Are the Tories going to tear themselves apart?

kinger101

mwpt wrote: »

Also need to pay for private medical insurance.

I mentioned this bit - the healthcare. The employer usually pays the lion's share of this. You'd think employers would lobby for a system paid through taxes; it significantly adds to the cost base of employment (although some employees get no cover).

kinger101

Mistermeaner wrote: »

I thought in the US you are also able to offset alot more of your costs against your tax; e.g. mortgage etc

You can elect to itemize deduction or take a standard deduction of $6,300 (which is additional to the personal exemption).

Moby

mwpt wrote: »

No, I can explain exactly what happened. Cells was responding to a comment about social spending vs tax take. He said that people who pay a lot of tax have a right to know how their tax is being spent.

You took this as an opportunity to make the sweeping and basically tangental statement that most self employed are tax evaders.

Firstly, that made no contribution to the meta topic being discussed that people who pay a lot of tax have a right to know. Secondly, you'd have a complete meltdown if someone claimed most people on benefits were benefit cheats.

Anyway, have at it.

See you are doing it again........you should have said 'I can explain exactly what I think happened.'
But to assist I was responding to the 'a lot of tax' phrase and widening the debate because I chose to. You see for me 'a lot of tax' and a 'right to know' are coded messages indicating judgemental attitudes behind them. I therefore responded in kind. So in my view I was participating in the meta debate because it was about values and judgements about taxes/benefits etc.

kinger101

Moby wrote: »

What's 'a lot of tax'....is it as long as a piece of string and who decides value?

Actually, Her Majesty's government sets the rules for determining how long the string should be. For self-assessment, you are supposed to precisely determine what length of string this is, and hand it over on time.

"A lot" might be subjective, but 90% of the income tax received is paid by the top 50% of the working population (and an entire one third by 1%).

If more money is needed from income tax, it really does need to come from the bulk of the population.

HMRC does send out breakdowns on what the money was spent on, and with a little digging, this can be broken down further.

Mistermeaner

a thing that irks me about the 'work+pay tax' or 'don't work+get benefits' structure in the UK is that those who work and pay tax are competing for scarce resources with those who dont work; the taxes paid by a young working person reduce their discretionary expenditure to e.g. buy a house while at the same time the taxes they have paid are indirectly used to 'give' a house to someone else thus reduces the supply of available resources and increasing the price they have to pay - its a double whammy.

same goes for other costs which must be bourne out of post tax income (or are themselves heavily taxed again) e.g. transport to / from work, clothing for work, childcare (albeit partly being addressed) - these are all post tax deduction costs that working people incur and non-working people dont.

The 'unfairness' (IMO) could be addressed quite easily through lower taxation the working people and less benefits for those who don;t work. If people want the nice stuff then work for it. What is wrong with that?

Jason74

Mistermeaner wrote: »

a thing that irks me about the 'work+pay tax' or 'don't work+get benefits' structure in the UK is that those who work and pay tax are competing for scarce resources with those who dont work; the taxes paid by a young working person reduce their discretionary expenditure to e.g. buy a house while at the same time the taxes they have paid are indirectly used to 'give' a house to someone else thus reduces the supply of available resources and increasing the price they have to pay - its a double whammy.

same goes for other costs which must be bourne out of post tax income (or are themselves heavily taxed again) e.g. transport to / from work, clothing for work, childcare (albeit partly being addressed) - these are all post tax deduction costs that working people incur and non-working people dont.

The 'unfairness' (IMO) could be addressed quite easily through lower taxation the working people and less benefits for those who don;t work. If people want the nice stuff then work for it. What is wrong with that?

While I disagree with much of the thrust of your argument on this thread, you've conducted the debate in a reasoned and respectful manner (something often lacking round here of late), so I will attempt to respond in kind.

I think there is definitely something in what you say in respect of having some skewed incentives. But I think that's more a function of decades of government thinking about issues in isolation (often to chase a soundbite or a short term gain), rather than looking at the big picture.

So to use your housing example, the fundamental issue is that in much of the country, we don't have enough homes to go round. If we take a big picture view and address that problem, then the unfairness issue you describe largely goes away, as there are enough houses to go round and everyone can (one way or another) afford to live in houses that meet their needs.

But of course, that's not what we do. We under build for decades, sell of much of the public housing stock at a discount (and then end up renting much of it back at full market rent!), and then enable those with the most resource to take a bigger share of the pie through BTL. We then have a series of "help" schemes, that throw more money at the same amount of houses and then (with the exception of HTB1) simply push up prices while doing nothing about the fundamental issue of too few homes where they are needed.

All of those measures look good on paper in the short term, but taken together create a complete mess. All of this could have been avoided simply by ensuring that enough homes were built, probably by a combination of removing barriers to private sector building, and a much larger public housebuilding sector than currently exists.

It's that lack of joined up thinking that's the real issue here, and while that continues, we'll have some pretty rubbish outcomes regardless of the system we use. With an American type system, we would end up with types of poverty that are for me simply unacceptable in a developed country (as exists in some areas in the U.S), and I personally would want to avoid that outcome at pretty much any cost (hence why I disagree with the thrust of your post). I'd personally actually favour a more Scandinavian type system (the polar opposite of your thought of course), although I acknowledge that whether that's deliverable in the current UK environment is another matter entirely.

But whatever system is used, unless the lack of joined up long term thinking is sorted, we'll still have poor outcomes imho.

Moby

Jason74 wrote: »

While I disagree with much of the thrust of your argument on this thread, you've conducted the debate in a reasoned and respectful manner (something often lacking round here of late), so I will attempt to respond in kind.

I think there is definitely something in what you say in respect of having some skewed incentives. But I think that's more a function of decades of government thinking about issues in isolation (often to chase a soundbite or a short term gain), rather than looking at the big picture.

So to use your housing example, the fundamental issue is that in much of the country, we don't have enough homes to go round. If we take a big picture view and address that problem, then the unfairness issue you describe largely goes away, as there are enough houses to go round and everyone can (one way or another) afford to live in houses that meet their needs.

But of course, that's not what we do. We under build for decades, sell of much of the public housing stock at a discount (and then end up renting much of it back at full market rent!), and then enable those with the most resource to take a bigger share of the pie through BTL. We then have a series of "help" schemes, that throw more money at the same amount of houses and then (with the exception of HTB1) simply push up prices while doing nothing about the fundamental issue of too few homes where they are needed.

All of those measures look good on paper in the short term, but taken together create a complete mess. All of this could have been avoided simply by ensuring that enough homes were built, probably by a combination of removing barriers to private sector building, and a much larger public housebuilding sector than currently exists.

It's that lack of joined up thinking that's the real issue here, and while that continues, we'll have some pretty rubbish outcomes regardless of the system we use. With an American type system, we would end up with types of poverty that are for me simply unacceptable in a developed country (as exists in some areas in the U.S), and I personally would want to avoid that outcome at pretty much any cost (hence why I disagree with the thrust of your post). I'd personally actually favour a more Scandinavian type system (the polar opposite of your thought of course), although I acknowledge that whether that's deliverable in the current UK environment is another matter entirely.

But whatever system is used, unless the lack of joined up long term thinking is sorted, we'll still have poor outcomes imho.

Spot on....it's getting the balance right between the market place and social planning to ensure there are no victims of said policies. Housing policy is such a good example. Imo we are trapped by short term thinking by various govmts whose policies are too dependent on shoring up their support base instead of doing what is right for the country as a whole. Exactly the point IDS called Osbourne out on!
Targeting those who are already vulnerable and reducing their benefits further also has a further corrosive effect on society generally. I'm glad Osbourne has been called out on this and has been forced to backdown from further benefit cuts this parliament! Housing insecurity is an awful problem in London. I watched one of my service users deteriorate before my eyes in the weeks over Christmas. He was sleeping in a railway station for two weeks until he got somewhere to live. That's the real issue imo!

mwpt

Mistermeaner wrote: »

a thing that irks me about the 'work+pay tax' or 'don't work+get benefits' structure in the UK is that those who work and pay tax are competing for scarce resources with those who dont work; the taxes paid by a young working person reduce their discretionary expenditure to e.g. buy a house while at the same time the taxes they have paid are indirectly used to 'give' a house to someone else thus reduces the supply of available resources and increasing the price they have to pay - its a double whammy.

same goes for other costs which must be bourne out of post tax income (or are themselves heavily taxed again) e.g. transport to / from work, clothing for work, childcare (albeit partly being addressed) - these are all post tax deduction costs that working people incur and non-working people dont.

The 'unfairness' (IMO) could be addressed quite easily through lower taxation the working people and less benefits for those who don;t work. If people want the nice stuff then work for it. What is wrong with that?

Nothing wrong with it when it is stated in very simple terms but to achieve it in practice while maintaining a certain level of a social society is the part where it gets hard. I am not against your right to desire a certain system but I do not want and wouldn't vote for such a system. Too many people fall through the cracks and suffer in such a system. You might be ok with that (and that's ok, I'm not moralising) but a lot of us are not.

So we have governments which - sort of - give us what we want, and what Brits generally want is social democracy with a welfare state. I think we're a centre-left society but with strong notions of free market capitalism.

By the way, I have an intense annoyance with people that seem to fall under the term social justice warriors. The left wing types who sit behind a keyboard telling everyone how bad they are, most of the time. The problem I have with them, is they are never practical. Everything for them exists in theory and in social media. They can write long ranty blog posts about how cruel the Tories are and so on, but they never ever have to actually implement the policies they preach. In reality we live in a world with scarce resources and finite wealth. We have to try allocate it as best we can. I highlighted in bold above a classic problem with our welfare system (I believe). We directly give people houses in their desired area. This is not efficient and is not best for everyone. What we should do instead, and I believe what Universal Credit aimed to achieve, is to give people the money and then allow them to choose where they live. I think we would soon find that more space for productive workers opens up in London and people receiving benefits choose to live in cheaper areas. But the SJWs (see above) won't have that. Any removal or tampering with benefits of any kind is auto-seen as vile Tories making the poor poorer.

And so, I strongly favour a basic income system where people can make their own choices. Remove tax credits and remove housing benefit and let people choose where they want to live and work.

CLAPTON

Jason74 wrote: »

While I disagree with much of the thrust of your argument on this thread, you've conducted the debate in a reasoned and respectful manner (something often lacking round here of late), so I will attempt to respond in kind.

I think there is definitely something in what you say in respect of having some skewed incentives. But I think that's more a function of decades of government thinking about issues in isolation (often to chase a soundbite or a short term gain), rather than looking at the big picture.

So to use your housing example, the fundamental issue is that in much of the country, we don't have enough homes to go round. If we take a big picture view and address that problem, then the unfairness issue you describe largely goes away, as there are enough houses to go round and everyone can (one way or another) afford to live in houses that meet their needs.

But of course, that's not what we do. We under build for decades, sell of much of the public housing stock at a discount (and then end up renting much of it back at full market rent!), and then enable those with the most resource to take a bigger share of the pie through BTL. We then have a series of "help" schemes, that throw more money at the same amount of houses and then (with the exception of HTB1) simply push up prices while doing nothing about the fundamental issue of too few homes where they are needed.

All of those measures look good on paper in the short term, but taken together create a complete mess. All of this could have been avoided simply by ensuring that enough homes were built, probably by a combination of removing barriers to private sector building, and a much larger public housebuilding sector than currently exists.

It's that lack of joined up thinking that's the real issue here, and while that continues, we'll have some pretty rubbish outcomes regardless of the system we use. With an American type system, we would end up with types of poverty that are for me simply unacceptable in a developed country (as exists in some areas in the U.S), and I personally would want to avoid that outcome at pretty much any cost (hence why I disagree with the thrust of your post). I'd personally actually favour a more Scandinavian type system (the polar opposite of your thought of course), although I acknowledge that whether that's deliverable in the current UK environment is another matter entirely.

But whatever system is used, unless the lack of joined up long term thinking is sorted, we'll still have poor outcomes imho.

certainly it's true that if, we have a cost free surplus then all needs / wants can be met.
The issue usually, is we don't have a surplus of things we need/want, so the issue is how best to distribute the things we have: with housing in large parts of the SE there is no realistic prospect of having a housing surplus so the problem is one of how do we distribute/ration existing stock whilst creating the right incentives to build more.


Your reference to Scandinavia seems unfortunate, given the very difficult housing situation in both Copenhagen and Stockholm

mwpt

Jason74 wrote: »

But of course, that's not what we do. We under build for decades, sell of much of the public housing stock at a discount (and then end up renting much of it back at full market rent!), and then enable those with the most resource to take a bigger share of the pie through BTL. We then have a series of "help" schemes, that throw more money at the same amount of houses and then (with the exception of HTB1) simply push up prices while doing nothing about the fundamental issue of too few homes where they are needed.

I agree with much of your post but wanted to add here that the system isn't quite that. It allows just about anyone to take out as much debt as they want based on rental income to remove houses from the purchase pool and rent them back to people who would like to own them.