Brexit revisited

Higher prices are quite obviously higher inflation. So why increase inflation artificially in order to reduce demand when the intention is to reduce inflation. Can you not see how idiotic is it to attempt to reduce inflation by artificially increasing it?



Your opposition appears to be ideological as usual, in this case a hatred for progressive taxation. It is the very fact that interest rates rises seeking to dampen inflation only effect some people that makes it so ineffective a tool, and why the pain on those people has to be so disproportionate. A levy on income would be far more effective because it would be spread more widely, and thus would need to hit far less hard for that very reason. And the poorest wouldnt pay it. Everyone else would just pay the same small percentage.

Interest rate rises after all are supposed to work by taking more money out of peoples pockets to dampen demand. Why not do that more fairly and effectively by spreading the load more widely and putting the monies raised to socially useful good?

You are seriously allowing either ideological blinkers or self interest to prevent you from understanding a simple to understand idea. 

Do you perchance have a good income with no mortgage or other significant debt, but a few savings? And thus are a net beneficiary of interest rate rises because they increase your income, whilst a tax on incomes would see you sharing the burden too? Surely you are not letting your own greed and self interest affect your judgement? Are you? I seriously thought you were better than that. Or is it totally the case that your ideological blinkers on this one are built out of reinforced concrete?

Are you one of those Thatcherite Tories who think that though everyone earns vastly different amounts, to be fair taxation should be blind to that and the fairest thing of all would be for everyone to pay exactly the same? The sort of self-interested delusion that led people like you to seriously believe that the poll tax was the fairest tax ever devised? And is that perverted notion of fairness influenced by your own self interest too?

lets hope the uk nations are from their slumber and stop starmer from taking power off the back off voter apathy and one man and his dog voting them in. 

Increasing prices increases inflation, so why use the one tax that does that as an anti-inflationary measure when others can achieve exactly the same thing without increasing prices? It truly is an idiotic move as an anti-inflationary measure.

And anything that takes money out of people's pockets suppresses demand, so it is not at all logical to assert as you are doing that increasing prices is the only way to do that. It is a logical fallacy born if ideological blinkers. The most effective and least painful way of suppressing demand as an anti-inflationary measure is to spread the load as widely as possible, as fairly as possible, in a way that does not itself put up prices.

And yet you insist on seeing this in ideological terms as wealth redistribution which is frankly nonsense. I am advocating a levy on income whose percentage would be the same for all earners, it is not a plan to take from some and giving to others. And you seem to believe that such a move cannot work because it would exclude the very poorest who are spending the very least, yet interest rates supposedly work fine even though a far smaller percentage of people pay them? Your ideological assumptions are leading you into grotesque and painfully obvious logical inconsistencies.

And are you really falling back upon the risible argument that no one else does this so why should we? Really? Instead of in the first place actually understanding it rather than reinterpreting it according to your own ideological assumptions, and in the second actually debating the proposal logically?

Every new and better idea has to start somewhere. If "nobody else is doing it so why should we?" becomes a failsafe way of preventing us as a nation from going our own way and trying to think of better and more effective ways of doing things, we will never with such an attitude ever become a world leader in anything.

Surely that depends on the rate of tax. I agree an increase of 1% has little effect on any ones spending, but an increase of 25% would have a dramatic effect across the board. 

I agree interest rates is a one size fits all badly. 

Yet you seem to think interest rates work just fine and dandy in doing that even though they hit far fewer people. With a levy on incomes the ones not paying would tend to be the ones with least discretionary spending to start with who are thus contributing the least to any demand excess that we are trying to suppress. 

Interest rate increases hit so few people in comparison that they have to be tough to have any effect at all. So many people from across the income range remain unaffected. Private tenants might be hit indirectly by landlords offsetting their increased mortgage costs onto tenants, so that landlords take no hit at all whilst their often poor tenants do. Social housing tenants meanwhile are immune to this yet entirely unaffected by interest rate rises regardless of how much they are earning. A young person on a high income but still at home with their parents is entirely unaffected. Anyone in fact without a mortgage - or any other significant debt vulnerable to rate changes - is entirely unaffected. Which is why as a tool it is so ineffective.

And you keep insisting on my idea of a small levy on income set at the same rate for all earners as somehow redistribution and therefore bad. It is not. It takes the same percentage from everyone whilst giving to no one. Note particularly the words "same percentage" and "giving to no one" in trying to understand it in non-ideological terms. Wealth redistribution it isnt. Spreading the load fairly in proportion to incomes is what it is. Those with more discretionary income would tend to pay more of course which simply increases the effectiveness of the idea, but only because they earn more. The actual percentage they pay is exactly the same.

And whilst decrying non-existent wealth redistribution in my idea, you fail to see that interest rate rises really are redistributive because they tend to take money from those in debt who often include both struggling mortgage payers and many poorer people, whilst actually enriching those with little or no debt and much in the way of assets or investments. Interest rate rises, and indeed rate reductions, are inherently redistributive. Rate rises tend to redistribute wealth towards the wealthier elements. Rate cuts do the opposite, tending to redistribute wealth away from wealthier elements.