Osbornes budget

[johnb]

I'm not sure where you think she would get her information from, other than the most 'official' figures that exist.Well, here's a really funny joke - or an original way of looking at the matter - depending on where your starting point is.

I think the Chancellor (that's any Chancellor) sees his job as optimising the tax system, at any point in time, as best benefits the Exchequer, which is to say the country's finances. If you think the HMRC are in some kind of conspiracy with Mr Osborne to cook up some figures to benefit his rich friends, you are entitled to that view. I don't share it - regardless of which party is in power or who is Chancellor.

Sure, any chancellor attempts to optimise the benefits to the Exchequer and to the country as a whole. But in any budget there are choices that are made and those choices are influenced by the political and ideological beliefs and objectives of the party in power, whether Labour or Tory.

As far as the HMRC report is concerned perhaps I chose my words badly. With any report the first things I do are find out who commissioned it and what they hoped the conclusion of the report would be. Two reports concerning the tobacco industry are likely to have different emphases if one is commissioned by tobacco industry and the other by a medical institution - even if both were prepared by reputable bodies.

(Incidentally, I wonder whether the HMRC will produce an analysis of the actual tax take resulting from the 50p rate for the following tax year. That would be very interesting to see.)

However, moving on ...Or even £100m, rather than, say, £350 million which is a ball-park figure (based on the £700m which the tax was raising), given that the higher rate of tax is not being abolished and the tax therefore still benefits from a rise from the original 40p to the proposed 45p.

I haven't seen the £700m figure you quote (my ignorance obviously). Perhaps you could give a link. George Osborne said the tax take was a third of the £3b predicted, i.e. £1b, and this ties in with the HMRC's estimate and the figure widely quoted in the press.

(Also, bear in mind that the opportunity to push some £16b to £18b into the previous tax year in order to avoid the 50p will not be an available in 2011-12 and 2012-13.)

No. The new ruling shored up the pension increases by ensuring that the figure that was most financially beneficial should be used - whichever one it was. Neither can you disregard the fact that in this coming year the personal allowance for the over 65s has been increased by 5.6% (my figure, hence E&OE )

The introduction of the 'Triple Guarantee' is a very good thing indeed and should help to maintain the real level of the BSP. I am sure you are correct that it will normally shore up the pension increase as earnings have usually outstripped inflation. However, for the year in question (2012-23) this was not the case, so the increase was determined by the rate of inflation in September the previous year, as had happened previously (though using the CPI rather than the RPI which had been used in the past).

Incidentally, this increase in the BSP for 2012-13 has nothing to do with the measures announced in the Budget, which will come into effect in 2013-14 - though, of course, it is politically useful to conflate the two things.

Well, I suggested otherwise too - that the government did indeed consult with business and would be very grateful to have a bit of good PR at this moment. The important point will be whether the factory is built and the jobs created. Surely?Yes. And I didn't do that. I didn't introduce the Glaxo into the debate - I merely queried whether creating 1,000 new jobs would be such a bad thing (were it to happen, of course).

I wasn't implying that you politicised the Glaxo announcement but that the CEO had done so. My understanding is that the decision to build in the UK was made months ago and was mainly influenced by the Labour government's Patent Box proposal which the Coalition progressed and has now implemented.

[Eine Alpensinfonie]

There are 10,000 centenarians alive in the UK
This will increase to 500,000 by the middle of the century
There will be nearly a million by the end of 2100
Eight million people currently alive will reach 100
1.5 million of those are already over 65, and three million of those are currently under 16 years old
Source: Office for National Statistics

I wonder whether this will still be the case if they force people to work until they are 68. That, combined with the high obesity levels among children, could change the situation significantly. On the Yorkshire coast there are quite a few 100 plussers, but the number under 70 who ride around dangerously on mobility scooters would suggest that in the future, only the Borg will live to a ripe old age.

[teamsaint]

There are 10,000 centenarians alive in the UK
This will increase to 500,000 by the middle of the century
There will be nearly a million by the end of 2100
Eight million people currently alive will reach 100
1.5 million of those are already over 65, and three million of those are currently under 16 years old
Source: Office for National Statistics

i would be very careful about the sources I use.

These are government statistics, produced for a reason, and based on various speculations.
I don't believe them, like I don't believe dave when he says we are fighting for our national security, or gomless when he says there will be a bigger tax take from the rich with a 45% top rate, or clegg when he says he won't raise tuition fees,or blair when he won't introduce tuition fees, (feel free to add you own).

What we do know, is that after almost 70 years of the NHS, and after 70 years of post war (relative) prosperity, only 10,000 people alive today are over 100 years old.
And they tell us that this will increase 50 fold in 38 years. Sorry, don't believe it.

[Lateralthinking1]

I personally would oppose: the loosening of the rural planning laws and the expansion of airport capacity. (Still no tax on aviation fuel?)

How Justine Greening has the gall to preside over further consideration of a third runway at Heathrow beggars belief. She was the loudest critic of the Labour option from the Conservative side. As for a new airport, I'm quite proud of this one. In a funny way the report referred to in para two of the link, but not replicated in full, is mine and it could still have a bearing some nine years later.

Yes, very late in the day, Labour bowed to pressure and a birdstrike study was commenced for Cliffe. While a senior officer was named Senior Project Manager, and signed it off, an EO on an average salary was tasked with finding expertise, going out to tender, arranging and chairing all the meetings, setting yardsticks, overseeing the progress of the study, getting it published and briefing relevant Ministers. That EO was me. I do have a hard copy of the full 229 page report but has anyone else, ha? It wouldn't be fair to overlook all the pages of detail just 'cos no one can find more than just a few eh? Anyhow, if you happen to be against an airport in the Thames Estuary and it turns out that information in some obscure document from 2003 proves highly relevant, think Lateral. In the process you might note that chasm of a difference between reward in the public and the private sectors.*

Cheers. - http://www.guardian.co.uk/environmen...stuary-airport

(* The Senior Civil Service is the private sector in my book while ordinary private sector staff are public)

[Lateralthinking1]

...........It seems that they have scrapped the Air Fuel Tax idea because of the Chicago Convention. Yet another broken pledge from the Coalition Agreement -

http://www.ft.com/cms/s/0/f5df07e4-4...#axzz1psmT1UW8.

They appear to have all sorts of problems generally what with many airlines and green groups complaining about Air Passenger Duty for different reasons and talk of a trade war over the European Emissions Trading System and associated carbon charges.

Looks like an absolute minefield to me.

[Flosshilde]

Are you quite sure, teamsaint, that you're not become a little detached from reality? ".. our environment is increasingly toxic." Really? Despite such recent changes as the banning of smoking in public places, and of lead in petrol? [/URL].

Ah, but our lovely ConDem coalition will change all that by getting rid of all that 'red tape' that so hampers industry & job creation.

[french frank]

Shame on you frenchie for acting as apologist for the 'Sheriff of Nottingham' and his pals.

'Ang on a tick. I'm not defending the budget. I'm simply pointing out some figures which I think are pertinent to the discussion, in order to see how people respond to them. I'm with those whose names I will not mention who say that docking 5p off the top rate of tax wouldn't have been a priority.

We all hate the rich, right? But here's another thought : The top 1% of earners pay almost a quarter (actually just over 24%) of the total income tax revenue. That's how staggeringly rich they are. The top 10% of earners pay over half of the total income tax revenue (53%). And the top 50% of earners pay not far short of 90% of the total income tax revenue (over 88%). I'm not saying they shouldn't pay even more, perhaps the whole lot. But we do have a progressive tax system.

The age allowance issue is (in my view) of minimal importance. At some point (but not this year, when they will be, what? - £112 better off with the rise in age allowance this year, plus a 5% rise in BSP, say another £260) pensioners are calculated to lose on average £83, if their income is high enough to qualify them for age allowance in the first place. Hmmmm. Well, yes, I do realise it's the principle not the money, of course...

You might see that as 'defending' the budget. I see it as putting a case which people are quite welcome to believe, disbelieve, attack, disprove. Or just find interesting.

[PhilipT]

But here's another thought : The top 1% of earners pay almost a quarter (actually just over 24%) of the total income tax revenue. That's how staggeringly rich they are.

Another way of looking at it is that if ordinary people - no, not the disadvantaged and the disabled and the elderly and so on, but those right in the middle - were to get what they earned, with no taxes and no benefits, they'd be worse off. That how staggeringly large is the contribution made by those who earn the most. They are carrying the rest of us.

This is what I find most annoying and misleading about all this talk of "helping the least well off in our society". I'm not saying there shouldn't be a safety net; of course there should, in a civilised society, and likewise a minimum income for pensioners. As for the NHS, there are other ways of guaranteeing basic health care for all; the NHS goes some way beyond basic health care, and costs a fair bit in general taxes as a result, but there's consensus in this country that it's the right way to go. But the message isn't articulated clearly enough to those in the middle that it is not they who are helping the least well off, they are being helped themselves by the most well off, and a little gratitude wouldn't go amiss.

[teamsaint]

but the very rich are very coy about how much of society's income and wealth they enjoy.
They may pay a lot of the tax, but even osborne admits admits that the people at the top are avoiding tax on an industrial scale.
Statistics are very easy to use to justify a position.
The people "in the middle". (and that is a spectacularly diverse group in income terms) are certainly paying their way, both in terms of an overall tax take of over 40%, and in terms of incomes, which are pretty modest to say the least across many sectors.
By any standards, historical or international, the income gap between the top and the rest is big and increasing in the UK. THAT is the source of any supposedly high tax contribution by the top 1%, not the tax system.
The richest people in out society display huge arrogance and quite exceptional greed. Most of the people in the bottom 80/90 centiles are just putting a roof over their heads.
I for one am not about to start being grateful to the top 1%, most of whom are not, in fact wealth creators, but wealth takers.
Genuine wealth creators can reinvest in their businesses to their hearts content and avoid tax that way through capital allowances etc.

[teamsaint]

'Ang on a tick. I'm not defending the budget. I'm simply pointing out some figures which I think are pertinent to the discussion, in order to see how people respond to them. I'm with those whose names I will not mention who say that docking 5p off the top rate of tax wouldn't have been a priority.

We all hate the rich, right? But here's another thought : The top 1% of earners pay almost a quarter (actually just over 24%) of the total income tax revenue. That's how staggeringly rich they are. The top 10% of earners pay over half of the total income tax revenue (53%). And the top 50% of earners pay not far short of 90% of the total income tax revenue (over 88%). I'm not saying they shouldn't pay even more, perhaps the whole lot. But we do have a progressive tax system.

The age allowance issue is (in my view) of minimal importance. At some point (but not this year, when they will be, what? - £112 better off with the rise in age allowance this year, plus a 5% rise in BSP, say another £260) pensioners are calculated to lose on average £83, if their income is high enough to qualify them for age allowance in the first place. Hmmmm. Well, yes, I do realise it's the principle not the money, of course...

You might see that as 'defending' the budget. I see it as putting a case which people are quite welcome to believe, disbelieve, attack, disprove. Or just find interesting.

I agree about age allowance.
On our progressive system, whilst its true that the income tax system is superficially progressive, its also true to say that the tax and benefits/national insurance system is shot through with anomolies, many of which mean that certain people well down the income system face very high marginal rates as their benefits are reduced, and while they contribute full NI. (which the rich conveniently forget to mention they don't pay on most of their income).
THings like age allowance are exactly the kind of thing that contribute to complexity, and which lead us to have higher rates than we could otherwise, whilst still raising the same amount of tax.
Incidentally, the raising of the personal allowance is in my view a really great move, and probably the one thing that the libdems can be proud.All they need to do now is simplify and improve the benefits system to provide real incentives to work, and for all the "wealth creators" to create jobs............

[John Skelton]

But the message isn't articulated clearly enough to those in the middle that it is not they who are helping the least well off, they are being helped themselves by the most well off, and a little gratitude wouldn't go amiss.

That's because it's an absurdly skewed message which fails to mention that since the early 1980s it has been global economic policy to hold down ordinary wages (wage restrain) and to massively increase the earnings, etc. of that 1%. Reflected in the expansion of the income etc. differential between the top 1%-ish and everyone else. The first part of the equation has, of course, fueled the massive increase in personal debt and the massive increase in the amount of liquidity sloshing around the system (until it stopped sloshing, of course). That's not people living beyond their means: that's people needing the means to live somewhere, or at least being told it was fine to find the means to buy all the stuff to keep the top 1% in a position to charitably subsidise everyone else. Not.

http://blogs.wsj.com/wealth/2011/09/26/why-the-rich-pay-40-of-taxes/

What would you and ff like to see - a new form of droit du seigneur introduced?

[Eine Alpensinfonie]

We all hate the rich, right?

It's not the rich "we all hate", but the idea that it's perfectly OK, and that they need tax incentives to enable them to have even more. I doubt whether a single one of them works any harder than many of us do.

[John Skelton]

Direct link to The Economist article http://www.economist.com/node/21530093

Data from the Tax Foundation bears this out. Between 1987 and 2008, the share of income controlled by the top 1% grew to 20% from 12%. That signals a total share growth of 67%. During the same period, their share of taxes went to 28% from 24%, suggesting share growth of 17%.

In other words, the top 1% share of income grew nearly five times faster than their share of taxes.

As The Economist points out, this same dynamic is true in much of the developed world, as globalization showers larger rewards on winners. At the same time, tax rates have come down in U.S., Great Britain to Denmark, France, Japan and many other developed countries.

“Marginal and average tax rates still rise with income, but overall tax structures are much flatter than they were a generation ago,” The Economist writes.

[Eine Alpensinfonie]

It doesn't matter if you tread on a few million ants.

[John Skelton]

OECD warning over income inequality trend

The study finds that tax and benefit policies which reduce inequalities in original incomes have lost much of their bite.

From the mid-70s to mid-80s, the tax-benefit system offset more than 50% of the rise in income inequality. It now manages just 20%.

The study controversially suggests that the better off may need to face higher taxes given that their share of the overall tax burden has fallen in recent years.

Access to work for the unemployed is crucial, the report says, but that requires “not only new jobs, but jobs that enable people to avoid and escape poverty”. In the UK, as in a range of other countries, there has been a rise in the numbers in work but who still fall below official poverty lines so “job quality” is a rising issue. Shrinking the difference between “standard” and “non-standard” forms of employment would help, the report suggests.

http://www.ft.com/cms/s/0/fc77fce8-7580-11e0-8492-00144feabdc0.html#axzz1pmJXKi2k