Corbynomics: A Dystopia

setmefree2

Older people must shoulder their share

The size of the liabilities the government is racking up are also much greater than generally appreciated. The official national debt is estimated at around £1.7 trillion, which is frightening enough. But our latest estimate of the real national debt – including substantial liabilities in relation to unfunded public sector pensions, unfunded state pensions and Private Finance Initiatives – stood at £8.6 trillion, or over £320,000 for every single household in Britain. The liabilities for state pensions are £4.4 trillion alone, a burden future generations will have to shoulder.
Given an ageing population is an inevitable trend, what can be done? There are two urgent candidates for reform.


First, the so-called triple lock is no longer defensible. Ensuring that the state pension rises each year by the highest of the consumer price index, average earnings or 2.5 per cent – essentially delinking such spending from the health of the economy and the ability of working age taxpayers to finance it – it is not just a bad idea in principle, but a dangerous one.
The Government Actuary’s Department says it is costing £6bn a year and when added to other costly universal pensioner benefits like the £2bn winter fuel payments, you start to see the yawning intergenerational chasm. The thorniest of policy issues right now is how to fund adult social care – given that there will be an estimated funding gap of around £3bn by the end of the Parliament, scrapping the triple lock seems a good first step to deal with it.


Second, the housing market is skewed towards older generations. Nearly three quarters of pensioners are home owners, but with the average house price now £284,000 (and much higher in London), it is little wonder that young people are struggling to buy.

http://www.cityam.com/258994/older-people-must-shoulder-their-share-government-spending

mrginge

setmefree2 wrote: »

Just add a couple of percent to income tax for people of a certain age, get rid of the triple lock, free bus passes, winter fuel allowance - whatever. If that's what you guys want. You can't squeeze any more out of the young I'm afraid. Nobody is going to vote for that.

Maybe the young should get out and vote then?

Triple lock is a shambles and should go agreed, but won't cost anything soon lol.
£5 billion to scrap all pensioner benefits - is that enough? Are we scrapping for all or means testing them? TBH I doubt the knock on costs will make a real net contribution here.

Income tax increases for the elderly fair enough. Let's do it. It's quite possibly a breach of equality legislation, but we can work round that.

2p on income tax for the whole of the uk will raise about 10bn. If we just apply that to rich pensioners, how much is that going to generate?

ukcarper

setmefree2 wrote: »

The simple fact is that young workers won't be able to shoulder boomers health care costs even if they wanted to. The levels of tax they face are eye watering. I have had this argument many times in the past with Martin Lewis (re student loans.)

Student loans were introduced in 1998 - 19 years ago. These students are now are at least 37. They face really high marginal tax rates

For income levels of between £17k (pre 2012) and £21k (post 2012) and above this is the marginal tax rates that young workers face.

At basic rate tax levels (From £17k To £43K)

NI = 12% Income tax 20% St Loans = 9%

Marginal tax rate = 41%

At higher rate tax level( From £43k to £150k) the marginal rate becomes
NI = 0% Income Tax 40% St Loans = 9%

Marginal Tax rate = 49%

Over £150k the marginal tax rate = 54%

So young people face marginal tax rates of 41% plus from income levels of £17k to £21k. This is clearly unacceptable.

Anybody who things the under 40s can be taxed more are nuts - frankly.

So, yes boomers are either going to have to fund their own health care through the tax system, get private health insurance or suffer the consequences imho.

Not to much different to the 39% everybody paid in the 70s and 80s

mrginge

ukcarper wrote: »

Not to much different to the 39% everybody paid in the 70s and 80s

To be fair we didn't also have 20% VAT back then.

shaggydoo

mrginge wrote: »

To be fair we didn't also have 20% VAT back then.

It would appear that the coffers are empty :eek:

ukcarper

mrginge wrote: »

To be fair we didn't also have 20% VAT back then.

No it was 15% but then I left school at 16 and still had to pay it plus real earnings are about 30% higher now than the 80s.

JACKBLACK

ukcarper wrote: »

No it was 15% but then I left school at 16 and still had to pay it plus real earnings are about 30% higher now than the 80s.

From To Rate
01 April 1973 28 July 1974 10%
29 July 1974 17 June 1979 8%
18 June 1979 31 March 1991 15%
01 April 1991 30 November 2008 17.5%

04 Nov 2011 - to date 20%

LHW99

And purchase tax prior to that was around 33.3% on "luxury goods", although there were quite a range of rates I believe from around 5% up to 100% on some things briefly.

setmefree2

ukcarper wrote: »

Not to much different to the 39% everybody paid in the 70s and 80s

Indeed. The tax burden is currently the same as the mid 80s.

Also.

UK tax burden a fifth higher than global average

The UK's tax burden, relative to GDP, is 18pc higher than the global average, which could be hindering growth, a new report warns

I think it's highly unlikely a Tory government will increase the tax burden further and there is no chance of a Labour government any time soon.

ukcarper

JACKBLACK wrote: »

From To Rate
01 April 1973 28 July 1974 10%
29 July 1974 17 June 1979 8%
18 June 1979 31 March 1991 15%
01 April 1991 30 November 2008 17.5%

04 Nov 2011 - to date 20%

between 1974 and 1979 there was a higher rate which varied between 12.5 and 25%. Income tax was 35% for awhile in the 70s and when I started work in the 60s it was over 40%