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Stanley
Local Historian & Old Fart


36804 Posts
Posted -  11/01/2009  :  06:04
New Year, new topic. If you want to see the old one do a forum search for same title but 2008.


Stanley Challenger Graham




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stanley at barnoldswick.freeserve.co.uk
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Tardis
Regular Member


453 Posts
Posted - 28/12/2011 : 10:25
Not sure I totally agree.

The problem in the economy is the banking situation, and the contraction in liquidity which is stopping folk borrowing to invest.

Thus, we either have to sort out the banks or come to a different compromise as the money has to come from somewhere, and I am suspicious of any state intervention leading to actual "sustained growth"

I welcome George Osbourne looking at the tax system, and hopefully the abolition of National Insuarnace which was basically used as Income Tax by Mr Brown.

Then, I welcome the levels of personal allowances set at about £10k.

Above that I think that there should be a flat tax, probably close to 40%, although really it should be lower, because most people are paying that anyway. I do not believe that because you earn more you should pay more in % terms because it reduces incentive. A man on £20k of tax able income at 20% pays less than a man on £200k taxable income at 20%. Anything else is unfair, and counter productive.

The system is not sustainable when 1% of the population puts more than 25% of the Income tax revenue into the Treasury.

I do not accept that "rich people" do not spend their money. They do. The rest sits in bank accounts or investments, and surprisingly our banks are short of this kind of liquidity. Thus a simple and elegant way to get the banks off the hands of the state without the necessity of state intervention.

I am much reminded of Kennedy's speech which said: ask not what your country can do for you - ask what you can do for your country

For far too long people have asked the wrong question. It is not the politicians that will recognise the values that the community wishes to see upheld, it is the people themselves, and it is only through their own actions that things will change.

I am also very conscious of the fact of the survey that said once people in the UK get over 37 they do not do any voluntary work. I beg to differ as I saw prime examples in the Rainhall Centre on Christmas Day; but maybe others need to take a good long look at what they could do to push society along instead of simply carping from their armchairs.



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Whyperion
Regular Member


122 Posts
Posted - 28/12/2011 : 21:17
No , its when we get to mid thirties the pressure of young families at one end , elder parents at the other and work the other that formal , sustained and committed voluntary work is very difficult to fit in , time and pressures normally allow by the time you are in mid 50s.

I used to remember all the marginal rates of income tax, the 40% rate really only comes in once the 12% of NHI falls away.  I would not like NHI and income tax to be merged , they are for different purposes , they apply differently to Earnings ( from employment ) , Earnings Benefits - like company cars , and Income ( Which may come from savings on which non NHI is payable ), I can see any proposed merger of the two affecting mid paid people in particular and slanted to increase the take the treasury has.  Capital gains tax is also levived currently at ones marginal income tax rate, and no NHI is paid on capital gains - which themselves are increasingly paper gains due to inflation only.


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Tardis
Regular Member


453 Posts
Posted - 29/12/2011 : 10:25
I think you point to an era when certain taxes were for different purposes, and now they simply all wash together in the Treasury, so that the figures can be trotted out like tractor factory statistics.

Abolition of NI is a simple way of acknowledging that the once vaunted budget of 1909 is no longer valid. It would also lead to major benefits in so far as we could do away with a whole department of the Public Sector at a stroke (integrate them into HMRC and cut down those demarcation barriers), and by applying flat taxes we could also marginalise the necessity to employ accountants for tax purposes for their cunning wheezes. It might also limit some of the exploits of the banks without actually having to pass any primary legislation against them to increase regulation.

It could be argued that the higher rate tax payers are subsidising the insurance rates of the poorer, who are more likely to avail themselves of those public services. There is a major imbalance here, but one which many would shoulder happily. Quite possibly the most "liberal" piece of legislation ever introduced.

The simple fact is, that the Treasury needs more money to pay down that which the people wanted. Everyone seems to agree that the people at the bottom need to be protected, but that the tax system should also be "fairer" and produce more money for the Treasury.

People and not the state should decide where money is spent. The private sector pays for the public, and the state must not kill off the golden goose.


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Whyperion
Regular Member


122 Posts
Posted - 29/12/2011 : 20:55
The people and the state are one.


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Whyperion
Regular Member


122 Posts
Posted - 29/12/2011 : 21:20
NI inspectors were quite proud of their statutory roots. The mis-use by governments came with the party promises to not increase income tax , ( leaving the way open for changes in Council Tax , NHI, VAT and the too many steath and extra taxes and charges ). This has created an unneccesary increase and divergence from the whole point of aspects of the NI system.  An increase in income tax at times in the past 35 years would have been economically the most sensible , fairest and easiest thing to do , but fear of headline reactions against this have created an aching and creaking system. NI as a payroll tax also gives rise to the two opposing views , employers should bear some of the cost of the pensions and  health provision for a strong and happy workforce( good ) , or it restricts employment growth ( bad , although for profit making enterprises it is a tax allowed cost making the actual 12.5% or so down to around a 8% after tax cost ).


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Stanley
Local Historian & Old Fart


36804 Posts
Posted - 30/12/2011 : 04:28
The key word you use Whippy is 'mis-use'.  Our taxation history is littered with cunning wheezes to extract money from the population from Dane Geld and Ship Tax, rhrough window and hearth tax to VAT. Even the Dissolution of the Monasteries could be argued as a tax. Over the centuries this has meant that the tax system became more and more complicated. Anyone remember Purchase Tax? It has become  Gordian Knot and the only way to unravel it is the cut it in two and start again, but what an enormous task!

However, my post was directed at a much more simple and basic proposition, that we should stop wallowing in disaster, look at what is doing well and concentrate on these things. There is a lot of income going into the government, if the supply can't be increased the obvious answer is to cut expenditure. This is where the imaginative policies need to kick in and those in charge should think the unthinkable like reneiging on rotten contracts, chasing the £25billion in tax owed, starting with the biggest culprits, not the easy targets at the bottom of the pile and slashing the use of 'advisors' and consultants. In the latter case, why not trust the expertise embedded in the Civil Service?


Stanley Challenger Graham




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stanley at barnoldswick.freeserve.co.uk Go to Top of Page
Tardis
Regular Member


453 Posts
Posted - 30/12/2011 : 10:16


quote:
Whyperion wrote:
The people and the state should be one.


corrected Smile


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Tardis
Regular Member


453 Posts
Posted - 30/12/2011 : 10:30
Yes, but as well as NI, companies also pay Corporation Tax on profits. I'm beginning to think that you narrow your arguement to make accurate points which ignore the whole.

Cunning wheezes are all very good, until the populace actually notices that they can avoid the taxes. Take a look at the report in the Telegraph today that shows older people are no longer retiring with savings ostensibly because the 'system' penalises them for doing so. Hence the risk to the state increases, through it's own policies. Why do these people think that it is "their right" to hold the state to ransom? It is fairly obvious that if they had "paid in" then the country would not have huge debts.

From my own dealings with authority it becomes clearly obvious that the people who 'know' have left the civil service, and those that have been retained are the jobs which could be more cheaply outsourced (also liberating the state from pension provision). Now the situation is such that legislation introduced in the last parliament means that all this consultation has to take place but the authorities have not retained the knowledge base to argue their cases and thus must have consultants before the message is finally politically nuanced.

I would recommend you read the Local Bill that will become Law around April next year. If you approach it with an open mind, then I'm sure that there would be many things that you might want to champion.


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Whyperion
Regular Member


122 Posts
Posted - 30/12/2011 : 20:37
For corporation tax you have to have a profit in the first place to pay the tax on. Its generally been the Conservatives that have changed the rules that meant things like investment being 100 ( or sometimes 125% ) allowable against corporation tax disappeared so many businesses that did not actually make a CT payment became tax payers directly , impacting on future growth in employment and technical advances.

Yes consultancy covers many areas of expertise , or otherwise , a problem is that when the short term consultant/s leave the permanent staff are left trying to understand what was actually meant and meant to happen.

Cameron has admitted that it seems to be very difficult to cut expenditure, the treasury is still committed to in year spend , rather than total project spend and the attempt to manage a debt:gbp ratio that makes no sense when more expenditure is committed or forecast in future years as a result of short term slow down.

Also not noticed by many other than the steath taxes has been under Brown as chancellor many of the payment dates of taxes have been brought forward which gave a one off illusion of lower govt borrowing , Osborne has no doubt found that this trick cannot be repeated giving even less wriggle room. 


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