Cameron to scrap taxes on savings (basic rate only)

nicko33

Reaper wrote: »

Sorry, but in my view that is the wrong thing to do in a recession. He is going to encourage personal saving (and therefore reduce spending making the recession worse) and fund it by cutting governement expenditure (also making the recession worse).

In isolation, maybe, but the reduction in Base Rate is discouraging saving and encouraging borrowing for (mostly) those who are still employed.

The temporary VAT cut is supposed to be encouraging spending.
To me, that's just a bit of fiddling around the edges.

and so would this savings tax cut be, except for those people that it would make a big difference to.

paulboy83

The one question that came to my mind was, where will the money come from? I'll admit to not having heard the full speech so correct me if it was mentioned in there, but if Cameron doesnt want to spend his way out of recession surely tax cuts are doing what he doesnt want to do? I would of course welcome any cut in tax on savings, but this doesnt sound right to me.

nobby24

Well seeing that there isn't going to be a General Election till at least some time in 2010 his proposal is purely academic!

dougs

Inactive wrote: »

Cameron ain't going to do anything, he isn't in a position to do anything.

Blatant electioneering.

Jeez! If he says nothing he gets accused of having no policies and being the "do nothing" party. If he says something he gets accused of "blatant electioneering".

People (and the Labour party who do most of the shouting down) should make up their minds whether they want him to say something or say nothing. You can't have it both ways :rolleyes:

GooeyBlob

Given that the government has been systematically punishing savers for the past decade by, amongst other things, running down annual tax-free savings limits in real terms, this would be a step in the right direction.

It probably won't give most of us that much extra money, but every penny helps as far as I'm concerned - that's why I'm on this site, to hold on to more of my own hard-earned cash. It's another incentive to save, instead of the debt-crazed frenzy we've had since Gordon has been running the economy and claimed to have single-handedly abolished the economic cycle.

Not often I hear politicians talking common sense, but this is a start.

Milarky

If ordinary savings become tax free this will release large amounts currently tied up in ISAs (with consistently lower gross rates) One reason G B* may not approve, therefore, is that ISAs were his idea - and bear the hallmarks of complexity and inflexibility.

ISAs will then remain the domain of HR taxpayers - because the difference in tax treatment would be the same as now for this group. Arguably that's a good thing - as basic rate taxpayers get next to nothing from S&S ISAs for instance - so dunstonh et al would find it easier to sell them appropriately than now...

(*On the other hand, he found a way of airbrushing the centrality of the10% starting rate of tax out of the history books - "Labour's Great Patriotic War on Poverty (1997-2008)" when it suited him to stuff it to the Tories with a populist 2p off the 'basic' rate of tax; they've had two bites at the cherry - May and November '08 - and still haven't fixed that - simply made some people better off and some people worse off in the process)

Andy_L

hmmm, so if I had £2mill in the bank I could sit on my bum & pay no income tax. Way to help those struggling pensioners

bristolleedsfan

dougs wrote: »

Jeez! If he says nothing he gets accused of having no policies and being the "do nothing" party. If he says something he gets accused of "blatant electioneering".

People (and the Labour party who do most of the shouting down) should make up their minds whether they want him to say something or say nothing. You can't have it both ways :rolleyes:

IMO, Cameron says it best when he says nothing at all.

Blah99

Reaper wrote: »

Sorry, but in my view that is the wrong thing to do in a recession. He is going to encourage personal saving (and therefore reduce spending making the recession worse) and fund it by cutting governement expenditure (also making the recession worse).

Measures to encourage saving instead of spending would have been the right ones previously when the economy was overheating, it is precisely the wrong thing to do now it has crashed.

I know you think this is right, because you've been sucked in by Labour's spin and poor media reporting. Unfortunately the best thing for people, individually, to do in this situation is to save as much as they can. In the current climate very few people are financially secure (mortgage loan-to-value problems, job security, excessive debts from previous years etc) therefore, to minimise further impact, everyone should be saving as much as they can.

As for the Government question, the Conservatives are doing exactly what is expected of a shadow cabinet - announcing the policies they would employ if they gain power. Of course if this country has any sense they will kick Labour out at the next election, because anyone with half a clue can see the damage they have done to this country. They've been extremely lucky to be in power through years of economic stability and growth, otherwise they'd have been found out much sooner.

If Labour get voted back in to power this/next year it simply proves that the majority of voters in in this country are too stupid to be allowed to vote.

casper_uk

Andy_L wrote: »

hmmm, so if I had £2mill in the bank I could sit on my bum & pay no income tax. Way to help those struggling pensioners

No once again people fail to grasp what this is about. This will only work for people paying the basic tax rate!.