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Post by zanygame on Jul 15, 2023 12:18:58 GMT
If you want to use taxation to reduce demand then the obvious way is to increase VAT to 25%. But we both know that is not what you had in mind - it's your usual 'tax the rich' mantra that would have no effect on general demand in the economy. The obvious way to reduce inflation is to do what works in other economies - stop having artificially high prices for energy. The only big effect i can see this is having is to reduce productivity. The government taxes people, gives the money to its employees, who then compete for the purchase of a reduced number of goods. Ie it is, if anything, inflationary. Only if you assume the government would give the extra income to its employees. They certainly show no leaning in that direction, forcing strikes on staff who's salaries are reduced by 30% The money could just as easily be used to reduce borrowing. Far better than giving it to rich bankers. What do they do with it? |
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Post by Orac on Jul 15, 2023 12:31:08 GMT
The only big effect i can see this is having is to reduce productivity. The government taxes people, gives the money to its employees, who then compete for the purchase of a reduced number of goods. Ie it is, if anything, inflationary. The money could just as easily be used to reduce borrowing. But you still reduce productivity with the extra taxes. It might be better to reduce borrowing without increasing taxes, or even better still, reduce borrowing and reduce taxes. |
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Post by zanygame on Jul 15, 2023 12:53:43 GMT
The money could just as easily be used to reduce borrowing. But you still reduce productivity with the extra taxes. It might be better to reduce borrowing without increasing taxes, or even better still, reduce borrowing and reduce taxes. How do increased taxes reduce productivity while increased interest rates do not? |
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Post by sheepy on Jul 15, 2023 13:31:24 GMT
No it won't reduce the national debt it never has and as for shortfalls it will be swallowed up as it always is in pet projects, what it might do though is create a situation where government borrowing will increase as its take rises. What it is really Zany is a big con. It is only a matter of getting enough votes to keep it going. I disagree. Extra income from tax has often been used to reduce national debt. In any case the two others factors That is reduces spending across the board That its better than giving it to the already rich. Outweigh (IMO) any downside you see. Well of course you do, as you believe the same old trotted out by the Westminster party until they get in. |
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Post by zanygame on Jul 15, 2023 14:04:13 GMT
I disagree. Extra income from tax has often been used to reduce national debt. In any case the two others factors That is reduces spending across the board That its better than giving it to the already rich. Outweigh (IMO) any downside you see. Well of course you do, as you believe the same old trotted out by the Westminster party until they get in. I believe in facts. |
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Post by Dogburger on Jul 15, 2023 14:05:07 GMT
And while all that is going on the rich get richer , profits and dividends doing very well as are wages and bonuses of the selected few . Thats where your inflation is . The government/BoE is targeting the wrong people It's a bank bail out by the backdoor, mortgage payers bailing out the bank, yet again the tax payers foot the bill for the banks utter incompetence, and even worse the government are sitting back and allowing it to happen, it's getting that way that the Tories are too afraid of 'upsetting' the establishment, they are being walked all over, Civil Service, public sector, the Woke, illegal migrants, Just Stop Oil, I've no idea what they are thinking of. They are not thinking , they are being led |
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Post by sheepy on Jul 15, 2023 14:07:17 GMT
The same facts that have proved not facts every other time they have been put up as facts.
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Post by Fairsociety on Jul 15, 2023 14:28:03 GMT
Wealthy people don't spend money, that's why they are wealthy, it's the little people who keep the economy flowing, hospitality, cinemas, high street shops, electrical shops, furniture shops, fast food joints, pubs, so on and so on, yes it's the little people keeping the wealthy wealthy.
They take more and more money off the little people until they have nothing left to spend, so we end up with no one spending money, then we have a economic crash.
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Post by zanygame on Jul 15, 2023 14:34:10 GMT
The same facts that have proved not facts every other time they have been put up as facts. Not those facts. The fact that historically government borrowing has gone down as well as up. |
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Post by Orac on Jul 15, 2023 14:43:06 GMT
But you still reduce productivity with the extra taxes. It might be better to reduce borrowing without increasing taxes, or even better still, reduce borrowing and reduce taxes. How do increased taxes reduce productivity while increased interest rates do not? I didn't say that that was the case. The extra taxes are still adding costs The reason (imo) why interest rates are better is because they select for efficiency, while our taxes tend to select against efficiency. |
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Post by bancroft on Jul 15, 2023 14:59:14 GMT
COVID spending was massive and took us up to 100% debt to GDP
So we opened the economy again and people started moving and spending yet many had either lost their businesses or were made redundant. Many oldies will cash-in pensions as due to corps preferring to employ diversities = white working class to the back of the queue. Some have moved into food retail or driving. Many also have things like IBS so can work on a pc yet not in mobile jobs.
Then Ukraine war drove up wheat, energy and fertiliser costs, so inflationary across the board and alsofrom reduced supply.
Then we started spending to support Ukraine, outflow of money.
WFH has also impacted retail outlets as many now prefer it, not really less demand just moved yet will impact food retail in the cities.
Also never forget the US, we stay close to them and they have raised rates too.
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Post by Pacifico on Jul 15, 2023 17:32:25 GMT
Wealthy people don't spend money, that's why they are wealthy, it's the little people who keep the economy flowing, hospitality, cinemas, high street shops, electrical shops, furniture shops, fast food joints, pubs, so on and so on, yes it's the little people keeping the wealthy wealthy. They take more and more money off the little people until they have nothing left to spend, so we end up with no one spending money, then we have a economic crash. If the wealthy dont spend money then taxing them more is not going to reduce inflation that is caused by excessive demand. Congratulations - you have just destroyed Zany's entire argument..  |
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Post by Handyman on Jul 15, 2023 17:43:39 GMT
Workers Pay rises will mean it may take longer for Inflation to be brought down, as they say One Mans Pay Rise is another mans Price rise
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Post by Fairsociety on Jul 15, 2023 17:53:50 GMT
Wealthy people don't spend money, that's why they are wealthy, it's the little people who keep the economy flowing, hospitality, cinemas, high street shops, electrical shops, furniture shops, fast food joints, pubs, so on and so on, yes it's the little people keeping the wealthy wealthy. They take more and more money off the little people until they have nothing left to spend, so we end up with no one spending money, then we have a economic crash. If the wealthy dont spend money then taxing them more is not going to reduce inflation that is caused by excessive demand. Congratulations - you have just destroyed Zany's entire argument.. He's already acknowledged that with 'like'.
the savvy wealthy people write most off their spending off to the tax man, or claim taxes via some tax scam or another.
"The Cayman Islands don't have a corporate tax and act as a haven for multinational corporations to shield some or all of their incomes from taxation. The Cayman Islands do not impose taxes on residents and are considered tax neutral".
So you see one way or another 'wealthy 'UK' people, don't actually contribute very much to our economy, they are basically wealthy scroungers, they are most likely registered in the Cayman Islands |
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Post by zanygame on Jul 15, 2023 19:26:45 GMT
How do increased taxes reduce productivity while increased interest rates do not? I didn't say that that was the case. The extra taxes are still adding costs The reason (imo) why interest rates are better is because they select for efficiency, while our taxes tend to select against efficiency. That's no evidence, just you saying the words. And you did say it, in your bid to show interest rates are better at controlling inflation than tax rises. You said that taxes reduce productivity, without saying so do interest rates. |
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