the economy.

[Balti]

https://www.gov.uk/government/news/britain-leads-clamp-down-on-international-tax-avoidance

The question is how easy is it for any government to clamp down on tax avoidance, this probably happens the world over, stating that loopholes should be closed and Amazon should cough up sounds a tad simplistic, we could do with an expert on the subject

Perhaps we should invest in them then

But the rich rule the world and they get away with responsibility me and you dont.

we need labour to rescue us like they always do lol

great result last time tbf

every time in fact

funny that

 

[bucks]

Don't understand why the chancellor or Dave or someone can't drag the chief exec of Amazon in and say, " look pal, we now how many millions you make here. We know you have a tax weez going, but if you don't get back here with a fucking big cheque to cover what we think you really owe in the next 7 days, we are gonna pull the plug or scamble your fucking website and close down your fucking wharehouse, understand?"

 

[Rascal]

https://www.gov.uk/government/news/britain-leads-clamp-down-on-international-tax-avoidance

The question is how easy is it for any government to clamp down on tax avoidance, this probably happens the world over, stating that loopholes should be closed and Amazon should cough up sounds a tad simplistic, we could do with an expert on the subject

Perhaps we should invest in them then

But the rich rule the world and they get away with responsibility me and you dont.

we need labour to rescue us like they always do lol

great result last time tbf

every time in fact

funny that

With an econonmic mind like yours im suprised you put pennies in your piggy bank

 

[Len Rum]

https://www.gov.uk/government/news/britain-leads-clamp-down-on-international-tax-avoidance

The question is how easy is it for any government to clamp down on tax avoidance, this probably happens the world over, stating that loopholes should be closed and Amazon should cough up sounds a tad simplistic, we could do with an expert on the subject

Perhaps we should invest in them then

But the rich rule the world and they get away with responsibility me and you dont.

we need labour to rescue us like they always do lol

great result last time tbf

every time in fact

funny that

Gordon saved us from financial collapse so at least you owe him that one.
Seem to remember Dave and 'Geoffrey' sitting in the House of Commons' looking like rabbits in the headlights as the crisis unfolded.

 

[Bill]

Perhaps we should invest in them then

But the rich rule the world and they get away with responsibility me and you dont.

we need labour to rescue us like they always do lol

great result last time tbf

every time in fact

funny that

Gordon saved us from financial collapse so at least you owe him that one.
Seem to remember Dave and 'Geoffrey' sitting in the House of Commons' looking like rabbits in the headlights as the crisis unfolded.

funniest thing i've ever read on here. you're a right card.

 

[Len Rum]

You're confusing two things here - the fiscal deficit and the national debt.

If government spending is higher than government income (i.e. taxes and other revenues) then the government has to borrow to finance that gap. So debt will increase by the amount of the deficit (and should decrease if there's a surplus). We've only shown a surplus in 5 out of the last 40 years, including 1999-2001, so government debt will always be increasing. The real question is around the level of debt compared to the growth in the economy and how that impacts the servicing of that debt.

What's happened in the last 10 years or so is that Gordon Brown, as chancellor, did quite a good job of bringing down debt as a percentage of GDP, by ensuring that spending didn't run ahead of income. By 2002 it was down to around 37% of GDP, from a peak of 50% in 1996 as he'd been recording a surplus and paying debt down.

In 2002 he went on a bit of a splurge and started building up a deficit, when there was an argument that, with the strength of the economy, there should have been at least a balanced budget if not a surplus and debt should have been reduced further but debt as a % of GDP started to creep up to around 43% in 2007, when it really should have been not much more than 30%.

In 2008, government spending started to increase dramatically, as the liquidity crisis started to take effect and absolutely ballooned the following two years. By 2010, government debt had increased to nearly 80% of GDP as we were spending far, far, more than we earned as a country.

Since then, Osborne has been trying to reduce the gap between what we spend and what we earn. That's had some limited success and debt as a % of GDP is starting to level off at around 90%. The economic argument is that cuts have to be delicately managed so they don't constrain recovery, as it's recovery that drives up GDP and therefore public revenues. As demand grows, then consumption grows, production grows, income and profits grow and higher personal and business taxes increase government revenues. Some feel that the cuts have been too severe but they are certainly having an impact on the debt/deficit picture. That's at a cost to the ordinary person though.

But that's not happening this time, as I've explained before, due to growth in production not feeding into growth in personal, disposable incomes and this is limiting demand. That latter growth is needed to drive a sustainable recovery. Current projections are that the deficit should be cleared in the next 3 years and we should start recording a surplus by the end of 2018 and that government borrowing (which is not quite the same as the deficit) should cease by the end of 2019/2020. That's how they can talk about tax cuts by that time. The real test will be whether this is achieved or even achievable without a growth in incomes.

Good post.
I do understand it -'Geoffrey' has run a cumulative fiscal deficit of half a trillion over the past five years, hence the increase in the national debt. His aim was to reduce the national debt to 650 billion at the end of this parliament and to start running a fiscal surplus in 2015-16 (LOL). He has failed spectacularly in both respects. However by allowing the deficit to rip each year he has engineered a growth in the economy to coincide with the next election (fuelled also by a temporary property boom).

It's probably just as well he got it wrong as, more by accident than design I suspect, he has engineered a growth of some sort in the economy. Had he hit his original target by cutting even more, we'd be facing another recession just like the eurozone appears to be, thanks to the German failure to invest sufficiently. Their problem is a more severe version of ours, where increased output is not fueled by productivity gains and there are many people (like in the UK) who are supposedly economically active but not really able to stimulate demand. We will probably face the same situation if we don't kickstart domestic demand.

To use the carpet analogy, Bill's suppliers (the carpet manufacturers) can increase output all they like, which will increase GDP. But if not enough people are buying those carpets then any benefit is purely temporary.

I think it's more by 'design' than 'accident' i.e. pretend you're making big cuts (particularly in welfare), without actually doing it. The cap on max benefits from £35k to £26k which was very popular only saved £100M. It's all sleight of hand and smoke and mirrors with the Tories but they're very good at it. 'Geoffrey's' timing of the 'recovery' may not be quite perfect as growth is predicted to slow down in the next quarters and an interest rate rise will put further pressure on the cost of living, the slowdown in Europe won't help him either. Your point about about increased output not being matched by productivity gains could be a key factor in the recovery stalling.

 

[cibaman]

There was never the remotest possibility of the Tories hitting their debt target. They set the target simply to appear tougher than Labour. Alistair Darling set the scene by saying that Labour would halve the deficit over the course of the parliament. That was a very demanding target given the size of the deficit and the state of the world economy. Labour's problem was that they hadn't a cat in hell's chance of hitting the target as they hadn't identified the policies necessary to do so. It would have taken them at least two years of in fighting within the party to gain acceptance of the need to impose any cuts at all.

The Tories should have adopted Darling's target and fought the 2010 election on the basis that they would actually meet it. But they chose instead to set completely unrealistic targets which they've never seriously tried to achieve.

Much the same will happen at next year's election.

 

[Ifwecouldjust.......]

you might have done but the country is riddled with lard arse layabouts whove never lifted a finger other than to sign on, and they dont even have to do that now. fucking shameful.

That is nonsense Bill.

But this thread was about the economy and my reasoning that taxes are too low are sound. I didnt advocate a rise in income tax although i would reintroduce the 50% rate at a higher threshold than it is currently. £40k is too low for people to pay high rate tax, but each rise in the threshold of paying tax benefits those on higher taxes more.

My thoughts on taxation were more about companies based here making billions, taking govt grants out of your hard earned tax but paying almost nothing. They are the real bad bastards. They use the infrastructure and services our taxes pay for but give less back than the scrounger pays in VAT on his cider.

If you cant see that then im astonished

The difficulty in raising tax in the UK is that the majority of the companies aren't based here and therefore won't have to pay tax here, and while we keep selling off parts of (what is left) of the UK Manufacturing industry the burden of reducing the deficit will fall on the average UK PAYE tax payer.

A good example of the short term thinking of this government is the award of the Scottish Rail Franchise . to a dutch company Abellio (owned by NS) as such any tax on profit will be paid into the Dutch coffers and not ours. had the franchise been retained by First then not only the franchise fee would be banked by the UK but the corporation tax would be as well.

It will be interesting to see whether Alex Samond and the SNP stand by a let this happen...

 

[mancityvstoke]

Enjoyed a quote this morning


"Working for your poverty".....for some people this is sadly true.

 

[Len Rum]

There was never the remotest possibility of the Tories hitting their debt target. They set the target simply to appear tougher than Labour. Alistair Darling set the scene by saying that Labour would halve the deficit over the course of the parliament. That was a very demanding target given the size of the deficit and the state of the world economy. Labour's problem was that they hadn't a cat in hell's chance of hitting the target as they hadn't identified the policies necessary to do so. It would have taken them at least two years of in fighting within the party to gain acceptance of the need to impose any cuts at all.

The Tories should have adopted Darling's target and fought the 2010 election on the basis that they would actually meet it. But they chose instead to set completely unrealistic targets which they've never seriously tried to achieve.

Much the same will happen at next year's election.

Hence the 'Con' in Conservative.