"it grows by reduction in corporate and small business tax, it grows by reducing national debt, it grows by cutting unecessary benefits and re-investing in other areas.
Partly correct. It grows mainly by people buying products and services. If there is no consumption, conspicuous or otherwise than your economy is heading down the pan. If you increase the price of the vast majority of items by a VAT increase, for example, and at the same time introduce 25% spending cuts in all government departments, apart from the NHS and Overseas Devt. over the length of the parliament, you get a substantial increase in unemployment and a lack of confidence in spending on items.
A substantial increase in unemployment results in an increased welfare state bill and an increase in the deficit. THere is a connection between the public and the private sector, as I am sure you are aware. Many public service contracts are awarded to the private sector. They too are hit by large reductions in spend in the public services.
I suspect this whole area is a tad more complex than you appear to think.
CHeers
D
The Budget
Re: David Johnson
DJ... you're so wrong my man...
Vat is a fairer tax... YOU do have a choice... "i will only buy one mobile phone this year" or just 8 bottles of wine, not 12 as normal.... is better than having higher income tax ... which you have NO control over... work harder... pay more.... OR work harder and with higher VAT... YOU decide to pay tax if you want a better motor... a fourth meal out this week... etc....
AND by increasing VAT keeps income tax down... the tax threshold has increased... the pension tagged to inflation... all good things
SO DJ yes you will pay more for your "stuff"... but I am sure you could get another year out of them underpants... hence you will be saving money !!!!!
Vat is a fairer tax... YOU do have a choice... "i will only buy one mobile phone this year" or just 8 bottles of wine, not 12 as normal.... is better than having higher income tax ... which you have NO control over... work harder... pay more.... OR work harder and with higher VAT... YOU decide to pay tax if you want a better motor... a fourth meal out this week... etc....
AND by increasing VAT keeps income tax down... the tax threshold has increased... the pension tagged to inflation... all good things
SO DJ yes you will pay more for your "stuff"... but I am sure you could get another year out of them underpants... hence you will be saving money !!!!!
Proud to be Von Boy
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David Johnson
- Posts: 7844
- Joined: Fri Jul 14, 2017 2:40 am
Von Boy
Here's a test for your imagination. Don't worry, I dont expect too much!
5% VAT rated:
Main items -
domestic fuel or power
0% VAT rated:
Main items -
some food
books, newspapers and magazines
young children's clothing and footwear
Now your test is to think of all the items that are not in the list and that you might need, really need at some time, not just your somewhat biased examples e.g. " a fourth meal out this week"
I will give you a start to help you get into the swing.
Clothes - do you think you might need them?
Cooker - do you think you might need to eat cooked food?
Heater, repairs to boiler - do you think you might need to keep warm in winter?
Car repairs - do you think you might need a car to get to work instead of potentially spending hours on expensive public transport?
All on standard VAT rate.
"Vat is a fairer tax... YOU do have a choice... "
You are talking nonsense. And the Institute of Fiscal Studies agrees with me.
Looking at VAT as a proportion of net household income, which the Treasury called "the most meaningful way of examining the impact on different income groups and household types", they found that the poorest 20% of households would be much harder hit by a VAT rise than the richest 20%.
Now of course, I can see your argument coming about the poorest 20% being useless, individuals that throw their limited money around like confetti.
However, what is absolutely undeniable is that there are items which are at the standard rate of VAT which ARE essential and which are not "just a matter of choice".
Cheers
D
5% VAT rated:
Main items -
domestic fuel or power
0% VAT rated:
Main items -
some food
books, newspapers and magazines
young children's clothing and footwear
Now your test is to think of all the items that are not in the list and that you might need, really need at some time, not just your somewhat biased examples e.g. " a fourth meal out this week"
I will give you a start to help you get into the swing.
Clothes - do you think you might need them?
Cooker - do you think you might need to eat cooked food?
Heater, repairs to boiler - do you think you might need to keep warm in winter?
Car repairs - do you think you might need a car to get to work instead of potentially spending hours on expensive public transport?
All on standard VAT rate.
"Vat is a fairer tax... YOU do have a choice... "
You are talking nonsense. And the Institute of Fiscal Studies agrees with me.
Looking at VAT as a proportion of net household income, which the Treasury called "the most meaningful way of examining the impact on different income groups and household types", they found that the poorest 20% of households would be much harder hit by a VAT rise than the richest 20%.
Now of course, I can see your argument coming about the poorest 20% being useless, individuals that throw their limited money around like confetti.
However, what is absolutely undeniable is that there are items which are at the standard rate of VAT which ARE essential and which are not "just a matter of choice".
Cheers
D
Re: The Budget
"it grows by reduction in corporate and small business tax, it grows by reducing national debt, it grows by cutting unecessary benefits and re-investing in other areas.
Partly correct. It grows mainly by people buying products and services. If there is no consumption, conspicuous or otherwise than your economy is heading down the pan. If you increase the price of the vast majority of items by a VAT increase, for example, and at the same time introduce 25% spending cuts in all government departments, apart from the NHS and Overseas Devt. over the length of the parliament, you get a substantial increase in unemployment and a lack of confidence in spending on items.
A substantial increase in unemployment results in an increased welfare state bill and an increase in the deficit. THere is a connection between the public and the private sector, as I am sure you are aware. Many public service contracts are awarded to the private sector. They too are hit by large reductions in spend in the public services.
I suspect this whole area is a tad more complex than you appear to think.
As I posted on another thread the unemployed are a huge drain on public funds.
I see nothing in this budget that will increase the demand for any type of item or service nor cut our imports by encouraging existing UK companies to expand and new ones to start up.
To try and not increase the price of their products so maintaining sales when 20% VAT lands manufacturers and retailers will seek cheaper sources from abroad.
One example is JCB. It was reported just before the election that 30 years ago 90% of their components were UK sourced but now 36%.
Also why is it economic to import pork and chicken from Holland and Germany? We ought to be able to produce at the same cost in the UK.
What is desperately needed is policies to reverse this trend.
Partly correct. It grows mainly by people buying products and services. If there is no consumption, conspicuous or otherwise than your economy is heading down the pan. If you increase the price of the vast majority of items by a VAT increase, for example, and at the same time introduce 25% spending cuts in all government departments, apart from the NHS and Overseas Devt. over the length of the parliament, you get a substantial increase in unemployment and a lack of confidence in spending on items.
A substantial increase in unemployment results in an increased welfare state bill and an increase in the deficit. THere is a connection between the public and the private sector, as I am sure you are aware. Many public service contracts are awarded to the private sector. They too are hit by large reductions in spend in the public services.
I suspect this whole area is a tad more complex than you appear to think.
As I posted on another thread the unemployed are a huge drain on public funds.
I see nothing in this budget that will increase the demand for any type of item or service nor cut our imports by encouraging existing UK companies to expand and new ones to start up.
To try and not increase the price of their products so maintaining sales when 20% VAT lands manufacturers and retailers will seek cheaper sources from abroad.
One example is JCB. It was reported just before the election that 30 years ago 90% of their components were UK sourced but now 36%.
Also why is it economic to import pork and chicken from Holland and Germany? We ought to be able to produce at the same cost in the UK.
What is desperately needed is policies to reverse this trend.
Re: The Budget
No government jacks up taxes unless they absolutely have to - nor do they cut public spending unless there is no alternative because they know it costs them votes. Some might argue that they hurt the poor because the poor would never vote for them anyway. That's probably true, but that just leaves the middle class and the wealthy - and if they represented enough voters to create a comfortable election win, then Britain wouldn't be in this position.
Phwooorr...look at her....CRASH
Re: David Johnson
DJ...
Clothes - You buy them... yes but its not something you need to buy each and every day... don't forget ebay... charity shops... again your choice
Cooker - In 15 years I have had two cookers... not a daily / yearly item
Heater, repairs to boiler - Yes it will cost you 2.5p extra per pound... not alot ... (think NHS)
Car repairs - yep! but hopefully not a weekly / yearly cost
All I can stress is that its far better to have a choice in how much tax you want to pay.....
I believe in paying for every mile driven and reduce petrol tax and delete to car tax... simple... pay as you use...
And don't forget we all want the NHS.... we love the NHS... we worship NHS staff....we allow the NHS to help the world...... its all needs paying for... Am sure no one would want this reducing just to keep VAT low.
Finally those underpants... as mentioned they will last... don't change them and save money.... you know it makes sense
Clothes - You buy them... yes but its not something you need to buy each and every day... don't forget ebay... charity shops... again your choice
Cooker - In 15 years I have had two cookers... not a daily / yearly item
Heater, repairs to boiler - Yes it will cost you 2.5p extra per pound... not alot ... (think NHS)
Car repairs - yep! but hopefully not a weekly / yearly cost
All I can stress is that its far better to have a choice in how much tax you want to pay.....
I believe in paying for every mile driven and reduce petrol tax and delete to car tax... simple... pay as you use...
And don't forget we all want the NHS.... we love the NHS... we worship NHS staff....we allow the NHS to help the world...... its all needs paying for... Am sure no one would want this reducing just to keep VAT low.
Finally those underpants... as mentioned they will last... don't change them and save money.... you know it makes sense
Proud to be Von Boy
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justincyder
- Posts: 326
- Joined: Fri Jul 14, 2017 2:40 am
Re: Justincyder
fair enough but you have to get away from this idea that being employed somehow means employed by the state.
This budget and the longterm plan is to try to switch the onus from employement by the state to a significant boost to industry particulalry manufacturing. I'll say this much it might not work but its a risk worth taking in my opinion to get away from state provided jobs. ( of which i have one oh the irony)
Folks who knows maybe even me will have to go out and retrain, you can't continue to have the number of civil servants etc being employed. Nevermind wages/salaries the pension bill down the line will be astronimical.
I'm aware too thats its a more complex issue than I appear to have described however I was referring to it in simple terms.
This budget and the longterm plan is to try to switch the onus from employement by the state to a significant boost to industry particulalry manufacturing. I'll say this much it might not work but its a risk worth taking in my opinion to get away from state provided jobs. ( of which i have one oh the irony)
Folks who knows maybe even me will have to go out and retrain, you can't continue to have the number of civil servants etc being employed. Nevermind wages/salaries the pension bill down the line will be astronimical.
I'm aware too thats its a more complex issue than I appear to have described however I was referring to it in simple terms.
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David Johnson
- Posts: 7844
- Joined: Fri Jul 14, 2017 2:40 am
Re: Justincyder
"fair enough but you have to get away from this idea that being employed somehow means employed by the state."
I have never suggested that. However, as I am sure you are aware there has been a huge increase in the last few decades in outsourcing contracts to private companies. This could be something like cleaning or it could be enormous construction contracts for hospitals etc via the PFI initiative.
By cutting back so hugely on public service expenditure (25%), in such a short period of time, this will have an enormous impact on the private sector. I think it is unreasonable to assume that the private sector will automatically take up the slack. It just won't happen.
Just last week there were ?2bn of cuts including hospital construction, retail centre regeneration, old steel site regeneration etc. Where are the private sector businesses lined up to do these jobs now goinig to get their business from?
I am not arguing here that there should be no job losses in the public sector, but I think it needs to be done with more care and commonsense than the Lib Dem COn coalition seem to be showing, not just for the sake of public services but for the entire economy.
CHeers
D
I have never suggested that. However, as I am sure you are aware there has been a huge increase in the last few decades in outsourcing contracts to private companies. This could be something like cleaning or it could be enormous construction contracts for hospitals etc via the PFI initiative.
By cutting back so hugely on public service expenditure (25%), in such a short period of time, this will have an enormous impact on the private sector. I think it is unreasonable to assume that the private sector will automatically take up the slack. It just won't happen.
Just last week there were ?2bn of cuts including hospital construction, retail centre regeneration, old steel site regeneration etc. Where are the private sector businesses lined up to do these jobs now goinig to get their business from?
I am not arguing here that there should be no job losses in the public sector, but I think it needs to be done with more care and commonsense than the Lib Dem COn coalition seem to be showing, not just for the sake of public services but for the entire economy.
CHeers
D
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David Johnson
- Posts: 7844
- Joined: Fri Jul 14, 2017 2:40 am
Re: David Johnson
Well I appear to be making progress. You accept that some items at the standard rate are essential.
What I should also have mentioned is that there are many low paid workers who need a car to get to work. In many cases, there may be no alternative.
Fuel is at a standard VAT rate.
Obviously any increases in these essential items impacts far greater on those on the lowest incomes as opposed to the rich.
Income tax strikes me as a much less regressive tax. You earn a little more, you pay a little more. As a proportion of your income, we are all hit the same by a 2p rise in income tax.
After all, as Osborne says "We are all in this together"
Perhaps some of us are more in it than others?
CHeers
D
What I should also have mentioned is that there are many low paid workers who need a car to get to work. In many cases, there may be no alternative.
Fuel is at a standard VAT rate.
Obviously any increases in these essential items impacts far greater on those on the lowest incomes as opposed to the rich.
Income tax strikes me as a much less regressive tax. You earn a little more, you pay a little more. As a proportion of your income, we are all hit the same by a 2p rise in income tax.
After all, as Osborne says "We are all in this together"
Perhaps some of us are more in it than others?
CHeers
D