UK unemployment total falls (April)

CLAPTON

Masomnia wrote: »

Gen, you're a month behind

June 2014

These ones are even better. Apart from the wages thing.

So they're saying bonuses were being deferred to next (this) tax year? Any particular benefit to doing that? Higher personal allowance?

the issue about bonuses is, that at the end of tax year 2012-13 bonuses were delayed until after april 6th as the tax rate then fell from 50% to 45%.

so the figures for year 2012-13 were distorted (i.e artificially lower that 'normal') and the figures for 2013-14 were artificially higher)

of course, in due course some-one will reproduce the figures in terms of tax take and hence 'proof' Laffers conjecture.

Masomnia

CLAPTON wrote: »

the issue about bonuses is, that at the end of tax year 2012-13 bonuses were delayed until after april 6th as the tax rate then fell from 50% to 45%.

so the figures for year 2012-13 were distorted (i.e artificially lower that 'normal') and the figures for 2013-14 were artificially higher)

of course, in due course some-one will reproduce the figures in terms of tax take and hence 'proof' Laffers conjecture.

Explains it neatly, thanks.

Generali

CLAPTON wrote: »

the issue about bonuses is, that at the end of tax year 2012-13 bonuses were delayed until after april 6th as the tax rate then fell from 50% to 45%.

so the figures for year 2012-13 were distorted (i.e artificially lower that 'normal') and the figures for 2013-14 were artificially higher)

of course, in due course some-one will reproduce the figures in terms of tax take and hence 'proof' Laffers conjecture.

There are lots of data that seem to provide evidence for the Laffer curve and that's before the obvious thought experiment:

1. Tax rate of 0%, tax take = £0 (obviously)
2. Tax rate = 100%, tax take = £0 (why would you work if all your money would be taken from you?)

At some point therefore, there must be a point where increasing tax rates cause falling tax take.

Here's a good start:

http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2155974##

It explains who Laffer was and what the Laffer curve as generally drawn is.

cells

Generali wrote: »

IIRC, many posters were claiming that reducing the public payroll would result in a catastrophic rise in unemployment. The reality has been that as public sector employment has fallen, private sectalternative ia that theu connt has risen pretty much every single month by more than enough to soak up the more ployed public former-employees.

Im not so sure the actual numbers of heads employed directly is that meaningful a metric. For instance say the council employs people directly to do the bon collections that would be 100 heads employed by the state. If the alternative is that they just contract it out to ABC LTD who do the work woth 100 men then it was not much more than accounting

I suppose the real figure or the more important one is how much the state is vs GDP. TonyB and GordonB took the state from 37% to 47% of GDP. It has been falling as the 47% peak was height of a recession however its not near the 1997 lows of circa 37%.

Between the two main parties I suspect labour would want around44% and the tories perhaps 41%. The difference being about £50B in extea taxes/borrowing. My guess

CLAPTON

Generali wrote: »

There are lots of data that seem to provide evidence for the Laffer curve and that's before the obvious thought experiment:

1. Tax rate of 0%, tax take = £0 (obviously)
2. Tax rate = 100%, tax take = £0 (why would you work if all your money would be taken from you?)

At some point therefore, there must be a point where increasing tax rates cause falling tax take.

Here's a good start:

http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2155974##

It explains who Laffer was and what the Laffer curve as generally drawn is.

thank you for your post
I understand a turning point on a continuous curve that has two zeros.
I completely agree that there will be one or more 'maxima' on such a curve.

However, in the circumstances I described the evidence doesn't show the maxima lies between 45% and 50% for income tax.

Generali

CLAPTON wrote: »

However, in the circumstances I described the evidence doesn't show the maxima lies between 45% and 50% for income tax.

Right.

Perhaps I'm being thick but I don't get your point. There is loads of evidence out there about the Laffer curve and how different variables change its shape. A single post about a changed time point in a bonus payment demonstrates........?

Bantex_2

Generali wrote: »

IIRC, many posters were claiming that reducing the public payroll would result in a catastrophic rise in unemployment. The reality has been that as public sector employment has fallen, private sector employment has risen pretty much every single month by more than enough to soak up the unemployed public former-employees.

Yet government spending still seems to be increasing.

Generali

Bantex wrote: »

Yet government spending still seems to be increasing.

Is this on topic? We're talking about unemployment. You're banging on about something else.

antrobus

Generali wrote: »

IIRC, many posters were claiming that reducing the public payroll would result in a catastrophic rise in unemployment. The reality has been that as public sector employment has fallen, private sector employment has risen pretty much every single month by more than enough to soak up the unemployed public former-employees.

Not just posters. Who can forget this thread from December 2012;

Unemployment Rising Fast-By Area-All Time High Predicted
https://forums.moneysavingexpert.com/discussion/4357023

which confidentally relayed the CEBR prediction that the unemployment rate was projected to jump from 8.8% in 2012 to 10.7% by 2016, "snuffing out any recovery".

Oddly enough the link given to the CEBR report containing that prediction now returns a 404.

antrobus

Generali wrote: »

Is this on topic? We're talking about unemployment. You're banging on about something else.

On topic? On topic! You've come to the wrong place my friend, if you expect threads to remain on topic.