Bollitics The new leader of the Labour Party

[Richard]

On the so called Granny tax, one for the budget thread I think the issues is that nobody will pay more tax in 2013/14 than 2012/13 as a result of these measures and there are no cash losers as a result of the changes. Even after the change, half of those over 65 will not pay tax in 2013/14. Over 5 million of the poorest pensioners unaffected. And everyone is still better off as a result of the increase in the basic state pension. I think this is what people are missing by jumping on a headline Granny Tax.

[blandy]

A banker earning £1m gains £42,500 from next April as the 50% rate is cut to 45%, whislt a pensioner retiring at 65, on a pension of £12k loses £259 as higher personal allowances are scrapped.

[Eames]

In other news..... apples and oranges are different.

That also relies on the massive assumption that the pensioners basic state pension is their sole source of income and doesn't accout for pension credits and the like.

[snowychap]

On the so called Granny tax, one for the budget thread I think the issues is that nobody will pay more tax in 2013/14 than 2012/13 as a result of these measures and there are no cash losers as a result of the changes. Even after the change, half of those over 65 will not pay tax in 2013/14. Over 5 million of the poorest pensioners unaffected. And everyone is still better off as a result of the increase in the basic state pension. I think this is what people are missing by jumping on a headline Granny Tax.

Blimey, Richard - straight from Millbank?

Edit: And the government's use of the increase in the state pension as some kind of protection for the abolition of the ARA for those turning 65 in April 2013 or after is as bad as the Labour party's continued use of their bankers' tax idea to fund every proposal they make.

[Risso]

A banker earning £1m gains £42,500 from next April as the 50% rate is cut to 45%, whislt a pensioner retiring at 65, on a pension of £12k loses £259 as higher personal allowances are scrapped.

A banker earning £1m is absolutely not under any circumstances going to be paying the 50% tax band. That I think, is the entire point.

[peterms]

A banker earning £1m gains £42,500 from next April as the 50% rate is cut to 45%, whislt a pensioner retiring at 65, on a pension of £12k loses £259 as higher personal allowances are scrapped.

A banker earning £1m is absolutely not under any circumstances going to be paying the 50% tax band. That I think, is the entire point.

Good God! And there was me believing everything I'd been told about how their pay and bonuses were just fine and dandy, because we get most of it back in tax!

You don't mean we've been lied to all this time, do you? I think I need a little sit down.

[Risso]

We get most of it back when they spend it on expensive restaurants and cars.

[peterms]

We get most of it back when they spend it on expensive restaurants and cars.

Excellent! We can wait on them in restaurants and wash their cars.

And don't forget employment creation through domestic service.

Let's give the national wealth to the rich. It will eventually trickle down to all our benefit, I have no doubt.

[Risso]

A lot of people are rich because they've created wealth in the first place. You'd have a cow if you saw the effect the tax cap has on the average rate of tax for rich people over here.

[peterms]

A lot of people are rich because they've created wealth in the first place. You'd have a cow if you saw the effect the tax cap has on the average rate of tax for rich people over here.

Interestingly, a lot of rich people are rich not because they have created wealth, but because they have inherited it (eg those whose income is largely rentier profits, receiving wealth from doing pretty much nothing at all), or because they are the beneficiaries of someone else (Mr Osborne and his £4m fund from his father), or because they have got control of public assets and are charging us for what we used to own, and so on.

Some have even become unimaginably wealthy themselves although they have destroyed wealth - read the comments of Andrew Haldane at the B of E on the way bankers' pay went up vastly at the same time as they were getting enormous hidden public subsidy and pretending they had somehow undertaken acts of creative ingenuity, when in fact they were causing an unimaginable destruction of value and creating a loss of output which is now around our collective neck like a dead weight.

This stuff about rich people all being entrepreneurial stars who create more wealth than they amass is simple propaganda. Some are; very many aren't.

[colhint]

Just wondering Peter, what proportion of these rich people made the money out of their own graft and hard work.

[Risso]

A lot of people are rich because they've created wealth in the first place. You'd have a cow if you saw the effect the tax cap has on the average rate of tax for rich people over here.

Interestingly, a lot of rich people are rich not because they have created wealth, but because they have inherited it (eg those whose income is largely rentier profits, receiving wealth from doing pretty much nothing at all), or because they are the beneficiaries of someone else (Mr Osborne and his £4m fund from his father), or because they have got control of public assets and are charging us for what we used to own, and so on.

Some have even become unimaginably wealthy themselves although they have destroyed wealth - read the comments of Andrew Haldane at the B of E on the way bankers' pay went up vastly at the same time as they were getting enormous hidden public subsidy and pretending they had somehow undertaken acts of creative ingenuity, when in fact they were causing an unimaginable destruction of value and creating a loss of output which is now around our collective neck like a dead weight.

This stuff about rich people all being entrepreneurial stars who create more wealth than they amass is simple propaganda. Some are; very many aren't.

Well, if you're going to take the Daily Mirror view that all rich people are bankers, and that all bankers are rich, then you're probably right.

[blandy]

In addition to totally agreeing with PMS, there's also the point that the rich who "through their own work" have become rich, have actually benefitted from a combination of luck and circumstance - their genes - intelligence, personality, stamina etc are inherited and are down to "luck". Their education and health is is down, also to what is provided for them by other people, often funded by the state (Uni). The roads that they transport their goods on, or the trains - ditto. The labour of their workers again comes from other people.

There's only a small part of it which is really down to personal sacrifice or effort alone.

But mostly money brings money.

[peterms]

Sorry, forgot fraud and criminal activity more widely, which accounts for part of the wealth of quite a few rich people.

[peterms]

Well, if you're going to take the Daily Mirror view that all rich people are bankers, and that all bankers are rich, then you're probably right.

Obviously not all rich people are bankers. By the way, when people talk about rich bankers, they are pretty clearly speaking of the people at the top, not cashiers, cleaners and call centre workers, but defenders of rich bankers like to try to make out that the term means everyone who works for banks. You're not doing that, are you?

[peterms]

Just wondering Peter, what proportion of these rich people made the money out of their own graft and hard work.

Pretty much impossible to say, I reckon. How would you assess it?

If you have someone whose family stole land in the enclosures and became a monopoly employer in an area, making lots of ,money out of stolen land and cheap labour, and the family later made more money from stealing resources from other countries in the colonial era, and all the time the land and money kept creating more and more unearned wealth, and then one of the family had an idea for a new service or product and was able to make it happen because of those freely available resources plus the contacts their exclusive social circle had made possible, to what extent is that down to their own graft or not? How could you weigh it?

[Risso]

Well, if you're going to take the Daily Mirror view that all rich people are bankers, and that all bankers are rich, then you're probably right.

Obviously not all rich people are bankers. By the way, when people talk about rich bankers, they are pretty clearly speaking of the people at the top, not cashiers, cleaners and call centre workers, but defenders of rich bankers like to try to make out that the term means everyone who works for banks. You're not doing that, are you?

You appear to be the one making sweeping generalisations. I haven't once defended bankers, so no, I'm clearly not doing what you suggested.

[Risso]

In addition to totally agreeing with PMS, there's also the point that the rich who "through their own work" have become rich, have actually benefitted from a combination of luck and circumstance - their genes - intelligence, personality, stamina etc are inherited and are down to "luck". Their education and health is is down, also to what is provided for them by other people, often funded by the state (Uni). The roads that they transport their goods on, or the trains - ditto. The labour of their workers again comes from other people.

There's only a small part of it which is really down to personal sacrifice or effort alone.

But mostly money brings money.

The roads and trains are there for everybody to use, to suggest that they play a large part in the success of entrepreneurs is ridiculous.

[blandy]

I beg to differ Martin. You're right they are there for everyone to use. That's the point. The state provides the transport network which businesses use to distribute their goods. They don't have that resource available to them because of their own efforts. Transport links are cited as a clear business advantage. As is a pool of either skilled or desperate labour available. These things are not down to individuals "efforts", but to the nation as a whole (hole). Much of the tools available to business are quite happily used by those businesses to generate wealth for the owners and staff, but have nothing to do with the "hard work" of the owners. Come the time the Country wants them to contribute to the upkeep or improvement of these things it's all "wah wah wah 50% tax not fair my hard work". Which rather contrasts with calls for better transport links, a third runway, tax breaks for business from the Gov't.

Double standards and taking credit for stuff that's not their doing.

[Risso]

Well, I sort of took it that basic infrastructure is a given. Yes I know that needs paying for, but unless I'm misunderstanding your argument entirely, successful businesses still rely upon somebody having the vision and drive to make a success of something. Yes there are bankers who are massive twunts, and yes lots of people have inherited lots of wealth. But there are still hundreds of thousands of businesses in the UK, and people who have made money from those businesses who have worked bloody hard to make a product or provide a service that people want, and employ people to make those businesses successful. To say that isn't down to hard work because they haven't had to build their own railway strikes me as a bit odd.