The New Fat Scotland 'Thanks for all the Fish' Thread.

CLAPTON

Generali wrote: »

The Laffer Curve is a funny thing. When explained it is completely obvious but when thinking about taxes on a day-to-day basis it isn't.

For the uninitiated, the Laffer Curve is based on a very simple idea. If you set a tax rate of 0% you will raise no tax. If you set an income tax rate of 100% you will raise no money because who the hell is going to work just to give all their money to the Government? Somewhere in between those two tax rates is a rate that raises the maximum amount of money. For other reasons however it isn't necessarily optimal to raise the maximum possible amount of tax.

The UK is clearly somewhere around the Laffer Curve inflexion point as we could see when Labour put up the top rate of tax and revenues fell yet this increase in the average rate of tax is being justified on the basis that it will raise more money!

If the 40% tax band's starting point is going to remain unchanged for 6 years then presumably a lot of extra people are going to be dragged into paying it. If CPI is at 2.5% (middle of the target range) and real wages rise by 2.5% (long term average for the UK) then the tax threshold comes down by about 25%. That's a huge amount.

whilst nearly all economists accept the logic of the laffer curve, there is no theoretical reason why there can't be many maxima and there is no theory that says where they are.
Points of inflexion aren't necessarily maxima.

Many economists relate the fall in tax revenue when labour increased the tax rate to the fact that it was pre-announced and a great number of people brought forward their income so to avoid it.
Similarly when George reduce it, it was pre-announced so offering the opportunity to delay taking the money.

That, of course, doesn't invalid the Laffer curve, but merely shows that these two particular situations, are poor tests of the theory.

However, the SNP example will be fastinating to monitor to see what happens; sadly we will have a few years to wait to see the effects.

CLAPTON

Moby wrote: »

Fixed it for you.;)

it is, indeed quite a tradition of the authoritarian left to distort and spread falsehood.

LABMAN

CLAPTON wrote: »

true, I have no idea what you are talking about

This sort of thing happens too much, English with a capital E, Scots with a small s and you have no idea?


Oh it's what I do all the time doesn't cut it BTW!

CLAPTON

LABMAN wrote: »

This sort of thing happens too much, English with a capital E, Scots with a small s and you have no idea?


Oh it's what I do all the time doesn't cut it BTW!

a serious peccadillo would seem to be an oxymoron to me

Rainbowgirl84

CLAPTON wrote: »

a serious peccadillo would seem to be an oxymoron to me

Really? You understand this and yet don't feel the need for really basic syntax and grammar? You screwed up, admit it and move on big boy!

Thrugelmir

You couldn't make it up........... Not as left as Labour.

Scottish Labour has challenged the SNP to raise the income tax rate for the 17,000 people in Scotland earning more than £150,000 from 45p to 50p - higher than elsewhere in the UK.
But speaking in the Scottish Parliament on Wednesday, Ms Sturgeon said it would be "reckless" and "daft" to do so straight away.
During the BBC Scotland debate, Ms Sturgeon again pointed to civil service analysis which suggested the move could actually leave Scotland £30m worse off.

That was because some high earners would either move their money out of Scotland or find other ways of avoiding paying the tax.

http://www.bbc.co.uk/news/uk-scotland-scotland-politics-35886879

Shakethedisease

.string. wrote: »

So what?

Would it be better if he supported Labour, or SNP or LibDem?

Would it matter if was a Muslim or a Ranger Football Supporter or a Nudist?

What matters are his credentials in the areas in which he gives his advice.

But then that's the normal approach isn't it? Belittle the messenger and ignore the message.

Do you really believe that to be an expert one has to belong to the SNP? It seems that way.

Oh string. Asking Adam Tomkins for legal advice on Scottish independence would be like me presenting you with documents written by Stewart Hosie or John Swinney as 'proof'.

You'll pardon me if I politely decline to be entertained by anything much Adam Tomkins has to say as unbiased.

Shakethedisease

Thrugelmir wrote: »

You couldn't make it up........... Not as left as Labour.

http://www.bbc.co.uk/news/uk-scotland-scotland-politics-35886879

Scottish Labour is tacking left, but it's a crowded market in Scotland. And to be frank, no one really believes them. Not so soon after Jim Murphy and Johann Lamont's tenures.

The SNP have made a rather sensible but boring move re income tax. While it will play well with voters no doubt, the media commentary and Scottish Labour are apoplectic they didn't do anything 'radical' enough to provide them with acres of column inches condemning it for being 'too radical'. While the media elsewhere are apoplectic that they didn't just go along with whatever tax cuts Osborne decides on this week.

This makes the SNP UK-wise paragon's of socialism as upper rate taxpayers in Scotland will pay more than the rest of the UK. But in Scotland, they are rabid right wingers determined to out Tory the Tories. All they've actually done, is keep things exactly how they are now.

It's just a measure now of how different Scottish politics has gotten from Westminster politics. A pre taster of independence politics, though the other Scottish parties don't seem to have realised it as yet.

Committing, more or less, to no personal tax increases during the life of the parliament is a bold, if not reckless, move but is clearly a vote-winner for all of us watching the pennies. You know what you’re getting – or rather what John Swinney’s getting – however fragile the employment scene is for you.

They even found a neat solution to the retention of control over tax thresholds by Whitehall. By introducing a zero rate they can effectively increase the level of income at which you start paying tax, giving Scots a better deal than the Treasury gives the UK. That really is pushing the Smith envelope – right back across the table and adding: Take that....

...What some journalists out there can’t stand is that the SNP don’t behave the way they expect or want them to. They refuse to fit into the mainstream narrative. Good for them. Who’d ever trust a journalist? And who is constantly proved to be right in its judgment and carries the goodwill of the Scots while the readership of the papers declines year on year? Sturgeon fails to meet the demands of a rabidly hostile media and a partisan opposition….isn’t that getting it exactly right?

http://derekbateman.scot/2016/03/23/ahm-no-weel/

Shakethedisease

HAMISH_MCTAVISH wrote: »

Wish the media commentary would make up their minds. The SNP seem to be doing the impossible here. :rotfl:



You're onto a loser here Hamish with this one. The media is ALL over the place trying to come up with a believable attack line. They've all failed.

HornetSaver

Shakethedisease wrote: »

You're onto a loser here Hamish with this one. The media is ALL over the place trying to come up with a believable attack line. They've all failed.

Perhaps so. But the SNP have set themselves up as such an anti-Tory party that the media observing similarities between Conservative and SNP policies will do damage to the latter party if it becomes a regular theme.

The Westminster MPs - as much as they'd rather they weren't there in the first place - are acutely aware of this, and thus are voting in ways they wouldn't ordinarily vote purely to distance themselves from the Tories at every opportunity. Given that the SNP have no interest in forming a future British government that's understandable - they don't need to be consistent or have a long term plan (and I don't criticize them for that).

By contrast in Holyrood the SNP's goal is to pave the way for the first independent Scottish government.Therefore they have to pursue policies which get them closer to that objective even if that means sometimes doing exactly the same thing as the Tories.