2022 mini-budget discussion
- Thread starter Harlequin
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Soldato
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Who would not realise that’s a free 4% uplift just for signing a bit of paper plus resolve the “migrant” issue? You’d have to be a wally to miss that.
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Soldato
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The real damage here is not being done by Truss though, it's being done by Kami-Kwasi and his moronic "mini-budget"
As for Truss though...
I honestly think she is so vacuous and stupid that she is just falling over herself with joy about being PM and is just saying "yes" to any suggestion or policy ideas that are being put in front of her, by an increasingly toxic Cabinet and Party.
toxic to some beneficial to others,
Soldato
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To be ahem “fair” here it’s only 20k pa consultancy on the face of it. On the other hand if the suggestion being made has any legs there must be an “additional interest” there
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I assume she has been presented some dubious business cases/mathematics whereby the assumptions are key. E.g. dropping the tax rate from 45 to 40 will mean we get 200k more rich folk....and then 15 asterisks on 200k saying it could also be 2, who knows?
I think that's a bit of a air-brushing of history there, I would recommend reading the book 'when britain went bust - the 1976 IMF crisis'.
Our country in 2022 is nothing like it was in 1976 pre-IMF bailout but the consensus is that its the Labour policies of sticking to Keynes that caused the 1976 crisis, not tax-cuts, the failure to grow the economy was down to sticking to both high-taxes and Keynes economic theory.
Our economy was essentially in ruins post-war, we were still heavily reliant on exports and the Pound was the global reserve currency. Too much was state owned and state controlled. The pound was very strong and we had not started to fully exploit north sea oil.
Out of these crisis (including the 1974 budget) came the public perception change for political change, that the Keynes/Labour policies used since post war were at a dead end that led to the rise of Thatcherism and the Tories stealing Liberal economic policy and re-labelling it blue.
No big reforms to the underlying economy happened until Thatcher implemented them but the country gave her a big mandate to do so. Prior to that, the country convulsed from crisis to crisis from post-war 1940's through to the dash-for-growth budget in 1972 and then the IMF bailout, even after the IMF bailout, it was not until 1979, when Thatcher took over, that real change started to happen and the start of breaking up Labour's choke-hold on the country, through public ownership and the unions and a binning-off of the Keynes-Labour policy axis that was killing the U.K.
In 1972 our currency was too strong, it strangled off the exports, made us even more uncompetitive, if you look at where the country was in 1994, after all the Thatcher reforms had been completed and had time to bed in, it was like living in the different world to 1974.
So no, tax cuts on their own did grow the economy in 1974, they did not grow it on their own either 1979 either when Thatcher cut the top rate from 83% (!) to 60% and then to 40% in 1988 (shortly before the ERM crisis).
It is the underlying economic policies of the time in the 1970s which lead to economic stagnation and therefore, higher taxes.
What is different now? We live in the age of the technology driven knowledge economy. We also live in a digitally enabled age of cheap international travel and semi-frictionless movements between (some countries) for people with the right skills. You need to attract and retain the right skills and talent to grow businesses, if you can grow businesses and keep the existing ones globally competitive, you will grow the economy and, you have a snowball effect that people will want to come here because it is is not in a doom spiral.
In 2022 if taxes are high, people will just choose to go live elsewhere and it will, overtime, simply choke off the economy leading to, a doom spiral of higher taxes for the poor and less welfare spending on tax credits. A downside of the top 1% paying the top 28% of taxes for everyone else is, it assumes that you can keep and retain the top 1%, if you don't do that, taxes for the remaining 72% will go back up from 20% to the 33% mark.
That's not social justice but as we saw in the very late 1970s and early 1980s, that goes out of the window when the country is facing financial ruin, the richer people in society won't suffer in the 2020's they will just flee to another place on a cheap easyjet flight and walk into an embassy of your choice, its the people at the bottom that will suffer more, those that can't do that if corrective action is/was not taken.
But they aren't high, and weren't high before these cuts. Our overall tax take was still below the average of the G7 and OECD and its not like all there's been a flight of all the high earners from the Countries with higher taxes either. Its almost like a few % here and there isn't the overriding decision of where people want to live and work.
More tax cuts on the way
Liz Truss plans to cut taxes further in the new year
Reforms to income tax, savings and child benefits considered to boost economywww.telegraph.co.uk
The entire tax system should be reformed to cut down bureaucracy. Get rid of NI and employers NI (because they all just go into the general tax pool anyway), single flat rate of income tax. Minimal (ideally no) slightly different rules for different groups. People will then be able to see how much they're really being taxed. Don't know if that's what he's planning, sounds more like it'll be to have the higher earners pay less tax.
A whole essay on one point I made.
I guess you didn't read the rest of my post. Possibly too busy thinking about where to put that 40k. I hope you're pleased with your additional money.
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Then they need much better tax advice.
But that might benefit the poor and the middle earners. Why would we want that?
Handsomely for some by the sounds of it, and aren't a ton of MPs home owners (assume a good chunk of them might have multiple homes).
The top rate of tax was an absolute killer back in the 70s. It caused a huge brain drain and ultimately finished off the UK (a lot of my family and others moved abroad). The fix back then was to reduce this to make the UK competitive again which is what happened. People are even more mobile today because of technology so the loss of talent coming to the UK and leaving the UK as they begin to earn more is significantly impacting tax intake.
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What will the simps say in response to this?
Nothing to see here.
He's declared it so it's fine.
You can't prove it's insider knowledge.
He needs the extra money.
Trickle down economics.
It seems you've pulled "the remaining 72% will go back up from 20% to the 33% mark" out of thin air without actually thinking about it, according to the ONS there's 2,344 households with gross incomes of more than £100k. That's a very small tax base when compared to the 27.8 million total households so if the households with £100k gross income decided to leave those taxes would be spread between the remain households. While I've not run the maths I'd be pretty shocked if the remaining households saw more than a 1% rise in taxes while also, one would assume, seeing a small rise in earnings cause by everyone moving up the pay scale due to those now vacated roles.
Honestly i find it surprising that some people still hold onto the idea that if we tax the rich more they'll leave because if you spend more than 5min thinking about it it's so obviously not true and even if it was why would anyone care. If we apply the same logic to everyone, the logic that less money will dissuade people from working in this country, if we apply that to people lower down the pay scale then someone on £27k would also be dissuaded from working here, would they not? You started your post by saying someone was air-brushing but it seems you're guilty of the same air-brushing by trying to make out it's just about the money.
I'd like to know by how many £ (not expecting you to know or anything, just would be interesting to compare that to average earners and other normal people).
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