The Great Pension Liberator

dddave999

Maybe, but what will the next delay be – an investment epiphany!:rotfl:

kidmugsy

Why did you dawdle to April 30th? What was wrong with the sixth?

FatherAbraham

kidmugsy wrote: »

Back to the question of how Osborne is to raise more tax.

Housing: he could start off with BTL.

Pensions and ISAs: how about a dividend tax?

Good heavens!

Dividends are already tax-disadvantaged in comparison to interest payments (firms may deduct their interest costs from their profits, reducing their corporation tax bill, not so for dividends).

The recent budget furthermore increased an extra £1000 interest-income tax allowance for basic-rate taxpayers.

Increasing taxes on dividends makes no sense -- the effect would be to make equity ownership even less attractive.

Warmest regards,
FA

kidmugsy

FatherAbraham wrote: »

Good heavens!

Warmest regards,
FA

I'm not advocating these things. I'm just wondering where the extra tax is to come from that (I assume) will be needed if ever the deficit is to be halted.

Where do you think he might raise it, FA?

gadgetmind

kidmugsy wrote: »

I'm just wondering where the extra tax is to come from that (I assume) will be needed if ever the deficit is to be halted.

You don't raise more tax by raising tax rates. HMG need to gain a deep understanding of the Laffer curve rather than showing a complete contempt for it.

You need a simple personal taxation system that doesn't have cliff edges and penalty zones. And you also need a corporate tax structure that encourages companies to our shores rather then driving them away.

kidmugsy

gadgetmind wrote: »

You don't raise more tax by raising tax rates.

You might or might not. Depends on the skill with which you pluck the goose.

gadgetmind wrote: »

HMG need to gain a deep understanding of the Laffer curve

There's nothing deep to understand about it. The tricky bit is trying to find where the maximum might be for each tax or duty (and even for the sum of them all).

Andy_L

gadgetmind wrote: »

You don't raise more tax by raising tax rates. HMG need to gain a deep understanding of the Laffer curve rather than showing a complete contempt for it.

Doesn't the Laffer curve show that there are circumstances (being on the "up-slope") that you will "raise more tax by raising tax rates". Shame there isn't a "Laffer Equation" to go with it

gadgetmind

Yes, you can sometimes raise more tax by raising tax rates, but we're gone way beyond this in the UK and it's causing an extreme disincentive to work. In my company, we already have people moving to other countries or reducing their work days as they can't see why they should earn extra just to pay 60%+ tax on it.

Taxation should be driven by economics and not as a way of trying to punish people for success.

Freecall

kidmugsy wrote: »

There's nothing deep to understand about it.

Arthur Laffer (later Proffessor Laffer) gained his PhD from Stanford University based on his analysis of supply side economics and what became known as the 'Laffer Curve'.

He went on to achieve prominence as one of the world's most distinguished economists based on this analysis and how governments raise revenue effectively.

If only he could have joined MSE he could have noted your considered appraisal of the subject and discovered that he was in fact, wasting his time because 'There's nothing deep to understand about it.'

Such a squandering of talent.

kidmugsy

Freecall wrote: »

Arthur Laffer (later Proffessor Laffer) gained his PhD from Stanford University based on his analysis of supply side economics and what became known as the 'Laffer Curve'.

Don't be silly. He sketched a curve on a napkin in a restaurant, assuming that since neither 0% nor 100% tax would raise money, there must be a unimodal curve in between. He's wrong, of course: there was no reason why the curve shouldn't be multimodal. But let's assume it is unimodal - just note that all he's done is state what he takes to be an axiom. Nothing requiring a PhD there. It's a useful point, of course, but not remotely original. I don't know that he's ever claimed that the point is original, though his well-chosen illustration may be.

(An unimportant detail: he's was also wrong about the 100% tax: if you do it retrospectively (as Roy Jenkins once did) you can even raise tax with a tax rate of greater than 100%.)