The banker loving, baby-eating Tory party thread (regenerated)

[snowychap]

My simplistic view is posted in the other thread...

No, that's not correct and it further reinforces my point about your 'question': I thought reduced powers for the Lords would be the VT lefty brigades [sic] wet dream ? .

[blandy]

I'm pretty well off, and am happy paying a decent level of tax.

But a job role has come around which would pay around £6,000 more, but would mean me working longer hours with a slight increase in stressfulness.

I have just realised that my marginal tax rate is 60% (child benefit tapering), so by taking this job, i would actually only get a net pay increase of £2,400.

So i've decided not to go for the job.   Dis-incentive to climb the career ladder for me built into the tax system.

But to re-iterate, i agree with what the tax system is trying to do, its just a shame that it works out that way for me.

 

I read a thing in the paper today looking at that kind of scenario and the unintended effects of laws. It's quite good, I think, as it explains the detail, to a degree and also exposes one or two myths

it was in the Independent and is also available in electrical form

Step back from the political shenanigans, fun though they were, and focus on the substance. Our system of tax credits is a fundamentally sound idea, introduced by Gordon Brown in April 2003, that after more than a decade’s experience needs reform – as you would expect. 

There is the issue of cost, for the scheme has turned out to be vastly more expensive than was predicted at the time. And there is the issue of design, for as so often with government schemes, there have been unintended consequences that have undermined the laudable aims of the project.

Start with cost. ...At the bottom end of the pay scale you cannot make work more attractive by cutting income tax because people aren’t paying it anyway. So you .. bump up income for low earners. 

But it is expensive. The cost has not risen from £1.1bn to £30bn as the Chancellor claimed in his July budget, for he is not comparing like with like....The better figure is the £2.7bn-a-year cost estimated by the Treasury and noted by the IFS. ... but let’s accept that the cost has gone up about fivefold in real terms. That is a lot, and explained at least in part by weaknesses in its design. 

At the risk of over-simplifying a pretty complex system, there has been one key unintended consequence and one key problem with design. 

The unintended consequence has been that there has been a surge in low-paid jobs and part of the reason for that is that the taxpayer in practice subsidises employers. People are prepared to work for lower rates than would otherwise be the case because the Government pushes up their pay to a more acceptable level. This is what the whole scheme was designed to do: to persuade more people to go out to work. 

But it has, you might say, been much more successful than its instigators expected. The UK economy has become a huge job-creating machine, with 2m more jobs since the recession, sucking in workers from all over Europe. But too many of those are low-paid. 

If you ask whether the tax-credit system is also associated with the record rise in participation rates – the proportion of people of working age in some form of work – the answer is almost certainly yes. Indeed some particular groups, such as lone parents, are much more likely to be at work now than in 2000: the proportion there has risen from 51 per cent to 64 per cent. So it looks as though that aim has been achieved.

But there are other areas where it seems to have had the reverse effect. One of these is a family where one partner is at work and the other not. ...

“For many couple families.....the tax-credit system makes it more attractive for one partner to stay at home, rather than go out to work. It is this adverse and unintended consequence of the tax-credit system that should be a key focus of any reforms.”

... “The Government’s proposals withdraw benefits more quickly from all kinds of families as they earn more income. Far from rewarding those on low incomes who work more, the Government’s proposals take benefits away earlier and more quickly from those who work and earn more.”

So the Chancellor has to be cleverer. There are ways of both cutting the cost and improving incentives, and the benefit of this pause for thought should be to use the time to fine-tune the reforms. That and other work by Dr Ebell is not a bad place to start. The key specific points here are that quite aside from containing the costs of the system, we need to do something about the very high marginal rates of taxation that occur when people either move up the income scale, or when the second partner in a family moves into work.

 But there is, in addition, a more general point and it is this: we don’t have a very good tax system. If you look around the developed world we are in the middle of the range in the proportion of GDP that the various levels of government raise in tax. 

At around 36 per cent of GDP, we are higher than the US, Canada and Australia, but lower than most of the EU. As so often seems to happen we sit between the Anglosphere and Europe. 

But this is not about the level of taxation but rather whether the money is being raised efficiently, and the answer here is we are at best the middle of the pack. We are not as inefficient and distorting as the US but we are not top of the class. Our tax code is unusually complicated and becoming more so. 

Whenever you make a change in taxes – even if you are just simplifying them – there are winners and losers. So it is much easier to make changes when finances are strong because you have some spare cash to compensate the losers. 

Since we still have one of the largest fiscal deficits in the developed world, notwithstanding our solid growth, this might seem a bad time for wider reform. But actually a reform of tax credits could be a start on the road to a better tax system – except that so far, it isn’t.

[tonyh29]

My simplistic view is posted in the other thread...

No, that's not correct and it further reinforces my point about your 'question': I thought reduced powers for the Lords would be the VT lefty brigades [sic] wet dream ? .

you seem to make a habit of knowing what I mean ,more than I do ... I thought it was only MrsH29 that had that superpower ...

[snowychap]

you seem to make a habit of knowing what I mean more than I do

No, I think we are both mostly on a par in this respect (that's not to say whether we do or don't know, though).

[MakemineVanilla]

I'm pretty well off, and am happy paying a decent level of tax.

But a job role has come around which would pay around £6,000 more, but would mean me working longer hours with a slight increase in stressfulness.

I have just realised that my marginal tax rate is 60% (child benefit tapering), so by taking this job, i would actually only get a net pay increase of £2,400.

So i've decided not to go for the job.   Dis-incentive to climb the career ladder for me built into the tax system.

But to re-iterate, i agree with what the tax system is trying to do, its just a shame that it works out that way for me.

 

Very often the personal monetary gain from taking on extra stress or working longer hours is zero.

'sometimes'. That is also true lower down the pay spectrum too.

I think it is even more true - a family living on a low income can absorb increases in income with hardly any detectable effect, in terms of identifiable gains.

But what I was suggesting was the truth of that old aphorism which men of my class used to repeat over their pints of mild in the G.O. years ago: 'give your missus three quid housekeeping and she'll just about manage, give her a fiver and she'll still just about manage'.

I was suggesting that even when a household is getting a good income, as in the case under discussion, it usually finds a way of spending it, even if it is £46 a week, so there is nothing gained for the extra hours or the extra worries.

Happily, all these truths can be encapsulated with the modern phrase: work-life balance.

 

[PompeyVillan]

And if we taught people at school the importance of balancing your personal finances, that would go a long way to bridging that gap. Weighing up the cost of something compared to benefit in quality of life.

I find it galling that low-mid earners buy new cars, TVs and sofas on credit and then feed the family muck and don't do anything together because they can't afford it.

Thats not a political issue more a rant. I find many people, especially low earners are so financially unaware, it's scary.

[omariqy]

And if we taught people at school the importance of balancing your personal finances, that would go a long way to bridging that gap. Weighing up the cost of something compared to benefit in quality of life.

 

I find it galling that low-mid earners buy new cars, TVs and sofas on credit and then feed the family muck and don't do anything together because they can't afford it.

 

Thats not a political issue more a rant. I find many people, especially low earners are so financially unaware, it's scary.

Financial education is finally on the curriculum at schools. Thanks mainly to the work of organisations like Pfeg.

[MakemineVanilla]

And if we taught people at school the importance of balancing your personal finances, that would go a long way to bridging that gap. Weighing up the cost of something compared to benefit in quality of life.

 

I find it galling that low-mid earners buy new cars, TVs and sofas on credit and then feed the family muck and don't do anything together because they can't afford it.

 

Thats not a political issue more a rant. I find many people, especially low earners are so financially unaware, it's scary.

Financial education is finally on the curriculum at schools. Thanks mainly to the work of organisations like Pfeg.

Wilkins Micawber - has some wise things to relate on that subject. 

[Jon]

And if we taught people at school the importance of balancing your personal finances, that would go a long way to bridging that gap. Weighing up the cost of something compared to benefit in quality of life.

 

I find it galling that low-mid earners buy new cars, TVs and sofas on credit and then feed the family muck and don't do anything together because they can't afford it.

 

Thats not a political issue more a rant. I find many people, especially low earners are so financially unaware, it's scary.

exacerbated by the culture of consumption and consumerism, a culture actively encouraged by 'the establishment', the wealthy and powerful. Getting people to spend and borrow well beyond their means is basically what caused the financial crash 10 years ago. 

[MakemineVanilla]

And if we taught people at school the importance of balancing your personal finances, that would go a long way to bridging that gap. Weighing up the cost of something compared to benefit in quality of life.

 

I find it galling that low-mid earners buy new cars, TVs and sofas on credit and then feed the family muck and don't do anything together because they can't afford it.

 

Thats not a political issue more a rant. I find many people, especially low earners are so financially unaware, it's scary.

exacerbated by the culture of consumption and consumerism, a culture actively encouraged by 'the establishment', the wealthy and powerful. Getting people to spend and borrow well beyond their means is basically what caused the financial crash 10 years ago. 

The Tory tendency to sermonise about the importance of living within our means while encouraging every private citizen to increase their debt is rank hypocrisy.

Personally I often think that a refusal to participate in crass consumerism would represent genuine and effective dissent.

Putting savings in a place where they are beyond the exploitation of the financial system would be another.

Pity we are all robots just motivated by one appetite followed by another.

Bring back the squander-bug campaign. 

[blandy]

 

the squander-bug campaign

I very much enjoyed their seminal third album "The Inflationary Effect" recorded live at the Budokan

Edited October 29, 2015 by blandy

[snowychap]

The Tory tendency to sermonise about the importance of living within our means while encouraging every private citizen to increase their debt is rank hypocrisy.

That's very true but I don't know that it's peculiar to Tories. They may be leading the chorus at the moment but plenty of others are happily following; they weren't really banging out that tune in the middle of the last decade, though.

It (the ever increasing private household debt) is surely one of the glues that holds our system together and has been ever more so in the last half century or more. It is one of the ways that capitalism has successfully adapted itself to cope with the inevitable crises it causes.

[snowychap]

Can we form an orderly queue to educate Ms Hartley-Brewer on what 'facts' actually are?

'Lifestyle choices' - my **** arse.

Edited October 29, 2015 by snowychap

[snowychap]

I'd like a gif of those last few seconds on This Week with Osborne's face (was that a genuine response to the Gove comments from April? - I guess not but still...).

Edited October 30, 2015 by snowychap

[snowychap]

[tonyh29]

slow news day  ?

[snowychap]

slow news day  ?

Is that a general 'observation' or in reference to my reproduction of one of the many 'shopped pictures created in celebration of the Downing Street 'shoppin in of the poppy on the picture of Cameron?

If the latter then:

Edited November 3, 2015 by snowychap

[tonyh29]

I just thought the rumoured scrapping of the Syria vote was more newsworthy than a shopped poppy .. though I am aware that I did moan about scruffy not singing and doing up his top button a little while ago before anyone mentions it 

[blandy]

I just thought the rumoured scrapping of the Syria vote was more newsworthy than a shopped poppy .. though I am aware that I did moan about scruffy not singing and doing up his top button a little while ago before anyone mentions it 

It's a bit odd this "scrapping" of the syria vote. If they think that bombing Syria is the right thing to do (it isn't), if that's what they believe, then they should say so, try and persuade people why, using reasoned argument and research and precedent and evidence, and then hold a vote.

What they appear to be doing is sort of having a vague feeling of "want to drop some bombs on it", realising not that many others share their ill considered view and so are kind of whimpering that lilly- livered namby pambies are preventing them taking firm and decisive action.

They're feeble and incompetent.

 

[OutByEaster?]

I just thought the rumoured scrapping of the Syria vote was more newsworthy than a shopped poppy .. though I am aware that I did moan about scruffy not singing and doing up his top button a little while ago before anyone mentions it 

It's a bit odd this "scrapping" of the syria vote. If they think that bombing Syria is the right thing to do (it isn't), if that's what they believe, then they should say so, try and persuade people why, using reasoned argument and research and precedent and evidence, and then hold a vote.

What they appear to be doing is sort of having a vague feeling of "want to drop some bombs on it", realising not that many others share their ill considered view and so are kind of whimpering that lilly- livered namby pambies are preventing them taking firm and decisive action.

They're feeble and incompetent.

 

Wanting to do stuff, and having a view or a principle are much less important than winning or looking like a winner - this is party politics.

Trying and failing to get a vote on this would make them look bad, so they're not going to try. I think they think it's the right thing to do, I think they think that's less important than 'winning'; and they might not win the vote, this might make them look bad, so the principle is out of the window - party politics in a nutshell.

I think that's also why there are people in the labour party who don't want Corbyn because being Labour is less important than winning - both parties have people that don't believe in anything but power.