Unpleasant Realities 1: Tthe Deficit & The Debt

[Segilla]

Sorry, I did mean avoidance.
It seems that if you have cash to put away you can increase its value by using an ISA envelope.

Quite how building societies justify a reduced rate compared with an equivalent non-ISA product seems to be simply a greedy hand dipping into the pot, and there is absolutely nothing that can be done about it.

[french frank]

Quite how building societies justify a reduced rate compared with an equivalent non-ISA product seems to be simply a greedy hand dipping into the pot, and there is absolutely nothing that can be done about it.

I suppose it's the difference between getting interest and getting dividends (from stocks and shares).

Are National Savings certificates considered a form of tax avoidance?

[Lateralthinking1]

Sorry, I did mean avoidance.
It seems that if you have cash to put away you can increase its value by using an ISA envelope. Quite how building societies justify a reduced rate compared with an equivalent non-ISA product seems to be simply a greedy hand dipping into the pot, and there is absolutely nothing that can be done about it.

I am not quite following this thread. However, we have been here before on the subject of ISAs. They are in many ways an extension of TESSAs which John Major introduced - I do remember that well - plus PEPs.

Everyone in theory has access to ISAs. They are not only open to those who can afford expensive accountants. In that way alone, they should be seen as a part of any Government's overall policy, arguably specifically on tax. There is a world of difference between looking for loopholes and following up on what in modern terminology would be described as a Government nudge.

The only way in which you could compare the two situations is if you interpret ongoing tax loopholes as being tacitly supported by Governments, whatever their statements to the contrary. While among the cynical of us, there is some undoubted belief in the lack of seriousness in tackling evasion through loopholes, even Mr Osborne wouldn't dream of speaking about the loopholes using the positive language generally applied to ISAs, nor should he. Tax loopholes were never introduced with fanfare in a budget.

[aka Calum Da Jazbo]

well having started the thread i had rather hoped that we might discuss the debt aned deficit which are a]huge and b] national emergency or crisis .... and deserve more serious consideration that Mr Austerity Osborne gives them ... he is just playing politics it seems to me ... if they are very serious and daunting it seems to me there needs to be a much more radical approach to government spending and taxation that the Cabinet seem capable of considering ...

and i had become rather disenchanted, fed up even, with all the ins and outs of allowances etc on the budget thread which are or are not fair but scarcely relevant to the crisis ... so i would be grateful if triangles and isa etc could continue elsewhere ... does any one else feel the national debt and the deficit are such serious issues as i am indicating?

the Coalition Sir Gus O'Donnell and M King Esq all said it was a big bad crisis .... and now they are failing to live up to the billing they gave it in my view ....

[Lateralthinking1]

does any one else feel the national debt and the deficit are such serious issues as i am indicating?

For what it is worth, I don't (know). That means somewhere between I don't and I don't know. The sensible side of me - almost prudent - believes that it is very important to have finances in good order. The side of me that follows the news is less sure about the current situation(s). They seem to have huge amounts of money to spend on everything they value. No urgent cut backs on war games and track and field, royal weddings and lines to Brum, MPs' bar subsidies and repeat research visits to the Arctic Circle.

Some of it is excuse for introducing change to public ownership. Plus we were paying off the American loan from the 1940s to the 1990s. All the angst seems a tad short-termist. Having said as much, it is very hard to see what we will be exporting in 2062 and therefore to know where the money will be made to repay and sustain. My view is that there should be all grist to the mill in fundamentally reforming the structures of western capitalism. This to me is the best chance. But I am not seeing it happening.

[Serial_Apologist]

We really have to start thinking far ahead - outside the boxing match. Some alternative perspectives?

http://www.transitionculture.org

http://www.collapsonomics.posterous.com

http://www.darkoptimism.org

[Vile Consort]

During the boom years that Broon presided over (and claimed much of the credit for) he should have been building up our reserves to see us through harder times ahead. Instead he built up debt. Now we have to pay the price. At least he had the sense not to take us into the Euro!

[Serial_Apologist]

During the boom years that Broon presided over (and claimed much of the credit for) he should have been building up our reserves to see us through harder times ahead. Instead he built up debt. Now we have to pay the price. At least he had the sense not to take us into the Euro!

Yes but while Broon didn't foresee the significance of that debt, neither did Cameron, Clegg, Sarcozy, Merkel or any of the "risk assessors" now making Cassandra-like prognostications about Britain's (or anyone else's) creditworthiness, since ALL western government's (apart from some Scandinavian ones) had plumped hook, line and sinker for the model based on finance capital being the "wealth creator", and kept their eye off the most important ball of all, which is the price "we" are now having to pay.

[teamsaint]

The idea that we are highly taxed is part of the "script"

I agree with a lot of what you say about "scripts".
but.....

We pay around 40% of all income over to our beloved governments.
Some is well spent, much is not.
by modern industrialised economy standards, our overall tax burden is in the normal zone.
We need to collectively pay for things we really need to buy collectively (health care, defence, social security, etc).

But much of the money we entrust to our lords and masters is spent on insane wars, a chauffeur for the mayor of Stoke, first class train travel for certain officials, and road schemes that don't seem to need doing, and bring little improvement.

the tax for those thing needs reducing. Tax is not really inherently good.

[MrGongGong]

I agree with a lot of what you say about "scripts".
but.....

We pay around 40% of all income over to our beloved governments.
Some is well spent, much is not.
by modern industrialised economy standards, our overall tax burden is in the normal zone.

precisely
not really exceptionally high
but
as to what it's spent on

(RBS Bailout - £45 billion, Northern Rock bailout - £100 billion,) for example

[teamsaint]

precisely
not really exceptionally high
but
as to what it's spent on

(RBS Bailout - £45 billion, Northern Rock bailout - £100 billion,) for example

The government "script", if you like , is that total tax take of 40% is just fine.
i happen to think that governments like taking a really big chunk of our earnings, as it keeps us in their grasp.

I am quite convinced that we could have great public services, and strong and fair welfare provision, and all the other things that we probably agree on, at a much lower level of taxation, which of course would be a good thing.

As you say bank bailouts, and i add wars, insane road "improvements", spectacularly inept government computer shemes, the olympics(which they lied about)etc etc all add to our tax bills.

[french frank]

We pay around 40% of all income over to our beloved governments.

Does that mean that the total amount of tax averages out at 40% each, or that each individual pays a sum amounting to, roughly, 40% of his/her income?

Tax is not really inherently good.

Well, without it who would pay for public services? I'd say tax is 'inherently' good, even if the system is manipulated and mismanaged by those in power.

[Eine Alpensinfonie]

I'd say tax is 'inherently' good, even if the system is manipulated and mismanaged by those in power.

[Beef Oven]

I have dreamed up a cunning tax-avoidance scheme (act quickly before the government closes this loophohle).

We can avoid paying a large part of the 40% tax levy by limiting expenditure to food, books, wheelchairs and children's clothing. The money saved can be put into an ISA.

This is entirely legal and the government can do nothing about it.

[aka Calum Da Jazbo]

The debate we need to have is intellectual, not party political. One doesn't have to be a Conservative to support Osborne's cuts (evidently the Lib Dems do), and one doesn't have to be Labour to oppose them. The intellectual debate opens up a wide field for distinguishing between good and bad capitalism. It needs to be framed in a European as well as a British framework, since the eurozone's recovery prospects are even more dire than our own, and Europe offers examples of a more benign capitalism than our own Anglo-American model. It is only through vigorous intellectual give and take that one can hope to rekindle people's interest in politics.
Skidelsky in today's graun

hear bloody hear ....sense emerges