UK future revenue stream for the government?

kabayiri

I noted with interest 2 unrelated recent events.

Firstly, income tax receipts now do not cover the Benefits budget.

Secondly, Barclays latest financials indicate a reduction in effective corporation tax, from 20.4% to 19.4%; this in no small part due to a combination of 300+ offshore companies they work to good effect.

Is this a double whammy? Income tax receipts falling; corporate tax receipts failing to fill the gap.

Where do my fellow forumites think the gap is going to be made up over the next few years?

(Hint: I hope you have a mirror handy )

drc

kabayiri wrote: »

I noted with interest 2 unrelated recent events.

Firstly, income tax receipts now do not cover the Benefits budget.

Secondly, Barclays latest financials indicate a reduction in effective corporation tax, from 20.4% to 19.4%; this in no small part due to a combination of 300+ offshore companies they work to good effect.

Is this a double whammy? Income tax receipts falling; corporate tax receipts failing to fill the gap.

Where do my fellow forumites think the gap is going to be made up over the next few years?

(Hint: I hope you have a mirror handy )

I think they are going to have to cut the welfare state down to size (possibly get rid of tax credits, try and get a lot of people off the sickness benefits etc). I think they'll also have to deflate the public sector and cut a lot of fairly useless jobs whilst raising taxes at the same time.

amcluesent

>Where do my fellow forumites think the gap is going to be made up over the next few years? <

Fiddling the pension rules to oblige the purchase of gilts by private companies schemes

Breaking public sector contracts to steal pension entitlements

Selling off the last of our infrastructure, roads especially.

Strong-arming plc into accepting renegotiation of PFI deals

More fines for nonsense 'crimes' enthusiastically collected by the tax police

VAT to 25% on 'luxury' goods

Spurious 'green' taxes at every touch and turn, i.e. when you sell your house and it's not 'eco friendly' etc.

Letting a nice dolop of inflation come through to take the sting out of debt

Selling Soylent Green (after passing new laws on uthanasia)

JoeCrystal

Well,

Raise Taxes and Lower Public Spending...

Well, I wonder if the Councils can borrow money in Bonds in exchange of high coupons?

I mean the Central Government would not be able to provide the Councils with enough money in the end. Look at Dorset, Poole and Bournemouth. All poorly funded... Well, that what the Councils tell us.

However, I do faintly recalled that Dorset police, who get the second smallest amount of central funding per head of the population and underfunded.

Sorry, just little annoyed about Councils in Dorset so badly underfunded...

bluey890

kabayiri wrote: »

I noted with interest 2 unrelated recent events.

Firstly, income tax receipts now do not cover the Benefits budget.

Secondly, Barclays latest financials indicate a reduction in effective corporation tax, from 20.4% to 19.4%; this in no small part due to a combination of 300+ offshore companies they work to good effect.

Is this a double whammy? Income tax receipts falling; corporate tax receipts failing to fill the gap.

Where do my fellow forumites think the gap is going to be made up over the next few years?

It will be those with savings and/or income.
Won't be the debt junkies. They have nothing to give.
Nor the v.rich, the Tories couldn't have that.

CLAPTON

It's total normal and totally expected that tax receipts fall in a recession and that government spending increases.

Why is this surprising?

Mr_Mumble

The Sunday Times leader is about pubic spending, of note:

Within Whitehall the talk is of 20% reductions, in line with what Canada achieved during the 1990s. Senior Conservatives have been talking to their Canadian counterparts of the time. It may sound tough but it follows a 50% real-term rise in spending under Labour.

nearlynew

Never underestimate the government's desire or ability to screw you over. They do not care about you, your family, or even the country.

All they want is to remain in power.

kabayiri

CLAPTON wrote: »

It's total normal and totally expected that tax receipts fall in a recession and that government spending increases.

Why is this surprising?

It's not surprising I agree, and yes economies have bounced back from previous recessions.

But things arent exactly the same, which is why I posed the question I guess.

Companies only have a duty to their shareholders. They can shift labour and profit around the globe using countless number of highly inventive schemes. Some here would argue this is the right course of action. Whatever the rights and wrongs, it's optimistic to expect massive returns from these companies in the short term.

Maybe I am naive but I think we need both to cut costs dramatically and generate serious additional income into the treasury's coffers?

baileysbattlebus

nearlynew wrote: »

Never underestimate the government's desire or ability to screw you over. They do not care about you, your family, or even the country.

All they want is to remain in power.

Absolutely spot on.

And that's for a party of any political persuasion.

macaque_2

CLAPTON wrote: »

It's total normal and totally expected that tax receipts fall in a recession and that government spending increases.
Why is this surprising?

Your statement implies that we are in a trough between two peaks. The evidence suggests that this is not the case. Today's economic conditions have more in common with the shoulder of a bubble that the fluctuations of a normal economic cycle.

Tax receipts and jobs have become far too dependant on house churning. We all know that half per cent interest rates cannot last much longer and when the £ starts to slide (as it must) the economy and tax reciepts will be ransacked.

The government has managed to keep the hot air balloon aloft by the burning basket. They continue to spend on the assumption that tax receipts will return to 2007 levels in the near future. Common sense tells us that this cannot happen. On that basis, current public sector spending policies are misguided, irresponsible and selfish.