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Post by Deleted on Apr 6, 2023 8:33:47 GMT
I wasn't suggesting a tax increase to increase investment. Don't know where you got that from. Surely if lowering taxes produces no advantage, raising them must produce no disadvantage? It is not as simple as that. Lowering taxes too much leaves insufficient revenue to fund all that needs to be funded resulting either in spiralling national debt or spending cuts that are so severe as to be regressively, economically and socially damaging. If taxes are too high on the other hand this too can suppress economic activity resulting in economic decline relative to others. It is not as simple as that either though, because different types of taxes hit different groups harder than others and can have even more or less damaging effects than others. Taxing activities that are detrimental to us economically can for example potentially both raise revenue and be economically beneficial. And taxing things like tobacco not only raises revenue but it also improves health and helps the NHS by discouraging smoking. We need to be more selective in which taxes we increase and which ones we reduce in a way that helps the economy without stifling effort and raises sufficient revenue. Taxes on income are probably amongst the most economically disincentivising. Well off people who pay the highest rates are always telling us so but they are particularly disincentivising for lower earners actually. Because once lower earners on about a tenner an hour hit those tax brackets they only take home about £6.70 an hour. When that is combined with a benefits trap that takes more than half of that away, the disincentivisation involved is obvious. I see colleagues in work who only seek to earn enough to get them to the tax brackets and then refuse all further overtime simply because it is not financially worthwhile. They are often paying such high private rents that there is no feasible way they can earn enough to escape this benefits trap as I easily can because I have a social sector flat where the rent is far more reasonable. When it comes to taxes in general, taxes on income have often been fairly high in this country whilst actual wealth, especially that locked up in land and property, has tended to be undertaxed. We should increase taxes on those economic activities that do us more harm than good, eg land banking, asset stripping and investing in ever more bricks and mortar which latter tends to put ever more upward pressure on house prices and private rents. Thus more and more of the nation's hard earned wealth is being sucked out of the pockets of individuals and locked up in bricks and mortar. Potentially productive investment in businesses and economically useful ventures is being diverted to the easy money investment in bricks and mortar which is just helping to further impoverish ands disincentivise millions of potentially highly productive workers. We need to be thinking about things like this when it comes to raising taxes to fund essential spending, or raising the funds to cut other taxes which are much more economically disincentivising. Some taxes have particular problems with them due to their excessively regressive nature, the most obvious one being Council Tax which as a proportion of income bears down far more heavily on the poor, and contributing significantly towards the latter's impoverishment and disincentivisation. And yet some people don't pay it at all because it is levied on properties and not individuals. Something really ought to be done to ensure a fairer and broader basis for local taxation, whether it be a reform of Council Tax itself, or a replacement of some sort. |
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Post by Steve on Apr 6, 2023 8:57:29 GMT
Surely if lowering taxes produces no advantage, raising them must produce no disadvantage? It is not as simple as that. Lowering taxes too much leaves insufficient revenue to fund all that needs to be funded resulting either in spiralling national debt or spending cuts that are so severe as to be regressively, economically and socially damaging. If taxes are too high on the other hand this too can suppress economic activity resulting in economic decline relative to others. It is not as simple as that either though, because different types of taxes hit different groups harder than others and can have even more or less damaging effects than others. Taxing activities that are detrimental to us economically can for example potentially both raise revenue and be economically beneficial. And taxing things like tobacco not only raises revenue but it also improves health and helps the NHS by discouraging smoking. We need to be more selective in which taxes we increase and which ones we reduce in a way that helps the economy without stifling effort and raises sufficient revenue. Taxes on income are probably amongst the most economically disincentivising. Well off people who pay the highest rates are always telling us so but they are particularly disincentivising for lower earners actually. Because once lower earners on about a tenner an hour hit those tax brackets they only take home about £6.70 an hour. When that is combined with a benefits trap that takes more than half of that away, the disincentivisation involved is obvious. I see colleagues in work who only seek to earn enough to get them to the tax brackets and then refuse all further overtime simply because it is not financially worthwhile. They are often paying such high private rents that there is no feasible way they can earn enough to escape this benefits trap as I easily can because I have a social sector flat where the rent is far more reasonable. When it comes to taxes in general, taxes on income have often been fairly high in this country whilst actual wealth, especially that locked up in land and property, has tended to be undertaxed. We should increase taxes on those economic activities that do us more harm than good, eg land banking, asset stripping and investing in ever more bricks and mortar which latter tends to put ever more upward pressure on house prices and private rents. Thus more and more of the nation's hard earned wealth is being sucked out of the pockets of individuals and locked up in bricks and mortar. Potentially productive investment in businesses and economically useful ventures is being diverted to the easy money investment in bricks and mortar which is just helping to further impoverish ands disincentivise millions of potentially highly productive workers. We need to be thinking about things like this when it comes to raising taxes to fund essential spending, or raising the funds to cut other taxes which are much more economically disincentivising. Some taxes have particular problems with them due to their excessively regressive nature, the most obvious one being Council Tax which as a proportion of income bears down far more heavily on the poor, and contributing significantly towards the latter's impoverishment and disincentivisation. And yet some people don't pay it at all because it is levied on properties and not individuals. Something really ought to be done to ensure a fairer and broader basis for local taxation, whether it be a reform of Council Tax itself, or a replacement of some sort.  On you last point, that Council Tax is a burden on all but the actual rich is one of the biggest evils of our taxation system. |
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Post by Orac on Apr 6, 2023 9:05:00 GMT
Surely if lowering taxes produces no advantage, raising them must produce no disadvantage? Lowering taxes too much leaves insufficient revenue to fund all that needs to be funded resulting either in spiralling national debt or spending cuts that are so severe as to be regressively, economically and socially damaging. To summarise- A tax policy is a choice between lowering economic activity and lowering government expenditure. |
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Post by Deleted on Apr 6, 2023 9:46:09 GMT
Lowering taxes too much leaves insufficient revenue to fund all that needs to be funded resulting either in spiralling national debt or spending cuts that are so severe as to be regressively, economically and socially damaging. To summarise- A tax policy is a choice between lowering economic activity and lowering government expenditure. As I have already stated but which you appear to have ignored for partisan purposes, it is not as simple as that. Excessive tax cuts can be economically as well as socially damaging, especially since reduced expenditure can reduce economic activity. Also taxes that raise revenue by discouraging economically detrimental investments and thus encouraging more beneficial ones can be economically helpful. So some tax rises can be good economically as well as socially. Some tax cuts can be good for the same reasons if affordable. It all of course depends upon which ones and to what extent in both cases. |
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Post by Orac on Apr 6, 2023 9:55:00 GMT
To summarise- A tax policy is a choice between lowering economic activity and lowering government expenditure. As I have already stated but which you appear to have ignored for partisan purposes, it is not as simple as that. Excessive tax cuts can be economically as well as socially damaging, especially since reduced expenditure can reduce economic activity. Also taxes that raise revenue by discouraging economically detrimental investments and thus encouraging more beneficial ones can be economically helpful. So some tax rises can be good economically as well as socially. Some tax cuts can be good for the same reasons if affordable. It all of course depends upon which ones and to what extent in both cases. All you are doing here is wandering into the weeds. A large fraction of government expenditure is of little economic value and the amount of tax that falls on economically damaging activity is very small. So, as a rule of thumb, my position is a pretty good guide. |
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Post by Deleted on Apr 6, 2023 10:16:07 GMT
As I have already stated but which you appear to have ignored for partisan purposes, it is not as simple as that. Excessive tax cuts can be economically as well as socially damaging, especially since reduced expenditure can reduce economic activity. Also taxes that raise revenue by discouraging economically detrimental investments and thus encouraging more beneficial ones can be economically helpful. So some tax rises can be good economically as well as socially. Some tax cuts can be good for the same reasons if affordable. It all of course depends upon which ones and to what extent in both cases. All you are doing here is wandering into the weeds. A large fraction of government expenditure is of little economic value and the amount of tax that falls on economically damaging activity is very small. So, as a rule of thumb, my position is a pretty good guide. Most expenditure is socially and often economically necessary, and there has since the dawn of civilisation always been a need to levy taxes. But there are still wasteful expenditures in the sense that they are not needed and are economically and socially unnecessary. Large handouts in the form of winter fuel payments to some who are clearly well off enough not to need them is one obvious example of wasteful expenditure. But there are areas of our society that are desperately crying out for more funding, notably local authorities, the NHS, schools, the police and the armed forces, and there is of course the pressing need to find a viable way to fund the growing cost of adult social care. How we find the money for this without damaging the economy is the biggie. There is very little scope for increasing taxes on incomes. But a land value tax and taxes on non-primary dwelling properties might raise more money in ways that do more economic good than harm, but it needs to be done right. Landlords just piling costs onto tenants is a potential problem, as is landlord flight from the private rental sector altogether. There would need to be measures in place to mitigate or limit all this. So getting it right would require very careful thought. |
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Post by Orac on Apr 6, 2023 10:51:27 GMT
All you are doing here is wandering into the weeds. A large fraction of government expenditure is of little economic value and the amount of tax that falls on economically damaging activity is very small. So, as a rule of thumb, my position is a pretty good guide. Most expenditure is socially and often economically necessary, and there has since the dawn of civilisation always been a need to levy taxes. What fraction of government expenditure's value is lower than the value released by not taxing and not spending is a matter of debate - i would put it at significant, which means that decisions to tax higher rather than lower come almost entirely at the expose of productivity. |
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Post by see2 on Apr 6, 2023 19:30:15 GMT
Your previous post that I criticised is ridiculous, maybe you should take another look at it before projecting your stupidity onto me. I dont need to project stupidity on to you - you have far too much of it already. Imposing your line of stupidity onto my posts is your way of hiding from my original comment. You can play mind games with yourself, that's good for a chuckle, but your mind games don't work on me. |
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Post by zanygame on Apr 6, 2023 19:44:06 GMT
What I responded to was. "'Tax breaks' get mostly eaten up by the bureaucrats and tax lawyers" I know you broadly don't understand economics, but i'm not interested in giving you argumentative lessons on how reality works. My main point is reduce taxesSurely I will not be taking economics lessons from you. But I'm not as rude as you so I wont respond to your insult. Safe to say its usually when someone's arguments run out that they turn to petty insults or pretence of superior knowledge. |
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Post by zanygame on Apr 6, 2023 20:08:53 GMT
Lowering taxes too much leaves insufficient revenue to fund all that needs to be funded resulting either in spiralling national debt or spending cuts that are so severe as to be regressively, economically and socially damaging. To summarise- A tax policy is a choice between lowering economic activity and lowering government expenditure. Tax has very little effect on investment. Ask any inventor or entrepreneur if they considered the tax rate when they set up and they'll laugh at you. Much the same with investors, they want a winning idea and a stable economy, that's how they get a return. Big business and corporates want low tax, but that's because they are already successful and because they are successful they are not going to pull out unless the tax makes profit impossible. |
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Post by Pacifico on Apr 6, 2023 21:19:28 GMT
Safe to say its usually when someone's arguments run out that they turn to petty insults or pretence of superior knowledge. OK - so any pretense of superior knowledge is bunk Hmm.... |
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Post by zanygame on Apr 6, 2023 21:25:12 GMT
Safe to say its usually when someone's arguments run out that they turn to petty insults or pretence of superior knowledge. OK - so any pretense of superior knowledge is bunk Hmm.... Exceptions prove the rule. This is a case of an extreme tax being claimed as a cause for pausing investment. But its hardly the norm. |
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Post by zanygame on Apr 6, 2023 21:28:45 GMT
The North Sea’s biggest producer has complained that the windfall tax on oil and gas companies “all but wiped out” its profits last year, at the same time announcing new shareholder pay outs that take the total to $1bn since the end of 2021
Poor souls
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Post by Pacifico on Apr 6, 2023 21:34:19 GMT
Exceptions prove the rule. This is a case of an extreme tax being claimed as a cause for pausing investment. But its hardly the norm. well as highlighted in the article, the OBR are forecasting a slump in investment caused by the higher business taxes. what leads you to believe their forecast is incorrect? |
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Post by zanygame on Apr 6, 2023 22:08:59 GMT
Exceptions prove the rule. This is a case of an extreme tax being claimed as a cause for pausing investment. But its hardly the norm. well as highlighted in the article, the OBR are forecasting a slump in investment caused by the higher business taxes. what leads you to believe their forecast is incorrect? The telegraph is behind a paywall. The Telegraph plays to its audience, just like any media. Those who read the Telegraph want o hear high tax is bad. |
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