Wizaard
Well-known member
The package consists of a series of loans that we pay back. The Government have borrowed to pay for it in the short term while at the same time, doubling interest rates. Talk about shooting yourself in the foot.
These people are having us all over!
- Thread starter Bennys_was_a_mob
- Start date
ItsGrimUpNorth
Well-known member
Yeah, good idea. Let’s get everyone who works for the NHS to go on strike.. then watch people die due to not having the care they need!
Just to clarify: I live a wealthy, happy life.. you keep moaning about yours and blaming how shit it is on the Tory party fella.
TSSeasider
Well-known member
Salary £25k p.a.
Tax paid £2486
NI paid £1633
Deductions £4119
Deductions 16.5%
Salary £200k p.a.
Tax paid £74969
NI paid £8390
Deductions £83959
Deductions 41.2%
(Taken from Money Saving Expert and haven't bothered with pension deductions etc)
So the higher salary has 20x the deductions of the lower salary despite being only 8x the amount and even as a percentage it's 2½× higher.
I'm not a higher tax earner, but I don't envy those who are and I also think that in the politics of tax the rich, we kind of forget we already do and they contribute far more than the rest of us.
All that said it was a stupid budget politically and might not work economically (I don't think it will) and I would have raised the tax free allowance rather than cut rates; and I would be looking at special taxes to pay the additional energy support.
Tax paid £2486
NI paid £1633
Deductions £4119
Deductions 16.5%
Salary £200k p.a.
Tax paid £74969
NI paid £8390
Deductions £83959
Deductions 41.2%
(Taken from Money Saving Expert and haven't bothered with pension deductions etc)
So the higher salary has 20x the deductions of the lower salary despite being only 8x the amount and even as a percentage it's 2½× higher.
I'm not a higher tax earner, but I don't envy those who are and I also think that in the politics of tax the rich, we kind of forget we already do and they contribute far more than the rest of us.
All that said it was a stupid budget politically and might not work economically (I don't think it will) and I would have raised the tax free allowance rather than cut rates; and I would be looking at special taxes to pay the additional energy support.
td53
Well-known member
What baffles me is the ability of some to defend the Tories economic policy *no matter what*
The Tories are literally costing us all money right now. Not only did the last Tory regime have a higher rate of tax than any time since god knows when, now there is even *less* money in our pockets and any tax savings have been gobbled up and then some.
The public spend has been saddled with paying loads of energy companies to keep bills down instead of taxing their profits. How does that help the economy in anyway? Lots of those companies aren't even UK based. Why not fund it and tax those profits? What 'growth' are utilities companies going to bring about anyway? We're essentially forcing us to borrow to fund that and therefore reducing capacity for any other investment be it in health, enterprise, technology or whatever else.
I genuinely don't understand what they are doing. Austerity was a con based on a simplification of "the country is like your household budget" but at least that was coherent, if disingenuous.
Now we're being asked to believe that the majority of people having less to spend is going to make us all wealthier, whilst the great enemies of quantitative easing use quantative easing in order that the crisis doesn't get worse.
They've also literally refused to cost their measures and we have to wait till November to see the sums. Again, 'fantasy economics' was the big put down for many years aimed by the Tories towards anyone else but now, well, it strikes me that if you won't publish the maths, the maths are either pretty bad or haven't actually been done yet, so if that's not 'fantasy economics' then I don't know what is.
People will likely say summat like "yeah but you're just a woke lefty sipping on the Labour Kool Aid - get real," but what I've just said above is basically a summary of the Financial Times podcast I listen too cos actually, I don't really have a lot of time for the guardian and that.
I don't mind paying tax for stuff me or other people can use, but I'm not that keen on paying tax to fund borrowing to fund private energy profits or simply to find borrowing that props up the economy because someone has decided to indulge their sub 6th form understanding of economics and tank the markets (and frankly, I think it's generous to suggest the purity of ideology is the sole motivation, given the potential for people to profit from market events such as we've seen)
Still, in the heads of some it's probably the secret Marxists at the banks and the woke agenda of the free market to blame for it all isn't it?
The Tories are literally costing us all money right now. Not only did the last Tory regime have a higher rate of tax than any time since god knows when, now there is even *less* money in our pockets and any tax savings have been gobbled up and then some.
The public spend has been saddled with paying loads of energy companies to keep bills down instead of taxing their profits. How does that help the economy in anyway? Lots of those companies aren't even UK based. Why not fund it and tax those profits? What 'growth' are utilities companies going to bring about anyway? We're essentially forcing us to borrow to fund that and therefore reducing capacity for any other investment be it in health, enterprise, technology or whatever else.
I genuinely don't understand what they are doing. Austerity was a con based on a simplification of "the country is like your household budget" but at least that was coherent, if disingenuous.
Now we're being asked to believe that the majority of people having less to spend is going to make us all wealthier, whilst the great enemies of quantitative easing use quantative easing in order that the crisis doesn't get worse.
They've also literally refused to cost their measures and we have to wait till November to see the sums. Again, 'fantasy economics' was the big put down for many years aimed by the Tories towards anyone else but now, well, it strikes me that if you won't publish the maths, the maths are either pretty bad or haven't actually been done yet, so if that's not 'fantasy economics' then I don't know what is.
People will likely say summat like "yeah but you're just a woke lefty sipping on the Labour Kool Aid - get real," but what I've just said above is basically a summary of the Financial Times podcast I listen too cos actually, I don't really have a lot of time for the guardian and that.
I don't mind paying tax for stuff me or other people can use, but I'm not that keen on paying tax to fund borrowing to fund private energy profits or simply to find borrowing that props up the economy because someone has decided to indulge their sub 6th form understanding of economics and tank the markets (and frankly, I think it's generous to suggest the purity of ideology is the sole motivation, given the potential for people to profit from market events such as we've seen)
Still, in the heads of some it's probably the secret Marxists at the banks and the woke agenda of the free market to blame for it all isn't it?
Wizaard
Well-known member
Until the Brexit vote everything was the fault of the EU. We left that to gain sovereignty and control, but now the Government is at the mercy of 'worldwide' issues.
There's always someone or something else to blame, never them.
tommytwojags
Well-known member
What's insider training?
Wizaard
Well-known member
Obviously trading. Spell check shite.
Mexboroseasider
Well-known member
A guide to insider dealing - Richardson Lissack
Insider dealing can seem complicated and confusing, but our comprehensive guide breaks it all down for you.
www.richardsonlissack.co.uk
Always tangerine
Well-known member
There is logic if you believe inequality is a good thing. Its an unpleasant, indeed cruel philosophy.
We now have the greatest inequality in Europe. Removal of 45 per cent rate apparently not put to Cabinet. On the day of the mini budget now being reported that Kwarteng had a champagne reception with " financiers" and hedge fund managers. " Let them eat cake " moment.
Next interest rate rise likely on 3 Nov it is suggested.
Wizaard
Well-known member
They will be converting the ground floors of tower blocks into workshops next. Make them earn their benefits. If it was good enough for the Victorians....
td53
Well-known member
I don't think it's even about nasty vs nice.
It's about the fact that if lots of people have less/no money to spend, then how does money cycle round the economy as it's a fact of life that wealthy people are more likely to spend abroad (whether via leisure or investment) where as lower incomes are more likely to service a localised economy.
Benefits are part of that cycle and ultimately, whilst we sometimes see them as 'dead money' even if they do go on the proverbial fags and ale, that money cycles round in spending, taxes and profits.
Someone buying a home in the Algarve to get away to is contributing sweet FA to the UK economy.
That's obviously simplified and basic but I literally can't understand why making the majority poorer makes any economic sense from any ideological perspective other than an extreme one.
Shandypants
Well-known member
JJpool
Well-known member
This is why were in this mess, quantitative easing is out of control.
The mini budget spooked markets but isn't the fundamental cause of the problems we face.
Printing money and shutting the country or world down for covid was a huge issue.
The mainstream won't talk about it as much as they supported the lockdowns and borrowing, paying healthy people to sit at home often.
I'm afraid the chickens are coming home to roost somehwat.
Mexboroseasider
Well-known member
As I’ve said on the other thread the markets were relaxed about the Covid borrowing. It was the budget that triggered them.
As for quantative easing, again as I’ve said on the other thread, the BoE were about to start selling gilts and bonds (quantative tightening) until the plan was derailed and they’ve have to pledge to spend an additional £65bn to protect insurance companies from the Chancellor’s “fiscal event”.
Mexboroseasider
Well-known member
It does seem very muddled I agree.
The state borrowing money in order to generate growth is basic Keynesian economics. And the time to do that is when the economy is in, or about to go into, recession. As now. There is though a danger that borrowing/spending at a time of inflation will simply make inflation increase. That’s why stagflation (which we have currently) is such a hard nut to crack. There are two conflicting pressures on the economy which on the face of it require different and conflicting remedies.
But clearly the government are committed to borrowing to encourage growth, and risking increased inflation, so the next question is whether tax cuts are the best way to spend that borrowed money and encourage growth.
The markets don’t seem to think so, hence the present calamity.
I think the problem is that the current government have the mindset that all taxation is wrong, so if you correct that wrong then that in itself must be the solution to the problem (the lack of growth). Now even if you agree that all taxation is wrong (and I don’t know anyone who likes it) it doesn’t follow that lower taxation for the wealthy leads to more growth nor that more growth means everyone is better off. The rich simply keep most of the profits generated by growth and get wealthier. IMO trickle down economics just doesn’t work.
Keynes once said of FA Hayek (who is a guru to a lot of Tories presently in power) “it is an extraordinary example of how, starting with a mistake, a remorseless logician can end in Bedlam”. Pretty neatly sums up where we are now I think. The madhouse.
M
Malced
Guest
By your own words, it’s a package. Did you not want a package of measures to boost the economy, to put more money in our pockets, to encourage growth, to help us with our gas and electric, and to help businesses stay afloat and keep people employed?
Or are you so ideologically blinkered that you can’t see past the 45p rate reduction? Because that’s what a lot on here have classed this ‘package’ as. It’s a Tory give away to their rich buddies cos they don’t care about us and just want the rich to get richer. That’s what they say. That’s their narrow mindedness.
I don’t know if you missed it somehow, but the package is designed to lead to growth. Such growth leads to higher tax returns. Our economy has flatlined and growth has been lagging. The cost of electric etc has not at all helped.
With regards to the cutting of the top rate of tax, which most are obsessed about, it’s only £2bn or so of the incredibly expensive package. And when top rates of income tax have been reduced in the past, they always lead to higher to tax returns. So it will pay for itself. We need to make our country one which is attractive to businesses so they open up here and invest and we get the growth.
There’s plenty of help in this package for all including lower earners. But giving handouts to all isn’t sustainable if the growth isn’t there.
Quite simply, growth pays for the package and more. But don’t take my word for it, let’s see what the OBR says.
A huge part of the expensive package is the help for gas and electric. Are you saying this help shouldn’t be given? If you think it should be given then I’ll ask you your own question - who do you think is going to pay it back?
Whilst you ponder that one I’ll help you with a partial answer - the highest earners will be the ones disproportionately paying it back.
These damn higher earners helping pay down our borrowing. Shocking. Shouldn’t be allowed.
Can you explain how it will lead to growth rather than just saying Truss and Kwarteng say it will, and please can it go beyond simply saying the act of cutting corporation tax automatically leads to growth as if that is the only input on the economy as a whole.
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M
Malced
Guest
You can please read my previous posts where I’ve described the conditions for growth.
Apart from that I think we all now need to wait and see what the OBR make of it. Their assessment will surely include the effect of the measures on growth forecasts etc. I’m not saying they will find in the positive, but they will make a conclusion and then we’ll know what the effect on growth these measures are predicted to have.
Shandypants
Well-known member
My life is good, I run a decent business and I moved 4 months ago to the countryside in an idyllic location. I want a fairer society and great public services. During the brexit debate I recall Rees Mogg telling everyone that wages have been suppressed due to foreign labour, that statement has been subsequently sweeped under the carpet because it hasn't resulted in wage increass. I want a govt that represents its people, not big business.Yeah, good idea. Let’s get everyone who works for the NHS to go on strike.. then watch people die due to not having the care they need!
Just to clarify: I live a wealthy, happy life.. you keep moaning about yours and blaming how shit it is on the Tory party fella.
I just re-read them. Unless I missed something the only thing you explicitly state will help growth from this budget is corporation tax cuts (or in this case cancelling rises). So why does Germany have a higher GDP per capita despite a 33% effective corporation tax rate? Why do countries such as Molodova and Bulgaria have tiny GDPs per capita despite having tiny corporation taxes? Is it your assertion that the simple act of cutting corporation tax will automatically lead to growth? Are there no other inputs on the economy at all?
Mexboroseasider
Well-known member
All the political parties (save maybe the Greens) are committed to growth so you shouldn’t pretend otherwise. The question is how you achieve that growth.By your own words, it’s a package. Did you not want a package of measures to boost the economy, to put more money in our pockets, to encourage growth, to help us with our gas and electric, and to help businesses stay afloat and keep people employed?
Or are you so ideologically blinkered that you can’t see past the 45p rate reduction? Because that’s what a lot on here have classed this ‘package’ as. It’s a Tory give away to their rich buddies cos they don’t care about us and just want the rich to get richer. That’s what they say. That’s their narrow mindedness.
I don’t know if you missed it somehow, but the package is designed to lead to growth. Such growth leads to higher tax returns. Our economy has flatlined and growth has been lagging. The cost of electric etc has not at all helped.
With regards to the cutting of the top rate of tax, which most are obsessed about, it’s only £2bn or so of the incredibly expensive package. And when top rates of income tax have been reduced in the past, they always lead to higher to tax returns. So it will pay for itself. We need to make our country one which is attractive to businesses so they open up here and invest and we get the growth.
There’s plenty of help in this package for all including lower earners. But giving handouts to all isn’t sustainable if the growth isn’t there.
Quite simply, growth pays for the package and more. But don’t take my word for it, let’s see what the OBR says.
A huge part of the expensive package is the help for gas and electric. Are you saying this help shouldn’t be given? If you think it should be given then I’ll ask you your own question - who do you think is going to pay it back?
Whilst you ponder that one I’ll help you with a partial answer - the highest earners will be the ones disproportionately paying it back.
These damn higher earners helping pay down our borrowing. Shocking. Shouldn’t be allowed.
On your own admission removing the top rate of tax has already cost us £2 billion in lost taxes. We may get that back if the tax cut results in more growth and more tax but that isn’t guaranteed. It’s a gamble.
It’s a gamble that the markets don’t believe in, hence the calamity of the last week including the risk to insurance companies which will cost us an additional £65 billion by mid October. So that’s £67 billion we’re down so far.
Plus the extra interest we’re going to have to pay on the increased borrowing as a result of gilt and bond yields increasing to massive levels. I think I saw a figure of £14 billion pa for that.
You’re right that the energy cap will help us all and the markets knew about that in advance of the budget. So they weren’t spooked at all and the market chaos wasn’t down to that. As for your question - who but the taxpayer could pay for that? Well the energy companies could have made a contribution via a windfall tax which meant less borrowing. But that was ruled out. A lot of those profits will therefore disappear overseas and won’t create growth in the U.K.
The reduction in the basic rate of tax and NI equates to pennies in the average household. I suppose, given that there are a lot of households, that might mean an increase in spending but I’m not convinced that’ll translate to growth. It certainly won’t feel like it to Joe Public anyway.
The corporation tax freeze won’t lead to growth. If a 19% rate didn’t have that effect before the budget then it won’t have that effect after the budget.
The changes to SDLT might have encouraged activity in the property market but that’s unlikely now given the increase in interest rates.
td53
Well-known member
Why were the OBR held back from publishing their predictions earlier?
We do 'just have to wait ' because the government say so but that's in itself, quite odd.
Again, this isn't my take, but that bastion of leftism the Financial Times' analysis who think that delaying the figures is, in itself adding to further instability as the market concludes that the figures must be lacking otherwise why delay?
Do the budget now, run the figures later?
That's very odd. Obviously, all figures are a projection, but to take really quite radical measures with no real data in the public realm on its efficacy to support it is... well... strange.
It's as if they're setting out to trash any remaining legacy of the hard won image of the 'grown up party' that took them the best part of 15 years and multiple leaders to gain.
The fag end of the last Tory epoch was scandal mixed with financial calamity and infighting.
It appears we're here again.
td53
Well-known member
The real question for an actual debate would be around what define growth as and how you measure it. Our democracy isn't capable of handling such a debate and thus we plow on doing the same shit, regardless of the day, believing in broken orthodoxies that deep down, everyone, including the people who spout them don't believe in really.
What do cunts like me know? I don't have a super yacht.
traffordtang
Well-known member
And what’s your view on freezing the basic personal allowance for the least well off. Those earning over 125k don’t have a personal allowance so no loss to them there.
traffordtang
Well-known member
The point is so they can give the wealthy tax cuts. No point wasting money on the most needy who will only spend every penny of it in this country and on things like food and clothing. Let’s not forget this is the party that won’t give free school meals to the most needy kids in the school holidays
Matesrates
Well-known member
They have, two of my grandchildren are in that category and their mum gets cash in the holidays
M
Malced
Guest
Having more cash means companies have the resources to procure capital, improve technology, grow, and expand. All of these actions increase productivity, which grows the economy.
Tax cuts also allow consumers to stimulate the economy themselves by having more money to spend.
But my main assertion is to wait for the OBR, then the experts can it explain it to us.
M
Malced
Guest
I’ve never pretended otherwise. And earlier in the thread I’ve stated that Kier Starmer just announced his plan for growth at their conference. I’m happy to debate the things we differ on but please don’t attribute things to me that I haven’t said - and where I’ve actually stated the complete opposite.
M
Malced
Guest
Do I need to say for the upteenth time that the new PM and Chancellor handled this wrong and should have gone to the OBR first. I’m not debating that.
I’m talking about the measures themselves and that they’re a package designed to boost growth. We’ll see whether they’re effective but it’s isn’t merely a give away for the rich as some would like to portray it.
Jogging around your lounge or doing press ups in the bedroom.
Bloodtangerine
Well-known member
Always tangerine
Well-known member
Of course .
JJpool
Well-known member
For the mini pound slump and market panic yes the budget was the tipping point temporarily, but there's far bigger issues caused by ridiculous amounts of QE, the war etc multiple factors.
Mexboroseasider
Well-known member
But in your post 118 you clearly insinuated that if people didn’t sign up to the budget then they were anti growth. I was making it clear that all parties were pro growth. The argument is how you get to that end.
I then went on to say why I didn’t think the other elements of the budget package wouldn’t achieve growth but you’ve ignored all that.
Chunkylad
Well-known member
Ok we have had a cracking debate here based on sound assumptions.
So if you’re backing the “growth” model theory then yes as an economist a growing economy reduces your % borrowing requirement. Only however, if your cost of borrowing is not more than the growth level (so growth higher than interest rates).
However, the one big issue to Truss theory beyond every other soundbite or the rich v poor debate for me is this….
How do you grow an economy and create more jobs, when you are already at full employment and have massive labour shortages already?
(NHS particularly).
We no longer have European freedom of movement so it must be via Visa application. How easy is that to achieve?
So if you’re backing the “growth” model theory then yes as an economist a growing economy reduces your % borrowing requirement. Only however, if your cost of borrowing is not more than the growth level (so growth higher than interest rates).
However, the one big issue to Truss theory beyond every other soundbite or the rich v poor debate for me is this….
How do you grow an economy and create more jobs, when you are already at full employment and have massive labour shortages already?
(NHS particularly).
We no longer have European freedom of movement so it must be via Visa application. How easy is that to achieve?
Again, this is theory presented as fact. It does seem that it is your assertion that the act of cutting corporation tax automatically leads to growth, as if this is the sole input into the economy. This paper, which is a quantative meta-study of 42 studies, based on worldwide economic data, concludes that a cut in corporation tax of 10 percentage points increases growth by 0-0.2%. So it could have absolutely no effect, or by the averages a 2% cut would at best lead to a 0.05% increase in GDP. This will not counteract the cuts to public investment which is due to come.
There are so many more things that go into growth than just cutting tax for the wealthy. Business want a stable government. They want capital investment, high skilled labour, consumer confidence, manageable inflation, a stable currency and market confidence. If it were as simple as 'cut corporation tax and you get growth', no country in the world would have corporation tax.
We have nothing to fear across Europe. Why should I worry about businesses leaving due to a corporation tax being 25% when France's is 25%, Germany's is 33%, the Netherlands 25%, Spain 25%, Belgium 25%, Italy 28%?
How does £50 extra for ordinary people help them stimulate the economy when inflation is sky high, mortgages have increased beyond that and energy bills are going up?
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Chunkylad
Well-known member
From a selfish point of view, this budget might actually help me as I’m paid in Dividends not salary and corporate tax has been reduced too.
Yet that extra in my pocket is worthless if interest rates continue to rapidly rise, the public services I use fall to pieces, and my customers find their customers are bankrupt and spending nothing with them.
I’m very concerned
Yet that extra in my pocket is worthless if interest rates continue to rapidly rise, the public services I use fall to pieces, and my customers find their customers are bankrupt and spending nothing with them.
I’m very concerned
But you did exactly what you are complaining about in this post!!
M
Malced
Guest
We could have full employment with low productivity and be in recession. If for example everyone was boxing pencils. Better conditions for growth would be a higher skilled workforce, leading to higher productivity. The environment for creating and attracting business investment is one where there's lower tax and businesses are incentivised to invest in new technology. Our productivity is poor by comparison to rival countries.
We do have skills shortages for sure. And the whole issue of work visas needs considering as it could be a hinderance to growth as you suggest. But its not just about numbers, its about what we are doing with the folk we have.
M
Malced
Guest
I admire you for your persistence if nothing else. I think I've said we need to wait for the OBR to assess whether the measures can achieve growth. Us theorising about it matters not a jot.
How can you seriously suggest there's only £50 in this package and in the same breath say energy bills are going up? You need to look at the package of measures properly and then you might notice some very expensive measures to help with energy bills.
Wizaard
Well-known member
They have now after initially refusing, swayed by Marcus Rashford's campaigning.
Wizaard
Well-known member
Help for energy bills is outweighed by increases in mortgages, rent etc caused directly by the mini budget.
Chunkylad
Well-known member
Highly skilled is the challenge though.
Lovely in theory but the time lag is years - which we clearly don’t have. I’ve had to recruit AI software coders from around the world due to the complexity and expertise required.
I’m always up against US companies as the main pull and previously found a rich vein in Eastern Europe (particularly Ukraine to be honest) which is now significantly more difficult to recruit. I’m working with a couple of UK unis for post grads and PhD students but they’re inexperienced and that takes more time than I’ve got to develop or train them.
I know I’m being a little specific but highly skilled economy takes highly skilled people who are not already employed.
Wizaard
Well-known member
The caring side of the Tories plain to see.
What happens if you're unable to work because of caring responsibilities, or disability, for example?
www.independent.co.uk
What happens if you're unable to work because of caring responsibilities, or disability, for example?
‘Get new job’ or cut back, Tory chair tells struggling Britons
‘Go out there and get that new job,’ says Jake Berry
www.independent.co.uk
M
Malced
Guest
I'm talking about the mini-budget here. You said that the £50 extra most people will be getting will stimulate the economy, what my counter is, is that there is still a net deficit as a result of all the extra money coming out of people's once disposable income. Therefore, any growth predicted as a result of this is fantasy. I'm glad the government took action on energy bills (although they are still rising massively this month), but we can agree that people will have less money right? The drop in income tax and NI is not enough to cover everything else rising.
If your whole point is just let's wait and see, I guess there is not much point in continuing and I wouldn't have replied in the first place. I'm not trying to force you to have an opinion on the matter. That's a totally fine POV to have if you want. However, you have been painting those who oppose this mini-budget as people who don't want economic growth, and espousing its benefits because of growth. So my replies have been asking you to explain where this growth will come from, and why it is your apparent belief that just cutting corporation tax automatically leads to it (which there is no evidence to support).
M
Malced
Guest
So they don’t have energy bills?