Granny Tax Hysteria

chewmylegoff

ruggedtoast wrote: »

How much are they losing? I heard it was about £80 quid a year.

We just lost five hundred nicker a year from the tax credits being changed. And every year inflation wipes out another chunk of my real salary.

80 quid sounds pretty good to me.

they are not losing £80 a year, or in fact anything at all.

a loss of £80 a year suggests that they will pay £80 more tax next year.

they will not. they will pay the same amount of tax as before. (actually that's not true, they will pay more tax but only because their incomes will be increasing, due to the 5.3% increase in the state pension).

the net effect of these two changes will be that they have more money, not less.

pqrdef

chewmylegoff wrote: »

and no money is being taken off pensioners at all

And yet, the Treasury reckons that because of the allowances thing it will have to start collecting income tax from 230,000 people who otherwise wouldn't be paying any. Tell those people that no money is being taken off them at all.

You might as well say that if the state pension had been frozen at five bob a week, nobody would have lost anything because it would never have actually fallen.

And nobody loses from 0.5% Bank Rate - they get just as much as if Bank Rate were, oh, let's say, for instance, 0.5%.

When they talk about a freeze, the obvious implication is that the thing frozen would otherwise be going up. You're basically saying everything is just the same as it would be under some hypothetical circumstance in which everything happened to be the same. True, but pathetic.

Vedder2008

I did notice that pensioners would get a 5.3% increase in pension from April scrolling along the screen, but there was no mention of the unemployed getting the same amount. Stinks!

pqrdef

Vedder2008 wrote: »

I did notice that pensioners would get a 5.3% increase in pension from April scrolling along the screen, but there was no mention of the unemployed getting the same amount. Stinks!

Governments don't move that fast. Very few things can be decided only 10 days before they come into effect.

Most of Osborne's announcements this week are for 2013.

The pension rise is 2012, but it was announced last autumn, along with all the other benefits. They're going up in line with the September CPI figure, which was 5.2%.

But if you keep repeating the same announcements and the same news, people keep the same thing keeps happening. The government wants people to think that pensioners are getting lots of 5% rises. It doesn't want people to think the unemployed are.

chewmylegoff

pqrdef wrote: »

And yet, the Treasury reckons that because of the allowances thing it will have to start collecting income tax from 230,000 people who otherwise wouldn't be paying any.

the only reason they will have to pay income tax is because their incomes have increased to put them through the current threshold.

anyway. taxable allowance up 0, state pension up 5.3%.

the state pension increases therefore from £5,312 to £5,564. If you take off the £80 that this supposedly "costs" pensioners, then you have a net increase of £172.

therefore the net increase in payments from the govt to pensioners who will be affected by this change (i.e. those earning more than £10,500 but less than £24,000) is 3.2% which is in line with inflation, which is falling. furthermore those pensioners will have other income not received from the government which is likely to be index linked to a significant degree.

fetch me the world's tiniest violin, and i'll play you a song.

ukcarper

chewmylegoff wrote: »

the only reason they will have to pay income tax is because their incomes have increased to put them through the current threshold.

anyway. taxable allowance up 0, state pension up 5.3%.

the state pension increases therefore from £5,312 to £5,564. If you take off the £80 that this supposedly "costs" pensioners, then you have a net increase of £172.

therefore the net increase in payments from the govt to pensioners who will be affected by this change (i.e. those earning more than £10,500 but less than £24,000) is 3.2% which is in line with inflation, which is falling. furthermore those pensioners will have other income not received from the government which is likely to be index linked to a significant degree.

fetch me the world's tiniest violin, and i'll play you a song.

I don’t know where they get that £80 figure from the additional tax allowance is just under £2100 now, if it had increased with inflation next year it would be about £1600 so some one retiring next year will get £320 less than they would have if things hadn’t changed. If the general allowance reached £10k the following year the difference would be about £1000 or £200.

chewmylegoff

pqrdef wrote: »

Governments don't move that fast. Very few things can be decided only 10 days before they come into effect.

Most of Osborne's announcements this week are for 2013.

The pension rise is 2012, but it was announced last autumn, along with all the other benefits. They're going up in line with the September CPI figure, which was 5.2%.

But if you keep repeating the same announcements and the same news, people keep the same thing keeps happening. The government wants people to think that pensioners are getting lots of 5% rises. It doesn't want people to think the unemployed are.

and of course the key indicator for the poorest pensioners is not that 5.2% rise, but the fact that the minimum income guarantee has only increased by 3.9%.

so the govt's harping on about the 5.2% figure is disingenuous in respect of the poorest pensioners, to whom it is irrelevant, as their increase is 3.9% regardless of how much the basic state pension changes.

still, we're not hearing anything about that because the press is more interested in the £80 that better off pensioners have supposedly lost.

chewmylegoff

ukcarper wrote: »

I don’t know where they get that £80 figure from the additional tax allowance is just under £2100 now, if it had increased with inflation next year it would be about £1600 so some one retiring next year will get £320 less than they would have if things hadn’t changed. If the general allowance reached £10k the following year the difference would be about £1000 or £200.

i don't either and i hadn't bothered to work it out. however:

the age related allowance is £10,500 now.

if it had increased with inflation (assuming 5.2% would be the figure used) it would be £11,046.

£546 increase x 20% = £109.

but of course you have to earn at least £11,046 in order to get the whole £109. So may be due to people earning between £10,500 and £11,046.

StevieJ

chewmylegoff wrote: »

they are not losing £80 a year, or in fact anything at all.

a loss of £80 a year suggests that they will pay £80 more tax next year.

they will not. they will pay the same amount of tax as before. (actually that's not true, they will pay more tax but only because their incomes will be increasing, due to the 5.3% increase in the state pension).

the net effect of these two changes will be that they have more money, not less.

I think they call it fiscal drag don't they, the sneakiest of all stealth taxes The Artful Dodger would have been proud The 5.3% reflects RPI and almost certainly doesn't reflect pensioner inflation, the freezing of allowances certainly means that pensioners will be in real net deficit due to this budget due to the effects of inflation, these pensioners will also have separate pensions as well that may be fixed (so no rise there). It is well and good that pensioners take their share of the austerity measures, but please don't pretend it ain't happening.

chewmylegoff

StevieJ wrote: »

I think they call it fiscal drag don't they, the sneakiest of all stealth taxes The Artful Dodger would have been proud The 5.3% reflects RPI and almost certainly doesn't reflect pensioner inflation, the freezing of allowances certainly means that pensioners will be in real net deficit due to this budget due to the effects of inflation, these pensioners will also have separate pensions as well that may be fixed (so no rise there). It is well and good that pensioners take their share of the austerity measures, but please don't pretend it ain't happening.

i'm not pretending that it's not happening. it was announced in the budget, it would be pretty stupid to claim that allowances were actually being increased.

however, the way that it is being presented as some kind of tax raid is ludicrous and the worst kind of media dumbing down going.

pensioners may be in real net deficit as a result of the budget, but let's think for a minute what is happening to wages, which have been outstripped by inflation for several years now.

personally i would have preferred the govt to target benefits, not including the mimimum income guarantee / state pension, for further austerity, but frankly had they done that instead then people would be going on about the most vulnerable in society being targeted.

the fact is that if pensioners are receiving an increase of over 3% in nominal terms, then they're doing a damn sight better than the majority of working people.

the deficit has to be tackled, unless you believe the milliballs line that we can just spend more and more and more and more, that means that everything gets "cut" (or as we have redefined cuts in the coalition age "increased more slowly than labour wanted").

if we can't cut benefits, can't cut pensions, can't cut health, can't cut education, can't cut police etc. then you're left with trying to solve the deficit by telling the civil service to spend less on staplers. good luck with that.