Where is my oil money?

CLAPTON

BillJones wrote: »

Some reducing the debt, and the rest getting rid of the 45% tax rate.

Higher earners were asked to bear a larger share of the tax burden in the downturn, it's time to stop taxing them at such a high rate, and let them keep more of their earnings.

I understood that reducing the 45% rate was self financing cg Laffe's curve?

cepheus

CLAPTON wrote: »

I understood that reducing the 45% rate was self financing cg Laffe's curve?

Laffer curve is bunk, corporate tax incidence argument is nonsense.

CLAPTON

cepheus wrote: »

Laffer curve is bunk, corporate tax incidence argument is nonsense.

what shape do you think the laffe curve has?

Marazan

pip895 wrote: »

Don't see the point in a wealth fund whilst you have National Debt - Should we be running down the National Debt to protect future generations YES. Should we have avoided adding to the National Debt whilst we were enjoying the windfall of NS Oil YES.

If you can borrow at 1% to invest at 5% would you?

A frequent question on this board is "Should I pay off my mortgage early", the answer is universally "No, take advantage of unprecedented low interest rates and put your money elsewhere".

BillJones

CLAPTON wrote: »

I understood that reducing the 45% rate was self financing cg Laffe's curve?

The laffer curve makes good economic sense, but we do not know which side of the peak we are at, so don't know the efffect, in advance, of any given small change. It's also unlikely to be a smooth or static shape.

The 50% tax rate was never designed to raise revenue, it was Labour looking to punish peopel that they did not like, and to give the Conservatives an electoral headache, as they woudl either be seen to keep punishing some of their core vote, or could be painted as pandering to the rich if they reversed it (which is exactly what happened even though they only partially reversed it).

For just about all of Labour's time in power the top rate was 40%. For them now to claim that the toreis' 45% rate is "doing favours" for the rich therefore makes no sense. Once you add inn national insurabce (the cap on which was removed), I'm paying a 47% marginal income tax rate, and an overall rate of over 40%. I'd like to see that reduced.

bigadaj

BillJones wrote: »

The laffer curve makes good economic sense, but we do not know which side of the peak we are at, so don't know the efffect, in advance, of any given small change. It's also unlikely to be a smooth or static shape.

The 50% tax rate was never designed to raise revenue, it was Labour looking to punish peopel that they did not like, and to give the Conservatives an electoral headache, as they woudl either be seen to keep punishing some of their core vote, or could be painted as pandering to the rich if they reversed it (which is exactly what happened even though they only partially reversed it).

For just about all of Labour's time in power the top rate was 40%. For them now to claim that the toreis' 45% rate is "doing favours" for the rich therefore makes no sense. Once you add inn national insurabce (the cap on which was removed), I'm paying a 47% marginal income tax rate, and an overall rate of over 40%. I'd like to see that reduced.

I don't understand this personalisation of these issues. If a decrease in the rate of tax generates more income then that's fine and should be considered, if a decrease in a tax rate reduces tax take then it's far more attractive to the nation as a whole. This doesn't take into account things such as growth but its in the mix.

I thought all the high tax rate bankers and the like were going to move to Switzerland, Dubai, Singapore etc anyway?

cepheus

The Laffer curve is an excuse for the rich to fill their pockets. Let's face it you can make this curve peak at whatever percentage rate you wan't. Simply allow more tax loopholes then the peak will move to the left. Retrospective taxation and it moves to the right.


Peer reviewed studies suggest that using the extremely lax tax collection regime for the rich, the optimum top rate is around 60%.
https://docs.google.com/viewer?a=v&p...hiNmRlNzU1ZWI3


Of course growth is not the only factor of importance, some studies suggest inequality should be given priority. However, the 'high rate tax is bad' argument fails even on the neo-liberals own playing field ideology of 'more is good!'


RATIONALWIKI

A point refuted a thousand times, commonly abbreviated as PRATT Economics

Supply side economics This states that if we cut taxes on the rich, they'll invest the money and it will "trickle down" to the less wealthy. Supply side economics and the Laffer Curve are sound in principle (for instance, if you have massive levels of crippling taxation and a population being fed by a black market), but have been thoroughly debunked as wishful thinking, since whenever these tax cuts have been implemented in real life, there has been no trickling down of the benefits. Yet despite this, they are held in high regard by many fiscal conservatives.

CLAPTON

cepheus wrote: »

The Laffer curve is an excuse for the rich to fill their pockets. Let's face it you can make this curve peak at whatever percentage rate you wan't. Simply allow more tax loopholes then the peak will move to the left. Retrospective taxation and it moves to the right.


RATIONALWIKI

A point refuted a thousand times, commonly abbreviated as PRATT Economics

Supply side economics This states that if we cut taxes on the rich, they'll invest the money and it will "trickle down" to the less wealthy. Supply side economics and the Laffer Curve are sound in principle (for instance, if you have massive levels of crippling taxation and a population being fed by a black market), but have been thoroughly debunked as wishful thinking, since whenever these tax cuts have been implemented in real life, there has been no trickling down of the benefits. Yet despite this, they are held in high regard by many fiscal conservatives.

no, that's not what the Laffe curve shows.

and you are right there has been no trickle down of benefits:
we are all demonstrably as poor now as we were 300 years ago.

jamesd

cepheus wrote: »

Laffer curve is bunk, corporate tax incidence argument is nonsense.

Anyone who made the initial mistake of believing that should read my question in that topic, specifically because the quotes concerned do not exist in the documents claimed to contain them.