Cameron makes savings tax pledge

JonnyBravo

No tax to pay on your savings (for most people) under the Conservatives.
Better than the VAT cut IMHO.

:T

http://news.bbc.co.uk/1/hi/uk_politics/7810932.stm

chewmylegoff

JonnyBravo wrote: »

No tax to pay on your savings (for most people) under the Conservatives.
Better than the VAT cut IMHO.

:T

http://news.bbc.co.uk/1/hi/uk_politics/7810932.stm

this is a bit of a hollow offering because most people who are BR tax payers already have significant protection from tax on their savings as they can put £3,600 per year into a cash ISA and pay no tax on their savings anyway.

realistically how many people are going to be saving substantially more than £3,600 per year who are BR tax payers? (and even if they could use up the rest of their ISA allowance by investing in shares or bonds).

good for pensioners living off investments though.

and i agree that it's better than the nonsense VAT cut.

huntersc

What's the real saving here? 20% tax on 0%? Very generous

Old_Slaphead

Lots of pensioners have a few tens of thousand as nest eggs. If they put it in Cash ISAs they'll lose some of the tax saving if they make any withdrawals.

While ever interest rates stay at the current levels of 1-2%, the tax saving (0.2-0.4%) is negligible anyway.

Rochdale_Pioneers

chewmylegoff wrote: »

realistically how many people are going to be saving substantially more than £3,600 per year who are BR tax payers? (and even if they could use up the rest of their ISA allowance by investing in shares or bonds).

Exactly - its a tax cut for the already well off.

Not sure how it helps allieviate our part of the global recession - doesn't get people spending money so helping liquidity. Doesn't keep people in jobs. Doesn't do very much apart from help those people lucky enough to have large savings keep money locked up out of use.

Isthat it? Is that all the Tories have to offer as a solution? No wonder their poll rating is collapsing - did they miss this weekend's poll showing that the majority blame rich bankers for the mess and would like them taxed?

nickmason

chewmylegoff wrote: »

this is a bit of a hollow offering because most people who are BR tax payers already have significant protection from tax on their savings as they can put £3,600 per year into a cash ISA and pay no tax on their savings anyway.

realistically how many people are going to be saving substantially more than £3,600 per year who are BR tax payers? (and even if they could use up the rest of their ISA allowance by investing in shares or bonds).

good for pensioners living off investments though.

and i agree that it's better than the nonsense VAT cut.

I think this illustrates the point I've been making about philosophy rather than policy. The effect of this might not be great. But the message is quite distinct - savings are to be encouraged and rewarded - and in a more general sense than an ISA allowance. A couple of secondary messages that are tied in:
1) simplicity is a good thing (ie you don't need to be clever to tax avoid, or require the services of a professional accountant - cf "Mr Tessa Jowell" and Berlusconi)
2) double taxation is something that should be avoided (I know this is vastly more complicated - but I am talking about a message, rather than the minutiae of policy)

amcluesent

Hurrah. Sound Tory policy that rewards individuals who make sensible provision for themselves.

What a contrast to Clown who loves to have his 'client state' tied-up in ever more convoluted rules and regulations to ensnare them to benefits.

nickmason

Rochdale_Pioneers wrote: »

Exactly - its a tax cut for the already well off.

Almost every incentive to rational behaviour can be described this way. It is one of the paradoxes of socialism that it disincentives rational individual behaviour that would be to the benefit of society as a whole.

Not sure how it helps allieviate our part of the global recession - doesn't get people spending money so helping liquidity. Doesn't keep people in jobs. Doesn't do very much apart from help those people lucky enough to have large savings keep money locked up out of use.

spending money will not help liquidity. The liquidity problem is one of confidence, not individual savings. To restore confidence you need some sensible long term strategies that look like they will restore national economic value such that the obligations (pensions, cost of governance etc) can be met. Investment is a good one. Throwing money at the problem is a bad one.

Isthat it? Is that all the Tories have to offer as a solution? No wonder their poll rating is collapsing - did they miss this weekend's poll showing that the majority blame rich bankers for the mess and would like them taxed?

It's a better solution than the considerably better resourced government has come up with - probably because of the vast tension between the brains in the civil service and the political imperatives from the politicians.

And if everyone is blaming the bankers, then thank you Mr Mandelson and team for doing your best to scuttle the UK economy. Wouldn't expect anything less - would have loved it if someone stood up and said actually we need to compete with the rest of the world, and that means embracing the areas we have made money. The city has brought money into Britain. The mismanagement of the credit boom is sending it out. Oh yes, let's blame the golden-egg-laying-goose for teasing us with riches and then allowing itself to be shot by the spinning government.

chewmylegoff

Rochdale_Pioneers wrote: »

Exactly - its a tax cut for the already well off.

well, it is an instant £7k tax cut for any couple with £35k+ savings income a year where one partner doesn't work.

Rochdale_Pioneers

nickmason wrote: »

It's a better solution than the considerably better resourced government has come up with - probably because of the vast tension between the brains in the civil service and the political imperatives from the politicians.

Yup, its a battle of intellect.

One one side you have the Labour Party. The IMF. The World bank. The EU. The CBI. Nobel-laureate economists. Most of the developed world's governments. Even the Germans, despite their comments before Christmas, have spent more bailing out their banks than we have, and have pledged to invest more of GDP than we have on propping up their economy.

On the other side you have Cameron and Osborne. Oh, and Redwood, with his "lets fully deregulate the mortgage market" idea.

Masomnia

chewmylegoff wrote: »

well, it is an instant £7k tax cut for any couple with £35k+ savings income a year where one partner doesn't work.

People with ~£1million in savings are not those we should be focusing on.