Another Labour Policy - Another Fail

cogito

Wookster wrote: »

Am I the only person who is quietly astonished that Labour are critising the Tories on economic policy when they have messed things up so badly.

Why aren't the Tories really hammering home Labour's incompetence more strongly?
e.g. increase in dole claimants, increase in disability benefits, failure to deliver on projects e.g. NHS IT project, home office failings, the list goes on.

Both parties are in disarray.

Vote Lib Dem!

Agreed. I was surprised that Osbourne didn't challenge Darling last Monday by pointing out that Labour had built up the country's debts to alarming levels and part of their solution was to borrow another £500bn over the next 5 years.

Kohoutek

StevieJ wrote: »

Maybe they think that the pain should be spread around, what is for certain they have not signed that letter (and I bet a number of them were approached).

Stupid boy! (or Girl)

You're the stupid one mate if you believe for a minute that more than a tiny minority of small business owners would be in favour of raising employer's national insurance.

How can you expand a business by capital investment or employing more staff if you are paying more tax on every employee? :eek:

There are many ways to pay back the deficit, but by increasing employer's NI is a terrible suggestion that will hurt jobs.

moggylover

All else aside, and not wanting to bang on upon one party being good and another bad BUT: the people who have gained most from the last boom years are the extremely rich.

Everyone keeps on about how the deficit needs to be paid back, but for many of the super rich the ONLY acceptable way is for those that have sweet fanny adams already to get even less in order to pay it all back:D

I would really have a lot more respect for them admitting that they have actually had a damn good time of raking it in during the boom times, and that they might just need to help pay a bit back now;) Certainly they had the most to loose from the banks going bust and therefore the cost of the bailouts would be better borne by those that preserved their very comfortable staus quo than by those that already struggle to make ends meet:D

Personally totally unimpressed by any of the parties these days and considering not voting at all for the first time ever in the 34 years since I reached voting age:(

Pennywise

Taxes must rise, but NIC is the wrong one for many reasons:-

1. It's only paid by workers,
2. It's not paid by those reliant on state benefits,
3. It's not paid by those whose incomes are derived from investment income, i.e. dividends (small owner managed limited companies), trust funds, investment portolios, capital gains, etc.
4. Employers NIC is also paid by public sector, so the rise will increase the public sector's costs - a money go round as the govt will have to step into breach the gap (again - remember the Olympics costing fiasco when they forget to include VAT!).

So any rise will disproportionately hit the workers and not affect those who don't have "earned income".

A smaller increase in income tax, VAT, etc., could acheive the same increase in tax revenue, but spread about more fairly among the entire population, not just the workers.

The Labour Treasury guy, (Liam Byrne?) actually tried to say on radio this morning that it wouldn't affect jobs and actually had the nerve to say the last increase in NIC was followed by lots of new jobs - making it sound like it creates jobs. Typical BBC didn't counter his argument though - the new jobs were public sector ones, largely created as a result of the growing NHS, so not because of increasing employment taxes - what a fool!

In fact, I'd go further than saying the NIC increase should be scrapped. I'd say NIC as a whole should be scrapped. It's a ridiculous unfair tax:-

1. For the reasons above,
2. Because you can have 2 or 3 low paid jobs and never pay NIC, but if you have one job and earn more, you pay a shedload of NICs - how fair is that?
3. There was a time when paying NICs bought your right to state benefits, but now you get state benefits regardless of NIC history.

I'd far rather see income tax and capital gains tax rise to a more realistic 25%, and an "employment tax" of say 5% on all employees (even low paid ones), to get rid of the anomalies, increase tax revenues, and get rid of a mountain of bureacracy surrounding NIC contributions etc.

How about starting a campaign to scrap NICs altogether - they're a tax on workers, and in these hard times, we need the workers to get us out of the black hole.

StevieJ

Pennywise wrote: »

Taxes must rise, but NIC is the wrong one for many reasons:-

1. It's only paid by workers,
2. It's not paid by those reliant on state benefits,
3. It's not paid by those whose incomes are derived from investment income, i.e. dividends (small owner managed limited companies), trust funds, investment portolios, capital gains, etc.

So any rise will disproportionately hit the workers and not affect those who don't have "earned income".

The pensioners won't like it once they realise that no NI increase means taxes elsewhere

whathavewedone

I think Labour have got it all wrong today, telling the business leaders that they've been misled - yeah patronise some of the country's biggest employers - that'll go down a storm.

These aren't just tory supporting business leaders that think raising NI is a duff idea, Sainsburys have been a massive donor to Labour over the last few years.

In reality, the NI rise will hurt small businesses far more. The ones on industrial estates that employ less than 10 people. Businesses like my husband's. No one's going to listen to a small fry like him but I'd be very suprised if you would find many small businesses who are struggling through this recession who would tell you that raising national insurance is a good idea in the near future.

It's not just a tax on jobs - it's also a tax on low earners.

There are many ways that the budget deficit can be cut. Just because the tories don't agree with Labour that taxing jobs and low earners is a winner does not mean that they are incapable of cutting the budget deficit.

Raising taxes does not necessarily = getting more taxes into the treasury - as was proved in the 80s when the top rate of tax was cut to 40%. Fewer people dodged their taxes, more people were incentivised to start businesses in the UK, they employed people - end result more money in the treasury than under the previous government.

What is the point of putting up national insurance in the hope of getting more money into the treasury to cut the budget deficit if it results in redundancies being made and fewer people getting taken on? It can't even be justified on the basis of fairness as we are not talking about high earners here.

Incidentally I have heard it rumoured that Labour are running around like headless chickens trying to get their own letter together. Quelle surprise!

StevieJ

whathavewedone wrote: »

Incidentally I have heard it rumoured that Labour are running around like headless chickens trying to get their own letter together. Quelle surprise!

Probably all those business leaders that have nice little public sector contracts with govt or LA's :mad:

Spartacus_Mills

Labour cannot even keep its own peers onside in this one.

Lord Desai, Labour Peer
Sky News

Labour peer Lord Desai called national insurance a “tax on jobs” and urged the government to cut the deficit through taxing consumption instead.

“It [national insurance] is a tax on jobs, that cannot be denied” he said. “At the margins it is bound to affect job creation or job retention.”
He also claimed that the government “should be taxing consumption rather than employment” and should cut the deficit by removing zero VAT rating from all goods.

aelitaman

http://www.politicshome.com/uk/article/7413/lord_desai_calls_ni_a_tax_on_jobs.html

Labour Peer Lord Desi now comes out and says NI rise is a tax on jobs and should be stopped and VAT raised including putting VAT on all currently exemped items, like food and baby clothes.

So now it is the Tories, Big business, CBI, Small business federation and the mainstream Labour Party all saying Labours planned hike in NI is a tax on jobs and does not help the economy.

It was widely spun at the time of the announcement that Darling and Mandleson were against it. So that leaves Brown and Balls as the only suportters.

Oh dear Labour election campaing falling apart at the seams.

Spartacus_Mills

StevieJ wrote: »

The pensioners won't like it once they realise that no NI increase means taxes elsewhere

Indeed. The taxes have to come from somewhere so where do they come from ?

This is why I do not get too hung up about motoring taxes. At least they are, in general, consumption based.

As I think we discussed in another thread people are happy to see taxes as long as they do not affect them personally.