn’t have said it. Salaries are taxed with two layers of NIC (slightly more than 20%) and self-employed pay one layer of NIC called Class 4, which is currently 9%.

    5. You final comment merely restates your original mistake from 1 and 2.

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  • Mark Wadsworth ,

    Thanks for your reply , especially pointing out that N.I. only covers half welfare and the NHS .

    Didn’t welfare actually exceed the income tax take in 2010 ?

    Over the years of reading this site I’ve learned that the main problem is the failure to annually tax location and that trying to do so much by taxing employment the wrong way of going about it .

    Sorry I edited the beginning of my post and forgot to delete the end .

    The Govt certainly makes no efforts to disabuse us of the notion that the state pension will remain universal and will not be subject to means testing .

    The term “Insurance” in the name implies that the many contribute but only the unfortunate few claim and it implies something in return when you really need it .

    Thus “Insurance” would be an appropiate way of describing unemployment benefit and treatment of serious health disorders .

    Insurance is not the obvious choice for funding something to be paid to the majority – eg the majority will reach 68 years of age .

    On the otherhand insurance would be a good choice for supporting old folk when they had exhausted their savings if the majority died before exhausting their savings .

    Politicians never used to publicly refer to the state pension as a benefit but have recently started doing so which I find worrying .

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  • Employers NI will not be reduced any time soon. Low-level labour supply is inelastic, high earners’ labour supply is elastic. The former won’t see the benefit of cuts. The latter will.

    To put it in layman’s terms, bankers will know to demand it off their employers or switch to an employer that will. Supermarkets will pocket it rather than give it to their staff. They already get away with paying them so little that the govt. has to subsidise their pay packets.

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  • bidin'matime says:

    By steadily raising NI rates (from a total of 14% employer’s + employee’s in the mid 70’s to their current total of 25.8% = 11.8% increase) successive governments have been able to con taxpayers/voters into believing that they are dramatically cutting tax rates (the basic rate has been brought down from its peak of 35% to the current 20% = 15% decrease).

    Meanwhile, VAT (tax we pay at the till, rather than in our pay-packets) has increased from 8% to 20% (= 12%) over the same period.

    11.8% more NI plus12% more VAT minus15% less income tax = 8.8% more tax paid (if you spend it on something that is VATable).

    So of course they can’t start combining taxes – they’d lose the scope to con the public… And who’d vote for a party that had ‘put tax rates up from 20% to 45%’?

    (Yes, MW, I know there are all sorts of minor adjustments that could be made to ‘fine-tune’ these figures, such as the employer’s tax relief on their contributions, but the principle remains unchanged.)

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