Stealth taxes out, hikes for the rich in
Remember Tony Blair signing an election poster pledging that neither the basic nor the top rate of tax would go up under Labour?
Remember him saying that he didn't go into politics to stop David Beckham becoming a millionaire?
Remember Peter Mandelson saying that he was "intensely relaxed about people getting filthy rich"?
Those days are over.
Stealth tax rises are out. Overt tax hikes on the rich are in.
Why?
• In the name of fairness.
• To cheer Labour's supporters.
• To wrong-foot their opponents.
• To distract the media.
• Oh, and to raise money (although the Institute of Fiscal Studies has questioned whether increasing the top tax rate will raise much).
Their hope is that tomorrow's headlines will be dominated by questions about Labour's breach of their manifesto pledge and that the Tories will be asked for months to come whether they will reverse that tax rise or not.
What they know is that opinion polls show that higher taxes on the rich are now popular in the way they once were not.
What they also know is that David Cameron and George Osborne will come under pressure from the Tory press and Tory bloggers to promise to reverse this measure.
What they also know is that that is a more comfortable place to be politically than answering questions about why the chancellor's just confirmed the deepest recession, the fastest rise in unemployment and the biggest rise in borrowing since the war.
UPDATE, 14:01: A scan of the Treasury's Red Book of Budget stats suggests that that headline-grabbing rise in the top rate of tax will actually raise less than increased fuel duty (up 2p a litre in September) and the squeeze on public spending.
As I wrote earlier, stealth spending cuts have replaced stealth tax rises as the principal tool of the Treasury.
UPDATE, 14:06: For those who like the figures, the new top rate of income tax will raise an estimated £1,130m next year and the pension claw-back a mere £100m, whereas the fuel duty increase will raise £1,250m.
UPDATE, 16:25: Those nice people from the Treasury have called to point out important footnotes to the table of statistics which I quoted.
These - they tell me - show that eventually the rise in the top rate of income tax and the clawing back of tax relief on pension contributions will raise more than fuel duty.
On pensions they estimate that £3.1bn will be raised by 2012-3. Why the delay? Because, they tell me, of the lag caused by the self-assessment of tax.
In addition, if you take into account the chancellor's previous announcement raising the top rate of tax to 45%, the total amount raised by higher income tax in 2012-13 is estimated to be £2.4bn.
In the same year the withdrawl of personal allowances (announced in the PBR) would, they hope, raise a significant £1.5bn.
Their message, in summary, is that these tax changes are not merely symbolic or political - they will raise real money - eventually.
Of course, there will be no similar lag before people feel the pain at the fuel or beer pump.
I'm 
© MMIX~RS~q~RS~~RS~z~RS~25~RS~)
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Thinking the budget and its very optimistic growth forecast for 2010 through, we may well get an election late summer/early autumn this year if unemployment continues to go up fast, because the polls will then take place prior to the next round of necessary downgrades of economic growth forecasts in the next pre-budget and next budget.
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"Stealth tax rises are out. "
Rather quick with this aren't you? Have you been through the entire budget? And what would you call the removal of tax relief on pensions? Smells like a stealth tax to me. Oh, and please define "fairness" will you Nick? You see, we all believe in fairness, but we don't all mean the same thing. I mean "a just reward for hard work" you clearly mean "stealing every penny you can before the electorate get their hands on you".
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Damn...there goes the yacht!
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So this budget was just more spin then? Was this budget just designed to wrong foot the opposition instead of doing what's right for the country?
Let's see what is in the details. As usual the speech is not a true reflection of the stealth tax rises under this "Lie Now, Spin Later" Labour government.
The devil is in the details as always.
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Cameron and Osborne WILL take the necessary action to save the UK when elected - watch out for savage cuts in quangos, overstaffed wasteful schemes, projects, and claw backs from all other handouts. They will NEVER have a better chance to get away with it - as for ZanuLabour - THEY WILL BE EXTERMINATED AND GOOD RIDDANCE.
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The unprecedented amount of gilts issuance will not cause a buyers' strike very soon but only in a year's time or so.
Not only will quantitative easing help gilts prices as the bank of england prevents mark-to-market becoming a burden for uk plc, but the banks regulator FSA has very cannily required UK banks to increase their gilts holdings for liquidity purposes. This very conveniently puts some sort of floor under gilts prices.
And hidden in today's budget is a change in the gilts auction process which may help prevent auctions failing, or at least hiding that failure.
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If the lowly paid didn't include so many lazy people (I heard that a staggering proportion of school leavers do not even attempt to get a job) then I'd understand a bit more but this Robin Hood budget sucks for those of us that are talented, motivated, dedicated and therefore successful.
50% tax is the tipping point for me and many others I suspect to leave the UK, that way I'll pay less tax, not more. I think the chancellor has shot himself, and the economy, in the foot.
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"What they also know is that David Cameron and George Osborne will come under pressure from the Tory press and Tory bloggers to promise to reverse this measure"
Tory Press and Bloggers need to ignore this provocation. Obviously Tory's would aim to reverse this at somepoint, but it doesn't have to be spelled out.
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Hi Nick,
The markets will see straight through this. How can they be taken seriously about a recovery, when their measures won't come in until 2011? It is a transparent electioneering postponement budget, with the perceived added bonus of being scorched earth if it doesn't work out.
See you in the pub.
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Another raid on pensions by this shameful and discredited government. And tomorrow they'll be complaining about people not putting enough away for their old age.
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So how does:
For those who like the figures the new top rate of income tax will raise an estimated £1,130m next year, the pension claw back a mere £100m whereas the fuel duty increase will raise £1,250m.
square with:
Stealth taxes out, hikes for the rich in
Poor journalism? you can't have missed the fuel duty, or could you?
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As I said pre budget:
I will echoe what a few others have already said. A "fair" budget will be interpreted by the ignorant as one that redistributes wealth. Personally, I do not want my wealth redistributed to the welfare generation, they can get off their backsides and earn their own. I work very very hard for a living, and I do not do it so I can pay for those who will not help themselves. If the higher rate relief on pensions goes without public sector pensions being slashed, I will not stay in this country, and I suspect that a large number of higher rate taxpayers (note, I am only just in the higher rate band at the moment) will also vote with their feet.
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He bottled it , some tinkering at the edges but its evident this is a holding measure ahead of the election - no wonder Cameron looked ticked off - odds are he'll have to sort this ..
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The rich are to blame for this recession. They caused it. It is right that they should pay more to clean up some of the mess that they created.
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The spin is "investing through the recession" and that borrowing will be taken care fo once growth resumes.
This is disingenuous at best.
The OECD has estimated that 7.2% of the UK's 12% budget deficit is structural, which means that there will still be 7.2%, or 100 billion pounds, deficits once the economy has started growing againg in line with its capacity. This structural deficit has nothing to do with the banking problems that have supposedly started in the US as the deficits are structural, i.e. deficits assuming normalised growth.
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Wht not " In the Name of fairness " call a General Election......NOW .!
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Good to see that Nick Robinson has turned this around, to what the Conservatives will have to do about the 50% rate of tax.
Let's come back to the £175 Billion (probably end up over that by miles)that the government is going to borrow this year and the other hundreds of Billions to follow that are going to bankrupt this country.
Let's have less bias in the BBC and more honest reporting/debate.
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Even the car scapping scheme is spin. Declare it to be GBP 2,000 then only put up GBP 1,000 of it. The other GBP 1,000 will have to come from the car manufacturers.
Are we going to see manufacturers only offering it on some slow selling cars?
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Pound Sterling down against all currencies. Only a matter of time that the UK's credit rating is downgraded so selling of gilts to the financial markets that is crucial to finance the record borrowing levels, will either become more expensive to the tax payer or there will be no takers...
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Labour's forcast for recovery and consumer spending does not take into account the hardship that people are suffering and will contunue to suffer under this tax and waste budget.
Nothing labour tells us can be believed. If Darling promised fine weather, I would build an Ark.
(an old TW3 joke, I think)
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can this government really expect us to belive in their forcast?
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Apologies, I had resolved to quit posting, but I just noticed that the election can not anymore be held before the next round of forecast downgrades.
The IMF have just come out with a 4.1% slump forcast for the UK eoncomy this year and 0.4% shrinkage in 2010 (Darling has just pontificated -3.5% and +1.25% for '09 and '10).
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The politics of envy and social class are alive and well.
"Overt tax hikes on the rich are in.
Why?
• In the name of fairness.
• To cheer Labour's supporters.
• To wrong-foot their opponents.
• To distract the media. "
Same old (new) Labour. Populist, headline grabbing moves, that do little of any value.
Election pledge not to raise income tax? Did anyone really fall for that one?
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tell me Nick, when did you sell your journalistic soul & get into bed with the third way collectivist nutcases in ZanuLabour?
i cannot believe your reports now - & i am not alone.
You sir are far too cosy with this completely discredited Government.
I am off to Guido's site to get some real news - there is nothing but watered down Government propaganda here - shame I have to pay for it like I do those Hoons.
PS - any chance of you publishing your expenses, particularly for the Atrium restaurant? I helped pay those expenses & i deserve to know how you are spending my money.
yeah, I know - comment rejected.
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Bradgate #15
This is an idiotic statement. I presume you mean bankers (and their like) or are you saying that people who work extremely hard to earn good money should use it to subsidise those who don't?
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One thing will be remembered in this Budget... The increase in taxes on alcohol and the increased fuel duties. The latter will be unpopular and will overshadow most of the other proposals.
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Hi Nick
Is it a soak the rich budget? Will it deliver your fairness agenda? Probably not as the rich usually find ways of getting around it. The sad part is that we are ignoring the evidence of the laffer curve which was a lesson we appeared to have learnt in the late 1970s and early 1980s.
We may end up with the "rich" paying less tax as they put more effort into avoiding it. So bizarrely the poor may end up paying more rather than less as you hint at......
So a budget which is likely to fail in its own terms which is left with a few attempts at political points scoring.
Very poor
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Does ronreagan's comment 'watch out for savage cuts in quangos, overstaffed wasteful schemes, projects, and claw backs from all other handouts.' include handouts to vastly overpaid city slickers, politicians, talk show hosts, et al?
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I'm afraid we all know that Tony Blair was no more than spin! The strategic move he made was to resign on 27 June 2007!!
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Nick,
so break a manifesto promise and introduce a measure that will raise very little revenue in the scheme of things just for the discomfiture of your opponents?
How pathetic.
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All these reactionary people who "work very very hard" for their money and do not want their wealth redistributed to the welfare generation"......
why are you all on the BBC website leaving public comments during a working afternoon, and using your employers hardware to do so, instead of "working very very hard?"
Seems a bit hypocritical to me, but then again, that is Middle England for you.
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Nick, although the raising of the top rate of tax is a highly political manoevre and is worth in part commenting on, I am aghast that this forms the central part of your blog, am sorry but the vast majority of us are interested in the detail and not the politcal spin on half measures that raise very little for the treasury coffers, could we please get back to looking at the detail and economics of the budget, and some of the rather staggeringly bizarre inclusions, the increase in the duty on fuel for instance, something for which directly stifles business and consumer spend.
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This 50% tax rate is an election strategy and nothing more. It will do more to harm the recovery of the British economy than to help it. There is a reason that the current problems with the finance sector is undergoing is so harmful to the British economy. The finance sector and other such high income industries are vital to Britain's economic well-being. By attacking high earners the Labour party, and in particular Gordon Brown, are breaking their manifesto pledge to attempt to gain some very expensive votes and leave the Tories with a broken economy when they win the next election. Tax increases do not necessarily lead to an increase in tax revenue - and as a long serving Chancellor, I'm sure that Brown understands this! What the country really needs is a CUT in taxes, especially in corporate rates and income tax, in order to stimulate the economy and increase revenues.
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15
Makes me despair of british people.
The rich caused the mess. Fantastically insightful comment. Rich people made everyone poor. End of story.
Of course, the people who borrowed more money than they could ever pay back should not be blamed in the slightest. The people too stupid to realise that there are consequences to leaving entirely on debt.
I'm guessing you might be one of them. Take some responsibility.
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This won't redistribute wealth!
The tax take from this rise will be a very negligable drop in the vast ocean of what we owe. The chances are the higher earners affected will get around the new increases anyway - I reckon the tax take will drop because of this and not rise
Why no question the fact that more manifesto promises have been broken? I voted for this lot on the strength of thoses promises! They have broken every one of them. I'm all for the better off contributing a bit more but I want to see that money being used on civil infrastrucutre projects and not on subsidising the lazy and feckless of this country
I have worked damned hard to earn myself a decent living and sacrificed a lot to do it.
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This is the wrong place for this comment but I could not find any other place for it
Hazel Blears looked very pleased with herself as she left No 10 yesterday with her seemingly mis-placed private details of Mr Brown's thoughts on MP's Expenses .. could it possibly be that this might have been deliberate .. they surly know that the camera's will pick this up .. & the media have surprisingly
not questioned it as they are far to pleased with what they think is a scope ... all I am suggesting is that not everything you see is what it might seem
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Their trick worked with you didn't it Nick, you opened your blog on it but then we are far cannier folk who don't believe everything this lot tell us.
What really matters is that they forecast the trampoline bounce for the economy and when that doesn't happen the rest of the figures fall apart. What happens to the government figures if they only get 1% growth rather than their wildly optimistic 3.5% that they forecast for 2012?
This ZaNulabour Government has a major problem. They have never been able to live within their means. The payback on debt in the late 90's was only achieve my the extraordinary amount raised by the sale of radio spectrum to mobile phone companies, bankrupting them in the process.
The reality of ZaNulabour is clear, they only know how to spend; and are very pious about it to boot. The whole of the taxation part of the budget apart from the spiteful taxation at 50% (which raises nothing but makes the left wing feel good) was for the years after the next election and isn't worth the paper used in printing the Red Book.
Call a General Election.
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I'm going to stay away from the is it a stealth tax or not. Lets face it Tax is Tax (by any other name) non of us like paying it but all of us expect the NHS to be there, decent standards in Schools, a fire service to respond if we need it, a police service to behave! etc. etc. these things cost money.
I think Labour should have brought the 50% tax rate in long ago for over £150 K after all most of the UK working population earn £23K or less - I'm fortunate enough to be a higher rate tax payer and would expect to shoulder the burden more than someone who is earning less than £20K its only fair. A tax cut of a few quid doesn't make me work harder (I run my own business)I have always thought this was a strange statement to make but maybe others are different. Likewise paying a little more tax doesn't stop me working hard either or make me think 'ah yes lets go and work overseas and have all the personal cost of a move and live somewhere away from family and friends so I can save an extra 5% on tax'!
I heard on the BBC coverage that the city won't like the 50% tax. Well considering they have got us in this mess in the first place I will offer to help them pack if they want to move overseas and mess up someones else's economy.
For me the real good news in this budget is the investment in climate change initiatives . Here in the NW we have a thriving low carbon sector that can compete with the best in the world. In the longer term this is where a lot of high tech jobs will be so this is good news.
Had a good laugh at Cameron with his reply especially his careful use of statistics it was a masterclass in spin -I think he tried a bit too hard with the anger though it took away from what he was saying (some of his content was even worth listening to) but it got lost in the House of Commons cleverness he just can't help showing off with. I think he will struggle to keep his temper as PM and when he does 'angry' both pretend and real he does look slightly consitipated. This will keep me amused though the next goverments PMQs.
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And of course the car scraping scheme is not £2,000 it's £1000 because the car dealers discount anyway so they will transfer their discount to the scheme. They more than likely will have a stock of old bangers in the backyard as well for you to "buy".
One thing you can be sure of is that the majority of people running round in bangers don't have the cash to buy a new car and credit is tight.
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Nick,
How do the figures stack up from the budget that Darling has just announced with the tranche of data that the IMF has delivered?
Will the money from the banks actually be paid back within the timeframe suggested by the government and thus vindicate the pressure HMG placed upon the IMF?
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Did I read that right? Another 2p a litre raise on fuel?! Oh and car scrapping money only for NEW cars - forget trying to get back to work I'm going on the dole. I won't be able to afford going anywhere!
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33
As it happens, some people think the budget is an important thing to take note of, and hence set asside a bit of time to catch up on it and chew it over.
I will still be at work in the early hours tomorrow morning however, earning money to pay taxes so you can get your benefits. Don't worry, I know its me who is the sucker here.
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In defence of those high earners on the backs of whom Darling is trying to raise political capital, though in reality litle real money: At a 40% tax rate someone earning over £150k is already paying much more tax in ££ terms than someone on, say £30k. What is unfair about this? If he works harder, is more successful and earns more then he will again pay more tax. A top rate of 40% was a fair and reasonable system - taxing higher than that reduces incentives, punishes the successful and achieves nothing. It is just plane wrong for anyone to have to pay half of their earnings in tax.
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Nice to see the BBC's spin on things is the same as usual.
Concentrating on the tax rise for the rich which probably won't bring in any cash at all anyway because it can always be avoided if you have a good accountant, and can only have a negative effect by making the wealth creators emigrate taking all the jobs that they'd create with them.
While ignoring the fact that ordinary people are saddled with trillions of pounds of government debt over the next 10 years which we'll all have to pay back.
So, Nick, is that the BBC/Labour election line then for 2010? Obfuscate/lie about the true state of the public finances and pretend you'll get all the money back from the rich and from an insane level of growth which nobody in their right mind believes?
The "tory toff" approach doesn't work well in elections, you know, especially when you're responsible for the worst economic situation we've ever had and yet still won't admit that any of the failed policies are wrong.
All they had to do was bin a handful of massive pointless government future projects such as ID cards; wouldn't have cost any jobs, would have saved a fortune and helped reduce the debt, but they couldn't even do that.
Hopeless.
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Having worked in tax and currently studying to train to be a Solicitor, I know that words like reasonable and fairness can have such an ambiguous meanings. What is "fair" in the Chancellor's view? I'm not sure that he knows either. Is it fair to go back those to people who voted for "New" Labour in 1997, 2001, & 2005 (note that I am not one of them) on the promise that the rich would not have their tax bills raised, to now have half of their income to be paid over to the tax man? I realise that this measure will not effect a great amount of people when compared to the population as a whole, however who is he being fair to?
This, as has already been said in previous comments, really is a robin hood budget, albeit a poor attempt. It is more about headline grabbing then actually sorting out the real problems that our economy faces at this present time.
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There are very few tax payers in the £150k+ salary range, Tory or otherwise. So, as a Tory myself on a 'normal' salary, I would say that reversing this decision as part of a manifesto commitment would not bring in any additional votes. Most of those Tory voters in this fortunate financial position will have far more significant reasons to continue to vote Tory, so, don't take the Labour bait, say 'what is done is done' and leave well alone.
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What's important for me is less about the Tories but more about Labour. The economy has been destroyed by an incompetent Chancellor (Gordon Brown) and an incompetent Prime Minister (Gordon Brown). I've been paying through the nose for taxes of all shapes and sizes for a number of years - so not much changes - I expect to be burdened by it and expect as ever not to get much back.....and that would be through the Tories as well. In effect it's really about Gordon Brown and Labour: you're incompetent and your days are numbered.
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"Their hope is that tomorrow's headlines will be dominated by questions about Labour's breach of their manifesto pledge and that the Tories will be asked for months to come whether they will reverse that tax rise or not."
But, of course, you're not going to fall for all that are you Nick?
You're going to cut through the spin and focus directly on what Labour's budget will do to fix the economic despair that their decade in office has brought left the country in... aren't you??
Oh, no, of course not... each of your blogs today have centred on how the Conservatives will be affected politically by this - what a surprise.
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It's not the right time to call an election. Brown and his muppets should be made to take responsibility through to the end - then we get rid of them!
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"15. At 2:20pm on 22 Apr 2009, bradgate2 wrote:
The rich are to blame for this recession. They caused it. It is right that they should pay more to clean up some of the mess that they created."
The increases in tax start with the removal of personal allowances at £100k. It speaks volumes for your lack of ambition if you think that is 'rich' and volumes about your lack of understanding of the situation if you think people on that level of income caused the recession.
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23 econce
'The IMF have just come out with a 4.1% slump forcast for the UK eoncomy this year and 0.4% shrinkage in 2010 (Darling has just pontificated -3.5% and +1.25% for '09 and '10).'
You have pointed out the key to this budget. Darling's forecasts are so widely out that borrowing will be much greater than predicted in the budget.
The headlines say £170+millions this year and next, but in the small print they are looking to raise £220million in gilts, and this figure could be £260million.
The finances are a total shambles and far worse than expected. And of course there is PFI on top.
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Absolutely awful coverage Nick, really really disappointed that yet again you try and spin the govt line without addressing the real political issues, total waste of time and effort by you.
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Seems fair to point up how politically cynical the proposed new top rate of tax is intended to be, i.e. nothing to do with raising revenue and everything to do with a political ploy.
Given that you have acknowledged that this is the true purpose of this measure, any chance that we can spared every BBC interviewer opening their questioning of any Opposition MP by asking if they will revoke the increase?
Thought not.
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I'm a Conservative and I have no problem at all with the 50% tax rate.
Mind you, watching TV and listening to the radio, there are people who would move their businesses, or at least their head offices where the majority of the high earning staff work, abroad for tax reasons. The UAE would be good for them, no income tax and no corporation tax.
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All those in the public sector can sigh in relief. Until after the next election.
It is obvious that this is the only area where real savings can be made but this lot haven't the guts to start on it now while they still think they may have public sector votes. A slight of hand is what they've done hoping that no-one will notice.
Where on earth do they think this growth is coming from to pay for all the debt they are incurring.
New businesses take years to grow and exports will never be enough to get us out of the mess we're now in.
Yet they go on trying to fool us all when we know the quagmire is going to get much deeper.
No wonder Darling and Brown were having a good laugh. Not at the Tories but at all of us for being impotent in getting them out until they're ready to go.
Heaven help the state of things by then.
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The tax hike for the wealthy is a drop in the ocean when compared with tyhe massive borrowing required to help lift us out of this mess. Sure it was calculated to reflect public opinion and embarrass the opposition but The Electorate are more savvy than you give them credit for Nick!
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"UPDATE, 14:06: For those who like the figures the new top rate of income tax will raise an estimated £1,130m next year, the pension claw back a mere £100m whereas the fuel duty increase will raise £1,250m."
So the fuel duty increase will raise more money then flagship "target the rich" tax?
Politically I have no problem with higher tax payers paying more, but everybody will pay for the increase in fuel duty as goods will cost more to deliver, it will cost more to go to work etc.
And why is Darling adding a few pence to fuel in September when he will be taking it off again at the end of the year (when the VAT goes back up).
After all failing to withdraw the increase in fuel duty to balance out the VAT cut would be a stealth tax and apparently those no longer exist!
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Well I never saw that coming. A few otiose gestures on taxing the rich designed to re-open the class debate and which will raise hardly any money whatsoever while putting back the inevitable large scale spending cuts until after the election. It's the kind of overt clumsy political strategy you might expect from a medieval monarch but sadly this is the extent of our PM's ability. The fact that he still insists our economy was roaring along with excellent fundamentals before it was cut down in its prime by foreign bankers is so ridiculous it's beyond laughable.
Cameron is right; the government is financially, morally and politically bankrupt. There is no further purpose for this Labour government save their own obsession with keeping power.
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"Stealth tax rises are out."
Are you a betting man Nick? I certainly wouldn't be putting any money on that. Indeed, I wouldn't be surprised if there are some tucked away in the details of this budget.
And perhaps the announcement of the 50% rate was not just a trap for the Conservatives but also a distraction from the increase in NI that will shortly hit everyone.
Also, Darling's figure for growth in the economy is way out of line. I believe it is out of kilter with long term trends and, according to a chart posted on the Spectator site, does not even tally with predictions from the Treasury made just a couple of months ago.
Thus, unless Darling's wildly optimistic figures are confirmed by a unprecendented burst activity the shortfall in his sums will have to be made up from somewhere.
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Just HOW does this put pressure on the opposition?
Forgive me, but they are NOT the ones under pressure , they can sit back and point out all the idiocy of this " budget" and all we'll hear from those cheery pranksters on the labour benches will be shouts of " the do nothing party" , a somewhat threadbare accusation, and from the lips of the singularly well cushioned cabinet " who cares?"
Pressure should be on a bunch of ne'er do wells who fleece the public purse for every penny and bathbung they can get.
I doubt if there is even one member of the public who could'nt write a money saving budget with ease, most would suggest fewer MPs and Lords a dancing, no Trident ,no ID cards, no illegal skimishes in other peoples countries and positively NO EXPENSE claims.
Job done! And the BBC to return to impartial reporting.
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What budget?
If you listen carefully and do some sums you'll realize we'll be skint for years because the money they borrow now will have to be paid back... think about it, where is is coming from when out industries are failing and people losing their jobs?
Some of the rhetoric is re-badge from the previous budges, yet to be put in place.
So he's gonna give you £2000 to scrap your old car and buy a new one.... one made in Europe no doubt so who's going to get the benefit there?
A prudent Chancellor wouldn't have sold the gold, frittered the pensions and raided the piggy bank the Tories left, A prudent Chancellor or PM wouldn't allow ministers to claim willy nilly at the tax payers expense.... nor what they allow the FSA and the banks remain un-regulated.
Thats listening to prudence for ya.
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I see the fine print is starting to unravel Labour's headlines already.
Remember, they are not cuts (only the tories cut), they spending restraints.
Time for change.
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I agree the 50% tax level should not be the headline.
It should read:
Government debt 79 percent of GDP in 2013/14
It appears the 50% tax level is going to gross less than a £1 billion. Why can't this be brought in with immediate affect? Where on earth are the 10's of billions going to come from to pay back this frightening level of debt.
I'm wondering how on earth do you vote to achieve a coalition government with Vince Cable as Chancellor?
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54. At 3:28pm on 22 Apr 2009, sagamix wrote:
oh no! - reading through this, it looks like Mass Emigration time.. I'll be sticking around but I guess that's of little comfort
Depends. Do you generate wealth, or are you another who feeds off that created by others?
Thing is, if you keep on loading ever more guys counting and munching (and assessing for H&S, diversity, etc) beans on the back of those few left trying to actually make 'em, eventually they'll collapse under the burden and no one will have any more beans.
Then those who used to make the beans, with families to feed, might turn from placid vegetarianism, bear their teeth and acquire a taste for fat.
Now, what's that a'coming, and where's that wall? I think the time has come that there's wabbits need a huntin'! Knowing their habits to date it won't take much as whatever it is they'll want to be first in line.
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Leave the country as soon as possible.
There is simply no point in living in a country run by a party who has messed up so badly but is so determined to blame everyone else and make everyone else pay for their mistakes.
Tax the rich? Don't make me laugh. Is it only the rich who drink, smoke and drive cars? They are taxing every one of of us, including pensioners and grandparents.
This government is graceless, artless, incompetent and for a long time morally and politically bankrupt. There is no reason to believe their forecasts and no reason to believe it won't go on getting worse until they disintegrate under their own spin.
The only shred of good news is that they have comletely given up on what made newlabour electable in the first place.
Newlabour; tax the rich, the middle classes, the poor, the unemployed.
This is the most spectacular labour party failure on record; to stand at the dispatch box without a credible plan for recovery, presented by a chancellor who has got every single forecast wrong since he stepped into number eleven Downing Street. How is he expecting the markets to believe him; never mind the pound - look at the cost of government debt since he started to speak. Just opening his mouth increased the cost of all this borrowing automatically. he is in deep trouble and he knows it. There is no longer any credibility left to their econimc strategy and markets have a cruel way of taking out their revenge on such incompetence delivered without a shred of contrition and without a clear plan to clean it up.
Call an election.
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It's really quite funny to hear that labour are taxing those earning over £150000 a year.
There aren't too many of them and the majority are actually working in the public sector anyway.
So apologies to those in the private sector but I'm sure there are other ways it can be made up but for those fat cats in the public sector it is long overdue. Cut their index linked pensions at the same time if you want to make us really happy.
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#13 well said
I am sick and tired of hearing about "fairness". Fairness is doing your work and getting paid for the nature, quality and amount of work you do.
Why the hell should I pay for a load of layabouts to get more benefits? It's a joke.
The only thing that's more of a joke is that I have to pay £130 p.a. to fund a propaganda machine like the BBC to try and convince me it's a good idea.
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Nick,
A very minute part of the budget but does it really need all of your blog to explain the ins and outs of the propesed tax increase for high earners.
What about Gordon`s pledge to help the millions of savers? Didn`t hear any of that in the budget, except for some pensioners where the effects of the change will be very limited.
Seems strange the only group of people that have been prudent and looked after themselves have had the brush off, yet again.
Gordon has gone out of his way to force banks to bail out people with mortgages; but has done nothing to force banks to give savers a decent return which would have been ploughed back into the economy and would have helped to ease the effects of the recession. All that is happening with people who have got mortgages is that the sensible people are paying more off the capital thereby shortening the life of their mortgages. That`s not helping the economy at all is it?
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Ahhhh but you missed the really good news Nick… in 2011 the economy is going to be growing again at the rate of 3.5%. (Darling actually predicts growth rates in 2011 will be higher than in 2007)
Worry not little proles…. all is well.
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Double Whammy
'And why is Darling adding a few pence to fuel in September when he will be taking it off again at the end of the year (when the VAT goes back up).'
Tax up, VAT up, everyone stuffed again.
No surprises there then.
Call an election NOW.
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That's it folks. WE'RE BROKE.
Last one to leave please turn out the lights.
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Gordon Saved
""What they also know is that David Cameron and George Osborne will come under pressure from the Tory press and Tory bloggers to promise to reverse this measure"
Tory Press and Bloggers need to ignore this provocation. Obviously Tory's would aim to reverse this at somepoint, but it doesn't have to be spelled out."
OK I for one promise to keep quiet about this, absolutely, shh, and anyway we shouldn't be so common as to ask Dave to spell anything out to us.
Stealth tax cuts in advance?
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I just realised that this increase in taxes for high earners comes in just a few months before the election - which means that all the Labour ministers on more then £150k are getting the cheaper rate of tax but if (which lets face it is likely) the Tory ministers will get charged the higher rate of tax!
New Labour have their snouts in the trough to the end!
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so it has come about and all the truths are in the open, neu-labour has failed.
from the PM down they have shown themselves to be self obsessed bar-stewards to put it politely.
we are in the worst state as a country since before records were kept.
this country has been sold out for a bag of magic beans and false hope.
we need rescuing from this situation but can any one rescue this country or why bother neu-labour have damaged us beyond repair.
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and the scrappage scheme:
David Cameron's response:
"You take something that’s 10 years old, completely clapped out, pumps out hot air, pollutes its surroundings, and is absolutely ripe for the knackers yard.
What a brilliant idea!"
What's to stop somebody buying a new car and then chopping it in for the £2000 "discount"?
Poor old Labour. Drinking a the last chance saloon. Not long now, thank God!
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"One minister actually said this: the IMF should be seen as something to celebrate – and I’m not making this up - “a bit… like getting wellbeing care or… going to a spa to recuperate”
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15. At 2:20pm on 22 Apr 2009, bradgate2 wrote:
The rich are to blame for this recession. They caused it. It is right that they should pay more to clean up some of the mess that they created.
= = = = = = = =
By the "rich" I take it you're referring to the Balls Coopers, the Darlings, the Hoons, Mandleson and that poor wee Broon fellow?
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57. At 3:46pm on 22 Apr 2009, mikepko
Make that Billions not Millions and you have hit the nail on the head!
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I noticed the following in the Budget round-up
"Alcohol taxes to go up 2% from midnight - putting the price of the average pint up 1p"
Now I admit that I am not much of a drinker, but if the price of a pint has gone up by 2% suggest that if a pint cost £1.00 the new price would be £1.02?
I am sure the drinkers who are struggling with the recession would love to know what pubs are selling a pint for 50p - it was more then that when I was at Uni in the 90s.
Or maybe the figures were incorrect - did they come straight from Downing Street?
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So I take it that instead of asking the chancellor what actually this non budget is supposed to do, you will be concentrating on asking the Tories how they feel about taxing the people in management who are in fact the producers in this country ? This budget was a total con , full of spin , rhetoric and half truths but sadly no substance and certainly nothing that will help to dig the economy out of the cesspit Labour's incompetence has dragged it into. True to form, like every other Labour government since the war this one has brought the country to the verge of bankruptcy.
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So the battle lines are being drawn. The Conservatives will introduce income tax cuts for those earning over £150K and abolish Inheritence Tax on those receiving upto £1 million pounds. Wake up - this is the same old "nasty party" of old. One Nation Toryism is long dead. In a recession do you want to be cut loose by the state with no support (whilst at the same time making the rich better off) or do you want a Government to intervene in order to try and mitigate the worst impacts of the (Global) recession.
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#85
I don't think that David Cameron was thinking about cars when he said those words - think about it . . .
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#76
Yes there was help for savers - cash isa limits raised by £1600 - meaning that at 3% someone will be a whole £9.60 a year better off!
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79. The lights in the private sector have already been turned off due to management cutbacks. Those burning brightly in the public sector will be left on indefinitely and the electricity bill added to our vast national debt.
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Many people angry about the token tax rise for the rich, what happens to people when they start earning large sums of money.
I recently fell out with a “rich” family member because whenever I visit her she don’t stop viciously going on about the tax she pays , the council tax, the unemployed the sick, immigrants, her “lazy” employees thieving their wage, how hard she works etc.
She has two large houses one of which she rents out, three constantly new cars, a place in Spain, she is completely addicted to shopping, and rarely more than 2 days go by without deliveries. She spends at least 6 weeks in total abroad every year.
I earn a about average wage and have three direct debits for charities, she would not dream of giving any of her money away to charities, she needs every penny.
Before she attained this wealth we used to get on well even go on holiday together, she now seems so angry at everyone and can’t seem to amass enough wealth and things.
We fell out because I said do you envy the unemployed you moan about or your employees. You have got rich from all of society why shouldn’t you give more back, how much do you need anyway.
She won’t speak to me now but I can imagine what she will be saying today.
We have an opportunity to start changing things to something more sustainable but all people and government are worried about is getting back to exponential growth and veracious consumption.
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Dear Nick,
Lnog time no see, how was Margate?
Hopefully, soaking the rich to 50% will plug up the national debt mountian, but if not. I have 3p in loose change down the sofa.
Xxxx
ps,
On Go 4th, one of the aims is this....
4. Highlight the damage a Conservative government will do to Britain.
And exactley how is that possible....?
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Whilst the headlines are about taxing the rich, the reality is it will hit the middle and lower earners more. Not only fuel, ciggies and alcohol but the efficiency savings ie cuts in public sector expenditure must surely result in higher council taxes and increases in stealth taxes such as car parking etc. etc.The many will pay for the disaster created by the few ie the Government and principally our "Great Leader". The pain will come when he and his colleagues are no longer in Governnment and no longer in the direct firing line. We are becoming, if not already there, a third world, sleaze country.
If we really want to cut public sector expenditure we must now address the issue of far too many MPs, MEPs, MSPs and Councillors. We cannot afford this and the consequential (often unecessary) legislation they enact. If you create a capacity, you will fill it whether it is needed or not. WE DO NOT NEED THE CURRENT CAPACITY -GET RID OF SOME OF IT.
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#93 kaybraes
Which managers are you referring to and what exactly are they producing?
I'm amazed that most of the people posting today didn't see this coming and what also amazes me is that Nick Robinson always seems to get it in the neck for somehow supporting the government.
Personally, I think Alastair Darling, not that I approve of New Labour, did a pretty good job politically and has lumbered the Conservatives with all sorts of problems.
Perhaps, hopefully, this will be the end of 3 term government in this country - in fact, it would be even better to see the back of the awful undemocratic 2 party political system that we have now.
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#92 hannafordlee
There may well be a consensus that Nick is a government plant but how many of those people would class themselves as independent, non-partisan posters?
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94. At 5:04pm on 22 Apr 2009, peteholly wrote:
So the battle lines are being drawn. The Conservatives will introduce income tax cuts for those earning over ?150K and abolish Inheritence Tax on those receiving upto ?1 million pounds. Wake up - this is the same old "nasty party" of old. One Nation Toryism is long dead. In a recession do you want to be cut loose by the state with no support (whilst at the same time making the rich better off) or do you want a Government to intervene in order to try and mitigate the worst impacts of the (Global) recession.
============================================
So you know what the tories will do?
Have you ever tried opening your eyes and looking at the numbers?
Currently we need a government to take tough decisions to try and dig us out of a huge hole - the changes in this budget will have no effect at all. All Labour have done today is used the budget to promote the kind of rhetoric you're spouting - they've reopenned the class debate while storing the difficult decisions away for the next government. They don't give a fig about supporting anything except staying in power for the sake of it.
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"UPDATE, 16:25: Those nice people from the Treasury have called to point out important footnotes to the table of statistics which I quoted."
In other words your "boss/handler" at the treasury has told you off for using proper figures and asked you to use theirs instead?
Remember that you can be politically neutral you don't have to blindly spout Labour spin.
Do you honestly believe the Treasury on figures? They have constantly had to readjust them for being overly optimistic in their projections.
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Nick, you say those days are over.
Other people would say that they were lies.
Depends on what message you want to put across I suppose.
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You fell for the Labour spin Mr. Robinson, didn't you. I've never known you so productive. Four blogs in one day??? My My My, you are really under their spell, or is it the 'cosh'?.
How you can even suggest that this is a problem for the Tories; not the LibDems as well, just the Tories? Are you a closet Conservative, just awaiting the eventual fall of Labour?
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101 extremesense
You are right in one respect, if Darling's purpose with this budget was to put pressure on the Tories, he did in fact accomplish something. I would ask the question though, in what way is it appropriate for this to be a factor in judging its success? We are talking about the livelyhood of the nation, as a whole and individually, making cosmetic changes for the purpose of exposing messrs cameron et al to some tricky questions is behavious most disgraceful.
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Some of the comments on here are naive beyond belief.
We have a budget deficit of £30,000 per person! Think of it. £30,000 excess of expenditure over income, just in one year, for every man, woman and child in the country!
The 50% supertax raises, however Nick calculates it or recalculates it, barely a percent or so of this extra debt. It is economically irrelevant. I'll give you a new comparison - the supertax raises less than the uncertainty, the margin of error, in the total collected from basic rate tax. It is a miniture sum, economically insignificant.
The conclusion that it is a trick to set off internal dispute among the Tories is entirely correct. Sure, the Tories have to be careful not to fall for it. I hope that won't be too demanding for them! But the budget deficit, the failure of government policy in previous years that led to it, and the failure of government policy now to address it, that is the story. That money will still have to be paid off even when I and everyone reading this posting is dead and buried.
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Another non-budget but was there much else he could do? Whilst I agree with a policy that means those who earn more make a bigger contribution to society really this is too late. And, why was this not happening before?
As has been said many times before we, the UK, should have been making hay whilst the sun was shining. The coffers should be swelling to help in these difficult times. New Labour squandered this opportunity in the past and are now bankrupting our future. This is the headline of this budget and this government. A say anything, do anything, deliver nothing party. How can anyone trust them again?
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90 yellowbelly
'57. At 3:46pm on 22 Apr 2009, mikepko
Make that Billions not Millions and you have hit the nail on the head!'
Sorry yellowbelly
Millions, billions, trillions, argh!!!!
I'm off to drink until midnight to save money!!?? Learned that trick from Brown and Darling.
Call an election NOW.
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Update 16:25 - Has HM Treasury factored in the very wealthy moving abroad to live into their calculations?
It's just the poor saps that are barely above the threash-hold that are going to suffer - the uber-wealthy will just move elsewhere in the world to live. That's what they did when Labour taxed the rich "until the pips squeaked" before.
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94. At 5:04pm on 22 Apr 2009, peteholly wrote:
So the battle lines are being drawn......In a recession do you want to be cut loose by the state with no support (whilst at the same time making the rich better off) or do you want a Government to intervene in order to try and mitigate the worst impacts of the (Global) recession.
= = = = = = = =
Or do you want a government that can't even be trusted to hold its own candidate selection hustings?
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102 extreme sense
'There may well be a consensus that Nick is a government plant but how many of those people would class themselves as independent, non-partisan posters?'
Not me. Happily I am a Conservative, but not an opinion former like Nick. There's the rub.
Or am I. If I suggested 10% tax for everyone would you all support me?
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Does anyone remember the government of all the talents?
Spin, spin, borrow borrow, waste, waste
Does Gordon get a pension for putting the UK back 60 years?
He should get hard labour
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Who says no stealth Taxes? Buried away in a Technical Note, not mentioned in the Chancellor's 'Budget speech' and not even mentioned in the Budget Notes or Press Releases is the fact that from 5th April 2010 the favourable tax treatment of Furnished Holiday Lettings is to be scrapped.
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By using the tax system to transfer purchasing power from the wealthy to the less well off, the Chancellor has moved in the right direction, because it is necessary to replace easy credit which performed this role before the credit crunch. The Chancellor has gone as far as he dared, but far more will probably need to be done in the future.
A new innovative tax is needed, which will mop up spare purchasing power unused in the hands of the rich and use it to stimulate the economy, without risking the stability of sterling.
One possibility is a universal land value tax, which has many advantages, not least that it is difficult to avoid, since land cannot be moved off shore.
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A courageous Budget, one that is carefully thought out and clearly will go some way to addressing the problems which the recession caused as a result of global factors.
Very striking how inept and how empty of ideas David Cameron is: the man could only try to make the Budget debate a series of jokes: hardly the sort of person we would expect to lead the next government!!!
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It's easy to hate the very rich. Envy unbalances judgement, and Brown may just crawl back into office because of this promise of increased taxation of the wealthy. One thing, however, worries me. I cannot see a reduction in the Vacancies section of The Guardian. Jobs will still be offered, at inflated salaries, for Diversity Officers, Multidisciplinarity Ethnicity Busybodies, etc. etc. Places for qualified medical staff will be cut, whilst openings will be available for agency-employed "paramedicals" i.e. half-trained, half-baked mainly foreign cheap labour. How right is the old adage, Whom the gods want to destroy, they first drive mad.
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Top tax might worry you Robinson but not me ..... and the majority of us!
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A pious DOSE from a Prime Minister with NO MANDATE!!
END TO BOOM & BUST.
NOW WE HAVE BUST ALL THE WAY TO THE IMF!
NOW WE HAVE THE BIG BILL!!
PITY DARLING STILL THINKS HE CAN SMIRK AT US ALL?
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You say breach of manifesto pledge, we say breaking of a promise. Gordon Brown says no need for referendum on EU treaty, we say breaking of promise. Brown says he's abolished boom & bust, we say breaking of promise.
Anyone see a recurring theme here.....
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"94. At 5:04pm on 22 Apr 2009, peteholly wrote:
So the battle lines are being drawn......In a recession do you want to be cut loose by the state with no support (whilst at the same time making the rich better off) or do you want a Government to intervene in order to try and mitigate the worst impacts of the (Global) recession."
Oh, do grow up. Why do you think we're in this recession in the first place. Who was in charge? This Government.
Moving on, I'm always amazed by Labour supporter's deluded belief in the power of their Government to 'create' anything. You take a group of people whose starting point is blind ideology. They have no experience (of business, of teaching, of running hospitals, in fact most of their experience before politics is pontificating at OxBridge about how great the world would be if they could teach the unwashed masses to knit their own free-range yoghurt). Once in power, they blindly crash about changing everything in society up to and including the lightbulbs, borrowing money in a way that would make Ponzi blush and when it all goes horribly wrong they make empty promises and predictions they won't be around to see through and prepare to slope off on their index-linked pensions to prepare for the after-dinner speaker circuit on which they'll pontificate about how close they were to a workers utopia powered by organic windfarms.
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117 - Stan, one day you'll have to get a job and then you might realise what a load of drivel you're writing.
Why and how do you think the wealthy become wealthy? Do you think it's unfair that you don't know the location of the 'secret' wheelbarrow, overflowing with cash that the lucky few can help themselves to?
Who do you think employs the 'poor down-trodden masses' (who, let's be honest, with the rise of obesity don't seem to be doing that badly).
Hard working people work hard because they want to better themselves. Take away the incentive and they'll go somewhere else and do it or simply not bother. With no-one creating wealth in the country who do you think will be paying for your tax-credits?
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Unfortunately the economic crisis has come too late in the electoral cycle. This dishonest, gutless Government was never going to be strong enough to take the necessary hard decisions. Instead they have tried to deflect attention from the quite horrendous borrowing requirement with the headline grabbing 50% tax on just one percent of the population (yet another election pledge scrapped.). It does not take a mathematical genius to work out that this will raise only a tiny sum in comparison to what is needed in the longer term. A completely wasted opportunity! I for one am prepared to pay a greater amount of tax to get the country out of the mire but only if we have a Government who I can trust to bring back taxes to a more reasonable level when sensible.
Dear Mr Brown, please call an election now then we will at least have a Government with five years to look forward rather than yours which is only concerned to limit the damage in the polls and to shore up your fast fading support within your own party.
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There will be no election in 2010.
There will be an ejection.
As for the tax / spend stuff. Just ask yourself this:
If I lost my job and income, would Gordon recommend that I still book the holiday, but whack it on the plastic?
Amazingly, his answer is to whack it on the plastic and carry on, something will turn up (my toes eventually)....
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#108 greatHayemaker
Oh come on, this is New Labour we're talking about - since when did they particularly care about the livelyhood of the nation.... in order to answer that question think Iraq.
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What is a gilt exactly?
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Weejonnie @ 96 wrote that a yearly increase in the isa allowance of £1600 @ 3 pa equals savers being £9.60 a year better off had better come and do my accounts. £1600 @ 3% equals to £4.80p pa. Thats provided you can get 3% on current savings without a bonus and all the strings that go with that. £1.60 return on £1600 seems more the norm.
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New Labour, turning ability into liability and and inability to asset.
Are you successful? Do you work hard, and get rewarded by good wages? Then New Labour will tax your pants off.
We need to avoid New Labours desire to create a vast underclass of state-dependents, funded by the entreprenurial job providers getting punished for providing job opportunities.
Vote for Change, vote for anyone other than New Labour, please I beg you.
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No 128
I know this one.
A gilt aka Government Stock is debt sold by the Government to help to cover their borrowing and spending requirements. Even with this regime it is inconceivable that the interest and capital repayments will not be made when due. After all they can always tax us more or print more money. The problem is trying to gauge the value of your investment when it is repaid. You may have seen that a conventional issue was unsuccessful a few days ago, an index linked issue on the other hand was over subscribed. The pension funds and foreign investors are telling us that inflation will become a big issue following Gordon and Alister's actions. As a result the buying power of your investment when redeemed will be much curtailed
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Any lip readers out there who can tell us what Gordon Brown was saying to those either side of him on the front bench as he smirked his way through the comments of the leaders of the Conservative and Liberal parties in the budget debate?
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"Their message, in summary, is that these tax changes are not merely symbolic or political - they will raise real money - eventually."
Now that all numbers seem to have 11 zeroes after them, those with eight zeroes (like 1.5 billion) just seem like toy money. Doesn't really seem to add up, unless eventually is in geological terms.
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The reduction of personal allowance of £1 for £2 of earnings above £100k means (for example) that someone on 107k will have his personal allowance reduced by £3500. This increases the tax take on that 3500 x 40% = £ 1,400 = 20% of the £7,000. That makes a marginal rate on the top £7k of 60% rather than the 50% above £ 150k. What's that if not a stealth tax?
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It is not your place to declare that a higher rate of tax for higher earners is 'in the interests of fairness.'
I suggest you retract this remark.
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Nick:
Stealth taxes out, hikes for the rich in Yes, they are out of fashion because in MOST citizens "eyes" they think that the RICH and wealthy Don't pay there fair share of taxes and skirt their resources into undisclosed locations.....
-Dennis Junior-
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I've noticed that people tend to believe the following three things
1. I work really hard
2. I should be paid more than I am
3. I am supporting overpaid public sector workers and the lazy unemployed
I believe three things too but not those ones
I believe that ...
1. You don't work very hard
2. You should be paid less than you are
3. You are BEING supported by underpaid people in the Developing World
hey and BTW, my posts keep getting referred ... is someone unhappy with me? ... please tell me because I don't like the thought of anyone being unhappy
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133:
Wasn't that arrogant smirk really annoying? He still smiles in spite of the fact that that his policies have condemned our children to two decades of austerity. I don't think I can recall an individual I have disliked as much as this man. His every twitch and movement makes me squirm with disgust.
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#129 Briangaare, I think you need to redo your calculations.
A 3% return on £1600 is £48. Without the increased ISA allowance, the tax on that (for a basic rate tax payer) would be £9.60, as pointed out by the previous poster.
The only thing wrong was that the cash ISA allowance has gone up by £1500, so the figure should have been £9. Don't spend it all at once!
To those predicting a huge demand for 10 year old cars - the text is very clear that it only applies to cars that have been registered to the owner for 10 years. The big winners will be households who own multiple cars.
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141
Sagamix, if you want to make political debate, by all means feel free. But do not be so assinine and presumptuous to pass judgement on me or anyone else when you don't have the faintest clue what you are talking about.
While there might be an argument that I am paid "enough" (I struggle; I live in London, have a family, and this is an extremely expensive state of affairs, but I get by) and am certainly luckier by far than those who struggle for survival in the third world (who incidentally receive both my time and money on a regular basis, I suspect that is far more than you can say), there are a dissproportionate number of people in this country who on a money to effort ratio are hugely better off than I am. So yes, you can quote your self righteous nonsense, "there is always someone worse off than you", but an intelligent person disregards this as irrelevent drivel.
Here is a news flash for you. All men are NOT created equal. But all should be expected to work to the best of their abilities, and the masses who go through life never making an effort do not deserve the least bit of help from me or anyone else.
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GHM @ 144
no no no - it was just a manner of speaking - by the "you" I mean the UK generally, I don't mean you the individual Great Haye Maker! - I'm sure that you work your nuts off - why would you keep saying you do if it weren't true? - what I'm saying should very much strike a chord with you because I think you feel the same, don't you? - we, the UK, are in big trouble because of living beyond our means - a.k.a. paying ourselves too much - that IS what you believe, isn't it?
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junk @ 72
do I create wealth?
you've nailed me there ... I'm not unemployed by any means but, no, I can't say I add a great deal to the stock of nations
it's interesting though, different people have very different ideas as to what constitutes a "Real Job" - like I was debating with someone on the Peston Blog the other day and this chap was of the view (vehemently held too) that traffic warden is a Non Job! - can you believe that? ... and it wasn't 'cos he'd just got a ticket either, it was his actual considered opinion - weird or what?
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145
Do I believe we are paying ourselves to much? I don't know that I have ever seen it in those terms.
Living beyond our means certainly, but that is not a question of what we are paid, but of what we have borrowed (both the population and its government).We "pay" ourselves what we earn, at the top level, a company makes its profits and these profits are distributed. Where the disconnect came in is the paper profit culture that has abounded, people wanting money for nothing. Investing is all well and good, and necessary for the growth of business, but the profit you can make from investing activity is not "real" increase in value. When you manufacture something, you literally take raw materials and add value to them. When you invest, the best that can be said is that you add the potential for value. When the value is all perception only, you end with a gaping whole where people expect value that has not been realised. So the earning's in this sense are not real, and we are distributing profit that we have not earned. But this is a failure of regulation (and dare I say it, my former profession, inadequate audit process), and does not I think equate to paying ourselves too much.
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Last time a government decided to recoop its 'losses through incompetance' by raising taxes for the 'very rich'... the 'very rich' changed their country of taxation to one that taxed at a lower level!
Some will remember the 'brain drain'?
Not all high earners are footballers! One or two of the country's leading businessmen could also be 'lost' and at this present time we need all the (business) help possible.
I sometimes think it would be better to have 40/45% of something than 50% of nothing... the straw that breaks the......
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haye @ 147
no comment - (more or less) completely agree with you - we're just expressing ourselves in different ways
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With all the ‘windfall’ and ‘back door taxes’ of the past decade we should have been the one Country able to weather the world recession. Instead we were the least financially ready… proven by the fact that our currency devalued by 25% – 30% against all the other leading Countries’ currencies in the world, also gripped by the same world recession. HOW DID OUR HUGE FUND OF GOLD RESERVES AND STERLING DISAPPEAR?
In just 10 years it has all gone… so have our gold reserves… and we have borrowed extra £billions… and before the World recession had occurred! No… nothing to do with Bankers… nothing to do, even, with the Private Sector.
Just what did the Government spend it on?
… on a hugely increased Civil Service and Public Sector Employment with new, additional layers of government and Civil Service in Scotland and Wales… not to mention a reduction in actual services received for this extra expenditure… whew! Should that really have been possible given the level of extra advisors Governments now enjoy?? Incompetence must be its own reward.
PS. It only took roughly the same number of Politicians and Civil Servants in the new Scottish Parliament to run the whole of the vast British Empire of the 18 and 19th centuries… and only with a quill pen, a horse or a sailing ship… oh… and the odd gun!
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