Osbornes budget

[french frank]

It gives one no pleasure to say this, but there really is no alternative to a class analysis.

But it is middle-class and upwards, rather than aristos, v. the rest of us: Stephen Hester went to a comprehensive school, and Fred Goodwin is the son of an electrician.

I agree with Owen Jones's analysis, but an analysis is one thing, solutions another.

On income tax you could reintroduce the 90p tax. Very enticing. It would still catch plenty of public sector employees (including people at the BBC!) but my hunch is that it would simply force down a certain number of those high salaries, meaning those people wouldn't be so rich but it wouldn't bring in the tax revenue either. Those in private business would engage in more tax avoidance, like moving abroad. From those people, instead of getting tax at 45p-50p the Exchequer would get nothing at all.

Analysis is fine, but how do you really hit the rich, short of seizing substantial assets from them?

[Serial_Apologist]

But it is middle-class and upwards, rather than aristos, v. the rest of us: Stephen Hester went to a comprehensive school, and Fred Goodwin is the son of an electrician.

I agree with Owen Jones's analysis, but an analysis is one thing, solutions another.

On income tax you could reintroduce the 90p tax. Very enticing. It would still catch plenty of public sector employees (including people at the BBC!) but my hunch is that it would simply force down a certain number of those high salaries, meaning those people wouldn't be so rich but it wouldn't bring in the tax revenue either. Those in private business would engage in more tax avoidance, like moving abroad. From those people, instead of getting tax at 45p-50p the Exchequer would get nothing at all.

Analysis is fine, but how do you really hit the rich, short of seizing substantial assets from them?

Being retired, and therefore lacking the kind of collective muscle needed to change things outside the given framework on which the running of things is based, there's nothing much I can do, FF. And, given the constitution of the existing government, I wouldn't expect anything different from them than what we have got now. What I would be prepared to do is volunteer my assistance to any effort by working people, call it civil disobedience if you will, to take over and run things first of all on the needs basics of most people, directing science and technology to designing and making and growing stuff that lasts and therefore safeguards natural resources and doesn't pollute in the production or the needing of long-distance transportation. A kind of WW2 effort against a common enemy that would bring back that sense of a nation acting as one irrespective of class, except in this instance the "enemy" would be an economic system that is wasteful, disjunctive with the natural order, doesn't work consistently to the benefit of the majority, only fitfully, then either takes fought-for gains away or conduces internecine strife between and within classes. The details of when and how would take more than a paragraph.

[aeolium]

On income tax you could reintroduce the 90p tax. Very enticing. It would still catch plenty of public sector employees (including people at the BBC!) but my hunch is that it would simply force down a certain number of those high salaries, meaning those people wouldn't be so rich but it wouldn't bring in the tax revenue either. Those in private business would engage in more tax avoidance, like moving abroad. From those people, instead of getting tax at 45p-50p the Exchequer would get nothing at all.

Analysis is fine, but how do you really hit the rich, short of seizing substantial assets from them?

I don't think you reduce the higher rate of tax on the basis that they are using tax avoidance measures, and without giving that higher rate a chance to operate over a number of years, when declared income can not simply be shifted to the previous tax year. As a budget commentator remarked recently, why have we (in England) got outdated and fairly narrow property tax bands based on 1991 house values? Why not extend the bandings and revalue the property ratings? The wealthy are getting away very lightly with property taxation and the rest are contributing disproportionately - someone with a £320K property will pay the same council tax as someone with a £10 million mansion. Crack down on tax avoidance in every way, not least by recruiting a large team of HMRC tax specialists devoted solely to reviewing (and proposing revision to) tax legislation for loopholes and going after wealthy tax evaders including multinationals. The recent shambolic HMRC episodes with Vodafone and other companies where the companies appeared to be let off huge tax liabilities were disgraceful.

There are several reasons why having the superrich at all is damaging to society. One is that having such huge inequalities in wealth is in itself damaging and societies that do not have such inequality tend to be better (see, e.g. The Spirit Level) Another is that it set ups as aspirational a mode of living which is essentially planet-damaging and unsustainable (multiple and hugely wasteful properties in several countries, multiple gas-guzzling cars, yachts, private planes, etc). It really would be better if ostentatious displays of wealth were viewed with contempt and the perpetrators treated as social pariahs. Unless we can move away from an idea of society where everyone tries to obtain more and more, and consume more and more, we're doomed. Taxing the rich heavily helps to send a negative message about excessive wealth and consumption, helps to redress the inequality in society, and even helps to save the rich themselves from pointless indulgence.

[Lateralthinking1]

But it is middle-class and upwards, rather than aristos, v. the rest of us: Stephen Hester went to a comprehensive school, and Fred Goodwin is the son of an electrician.

I didn't know which quote to include as I agree with nearly all of the comments. For a direct link, it is very high wealth rather than aristos. The idea that "aristos equal very high wealth" is more about likelihood for they are a bit of a mixed bunch. Have been for most of my lifetime. What the backgrounds of the MPs do is act as a symbol of wealth and link it closely to background. I can't think of one who is of that class and not well-off. If they were, they would probably be painting in an attic rather than a politician.

I think that there were many ordinary people in their 70s, 80s and 90s on the Aldermaston marches in the early 1960s. In more recent years, Jack Jones was a figure for elderly rights and then Joan Bakewell but she was appointed. Roots action is needed.

I agree with the point made about Council Tax banding. Throughout the country, people are doubling the size of their houses and still in the same band as that applied in 1991. It is quite ridiculous, and unfair, that the assessments should apply 21 years on.

I agree that the budget is not good news for the Government. Swinging voters in the main are not the very poorest. They are more in the low-middle bracket. The other thing about them is that, unlike many students, they vote. The Granny Tax is one move too far for many. Whatever one's views - and the next two don't get me really jumping about - the media vibe in the South East is that people are furious about the minimum alcohol pricing and forthcoming petrol increases. It is not an election winning package.

Having said as much, we are seeing in London how personality can override anything. Johnson and Livingstone were neck and neck three weeks ago, Now Johnson has an eight point lead. My impression is that he is to the right of Osborne. He's playing it down.

[Simon]

Unless we can move away from an idea of society where everyone tries to obtain more and more, and consume more and more, we're doomed.

Well, I wouldn't go quite that far, but not for the first time, Aeolium hits the root of the problem.

I have no intention of wasting time rebutting some of the tired old class-warrior comments made by some on here, but in general most of today's problems are not the fault of the system that creates wealth and profit, but of the attitudes in the society in which that wealth is generated. They are also, of course, the result of individual inequalities, which, try as the left might, it can't avoid. Man is not equal, and never will be.

If everyone were magically "equalised" tomorrow - the same amount of wealth and property - within a month the same old idifferences would be showing. Some would have wasted their resources and be reliant again on charity and benefits, others would have increased theirs and be paying the taxes to support others.

That a more equitable tax system can help, is a given. Unfortunately, neither this lot nor the last lot nor the next lot are likely to manage that to any great extent - too many snouts in the trough.

[Simon]

What I would be prepared to do is volunteer my assistance to any effort by working people, call it civil disobedience if you will, to take over and run things first of all on the needs basics of most people

A truly terrifying thought. And you and your mates decide "the needs", eh?

[teamsaint]

A truly terrifying thought. And you and your mates decide "the needs", eh?

well we could try giving people a decent state pension at a sensible age, a minimum wage you could actually live on, and housing priced at a level(to rent or buy) so that you don't need to be in a higher rate tax bracket to afford a home.

Oh , and we could keep the NHS free at the point of use for all, not just for those that the private medical companies are going to want on their books.

If SA agrees that lot for starters, I am with him !!

[Lateralthinking1]

That a more equitable tax system can help, is a given. Unfortunately, neither this lot nor the last lot nor the next lot are likely to manage that to any great extent - too many snouts in the trough.

Nor indeed are they likely to manage the benefits system to any great extent. We are all aware of the frequent Daily Mail type stories of people with eight children who have been housed in a mansion for years and never worked. A good reaction is "how do they manage to dig out these unusual stories?". Another good reaction is to accept that the stories have probably been nowhere near as unusual as those of us who support the benefits system would like to think.

My feeling is that Governments of all political colours let it slide and slide for decades. People in fairly large numbers did take advantage even though the vast majority of claimants were in genuine need. And the moment they clamp down across the board? You've guessed it. The one when they are creating conditions for unemployment and real worry, and in some circumstances actively arranging job loss, while claiming that their objective is to get people back into work.

It isn't only unfair and bloody-minded. It shows how those in Governments are too often, frankly, lousy managers of resources. I see that as a problem about individuals rather than the system itself. It does my head in actually - that idea of "you've got to lose your job" and "why the hell aren't you in work?". It is like dealing with people who are "not quite right", if you get my gist.

[french frank]

The revaluation of property is the one that Labour ducked out of. It was supposed to happen in 2007(?) but they weren't going to touch it until after the election. Although it's an obvious thing to do - and, yes, needs to introduce more bands - it's not without its difficulties. In Wales the revaluation was very unpopular with the large number of householders who were placed in a higher band. And it could hit pensioners who have lived in their homes for a long time and now find the value has rocketed. Still, the coalition couldn't be much more unpopular, so they might as well do it now ... The "mansion tax" is a blunter instrument but looks as if it's creeping back on to the agenda. (LibDem policy has been for a local income tax but that's clearly far too radical for the politicians - and probably for the public too. Land tax an option too.)

The super-rich (how rich do you have to be?), though, are a global evil. My guess that the gap between the (very) rich and the poor has increased everywhere. I'd like to know how other countries have dealt with the problem.

[french frank]

Hmmm, I see the Guardian money editor agrees with me on the 'granny tax'. How could he have got it so wrong?

[Lateralthinking1]

Hmmm, I see the Guardian money editor agrees with me on the 'granny tax'. How could he have got it so wrong?

Well, for a start in believing a study that claims those in their 20s will be the first generation to be worse off than their parents.

I see a lot of evidence that those in their late 30s, 40s, 50s and even some in their 60s, are worse off than their parents. In fact, I can think of tens of people, if not hundreds, who are at HEO and EO levels in the Central London Civil Service who are in their 40s or just either side of their 40s. They are living in the family home, in box flats, in terraced houses 50-70 miles out, all educated to A'level or degree level, some with families and some without families. All have worked for tens of years for Ministers.

In every case, their parents, married or divorced, live in smart houses, mainly post-1960s, of between 2 and 6 bedrooms, nearly always less educated, often having had similar work roles. So seeing that the ones I mention are hardly at the bottom of the pile themselves, I'd say that the study was a lie. Furthermore, we have no way of knowing what Britain will be like in the 2060s. How can anyone know about life then for those in their 20s now? Why will they be that much worse off? How do they differ from the 50 year olds of today? Perhaps they need to see what the position looks like once they have had some years of work behind them.

As for current pensioners who are on £10Kpa each, which ones are these? Not ones who are wholly reliant on the state pension. Anyhow, this is to fall into the trap. There may be generational trends but wealth difference is absolute and crosses the ages.

[teamsaint]

Hmmm, I see the Guardian money editor agrees with me on the 'granny tax'. How could he have got it so wrong?

I agree with you too.

The intergenerational stuff will come back to bite us I am afraid.

If you want to think of a really bad deal, imagine you are setting out as an undergraduate next September. The £10K PA in tuition fees alone makes the freezing of the age tax allowance look like a bit of a non issue really.

I suppose they could decide not get educated and join the other 25% of young people currently looking for a job(probably on the now frozen minimum wage).

They have every right to be very angry about the world they have inherited from older generations.

[french frank]

Well, for a start in believing a study that claims those in their 20s will be the first generation to be worse off than their parents.

I see a lot of evidence that those in their 40s, 50s and even some in their 60s, are worse off than their parents.

But it doesn't mean that older individuals won't be worse off than their parents. It means across the entire generation they will be worse off than their parents. I can believe that.

As for current pensioners, who are on £10Kpa each, which ones are these? Obviously not ones who are wholly reliant on state pension.

No. Though if they are only on the basic pension and have little in the way of savings they will be eligible for pension credit. They will also not be affected one way or the other by the 'granny tax', whether ARA continues or not, since they don't pay any tax anyway.

[Lateralthinking1]

I agree with you too. The intergenerational stuff will come back to bite us I am afraid. If you want to see a think or a really bad deal, imagine you are setting out as an undergraduate next September. The £10K PA in tuition fees alone makes the freezing of the age tax allowance look like a bit of a non issue really. I suppose they could decide not get educated and join the other 25% of young people currently looking for a job(probably on the now frozen minimum wage). They have every right to be very angry about the world they have inherited from older generations.

I would say the issue you mention is largely one of their living standards in middle age, ie the right to buy. A lot of it is very valid indeed but an element, kindly, is about ego, both theirs and their parents. The loan - and don't get me wrong, I always supported a grant with only 25% of people going to university : the 1980s position - will not be payable until salaries are above a certain limit.

Wage levels aren't rising much so more will not be at that level for some time. Many will not buy houses although many will. Of those who don't, a significant percentage have parents who own their own houses so they will inherit in older age.

The student loan will be paid off fairly easily by anyone on a salary of over, say, £40,000, in long-term employment and there will be many of those. Of the rest, it should be payable via inheritance or a little downsizing by middle aged parents.

The people who really have it bad are the ones I witnessed in rural Dorset. Aged about 20, not overly bright, taking out chairs in the morning, working in an ice cream shop, discussing not knowing how to pay back their mothers a loan of £20. I really feel worried for them. The important thing is having access to some form of housing in life and financial security in vulnerable old age.

Bashing the elderly may be in vogue in Britain but you wouldn't get that in Indian or Pakistani families. They are the right way round. They have honour and dignity. Many work together and in that way show very considerable common sense.

Basically if you are fairly average parents and permit your well-intentioned children with the Government to drive a wedge through the generations, thereby reallocating wealth on a generational basis, your children are less likely to benefit from what you have managed to earn, not more. Plus the poorer kids won't benefit sufficiently to make a difference and the Eton kids will rake it in again. This is such an important message to get across. A wealth driven reallocation is very different and one I would support.

[scottycelt]

Hmmm, I see the Guardian money editor agrees with me on the 'granny tax'. How could he have got it so wrong?

If he talked about the super-rich and millionaires like that he would be accused of indulging in 'the politics of envy'.

It would appear the writer would welcome pensioners' retirement reverting to being 'short and miserable' as existed pre-welfare state ... and apparently some of today's young are secretly cheering at the Chancellor's decision. Charming ... there's a touching concern for some of the most weak and vulnerable in society. Mind you, the Money Editor of the Guardian has probably a nice cushy pension himself to look forward to in 2017, unlike so many others. who have to settle for the bare minimum.

These same pensioners went through two big recessions accompanied by sky-high mortgage-rates, unlike today when those are at a record-low and likely to remain so for some time. All generations have quite different challenges to try and overcome.

It is quite extraordinary how old-age pensioners are now portrayed in some quarters as virtual 'scroungers', as they reap some modest rewards from a lifetime's often unhealthy graft, whilst bringing up today's little darlings and grand-darlings, before finally heading for the Great Retirement Home in the Sky, with the cry of 'good riddance' ringing in their ears ... another sad, sad reflection of much of the embedded 'yoof culture' of modern society, imho.