The Labour Party

[Chippy_boy]

And all raising the minimum wage does is cause an increase in prices, shops, cafes, pubs and other small businesses have to make up for the increase in staff wages somehow, yes it's great saying everyone is earning more but no one is actually any better off as a result.

As I said in an earlier post, it's effectively a stealth tax. Everyone's costs go up so that the less well off can earn a bit more.

But raising prices depresses sales, which means less labour required and less jobs sustained. And exports depressed because UK goods are overpriced. It's an unsustainable downward spiral.

The key to greater prosperity is higher value work, greater output and greater productivity. And more people in work. Being in a job is better than being on benefits in so many ways.

 

[aguero93:20]

And all raising the minimum wage does is cause an increase in prices, shops, cafes, pubs and other small businesses have to make up for the increase in staff wages somehow, yes it's great saying everyone is earning more but no one is actually any better off as a result.

If the burden is put on SMEs, yes.

 

[The Light Was Yellow Sir]

At least we’ve got the low tax party in power and not the Marxist scum......

• A new research note, released today by the TPA, reveals that the tax burden in Britain has reached a 49-year high. This year, taxes will account for 34.3 per cent of GDP, the highest since 1969-70 when the figure was 35.0 per cent
• This analysis follows previous research by the TPA which found that the bottom 10 per cent of earners in Britain pay 49.5 per cent of their income in tax

 

[Chippy_boy]

At least we’ve got the low tax party in power and not the Marxist scum......

• A new research note, released today by the TPA, reveals that the tax burden in Britain has reached a 49-year high. This year, taxes will account for 34.3 per cent of GDP, the highest since 1969-70 when the figure was 35.0 per cent
• This analysis follows previous research by the TPA which found that the bottom 10 per cent of earners in Britain pay 49.5 per cent of their income in tax

I don't know what sample of people or profile of people they use for this sort of analysis, but it sounds like bollocks to me.

Consider someone on £25k a year: Half their income in untaxed, the other half is taxed at 20%. NI is 10% IIRC. So they are paying maybe 15% in income tax and NI overall.

To be paying 50% of their entire income in tax therefore they have to be paying nearly 50% tax on everything they spend. That's pretty hard to do when most of your disposable income is going on food or rent, which carry no tax at all.

If this 50% tax is even possible, they'd have to waste a vast amount of their income on booze and fags. A pretty stupid lifestyle choice for people on the breadline worried about how to make ends meet.

 

[The Light Was Yellow Sir]

I don't know what sample of people or profile of people they use for this sort of analysis, but it sounds like bollocks to me.

Consider someone on £25k a year: Half their income in untaxed, the other half is taxed at 20%. NI is 10% IIRC. So they are paying maybe 15% in income tax and NI overall.

To be paying 50% of their entire income in tax therefore they have to be paying nearly 50% tax on everything they spend. That's pretty hard to do when most of your disposable income is going on food or rent, which carry no tax at all.

If this 50% tax is even possible, they'd have to waste a vast amount of their income on booze and fags. A pretty stupid lifestyle choice for people on the breadline worried about how to make ends meet.

Insurance premium tax, council tax, air passenger tax and of course that most regressive tax, VAT.
VAT set at 10% in 1973, on joining the EU. Reduced to 8% after the 1974 election. Increased to 15% in 1979. Increased again (17.5%) in 1991. Domestic power upped from zero rated to 8% in 1994 (supposed to go to the full 17.5% but defeated in Parliament in 1995). Domestic power VAT down to 5% in 1997 and domestic sanitary products and energy saving products down from 17.5% to 5% in 1998. VAT up to 20% in 2011. There’s a theme in those VAT rises but I’m sure you know that.

 

[Chippy_boy]

Insurance premium tax, council tax, air passenger tax and of course that most regressive tax, VAT.
VAT set at 10% in 1973, on joining the EU. Reduced to 8% after the 1974 election. Increased to 15% in 1979. Increased again (17.5%) in 1991. Domestic power upped from zero rated to 8% in 1994 (supposed to go to the full 17.5% but defeated in Parliament in 1995). Domestic power VAT down to 5% in 1997 and domestic sanitary products and energy saving products down from 17.5% to 5% in 1998. VAT up to 20% in 2011. There’s a theme in those VAT rises but I’m sure you know that.

Fair point about council tax.

The rest? No. You don't arrive at a figure of 50% tax on all your income by taking home nearly all your gross income and then paying 20% (for example on VAT) on everything. Do the maths - it doesn't add up.

Let's look at that person on £25k again. They are taking home something like £21k. Let's say their council tax is £2k and they get no relief or benefits.

So they have £19k left out of the £25k income.

If the 50% tax figure is correct, they need to be paying £12,500 in tax and we've accounted for £6,000 of it so far, in income tax, NI and council tax So on their £19k they need to pay another £6500 in tax on that in order to make it to 50%.

That's 34% of their £19k. If they spend half their £19k on food and rent, they have to pay 68% tax on the rest of their spend.

The only way you can do that is by spending all of that on petrol, booze and fags. Nothing else is taxed highly enough.

The analysis IMO is done with a political agenda to paint the lower paid worse off than they are, or certainly than they should be if they exercised any prudence at all. Spend your nights down the Labour club drinking and smoking Lambert and Butler's and yes, I can see how you get to 50%.

 

[Indaparkside]

Fair point about council tax.

The rest? No. You don't arrive at a figure of 50% tax on all your income by taking home nearly all your gross income and then paying 20% (for example on VAT) on everything. Do the maths - it doesn't add up.

Let's look at that person on £25k again. They are taking home something like £21k. Let's say their council tax is £2k and they get no relief or benefits.

So they have £19k left out of the £25k income.

If the 50% tax figure is correct, they need to be paying £12,500 in tax and we've accounted for £6,000 of it so far, in income tax, NI and council tax So on their £19k they need to pay another £6500 in tax on that in order to make it to 50%.

That's 34% of their £19k. If they spend half their £19k on food and rent, they have to pay 68% tax on the rest of their spend.

The only way you can do that is by spending all of that on petrol, booze and fags. Nothing else is taxed highly enough.

The analysis IMO is done with a political agenda to paint the lower paid worse off than they are, or certainly than they should be if they exercised any prudence at all. Spend your nights down the Labour club drinking and smoking Lambert and Butler's and yes, I can see how you get to 50%.

Do they still do lambert and butler??

 

[aguero93:20]

I don't know what sample of people or profile of people they use for this sort of analysis, but it sounds like bollocks to me.

Consider someone on £25k a year: Half their income in untaxed, the other half is taxed at 20%. NI is 10% IIRC. So they are paying maybe 15% in income tax and NI overall.

To be paying 50% of their entire income in tax therefore they have to be paying nearly 50% tax on everything they spend. That's pretty hard to do when most of your disposable income is going on food or rent, which carry no tax at all.

If this 50% tax is even possible, they'd have to waste a vast amount of their income on booze and fags. A pretty stupid lifestyle choice for people on the breadline worried about how to make ends meet.

You're forgetting VAT etc.

 

[The Light Was Yellow Sir]

I don't know what sample of people or profile of people they use for this sort of analysis, but it sounds like bollocks to me.

Consider someone on £25k a year: Half their income in untaxed, the other half is taxed at 20%. NI is 10% IIRC. So they are paying maybe 15% in income tax and NI overall.

To be paying 50% of their entire income in tax therefore they have to be paying nearly 50% tax on everything they spend. That's pretty hard to do when most of your disposable income is going on food or rent, which carry no tax at all.

If this 50% tax is even possible, they'd have to waste a vast amount of their income on booze and fags. A pretty stupid lifestyle choice for people on the breadline worried about how to make ends meet.

Do you really think the ‘lowest 10%’ of earners get paid £25000 a year?

 

[Rascal]

Do you really think the ‘lowest 10%’ of earners get paid £25000 a year?

If the minimum wage was £10 p/h working a 40 hour week you would earn £20,800 per year.

As it currently £7,83 p/h that works out at £16,286.40p per year

Before tax.

Considerably less than the 25K figure.

 

[Chippy_boy]

You're forgetting VAT etc.

No, I really am not. VAT would have to be charged at like 50%+ to make the numbers add up.

 

[Chippy_boy]

If the minimum wage was £10 p/h working a 40 hour week you would earn £20,800 per year.

As it currently £7,83 p/h that works out at £16,286.40p per year

Before tax.

Considerably less than the 25K figure.

Thanks - your post led me to check their analysis.

They are classing the bottom 10% of **households** (not people) as having an average income of £11,500 a year. It's believable therefore that households on incomes that low pay 50% tax because so much of their income goes on council tax.

Rather less headline-grabbing is that the next percentile up the income scale - those on £19k - only pay 32%. Presumably not mentioned in the report since that doesn't suit their political agenda, 32% bring much lower than the 40% or 45% higher earners have to pay.

It also conveniently glosses over the fact that any household with s total income of £11.5k a year is very likely in receipt of all kinds of benefits which effectively mean their rate of tax is lower.

Basically it's an analysis with a political agenda.

 

[west didsblue]

Thanks - your post led me to check their analysis.

They are classing the bottom 10% of **households** (not people) as having an average income of £11,500 a year. It's believable therefore that households on incomes that low pay 50% tax because so much of their income goes on council tax.

Rather less headline-grabbing is that the next percentile up the income scale - those on £19k - only pay 32%. Presumably not mentioned in the report since that doesn't suit their political agenda, 32% bring much lower than the 40% or 45% higher earners have to pay.

It also conveniently glosses over the fact that any household with s total income of £11.5k a year is very likely in receipt of all kinds of benefits which effectively mean their rate of tax is lower.

Basically it's an analysis with a political agenda.

Yep, it says it doesn’t include benefit payments so it’s pretty meaningless.

 

[Rascal]

Thanks - your post led me to check their analysis.

They are classing the bottom 10% of **households** (not people) as having an average income of £11,500 a year. It's believable therefore that households on incomes that low pay 50% tax because so much of their income goes on council tax.

Rather less headline-grabbing is that the next percentile up the income scale - those on £19k - only pay 32%. Presumably not mentioned in the report since that doesn't suit their political agenda, 32% bring much lower than the 40% or 45% higher earners have to pay.

It also conveniently glosses over the fact that any household with s total income of £11.5k a year is very likely in receipt of all kinds of benefits which effectively mean their rate of tax is lower.

Basically it's an analysis with a political agenda.

All analysis come with a political agenda because tax is a political and fiscal tool that governments of any hue can use to garner votes.

What levels of taxation are acceptable depends on political positioning. When I started work I paid 33% tax which I thought was fair and I was given a tax cut by the Thatcher government that I just did not need. On the same wage now I would pay lowest rate of tax and would be better off but I would not need it. I personally would prefer to pay more tax so it funds decent public services and pensions.

It comes down to statist/individualist positioning, the Tory party believe an individual has the right to spend there money as they see fit, Labour prefers that social provision is good enough to alleviate poverty.

There is merit in both arguments, neither are totally right nor totally wrong, the trick is finding the correct balance. Under the Tories the pendulum swings one way, under Labour it swings the other and the result is the tax code is now so complicated it is as thick as War and Peace. I would prefer it was slimmed down and most governments promise to do that but never do, they introduce measures to buy power. It is a rather ludicrous state of affairs when you actually think about it.

I would actually hope everybody would see that taxation is necessary for society to function, only extreme Libertarians would say different I suppose, but one thing that can not be doubted is that taxation has increased living standards across the board. We probably live in a more equitable society than ever before yet still their are anomalies and their are winners and losers.

You often hear Labour tax proposals as being in the same vein as Dennis Healy's famous "tax them until the pips squeak" speech. What people don't know is that is this a misquote and Healy was not referring to the rich, but to property speculators. However the narrative stuck and the Labour party is addled with that quote now. It is a rather clever piece of media manipulation of the masses.

 

[Vic]

Insurance premium tax, council tax, air passenger tax and of course that most regressive tax, VAT.
VAT set at 10% in 1973, on joining the EU. Reduced to 8% after the 1974 election. Increased to 15% in 1979. Increased again (17.5%) in 1991. Domestic power upped from zero rated to 8% in 1994 (supposed to go to the full 17.5% but defeated in Parliament in 1995). Domestic power VAT down to 5% in 1997 and domestic sanitary products and energy saving products down from 17.5% to 5% in 1998. VAT up to 20% in 2011. There’s a theme in those VAT rises but I’m sure you know that.

Some may not. All by the Tories. All reductions by Labour.

 

[Vic]

All analysis come with a political agenda because tax is a political and fiscal tool that governments of any hue can use to garner votes.

What levels of taxation are acceptable depends on political positioning. When I started work I paid 33% tax which I thought was fair and I was given a tax cut by the Thatcher government that I just did not need. On the same wage now I would pay lowest rate of tax and would be better off but I would not need it. I personally would prefer to pay more tax so it funds decent public services and pensions.

It comes down to statist/individualist positioning, the Tory party believe an individual has the right to spend there money as they see fit, Labour prefers that social provision is good enough to alleviate poverty.

There is merit in both arguments, neither are totally right nor totally wrong, the trick is finding the correct balance. Under the Tories the pendulum swings one way, under Labour it swings the other and the result is the tax code is now so complicated it is as thick as War and Peace. I would prefer it was slimmed down and most governments promise to do that but never do, they introduce measures to buy power. It is a rather ludicrous state of affairs when you actually think about it.

I would actually hope everybody would see that taxation is necessary for society to function, only extreme Libertarians would say different I suppose, but one thing that can not be doubted is that taxation has increased living standards across the board. We probably live in a more equitable society than ever before yet still their are anomalies and their are winners and losers.

You often hear Labour tax proposals as being in the same vein as Dennis Healy's famous "tax them until the pips squeak" speech. What people don't know is that is this a misquote and Healy was not referring to the rich, but to property speculators. However the narrative stuck and the Labour party is addled with that quote now. It is a rather clever piece of media manipulation of the masses.

Taxation isn't just about alleviating poverty. It's about enough teachers in schools, enough staff in hospitals, and flowers on roundabouts.

 

[Rascal]

Genuine question - how does Corbyn square raising Corp Tax(squeezing small/medium businesses) and raising the minimum wage(squeezing small/medium businesses)?

I’m all for a fair days wage for a fair days work but but surely he can’t raise both without significant negative impact?

You can of course do both as part of an overall budgetary realignment. It probably would not be feasible to just introduce those two measures alone.

An argument could be made that any business who cannot pay the minimum wage is not a viable business and should be allowed to go bankrupt just as any company not paying there fair share of corporation tax is not a viable company and should also be allowed to go bankrupt. Why should the public subsidise business that is not viable?

When the minimum wage was introduced, it faced huge opposition yet proved to have none of the negative connotations associated with it. Business actually thrived although I do accept the economy was doing well at the time. There were no large scale job losses as predicted for the simple reason their was money in the system and those on the minimum wage have the highest propensity to spend so it actually provided an economic boost to the country. Business grew because people spent more money.

 

[Rascal]

Taxation isn't just about alleviating poverty. It's about enough teachers in schools, enough staff in hospitals, and flowers on roundabouts.

Which all help alleviate poverty in one way or another.

Even flowers on roundabouts help because they soothe the mind and make the world a brighter happier place to live in, that is of course if you like flowers. I couldn't care less, but to think of the poverty of the slums where nothing like that would exist, flowers on roundabouts have to help.

 

[Mazzarelli's Swiss Cheese]

You can of course do both as part of an overall budgetary realignment. It probably would not be feasible to just introduce those two measures alone.

An argument could be made that any business who cannot pay the minimum wage is not a viable business and should be allowed to go bankrupt just as any company not paying there fair share of corporation tax is not a viable company and should also be allowed to go bankrupt. Why should the public subsidise business that is not viable?

When the minimum wage was introduced, it faced huge opposition yet proved to have none of the negative connotations associated with it. Business actually thrived although I do accept the economy was doing well at the time. There were no large scale job losses as predicted for the simple reason their was money in the system and those on the minimum wage have the highest propensity to spend so it actually provided an economic boost to the country. Business grew because people spent more money.

Looks like this @Rascal is for turning! Allowing unviable businesses to go under would get you a job managing British Steel and the Coal Board in Thatchers 1984 cabinet mate. You'll be going all Tebbit soon and telling folk to 'get on their bikes' to look for work. ;-)

 

[Rascal]

Looks like this @Rascal is for turning! Allowing unviable businesses to go under would get you a job managing British Steel and the Coal Board in Thatchers 1984 cabinet mate. You'll be going all Tebbit soon and telling folk to 'get on their bikes' to look for work. ;-)

I am getting a blue rinse this morning. ;))

But the comparison you make is an interesting one. The Thatcher government was quite happy to see those businesses go bust but now small businesses have to be saved. A true capitalist would say that any business that is not viable should be allowed to go bust as that is natural selection and the survival of the fittest.