UK - Election 2015

[MikeG]

How patronising.

It wasn't meant to be, and I can't see how it is.

For someone to be better off they have to be earning more than £10,000 per year.

Really? I don't believe that figure.

As noted, raising the TFA by £600 only means £120 less in tax per year.

But it hasn't been raised by £600. It has been raised by £4125, from £6475 to £10,600 This amounts to a tax saving of £850 per annum or some £71 per month. For a poor person, this is a huge difference.

eta Perhaps you could point to any other government in UK history that has taken so many people out of tax altogether, or that has increased the standard rate personal allowance by about 65%.

So someone actually earning £10,600 goes from getting £873.33 (less NI) in their hand, to £883.33. A massive increase of 1.15%. It's such a derisory amount that it hardly makes any difference, but at what cost in the forms of cuts elsewhere? £120 million for every million workers who "benefit" the price of a few cups of coffe/beer a month.

In light of your £3500+ error in the amount it has been raised, perhaps you'd like to revisit this paragraph.

 

[MikeG]

......The tax cut for the rich however was a real saving.

Don't you think it odd that Gordon Brown, during his entire tenure at the Treasury, thought 40% was the best rate for higher rate tax payers? Perhaps it was because he knew that decreasing the rate generally increases the amount of tax collected. Laffer curve.

 

[Lothian]

Don't you think it odd that Gordon Brown, during his entire tenure at the Treasury, thought 40% was the best rate for higher rate tax payers? Perhaps it was because he knew that decreasing the rate generally increases the amount of tax collected. Laffer curve.

No I don't think it odd. Tax rate rises are unpopular. The Blair government went to great efforts to persude the wealthy that New Labour were their friends, for political reasons I see why Brown would not want to increase tax, However that does not mean it is economically the right answer.

I am familar with the laffer curve. Do you have any evidence that 40% is the rate that maximises yield?

According to HMRC an increase (from current rates) in the top tax rate brings in more yield and a decrease costs money

 

[Craig B]

I can't help wondering if the SNP might get caught in a '92 and end up not doing as well as people predict. I doubt they will do badly but I wouldn't be surprised if Labour hold onto a few seats because of the fear of a Tory government getting to people in the booths.

Could be interesting if that happens and Labour were in a position to still need a bit of help forming a government.

(Of course it would not be a shocker if I am totally wrong...ho hum).

Agreed. The clean sweep predictions just have to be exaggerated. I think the SNP will do very well. But 25-30 would be great by any standards except the current polls. And they may get more than that.

For example, YouGov final poll gives for all UK

Con 276, Lab 276, Lib Dem 23, SNP 51, UKIP 1 and Green 1.

Where on earth are SNP figures like that coming from? I have spoken to SNP reps at polling places in Glasgow this morning, and they don't believe it either. But where are these figures coming from? What's going on?

 

[DarthFishy]

Agreed. The clean sweep predictions just have to be exaggerated. I think the SNP will do very well. But 25-30 would be great by any standards except the current polls. And they may get more than that.

For example, YouGov final poll gives for all UK

Con 276, Lab 276, Lib Dem 23, SNP 51, UKIP 1 and Green 1.

Where on earth are SNP figures like that coming from? I have spoken to SNP reps at polling places in Glasgow this morning, and they don't believe it either. But where are these figures coming from? What's going on?

YouGov, being an online polling website, skews slightly toward younger viewers? Hence the tend towards SNP and away from UKIP?

Maybe?

 

[MikeG]

......I am familar with the laffer curve. Do you have any evidence that 40% is the rate that maximises yield?........

No, I haven't. Nor could I find any research or other evidence about the actual amount of tax brought in by the higher rate tax, and any assessment as to whether it had gone up or down as a result of the change. The assertion at the time that it was lowered was that the change would actually increase the tax take, (due to a reduction in the amount of avoidance measures people take in those circumstances). I haven't seen anything which assesses the validity of that theory.

 

[MikeG]

YouGov, being an online polling website, skews slightly toward younger viewers? Hence the tend towards SNP and away from UKIP?

Maybe?

And towards Labour and away from Conservative. I suspect they may prove to be the least accurate of the pollsters.

 

[Lothian]

eta Perhaps you could point to any other government in UK history that has taken so many people out of tax altogether, or that has increased the standard rate personal allowance by about 65%..

I think the question is more, the real increase in take home pay rather than taking people out of tax. I am not sure if the 10p basic rate or some of the standard rate cuts helped the low paid more. I guess it depends how you define low paid. That said I agree that the increase in the basic allowance is good.

As I am sure you know income tax is not the be all and end all. Working tax credits mess up the picture. There is also the issue of VAT, a regressive tax which huts the poor more than the rich, a tax increased by this Government.

I don't know if there is a 'how did the budgets affect you?' for the term of this parliament. Each budget we get one and I could add them but I suspect the real tax winners over the last 5 years are the rich followed by the poor with the middle earners doing worst..

 

[jimbob]

No I don't think it odd. Tax rate rises are unpopular. The Blair government went to great efforts to persude the wealthy that New Labour were their friends, for political reasons I see why Brown would not want to increase tax, However that does not mean it is economically the right answer.

I am familar with the laffer curve. Do you have any evidence that 40% is the rate that maximises yield?

According to HMRC an increase (from current rates) in the top tax rate brings in more yield and a decrease costs money

Cuts to HMRC also cost money - and this is just investigating tax that is owed.

 

[Lothian]

No, I haven't. Nor could I find any research or other evidence about the actual amount of tax brought in by the higher rate tax, and any assessment as to whether it had gone up or down as a result of the change. The assertion at the time that it was lowered was that the change would actually increase the tax take, (due to a reduction in the amount of avoidance measures people take in those circumstances). I haven't seen anything which assesses the validity of that theory.

The theory is fine although I recall tax avoidance doesn't play a part in it. I think it is a bit more about a decreasing incentive to work. Happy to be corrected.

Incidently this government has done quite a bit on tax avoidance, arguably more than the last one.

 

[ddt]

YouGov, being an online polling website, skews slightly toward younger viewers? Hence the tend towards SNP and away from UKIP?

Maybe?

About every pollster predicts 50+ seats for the SNP. Ladbrokes has them on 53, and unlike pollsters, they can also lose money from their predictions.

 

[Peter May]

The theory is fine although I recall tax avoidance doesn't play a part in it. I think it is a bit more about a decreasing incentive to work. Happy to be corrected.

Incidently this government has done quite a bit on tax avoidance, arguably more than the last one.

I fear Ed Miliband is dragging Labour to the left, in which case, he is going to lose
votes to the Conservatives, and the Lib Dem's.
Where the UK's defence relies on Trident, and it's replacement.

Wait for a Conservative win......

 

[Rum]

Walking back from the park after my evening dog walk, a number of 20 something lads (we have a university locally) with large packs of beer on their shoulders, obviously ready for an all nighter!

 

[jimbob]

Cuts to HMRC also cost money - and this is just investigating tax that is owed.

I'll expand on this.

The stated purpose of austerity is to balance the Government's books. There are tax rises, including regressive ones that directly impact spending (like VAT) and there are cuts in government departments. HMRC is included in the spending cuts and job losses, despite the fact that every HMRC inspector is revenue-positive, they bring in far more tax than they cost. Last time this was discussed on the radio (within the last 5-years, can't be more specific than that unfortunately), the experts all said that there are more opportunities for chasing up tax evasion and tax avoidance than the current staff could address. In other words, every cut to the HMRC inspectors is a greater reduction in revenue than a reduction in cost.

There was a leaked memo in 2014 about the impact of job cuts and a related story in the IBTimes


These inspectors are also targeting avoidance and evasion, so the revenue gain (estimated gap somewhere between £34Bn and £120Bn) comes from real freeloaders and cheats, as opposed to the nearly-mythical benefit cheats, where the measures to stop them also affect justified claimants.

 

[Lothian]

I'll expand on this.

The stated purpose of austerity is to balance the Government's books. There are tax rises, including regressive ones that directly impact spending (like VAT) and there are cuts in government departments. HMRC is included in the spending cuts and job losses, despite the fact that every HMRC inspector is revenue-positive, they bring in far more tax than they cost. Last time this was discussed on the radio (within the last 5-years, can't be more specific than that unfortunately), the experts all said that there are more opportunities for chasing up tax evasion and tax avoidance than the current staff could address. In other words, every cut to the HMRC inspectors is a greater reduction in revenue than a reduction in cost.

There was a leaked memo in 2014 about the impact of job cuts and a related story in the IBTimes

I am not sure there have been that many cuts to HMRC "front line" staff numbers during the last parliament. HMRC is one of the departments exempted from the general governmental department austerity savings. This fact check shows the majority of cuts happened from 2005 to 2010
Since then HMRC have had extra money specifically for addressing tax avoidance including £77 million in 2013
I believe most staff savings (horrible term) have been in back office processing areas brought about by the move to on-line filing.

That said your point about the revenue positive nature of their staff is quite correct as is.......

These inspectors are also targeting avoidance and evasion, so the revenue gain (estimated gap somewhere between £34Bn and £120Bn) comes from real freeloaders and cheats, as opposed to the nearly-mythical benefit cheats, where the measures to stop them also affect justified claimants.

 

[KDLarsen]

Oh. My. God. If that Exit Poll holds.

 

[LondonJohn]

BBC exit poll:

Con 316
Lab 239
SNP 58
LibDem 10
Ukip 2

 

[GlennB]

Hard to believe. We shall see, but if it's that severe it'll be the end of Miliband.

 

[DarthFishy]

So the Conservatives and Labour were not as close as expected, and SNP doing really well.

Will be very interesting to see if the exit poll remains accurate.

 

[LondonJohn]

My prediction from last week (when all the polls were predicting Con/Lab at roughly level pegging on seats at 270-280 each):

Conservative: 315
Labour: 270
SNP: 40
LibDem: 12
Others: 13

I seem to have underestimated the damage the SNP would do to Labour in Scotland - but other than that, I might have got pretty close.