TAXIS...Beating the cancer and clearing the mortgage the final hurdle.

InaPickle

*Pops in*

:wave: Just popping in to say hello. Hope you are feeling well.

*Pops back out again*

taxi73

Am fine thanks Pickle x

ZTD

taxi73 wrote: »

the problem arises when the person is neither employed by the private or public sector and then has to live on benefits then that person can't spend.
the private sector would still be paying the tax they were paying ...as nothing has changed for them.
the public sector worker would not be paying tax as they are not working and would be getting benefits out of the tax payer system...this is assuming that the private sector has no jobs for them..thus not saving a great deal on the wage bill...
so whatever is left is in the goverments pocket not the wider economy....

or is my chemo brain compltely off course

the real savings are to be had at the top of the public sector in the non jobs/quangos rather than on the front line

A public sector person pays tax in name only - if you give me money to give you straight back, it's just an accounting mirage. It's just the same as if you'd never given me the money in the first place - and that's exactly how it operates with the tax system. Every public sector person is paid nett.

It's a bit like asking one of your kids to pay you rent when the only income they have is pocket money. The rent you'll get back are the exact same notes you just handed them...

Now take the issue of someone public sector person on £500 a week. They go on the dole at £100 per week. (Yes, these are my infamous round numbers) There is £400 floating around somewhere.

Where is it?

If you cut taxes, it means the tax payers have £400 extra. They can either spend it, or put it in the bank (in essence lend it to the bank).

If you don't cut taxes, you'll cut borrowing - which means your lenders now have £400 extra to either lend to someone else, or to spend.

If someone lends it, then someone else (by definition) must borrow it. What are they going to do with £400 they've just borrowed?

Spend it...

And this assumes everyone stays on the dole. If they don't and become productive, then not only is there £500 in their wage savings, but you will now get "real" tax from them.

It also assumes, they aren't spending taxpayer money as part of their job, if so, then the difference is even greater. Some people of course would argue that the Government can spend your money more wisely that you can.

Just as a contrast, in the Victorian era when Great Britain had an Empire so large the sun never set on it, the Government spent about 10% of GDP. Now it spends about 50%.

We're obviously 5 times more important and powerful these days.

taxi73

wow..my heads mashed with that lot.
in the instance of the public sector worker going on £100 a week dole money instead of private sector job..is the £400 not still in the governments coffers as it hasn't left there coffers in wages in the first place?...so that £400 comes off government debt...

my whole point relates to the private sector not having jobs available for the poor souls that will lose their jobs in the public sector...thus the government have got the £400...the one on the dole £100..the public sector still the same as before as tax etc hasn't changed.
so now only £100 to be spent in the real economy on things they choose rather than £500.

am i looking at this all wrong

dentonemma

MY OH works in the pubilc sector for the last 24 years years and he has been told he faces automatic transfer to a new private company which means working at least 5 years longer before he can leave. And the extra money he has paid into his pension system has been removed. He is looking at leaving before March next year. His package to leave has been cut in half by the goverment changing the bill in government. We have worked out that when NI increase and Child benefit stops we will be £11,000 short. He gets £44.500 before tax a year. People in the public servic still have family to feed and put a roof over our family heads.

dentonemma

I forgot to mention that we have a child that is 14 who wants to go to further education. we also have two children who are much younger age 8 & 6 whichwe now have pay for all their feed approx £27,000 fees fors. If /when my OH gets kicked out of a job he loves.


At the present time the reasom he is thinking about leaving.is to have enough money for his children to go to further education.
and Y OH has no intention of giving any money to anyone but me in cash because banks £ building society

taxi73

I know it's awful what they are doing to people but what are the answers?I seriously think that once these job losses start occurring and all their effects start to be felt we will be in for a very rough time for a long time to come.The government debt is so large that it's hard to keep on topof the interest let alone put a dent in it.

macgirl

Is it awful. I know a few people who are facing redundancy. One is an ex-teacher so should be re-employable. Another works for the Department of the Environment and feels prospects are bleak.

Although my job is (hopefully) safe, we are facing difficulties. For one, people will have less in their pockets so won't be spending with us. Also, there is a crisis in China at the moment with regards to manufacturing costs and lack of workforce, so people will see the price of things going up next year - clothing especially....

It's going to be tough for a few years yet.

Gemmzie

But thankfully we have MSE mantras to get us through, I just hope local and central government do their SOAs throughly!

ZTD

taxi73 wrote: »

wow..my heads mashed with that lot.

It'll be even more mashed, when we go to the effect of inflation...

taxi73 wrote: »

in the instance of the public sector worker going on £100 a week dole money instead of private sector job..is the £400 not still in the governments coffers as it hasn't left there coffers in wages in the first place?...so that £400 comes off government debt...

Yes. And since that's £400 the government isn't borrowing, that's £400 the private sector isn't lending to the government. What happens to it then? Will it's either lent to someone else, or spent.

Since the Government isn't demanding so much money, the "price" of it (interest rates) will go down, so the person who does actually borrow it, pays back less, and hence has more to spend. (This is termed "crowding out")

taxi73 wrote: »

my whole point relates to the private sector not having jobs available for the poor souls that will lose their jobs in the public sector...thus the government have got the £400...the one on the dole £100..the public sector still the same as before as tax etc hasn't changed.
so now only £100 to be spent in the real economy on things they choose rather than £500.

am i looking at this all wrong

You're missing where the £400 comes from. You're focussing on where it is, and where it can go, but missing where it came from.

You're saying the £400 going into the private sector is good - but then not saying that the £400 coming *out* of the private sector is bad.

Well let's try this the other way around. Let's make the government employ everyone. One half the population digs a hole. The other half fills it in.

Obviously the government will pay everyone £500. Is that a sustainable economy? If not, we'll stop the Government employing one person, and send them off to the private sector. Is it sustainable now? If not, we'll keep sending off one person into the private sector until it does become sustainable.

At which point does it become borderline sustainable?

Would you leave it at that point, or would you send off a few more to the private sector to be safe?


If for some reason you can't get them off to the private sector:

You have the choice to give them £500 to waste their time, or stick them on the dole to waste at £100 a time. Which would you choose and why?