Political Ramifications of Covid-19 Pandemic

[mjmooney]

The problems of calitalism are inbuilt, and can't be solved simply by taxing billionaires - they will ALWAYS find a way not to pay. 

[Straggler]

20 minutes ago, mjmooney said:

The problems of calitalism are inbuilt, and can't be solved simply by taxing billionaires - they will ALWAYS find a way not to pay. 

They can't be solved by cutting public services indefinitely either. After 10 years of austerity a 20% cut is like telling a quadruple amputee that we just have to lop one more thing off. Something has to give and we will never get the 1% to pay if we don't try. The conversation is starting in the wrong place. If we put half the energy and investment we use on finding cuts and denying benefits into shutting loopholes and finding the money we could make it happen.

You don't have to go too far back in time to find a system that did tax the rich more than it does today. It really is not beyond a motivated government to get back to that point, it does not even require original thought.

The big problem is not ability it is ideology.

[tonyh29]

1 hour ago, Straggler said:

Cut cut cut

I hadn't even looked at the news yet and here it is already.

A 10 billion pound black hole and 20% in cuts is the solution. Just for once can't the headline be "Billionaires fear 20% wealth tax to pay for saving their lives and businesses".

  Reveal hidden contents

 

Well here’s your first problem with that article 

 

Labour claims  

 

right back when it started Boris said people bore the brunt of the 2008 crash whilst bankers got away with it , and this time “that will not happen”

of course , Politicians do have a habit of lying , this PM in particular , but his government followed that up with a furlough scheme and various money trees ... I’ve not seen them make any statement about 20% cuts

long term someone is going to have to pay for it , and if the govt try and do this through austerity I’ll join you marching on parliament armed with a pitchfork ...

[Straggler]

8 minutes ago, tonyh29 said:

Well here’s your first problem with that article 

 

 

 

right back when it started Boris said people bore the brunt of the 2008 crash whilst bankers got away with it , and this time “that will not happen”

of course , Politicians do have a habit of lying , this PM in particular , but his government followed that up with a furlough scheme and various money trees ... I’ve not seen them make any statement about 20% cuts

long term someone is going to have to pay for it , and if the govt try and do this through austerity I’ll join you marching on parliament armed with a pitchfork ...

TBF I'm using the article as an example of cuts being the lead in the headlines and being the first thing that is thought of as a solution.  In the context of many other articles talking of a public sector pay freeze being a very real possibility I think it is a shame that the lead is not more tilted towards making society a fairer place.  The only tax hike that is being talked about is a 1% raise on all levels of income tax.  This does nothing to get at the vast sums of money that are being sucked out of the economy at the very top as they are not being subjected to any tax anyway.  The scale of the problem of wealth being accumulated at the very top is staggering, but solving it is not even a part of the conversation.

Yes I do get your point that the government have said they won't go back to austerity, but you would also be right that they do rather have a habit of lying about such things.  It is not a stretch to imagine the crocodile tears as the same people who cheered at preventing nurses getting a pay rise in the last 12 months tell us that they simply can't afford to pay them any more next year.

[chrisp65]

Look, they’ve had a badge, many people have banged pots n pans, The One Show have shown them getting free meals cooked by various celebrities over the last few weeks. Hell, I’ve even drawn a chalk rainbow on the pavement for the bin men to admire.

Are you seriously suggesting we should also give them more money?

Taking the piss.

I didn’t vote a massive tory majority so I can pay more tax so others in low skilled jobs can have a pay rise at my expense.

[tonyh29]

26 minutes ago, Straggler said:

is not a stretch to imagine the crocodile tears as the same people who cheered at preventing nurses getting a pay rise in the last 12 months tell us that they simply can't afford to pay them any more next year.

Touched on this in another thread but that’s a misrepresentation of events that even Starmer wouldn’t try and put out there   ....they were cheering the defeat of an opposition amendment to the Queens speech , not cheering preventing nurses getting a pay rise ... 
 

In terms of raising the money , I dunno , it sorta feels different this time around ,I don’t think the public would stand for wholesale cuts and pay freezes for care workers, nurses , bin men etc  ... but yeah I know that’s me taking naivety to a whole new level and @chrisp65 will be along shortly to sell me a bridge 

Edited May 14, 2020 by tonyh29

[chrisp65]

I don’t believe there will be any radical promises or threats any time soon.

They can’t know the size of the hole yet, we haven’t finished digging. It would certainly be bizarre to start floating the idea of key worker pay freezes and cuts right now when people are behind them on the financial side of things more than the health competency side of things.

It may be, that by mid summer we start hearing the warnings, when people have had time to work out for themselves that we are nowhere near ‘going back to normal’.

They have this crisis to get through, and four years of time left. No rush to start pointing out the obvious just yet.

 

[tonyh29]

3 hours ago, chrisp65 said:

I didn’t vote a massive tory majority so I can pay more tax so others in low skilled jobs can have a pay rise at my expense.

That seems to be an admission that you did vote Tory though  

[chrisp65]

3 hours ago, chrisp65 said:

I didn’t vote a massive tory majority so I can pay more tax so others in low skilled jobs can have a pay rise at my expense.

2 minutes ago, tonyh29 said:

That seems to be an admission that you did vote Tory though  

I didn’t get where I am today by disappearing up my own double negative.

[mjmooney]

49 minutes ago, chrisp65 said:

I didn’t get where I am today by disappearing up my own double negative.

National Service never did me any harm. 

I didn't do it. 

[PaulC]

Talking about cuts the amount of elderly that have died from this virus will free up pension money and care costs. Now please don’t slam for pointing this out and it will only be a drop in the ocean anyway. 

[bickster]

13 minutes ago, PaulC said:

Talking about cuts the amount of elderly that have died from this virus will free up pension money and care costs. Now please don’t slam for pointing this out and it will only be a drop in the ocean anyway. 

Can we slam you for pointing out something pointless then?

[HanoiVillan]

8 hours ago, mjmooney said:

The problems of calitalism are inbuilt, and can't be solved simply by taxing billionaires - they will ALWAYS find a way not to pay. 

I appreciate that @Straggler was mostly talking about billionaires in his comments, but a shift in the direction of taxing wealth could target many classes of assets, and be something that many people paid, not just billionaires. A government that actually wanted to tax wealth would have plenty of options - increased inheritance tax, increased stamp duty, increased capital gains tax, a land value tax, a financial transactions tax, etc - and while avoidance for most of these would be possible, for most people it won't be worth the effort. Assets like residential housing and UK-domiciled shares are not hard for regulators to keep track of either. No tax is ever completely free of avoidance or evasion, but tax rises do raise revenue, that's why they happen.

What has been missing previously is the political will to tax wealth in the first place. The Tories will not be keen to start now, either, but they may do some tinkering at the edges.

Edited May 14, 2020 by HanoiVillan

[blandy]

2 hours ago, HanoiVillan said:

What has been missing previously is the political will to tax wealth in the first place.

That's hardly surprising. It's very easy (regardless of anyone's politics) to say "tax the rich and asset wealthy," where "wealthy" is defined as "people with quite a bit more than me".

But once it gets to "me" and "me" doesn't feel rich - perhaps they have savings for a rainy day or for old age, then suddenly it's all "hold on, I scrimped and saved, avoided expensive cars, TVs, holidays to build that nest egg, and now the Gov't wants to nab a chunk of it - that's completely unfair".

So, OK, well not people's savings then, what about their house value that's gone up over the decades? but then you get "hold on, my house might have gone from 30K to (say) 500K, but I only earn 25K, or I'm on a pension now - where do I get 10 grand a year property tax from?

Then you end up back at "tax people with quite a bit more than me". So you aim at the really wealthy, but as Mike said earlier, they just shift it, with smart accountants and off shore funds and tax havens etc.

So then all that's left is income tax on PAYE folk. Or death duties or VAT. These largely hit "the middle" and the poorer people harder and the wealthy get away with it...trust funds, off shore registration, my dog in Monaco owns the ferraris....

I'm not taking a view that they shouldn't try, just that it's not just "political will" it's also specifics that are not inherently unfair, or which don't have unintended consequences. Empty high streets, businesses going under, people having little money in old age, companies moving overseas, or moving jobs overseas.

Essentially international action is required to stop it, but nations are competing for the rich to settlle there...etc.

Stuff like taxing polluters, taxing sales of companies like Amazon, Apple and Google in the nation of the purchaser, not the location of the offshore headquarters is less difficult, and that's not easy, either.

[tonyh29]

41 minutes ago, blandy said:

That's hardly surprising. It's very easy (regardless of anyone's politics) to say "tax the rich and asset wealthy," where "wealthy" is defined as "people with quite a bit more than me".

But once it gets to "me" and "me" doesn't feel rich - perhaps they have savings for a rainy day or for old age, then suddenly it's all "hold on, I scrimped and saved, avoided expensive cars, TVs, holidays to build that nest egg, and now the Gov't wants to nab a chunk of it - that's completely unfair".

So, OK, well not people's savings then, what about their house value that's gone up over the decades? but then you get "hold on, my house might have gone from 30K to (say) 500K, but I only earn 25K, or I'm on a pension now - where do I get 10 grand a year property tax from?

Then you end up back at "tax people with quite a bit more than me". So you aim at the really wealthy, but as Mike said earlier, they just shift it, with smart accountants and off shore funds and tax havens etc.

So then all that's left is income tax on PAYE folk. Or death duties or VAT. These largely hit "the middle" and the poorer people harder and the wealthy get away with it...trust funds, off shore registration, my dog in Monaco owns the ferraris....

I'm not taking a view that they shouldn't try, just that it's not just "political will" it's also specifics that are not inherently unfair, or which don't have unintended consequences. Empty high streets, businesses going under, people having little money in old age, companies moving overseas, or moving jobs overseas.

Essentially international action is required to stop it, but nations are competing for the rich to settlle there...etc.

Stuff like taxing polluters, taxing sales of companies like Amazon, Apple and Google in the nation of the purchaser, not the location of the offshore headquarters is less difficult, and that's not easy, either.

Good post 

Though it should be pointed out that through PAYE the rich are already paying the majority of revenue received by HMRC through this .. it’s something like just under a third of revenue is collected from 381,000 “wealthy”  individuals and the remaining two thirds from the 20 odd million or so other tax payers 

[snowychap]

3 minutes ago, tonyh29 said:

Good post 

Though it should be pointed out that through PAYE the rich are already paying the majority of revenue received by HMRC through this .. it’s something like just under a third of revenue is collected from 381,000 “wealthy”  individuals and the remaining two thirds from the 20 odd million or so other tax payers 

The corollary of just what this might mean in respect of the split of income (for those 381,000 versus the rest of the population) is never really highlighted whenever this is trotted out.

 

[HanoiVillan]

@blandy I can't really tell if your post is meant to be a reply to mine?

Anyway:

1 hour ago, blandy said:

That's hardly surprising. It's very easy (regardless of anyone's politics) to say "tax the rich and asset wealthy," where "wealthy" is defined as "people with quite a bit more than me".

But once it gets to "me" and "me" doesn't feel rich - perhaps they have savings for a rainy day or for old age, then suddenly it's all "hold on, I scrimped and saved, avoided expensive cars, TVs, holidays to build that nest egg, and now the Gov't wants to nab a chunk of it - that's completely unfair".

So, OK, well not people's savings then, what about their house value that's gone up over the decades? but then you get "hold on, my house might have gone from 30K to (say) 500K, but I only earn 25K, or I'm on a pension now - where do I get 10 grand a year property tax from?

Nobody is saying that tax rises are universally popular, and nobody is saying that they are particularly popular with people they apply to. Nevertheless, tax rises do happen. The share of tax take-GDP has increased since 2010, not decreased.

We don't live in California or Switzerland or one of those weird places where tax rises need to get past a referendum. If the Treasury truly want a tax rise, the Chancellor has to get through a few uncomfortable days of media pressure and bad headlines, but it's not fundamentally impossible.

1 hour ago, blandy said:

So you aim at the really wealthy, but as Mike said earlier, they just shift it, with smart accountants and off shore funds and tax havens etc.

So then all that's left is income tax on PAYE folk. Or death duties or VAT. These largely hit "the middle" and the poorer people harder and the wealthy get away with it...trust funds, off shore registration, my dog in Monaco owns the ferraris....

I'm not taking a view that they shouldn't try, just that it's not just "political will" it's also specifics that are not inherently unfair, or which don't have unintended consequences. Empty high streets, businesses going under, people having little money in old age, companies moving overseas, or moving jobs overseas.

There's a fairly large element of catastrophising here.

[tonyh29]

13 hours ago, snowychap said:

The corollary of just what this might mean in respect of the split of income (for those 381,000 versus the rest of the population) is never really highlighted whenever this is trotted out.

 

The split of income isn’t relevant  , Blandy trotted out a line to use your phrase that in regards to PAYE the wealthy  “get away with it “ ... I merely pointed out that by and large they don’t ....PAYE is a tax on income not a tax on wealth

taking his trotted out line further , 5.7 million people fail to declare earnings on   “side hustles” , estimated to be in the region of £23bn a year

Moving on to car driving dogs , It’s estimated that in terms of tax avoidance 

£13.7bn  is from from small business

£7bn is from large business

£5.4bn is from criminal activity 

£3.9bn is from medium businesses

£3.4bn is from individuals (note individuals , not necessarily just wealthy individuals)

But yeah , it’s the rich causing the problem 

 

Edited May 15, 2020 by tonyh29

[snowychap]

6 hours ago, tonyh29 said:

The split of income isn’t relevant

Of course it is. This apparent burden upon this small number of people is because of the level of income they receive.

Dismissing this as you have and going on to quote statistics from a website by Patrick Cannon at me about tax evasion figures suggests that you're either not getting the point of what I said or not remotely willing to go where it leads.

Talking about the tax gap and what constitutes that is different to talking about any future proposed changes to tax arrangements. That there is avoidance and evasion now should rightly inform expectations about whether what would be due in the future would be what is actuallly received (it should be taken for granted that it wouldn't be and that there would continue to be a gap) but that's probably as far as its usefulness goes.

Other than keeping the expectations realistic, however, that this occurs should not dictate the framing of any discussion about future tax policy unless and until the tax gap issue for those at higher income levels becomes such a barrier that any increases in income tax levels for those will be largely ungatherable due to a corresponding increase in the tax gap for this group.

 

[bickster]

7 hours ago, tonyh29 said:

£5.4bn is from criminal activity

Sorry to be picky but... those criminals avoiding tax on their illegal and therefore untaxable income....
 

We know what you’re doing is illegal but please pay your taxes on it?