UKC

https://www.youtube.com/watch?v=nFR8IBdXdJE&feature=share

http://www.theguardian.com/commentisfree/2015/nov/11/david-cameron-letter-c...


Just sowing seeds...

In reply to Stuart (aka brt):

Did you read your subject heading before posting that? Or is it - like - ya know - "ironic"?

In reply to Fraser:

I think he's referring to the video.

In reply to Fraser:
Did you look at the link before you commented? Or is it like - ya know - your own "prejudice" blinding ya?

In reply to Stuart (aka brt):

I tried the Youtube link but it didn't appear to work on my phone. Is it worth watching or does it explain something?

And to answer your qu. it was the latter.

In reply to Fraser:

Actually, I think the first link that Stuart's given us above is about the most brilliant diatribe I've ever seen. Worthy of an Oscar for its delivery. I love the way, about three or four times, he goes from fortissimo to pianissimo. And the long pauses at the end are pure gold.

In reply to Gordon Stainforth:

Sounds intriguing, I'll see if I can view it later at home.

In reply to Stuart (aka brt):

I don't think he's stupid, he's just nasty, disconnected from reality and doesn't care about the impacts of him following his ideals.

In reply to Stuart (aka brt):

He is a very bad person who I suspect will break this country. I'm not a political genius and not armed with all the 'facts', but my understanding is the government has increased borrowing enormously during their tenure, and massacred public services. I also understand their plan is to continue doing that.

Stupid? Perhaps to the population. Either way, as a multi-millionaire (as are his colleagues), he will be immune from any difficulties he creates, and will most likely benefit. Nasty? Oh yes, very. But then as an apathetic electorate we let him carry on like that. I wonder how long for though.

I am greatly saddened to see the dismantling of community and community services, and an increase in gated-community style thinking by those who have the finances that do not need community services (yet). I do strongly feel this country will struggle to recover from this period of government.

In reply to Stuart (aka brt):

Is David Cameron the Most Stupidest Person in Britain??

He's got some fairly stiff competition.

In reply to tony:

It'd make a good performance poetry piece in different hands.

-You're not a service user, you're a service abuser!

In reply to Stuart (aka brt):

Get that man on Question Time... And Cameron ought to be awakened by his rant each morning.

In reply to Gordon Stainforth:


Maybe he could give Jezzer some coaching!

In reply to Postmanpat:

Will they ever leave him alone?

In reply to Stuart (aka brt):

So flame me.
The UK has routinely been spending more than we can afford. We need to stop doing so. Of course it's going to hurt "front line" services and benefits that are currently taken for granted.

The sooner we realise that some sacred cows need slaying, the better:
- most people with a workplace pension should not get a state one (including me)
- we can't afford the health service we aspire to

In reply to JJL:



So why aren't we?

In reply to JJL:


I can't help wondering what health service the UK does aspire to - it's already one of the lowest cost per capita in the developed world. There is quite a lot of economic evidence[no, I'm not supplying evidence!] that strict austerity causes more problems than it solves and that running a government as if it was your personal bank account is asinine.

The cynic in me thinks - if I fall off something and damage myself enough to need medical care it will cost me ~£1000 minimum. These people think they can get patched up for free and then go right back and do it again....

In reply to Alyson:

Well, I think there are attempts to - but every cut is met with a "you can't touch that" and there's insufficient gumption to touch the sacred cows.

In a way, choking the borrowing supply somewhat might actually help. Whilst we can go on borrowing it's much easier to ignore the issues.

In reply to pneame:


We aspire to free at the point of delivery, universal, and high quality. We need to pick 2.

In reply to JJL:


Or pay for all three. Just saying. I mean we used to before the idea that taxes should only ever fall and the free market will solve everything took hold.

jk

In reply to jkarran:

VAT to 25p is indeed a sacred cow

In reply to JJL:

Like corporation tax you mean?

Genuinely, the NHS is being dismantled, social care is disappearing, university tuition is rapidly becoming unaffordable... which are these sacred cows? State pension is about all that's left.

In reply to Alyson:

http://www.independent.co.uk/news/uk/crickhowell-welsh-town-moves-offshore-...

These guys are doing something about corporation tax. Are they helping or are they making the problem worse? It's an interesting debate..

In reply to JJL:






Or you could just close the loophole that allows billions of pounds of tax evasion each year to enable the stinking rich to get even stinking richer?

But hey, it's much easier to kick even more shit out of the poor isn't it?

In reply to Alyson:



People who will be higher rate tax payers on retirement do not need a state pension.

But, yes, like corporation tax and income tax and VAT.

Corporation tax raises about £40bn; income tax about £160bn and VAT about £105bn.

Current annual borrowing is forecast this year to be £75bn.
The NHS wants an extra £20bn.

Triple corporation tax?
VAT to 35%?
Basic rate tax to 30%?

That's the scale of the problem. It's not going to get fixed without it feeling a bit different.

In reply to JJL:

Why would you suggest increasing VAT, probably the most regressive tax we pay?
jk

In reply to Stuart (aka brt):

I don't think he is.

However, he is a complete C**T.

In reply to Goucho:


Indeed. Independent in 2013 says £4.7bn if closed. Get onto it.
http://www.independent.co.uk/news/uk/politics/revealed-47bn-corporation-tax...

BUT, individuals avoiding income tax = £15.3bn
http://www.theguardian.com/politics/2013/oct/11/uk-tax-gap-rises-hmrc-avoid...


Not sure where you imagined I said anything of the sort?

In reply to jkarran:



He's not, he's presenting some of the options.

In reply to jkarran:


I'm not suggesting we do. I'm asking how we close a £75-80bn borrowing requirement by raising taxes - which actually was Alyson's question. To help with what I accept is quite a difficult task, I have provided some facts. To raise £80bn you have to put VAT to 35%, or do something else.

In reply to JJL:

You missed off our new aircraft carriers, endless futile wars and a half trillion pound 'investment' in a new doomsday machine we apparently couldn't possibly do without. Thinking about it faced with all that and an aging population the obvious thing to do would be slash spending on social care and further education then cut inheritance tax of course because, well, just because! It's almost like they're taking the piss.


You're right of course. For the already rich this is a fabulous opportunity to profiteer in the misery of others.
jk

In reply to JJL:


Exactly how much of this reduction in deficit etc during the course of this parliament, is economic necessity, and how much of it is political ideology?

In reply to Postmanpat:


Perhaps I should have quoted his entire post to me, the one to which I responded:


I don't see any other options there.
jk

In reply to JJL:

That is really clever. Up corporation tax to 35% so that all businesses who can leave the UK do so and take their Ho 's etc overseas. Those business that are left then have to pay an even higher % to make up for the shortfall.

Stupid and irrational idea.

In reply to JJL:

Ooh that's nice:
free at the point of delivery, and high quality - how on earth can this possibly work? If you can afford it great - otherwise just rot in the gutter
universal, and high quality - ditto
free at the point of delivery, universal - isn't this what the government is aiming at? Awful care unless you can afford high quality

In reply to jkarran:

I'm saying that there shouldn't be no-go options; putting up VAT is an option. It mightn't be the best one, or even a good one, but money has to come from somewhere.

When I did the calculation it needed to be 35% not 25%.

I'm not advocating (for all you people getting a little frothy-lipped about it) any particular stance; merely that if we want stuff we need to pay for it. We have had lots of stuff on credit for a long time. So we need to either pay more or have less stuff or a bit of both. Oh, and trying to highlight the scale of change that's required, which is a bit boggling.

In reply to pneame:





My own choice would be that it becomes not free for some people (e.g. higher rate tax payers), no cosmetic treatments and cessation of research on very premature birth survival support

In reply to JJL:


That latter one is ..... interesting. Personally, I disagree with you, so I was wondering why you singled out neonatal intensive care specifically?

In reply to Goucho:


Good question.
http://www.economicshelp.org/blog/4001/economics/tax-revenue-sources-in-uk/

The broadly recurrent income was £490bn (plus £100bn non recurrent form flogging assets etc).

The annual gap is £75bn.

The accumulated debt is now £1560bn and the interest payments £43bn (and that's setting aside the issue of public sector pensions).

So I'd say we have a fairly pressing problem. I'd say we'd be a bit irresponsible to continue growing the debt.

We can't afford the standard of living that we are used to. It's based on credit.

In reply to climbwhenready:

Because it's hugely, disproportionately expensive and leads to a lifetime of intensive healthcare support.

For that money we could do an awful lot of other stuff around health promotion and disease prevention - all the prevention stuff gets squeezed out at the moment.

In reply to JJL:



Paul Krugman (among many others) disagrees with your analysis - see e.g. http://www.theguardian.com/business/ng-interactive/2015/apr/29/the-austerit...

In reply to Stuart (aka brt):

Yes.

In reply to Rob Parsons:


Except he doesn't really - look about halfway down where he says "It’s true that you can’t run big budget deficits for ever (although you can do it for a long time), because at some point interest payments start to swallow too large a share of the budget." and "At some point you do want to reverse stimulus."

We have run a big deficit for a long time; the interest payments are large (15% of income; consider that for a moment) and a risk should the rates ever be open for negotiation.

Gauco's question about "in this parliament" is a good one - it's the timing, not the destination. The problem is that it's easy to say "tomorrow" but we are seeing just how hard it is to bring spending and income in balance... and it absolutely will not get easier with higher interest payments (or rates).

In 20 years' time, the population will have three times as many over-80 year olds, and proportionately fewer carers, and proportionately fewer people paying for pension provision to others. It won't be easier then.

In reply to JJL:

His conclusion reads: "For whatever the politics, the economics of austerity are no different in Britain from what they are in the rest of the advanced world. Harsh austerity in depressed economies isn’t necessary, and does major damage when it is imposed. That was true of Britain five years ago – and it’s still true today."

In that respect yes - it's the timing.

What we are seeing now isn't about economics; it's an opportunistic political programme.

In reply to JJL:


The problem, as the link explains, is that the line about the necessity of cuts to front line services is dishonest, because the government can find money - or afford not to collect money - for the rich.

Perhaps you can explain how tax cutting inheritance tax is commensurate with such severe pressure on the public purse that front line services such as children's centres must be sacrificed for the greater good?

It doesn't matter where you sit on the political spectrum - it doesn't add up. Either we have money to spare on cutting taxes for the rich, or just for pathetic marketing purposes (marriage tax break), in which case the cuts to services for the poorest are inexcusable, or we don't. So which is it?

In reply to Rob Parsons:
I maintain the right to disagree with Krugman, I'm also more peaceful than Oboma (just to deal with the Nobel card).

We are not in a depressed economy, and we are not doing harsh austerity. They are the factual errors in what you have quoted.

More generally Krugman does not seem to understand the difference the worlds superpower who own the worlds reserve currency, and the UK.

In reply to Rob Parsons:




I don't think we're going to agree (and I vote Liberal).

I wouldn't run my own finances like we have nationally for the past 30 years.

In reply to Jon Stewart:


Well you know the argument, if we tax the rich they'll all go live in Switzerland and our economy will tank. I don't actually believe it but that is their argument.

To be fair to JJL he doesn't seem to have ruled out tax rises on this thread, he's talking about borrowing.

In reply


I agree there is a problem, but as with all aspects of economics, the numbers can be interpreted in many different ways, according to which argument you are putting forward.

It's like the old joke...
How do you get 3 different economic opinions? Ask 2 economists!

So the Tories might have reduced the deficit, but they have doubled the debt - and by default our interest payments and liabilities.

It's important that we don't confuse necessary economic constraint with political dogma.

The finances of a country can not be run along the same lines as the finances of a company. That is not only morally bankrupt, but also fiscally unachievable.

In reply to Jon Stewart:



At what point did I say that it was?
However, since you have raised it, yes, inheritance tax is another source. But it isn't enough - the gap is HUGE. It's 15% of government income. Inheritance tax raises less than £4bn; doubling it to 80% will raise £4bn (less the additioinal avoidance you will stimulate). Now find the other £76bn.


Why is everyone acting like I'm a billionaire lining my pockets and attributing points of view and statements that I have not extended?!

Last time:
We have a £80bn hole recurrently. We've allowed it to continue for years and years until, even at miniscule interest rates, the interest is £46bn.
We can't afford tax breaks or perks for the comparitively wealthy (see my comments re pensions and health co-pay for higher-rate payers); we can't afford the standard of services we have been enjoying - because we have been paying for them on credit.
If we want to pay for them ourselves and continue those standards, the hikes in all available taxes are enormous. I gave some examples.

So far the arguments in this thread against this logic appear to be either "make someone else ("the rich") pay" or "keep borrowing, it's cheap at the moment". You'll forgive me for being a little disappointed.

The wealthy should pay more, but the gap is too big to close like that, so some spend also needs to get reduced.

Anyway; looks like I got the explected flaming!

In reply to Mike Stretford:


That argument doesn't apply to cutting inheritance tax, nor to the marriage tax break - even if it did apply to the 50p rate. Cutting corporation tax is one that can be argued as a stimulus measure. The point is that this govt is intent on cutting taxes where there is no stimulus argument, yet we are told that it's necessary to cut working tax credits. It's manifestly dishonest, a child could see it, yet Tory voters just accept it for reasons of self-interest.


No, but his starting premise was that we cannot afford the services which are being cut. And I'm saying, if that's the case, then we certainly can't afford tax cuts for the rich, and the desire to deliver these tax cuts completely undermines the credibility of the austerity story.

In reply to Goucho:


The tories have doubled the debt??
We've been building it for almost a century - all parties and, most of all, the public.


No dogma here - just laid out some facts and asked which combination of things people would find palatable that actually close the gap.


Nor can the finances of a country be built on infinte borrowing. And why is it morally bankrupt to run a country within its means to pay? Ultimately we have enjoyed a fantastic rise in standards of living. It's completely disproportionate globally.. and partly owed to what many would argue is exploitation of less fortunate places. Is thta less "morally bankrupt"?

I think there will be some rebalancing!

In reply to Jon Stewart:

They think that if you cut inheritance tax then the kids will spend it all and boost the economy. Again I'm dubious but that is an argument I've heard.


I'd agree with that, I do think they are political. But again they will claim it's about stimulus.

I do think JJL last point is correct, tax rises on their own won't do it.... remember the Tories have 'ringfenced' pensions and health.

In reply to Jon Stewart:


Would you please stop mis-quoting me?
I said we cannot afford the lifestyles we have become accustomed to.

In reply to JJL:


No, you didn't. I made the wrong assumption that you thought that the cuts to services were justified in the context of wider policy decisions by the state of public finances.


You've misinterpreted my point on tax cuts - I'm not saying that raising these taxes can close the gap - because I'm agnositic about whether gap needs to be closed in the simple way you put it. The turning of the economic cycle will dictate if and how the books will be balanced, rather than taking a snapshot now and working out how to find the missing 80bn today.

All I'm saying is that the govt line on cuts affecting the poorest is manifestly dishonest, and yet people are still happy to vote for them, which I find very depressing.


I don't believe that there is a pot of free money in taxing the rich. I also don't see the evidence that we need to get achieve surplus in 4 years or something terrible will happen.


But surely it all depends on what happens to the economy over the rest of the cycle. Conceivably, the gap could close itself without policy change, or on the other hand, it could grow no matter how much fiscal policy the govt threw at trying to close it.

In reply to JJL:


The UK has routinely been spending more than we can afford. We need to stop doing so. Of course it's going to hurt "front line" services and benefits that are currently taken for granted.


Not really a misquote, is it?

In reply to Jon Stewart:

Take a look at the graph at the top of this page:
http://www.theguardian.com/news/datablog/2010/oct/18/deficit-debt-governmen...

I hope that we'll agree that, since 1979 when the graph starts, there have been several "cycles".

There have, however, only been 6 surplus years - and several of those are teeny-weeny.

So sitting back and allowing the "cycle" to turn doesn't really fill me with much hope.

And yes, I do think services will have to be cut - I just haven't said that I support the where/how that we are seeing now.

In reply to Jon Stewart:



The misquote was that I was supporting the cuts currently being enacted. I'm not. I'm saying that cuts are going to be needed as you can't credibly balance through taxation alone.

In reply to JJL:


Good graph!


I don't really understand what we'd get from a big surplus, and I would imagine a chancellor would choose to ideally just be in surplus but spend the rest on good stuff like hospitals.


My point was that the 80bn figure is pretty much useless, since with no policy change it could half or double in a matter of months. Also, the consequences of not achieving surplus in 4 years have not been explained, I don't know what I'm meant to be scared of.

In reply to neilh:



You do realise that I'm not saying that don't you?

1. The 35% is the rate VAT wouold need to be (theoretically) to close the annual deficit; not corporation tax
2. Corporation tax would need to double (to 40%) to do the same
3. I was just listing the comparative magnitude of different things, because in these debates there are rarely enough facts so people talk about inheritance tax without understanding that it's only a £4bn income stream.

In reply to Jon Stewart:


Agree - although paying off some of that £1560bn that we pay £46bn interest on would be part of my plan if I was in charge. Over perhaps a century, like a mortgage.


Double or halve in a matter of months - I don't think so! Not sure how you get thta idea?

As for 4 years, I've not expressed a view on timescales other than just leaving the problem to get bigger isn't smart. My guess is that it won't be gone this parliament, but will be smaller. A proper discussion of pace and the nuance of how fast changes hit both people and the economy, would take too much typing. I'll buy you a beer at the crag sometime and we can do it then I expect.

In reply to Jon Stewart:



Another graph, inflation adjusted and per capita, so it's not so volatile to gdp.

http://www.ukpublicspending.co.uk/spending_chart_1900_2016UKd_15c1li011lcn_...

Our actual debt (as apposed to deficit) is pretty big and the idea behind the fours years is that in four years the actual debt will stop rising. Pretty arbitrary I know, but I can see the point.

In reply to JJL:



True, but the debt is twice what it was when Osborne became chancellor.


The question is, how much of the gap actually needs to be closed over the next 4 years in the name of responsible fiscal economics, as opposed to political ideology to enable Osborne to give the Tory faithful an errection and get elected as PM?


Of course not, so why has Osborne doubled the debt?

And why is it morally bankrupt to run a country within its means to pay?

If it means punishing the less fortunate in society in order to adhere to a construct which is politically motivated, then that is morally bankrupt.


I think there are several million people who might disagree with you on this point.

In reply to JJL:


Things changed pretty quickly in 2008 didn't they? Although halving in a matter of months is more difficult to imagine!


Most on the left would agree with this stance. On the other hand, the Tories have completely self-serving goals in mind of offering tax cuts as soon as possible, and reducing public services for ideological reasons without giving a hoot about the harm caused to the poor and vulnerable for the simple reason that they don't vote for them.

A proper discussion of pace and the nuance of how fast changes hit both people and the economy, would take too much typing. I'll buy you a beer at the crag sometime and we can do it then I expect.

Haha yes. Although I'm not sure about beer at the crag - maybe after!

In reply to Goucho:


I can only think you are trying to be party political here. The deficit was 153bn when he came in, there's no way he could cut that overnight so debt was going to increase. Not a fan of him, but a debt rise was inevitable, you haven't made any real point.

In reply to Stuart (aka brt):

Haven't seen anyone addressing the Guardian article. I thought it was quite interesting...

In reply to Mike Stretford:


Not party political at all - I think all politicians are wankers.

The point I was trying to make, is I'm not convinced the austerity measures imposed by Osborne, nor the timescales, are driven purely by economic necessity?

I think a lot of it is driven by political ideology.

In reply to Mike Stretford:


Ta.


Again, the part of the argument I don't understand is: what is the impact of the debt rising? The borrowing costs thing doesn't seem to have happened after the Coalition failed on their targets; and if we're decimating public services in order to get the deficit down, presumably once this is done, we're then faced with a massive bill to regnerate all the crumbling schools, hospitals and infrastructure. A bill that we wouldn't have faced if we'd maintained services by borrowing. Unless we don't want schools, hospitals and infrastructure any more, because we'd rather have the money in our pockets to spend on iphones and holidays? Is this really the case? I guess if you're happy to go private and let others rot, then maybe, but that rather kills off the idea of 'compassionate Conservatism'.

The degree of debt (or the rate of increase) on its own can't be used as an argument for cutting services, someone has to explain why the damage of debt is *worse* than the damage of cuts.

Edit: I'm not assuming that you believe the arguments I'm criticising here - I'm just making the case.

In reply to the thread:

Well, I'm off. I got my flaming - which has left a nice warm glow!

No hard feelings - I'd still lend you a fiver if you needed it, even though it's clear I'd never get it back...

In reply to Stuart (aka brt):

I'm fed up of being civil, Cameron is a nasty pig-f***ing stupid knobbrush

In reply to Jon Stewart: Yeah I agree, I think the current cuts are political. But at the same time I think a big debt is something to worry about, especially given our low productivity. There does come a point were just the interest payments on the debt can suffocate an economy, and another financial shock could push us close to that.

I don't think there are any easy answers on our economy. I do think in terms of the non ring fenced public services, they went far enough before the end of the last term of government. To go further must be the easiest answer for the tories.... good on Monbiot for making it less 'easy'.

In reply to JJL:

Yes

In reply to Stuart (aka brt):


Great vid, like it, thanks. On account of its -- as Gordon has pointed out -- exceptional quality, I was expecting it to have gone viral. But only >3k views. Maybe give it a few days.

In reply to felt:


It's possibly too long for that, short attention spans an all...

In reply to Gordon Stainforth:


He tells his thoughts very well, I thought. Hard to argue with.

In reply to Timmd:

Yes, and re. the double superlative, OK, it's not good grammar, but it's a device quite often used by writers. Even Shakespeare does it, for example: 'the most unkindest cut of all' (Julius Caesar) and 'the basest and most poorest shape' (King Lear).

[...] Triple corporation tax?
[...]

Last year I paid more corporation tax than Facebook and George Osborne's family firm combined. The government could easily raise billions if companies paid tax on the turnover rather than the profits.

In reply to Stuart (aka brt):

Cameron Stupid er no. But he thinks the general mass of people of the uk are the dumbest sons of bitches that ever lived. And he has a point.

Cameron is a ruthless evil cynical doublespeak newspeak puppet that does what his paymasters tell him to do: sell the uk population down the river while he laughs all the way to the bank.

In reply to Gordon Stainforth:

Very interestingly it seems that this is probably 'the artist taxi driver'. Not 100 per cent sure, but about 95. What a great character.

youtube.com/watch?v=xBIv0xRTegE&

In reply to Andy Hardy:


They already do. Hadn't you noticed? It's called VAT.

In reply to Andy Hardy:




How you think that would affect investment by corporations?

In reply to Postmanpat:

I see on reading back through the thread that VAT has already been discussed from a different angle, with the pertinent observation that although the tax is paid by the corporations, the cost is borne by the consumer.

By the way, so did I (pay a lot of corporation tax) last year. And the year before that, and so on for 20 years. I'm what some in this parish would call a nasty capitalist and I'm wondering where these tax breaks are that I'm supposed to be enjoying. L

In the recent budget, Osborne increased the tax on profits derived from private business ownership (that's my wage in common parlance. I don't have the safety blanket of regular earnings like normal workers) by a whopping 20%. Yes, effectively, a 20% increase in income tax.

That hike didn't make any headlines because it doesn't suit the narrative of tax cuts for the wealthy.

I wonder how many here even knew about this increase? Which also hits UK-based shareholders of major corporations in the same measure by the way.

While you'll all be glad to see the pain being shared out among the more economically fortunate it strikes me as bizarre that the tax hike hits entrepreneurs directly but fat cat directors and bankers only on their investment earnings. I guess I would say that though wouldn't I so maybe I shouldn't comment.

In reply to BnB:
I'm a lefty liberal fan of capitalism, having seen a relative transform his circumstances through selling his skills, and it seems rather unequal, what you've outlined.

I think you're onto a loser if you equate being towards the left with seeing capitalists as nasty and selfish etc, by the way.

In reply to Gordon Stainforth:

Correct - check out his youtube channel.

In reply to BnB:


The tax break that's come up is inheritance tax - not usually an monthly or annual bill!




Yes I remember it now you mention it, and it hasn't been reported on much. If you think that's because the left control the popular media then you're living in a parallel universe. The reason is that the popular press don't know what to say about it - what can they say? "Isn't it brilliant that our taxes have gone up!" - that'll sell a whole load of papers, won't it. Or "isn't it a disgrace that our taxes have gone up!" - that's not going to go down well either. The reason it wasn't in the papers was because it wasn't in the interests of the papers for it to be in the papers. Sometimes you have to pay your taxes, and you can't even bask in the public glory of your generosity - life's a bitch, eh?

In reply to JJL:


We can afford a much better standard of living, in fact we can afford and should expect a continuously improving standard of living, It's based on technical progress: there is no physical reason why we shouldn't.

The thing that is screwed up is the financial system which is concentrating wealth and rewarding property ownership far too much relative to productive work and invention.

In reply to Jon Stewart:
It's okay John. I do know why it wasn't in the papers. I even wrote that it doesn't suit the popular narrative of "tax cuts for the wealthy" to highlight a tax that only hits the wealthy. But it's important nonetheless that anyone who imagines only the less well off are being hit be disabused of that notion.

The inheritance tax changes that you point me to are much misunderstood, though not by you I feel sure . For starters, those with larger estates, and that means every other homeowner in many London boroughs, don't get the IHT tax break at all.

It's a tax break for middle England, not the wealthy, and in a world where property ownership is becoming more and more challenging for the young, the ability to inherit your parents' home, rather than have to sell to pay the death duties, could be seen as socially responsible albeit not progressive.

That its motivations are political rather than social, however, is undeniable. But why else do politicians act?

Edit: Apostrophes

In reply to tom_in_edinburgh:


I can assure you that productive work and invention is exceptionally well rewarded. Ask Mark Zuckerberg. Or visit any hi-tech company in the UK and see how well rewarded their workers are. The problem is the shortage of productivity and innovation across the wider UK economy. You can blame successive governments to a significant extent, and education policy in particular, in which case Tony "Education. Education. Education" Blair must be first in the dock. But it isn't all the fault of Westminster or Holyrood.

In reply to BnB:

Is not the 20% aimed at self employed contractors rather than businesses who employ people? If so is it not just a measure to kill tax avoidance on these contractors who chose self employed status instead of being employed to ovoid tax?

In reply to neilh:


It certainly does catch contractors operating a limited company (not self-employed) and that may be a deliberate intention, although it is more probably an attack on dividend income on wider investments. It takes the form of a removal of a tax credit rather than an increase in the headline rate of tax, although it's effect is felt as a direct increase in income tax.

Literally a case for the government slashing tax credits (for the comfortably off).

Unfortunately it is a massive disincentive to entrepreneurship. Although business owners enjoy more flexibility in defining their income delivery, it widely accepted that this is an reasonable trade-off for the extra risks, red tape and statutory obligations borne by entrepreneurs. A key example is the amount of effort and cost that goes into collecting PAYE and VAT for the government. Imagine if we collectively downed tools on this obligation!!

The key benefit has been the option to receive dividends instead of salary which reduces the burden of employer's NI on the business owner's wage. Remember that this delivery mechanism relies firstly on a business actually making a profit and then on all other creditors being satisfied before the dividend can be paid, meaning that in the early years of a business the entrepreneur may go entirely without income and that throughout the life of the business, the entrepreneur may only receive the benefit of his or her profits a year or two after they have been made. Care to wait two years for your salary, anyone?. Flexible tax arrangements are a key factor in motivating entrepreneurs to take these substantial and uncertain risks.

A key feature of the taxation of dividends is the mechanism whereby a double tax charge on profits, first in the form of corporation tax, then on the dividend itself, is avoided by means of a tax credit. This has now been eradicated and so, for the pleasure of collecting HM Govt's PAYE and VAT, and paying a tax of 14% out of our own pockets on the wages we pay to our staff (yes on other people's not our own wages), we now get taxed not once but twice on the same profits.

If all this sounds like a call for sympathy, it isn't. It's an effort to help those who only see the headlines to understand that the squeeze is going on at all levels. And to wonder what happens to the UK if entrepreneurs decide it's not worth the risk any more.

In reply to BnB:


Not true. Over a forty year working life you do better sitting on property and waiting for a pension working in a not-particularly-innovative semi-public sector job like medicine, dentistry or law than working in high-tech industry.

Unlike the 'professions' tech industry has a winner takes all dynamic which concentrates wealth in the hands of a very few. Mark Zuckerberg, Bill Gates, Steve Jobs etc get massively wealthy but the average engineer does not. Most people that found high tech startups come out with nothing, except maybe a job in a larger company. The press concentrate on the few people that get rich because that is a good story, just like they write about people that win the lottery or make money gambling but not the much larger number whose startup is flattened by Microsoft/Google etc.

Most of the money in high tech comes from gains on stock options rather than salary and although you can do really well for a few years while your sector of the industry is the flavour of the month and the valuation of your company is crazy it doesn't last. Over an entire career high tech is not well rewarded and since companies have been offshoring design work to India its got worse.

In reply to BnB:


Surely your wage is your wage on which you pay NI and income tax (taxs many small business owners seek to minimise). Your company's profit can be used to pay dividends to the share holders (you?) on which they pay capital gains tax.

Are you telling me you took a 20% pay cut or that you've had to restructure how you're paid?
jk

In reply to BnB:
I am a business owner ,I employ people ,I export and I am one of those "march of the makers types".

It does not disincentivise me, as I look at it as catching contractors out.I have always considered it to be an anomaly in the system.

In reply to tom_in_edinburgh:

Perhaps you and I differ in our definition of hi-tech companies. For our part, we work with Sony who pay 19 year olds £45,000 to sit on a sofa for three months and do nothing but play video games (software testing). We work with Sky in Leeds who pay £55,000 as a permanent salary to 24 year olds with 2 years work experience. We work with Astra Zeneca in Manchester who pay clinical trials managers £900 per day. I simply don't recognise the world you describe, but then I've only worked in tech for 30 years. Perhaps you could give comparable examples from your professional experience?

In reply to jkarran:



Most entrepreneur's dividends (profits) are their only or major source of income.

Dividends are taxed to income and the changes are effectively an increase in income tax.

There is no (legal) restructuring that can avoid this increase. Not that I'm trying to avoid it, merely highlighting the substantial tax hike on the sector of the economy most responsible for job creation.

In reply to BnB:

I think you are putting too much spin on this aspect. I am in a networking group of like minded entrepreneurs who are defined as high growth by Goldman Sachs.It barely even registers on the scale of important issues when we get together every couple of months.

In reply to BnB:

Yeah, if only that were true.

Nobody pays that kind of money for no reason. Why on earth would anyone pay £45K to 19 year olds just to play video games when there are millions and millions of people who would do that job for far less money? Maybe you would pay for a test engineer who was also good at video games.

Sure there are anomalies and if you have an exact skill set that is in demand by companies with more money than sense you can get paid a lot for a few years. But it doesn't last, in the end once the stock price driven craziness goes out of a segment the bean counters start comparing salaries with those in India.

Pharma is different because patents work far more effectively for drugs than they do for software and electronics hardware. Pharma companies get away with things like charging 10x more for the same product in the UK as they do in Africa or China where if a software or electronics company tried that everyone would buy on the grey market.

In reply to tom_in_edinburgh:


So your half-baked notions based on zero or limited professional experience of the sector are true while my real examples, all three of which are current and sit on top of 30 years of expertise in this field, are the lies. Interesting. You come across as very intelligent and I enjoy conversing with you but on this occasion I think I'll save my breath.

In reply to tom_in_edinburgh:

You're right. He's wrong.

In reply to BnB:

You're right. He's wrong.

In reply to neilh: I'm not trying to launch a campaign to save the entrepreneurs. My tax rate has been going up and down every year since I started paying them. I'm just pointing out that certain groups who might appear to be being leniently treated by the government are in fact being rather successfully targeted for tax.

In reply to BnB:


I try and keep this site separate from my professional life but please be assured that you are completely wrong about this.

In reply to BnB:

Looks more like anomalies to me. I worked in tech for more than a decade and several of my colleagues started as video games tester. Usually paid at around 20k, and that's in London. Even senior software tester rarely make above 40k. I haven't seen anybody in a junior position in tech earning anything above 40k unless they were exceptionally good or had a rare skill.
The salaries you describe at Sky as well seem very unlikely to me, I worked at Sky as a contractor and I know several people there in senior technical positions and I doubt they are at anything above than 40k.

In reply to RomTheBear:

Then, as you have access to the horse's mouth, I suggest you talk to your friends at Sky and ask them what has happened to software salaries in Leeds as a consequence of their building a development centre there. You're in for a surprise.

In reply to BnB:
I will, but have a simple look at glassdoor:

https://www.glassdoor.co.uk/Salary/Sky-Salaries-E3903.htm

Looks much closer to what I have observed myself there (and the rest of the industry in general).

In reply to RomTheBear:
The obvious questions are what location are those figures and when do they relate to? I'm referring to their current recruitment campaign in Leeds where salaries in general are not comparable to London.

I've just looked at the last ten offers made to applications developers (all in 2015) in Leeds and the average basic salary is £44,000. This is in Yorkshire, mind.

Of course those basic stats don't give the highest quality of information about experience etc.

In reply to BnB:


Well indeed 44k for a good developer with 4/5 years experience is pretty much market price out of London.
its your claim that they hire 24 year old on 55k.. I mean it's possible if they are extremely talented or have a very specific skill, but not generally representative imo.

In reply to RomTheBear:

And is evidence that in the tech sector good earnings are not limited to the top few. I take it we can agree that 44k for a 27 year old in a former mining region is a good wage? Wasn't that my original point?


Yes, it's an outlier but a real one in a scarce skill area which again shows the trickle down of wealth in the tech sector.

In reply to BnB:

Doesnt the customer pay this Vat?

In reply to _sllab_:

Good to see that you have as good a grasp of basic economics as you do of most things.

VAT is a relatively complex beast so you might want to wrap your head in a wet towel before trying to understand.

In reply to BnB:


Yes I agree with that you can make fairly decent salaries in the tech sector if you're half smart and mildly hard working.


Trickle down of wealth not so sure about that though, yep a few tech employees can hope to make fairly decent salaries for a little while, but salaries don't really matter these days anyway, its all about real estate.

In reply to Gordon Stainforth:


I agree, it is just about perfect.

In reply to Stuart (aka brt):
http://www.oxfordmail.co.uk/news/13948252.David_Cameron_clashes_with_counci...

Perhaps this is a better example of the glorious leaders character than that he's an evil nazi. He's simply clueless. His whole purpose was to get elected and that policies are men in blue suits that Theresa May looks after or him

In reply to BnB:

Since you specifically mention Facebook, let's recall that it paid the grand total of £4,327 in UK tax 2014. That was after reporting a loss of £28.5m, having paid UK staff £35m in share bonuses.

The 'tech sector' has always been as libertarian as it gets. Where's the 'trickle down'?

In reply to Stuart (aka brt):

Someone must have voted for him....does that make them more stupider??