The economics of pensions - what should the country do?

antrobus

Thrugelmir wrote: »

VAT isn't charged on turnover. It's charged on the value of goods or services supplied. A tax on turnover would reduce the ability of multi nationals to move profit around their international subsidaries. Thereby impacting the level of corporation tax paid.

What do you mean by turnover?

Many people use the term 'turnover' to mean sales. The value of goods or services supplied is just another term for sales.

In any case, the value of goods or services supplied for VAT purposes, and the value of goods or services supplied for accounting purposes can be quite different. Accountants often put some effort into reconciling VAT turnover with Sales turnover. Just in case those bar stewards from HMRC start asking questions.:)

antrobus

michaels wrote: »

...Finally NI is income tax in all but name

No, it isn't. It's completely different to IT.

michaels wrote: »

...

and the two should be merged, with the impact on wealthy pensioners accepted.

The impact would be felt be every pensioner who earned over £11,850. If you think that's 'wealth' you are living on a different planet.:)

Of course, it is entirely possible that people will not accept the impact of the proposal in any case and vote for someone else.

antrobus

Sapphire wrote: »

Thoroughly agree with that sentiment.

Sentiment makes poor economics.

antrobus

vivatifosi wrote: »

...

If true, what should the government do? Stop raising the ages, raise them still pay pay down the deficit or pay for the NHS, or something else?

Wait for the next report on Long term State Pension Sustainability, or whatever they call it these days?

[Deleted User]

One easy way to raise money from older people would be to make them pay N.I. as long as they keep working, and at the opposite lower the start of N.I to £100 per week.

kinger101

sleepymans wrote: »

Top priority is to settle the WASPI womens valid claims to the pensions they were defrauded at the end of their 40 year working lives, with no time to ameliorate the loss

There's no fraud. As for making up the "loss", surely working until the same retirement age as men gives them an opportunity to increase the amount of savings available for retirement.

kinger101

antrobus wrote: »

No, it isn't. It's completely different to IT.

I wouldn't say it's completely different. It's a tax on employment income rather than income per se. And with the exception of the self-employed, bourne by two parties (employer/employee). For most employees, their main source of income is employment, so it's hard to see the practical distinction.

I bet there isn't a chancellor in recent times who hasn't thought of merging the two. Though then they wouldn't be able to spout !!!!!!!! about no main income tax raises (subtext we'll take it via NI instead).

kinger101

venison wrote: »

One easy way to raise money from older people would be to make them pay N.I. as long as they keep working, and at the opposite lower the start of N.I to £100 per week.

It would be simple and cost-effective to administer, but the truth is, it's going to bring in peanuts. And many those that do continue to work are probably doing so out of necessity rather than desire, so it wouldn't be particularly progressive.

Spidernick

I'm going off at a bit of a tangent, but surely one thing that needs to be done is to stop all Defined Benefit plans for anybody employed by the state, as they are not affordable (correct me if I am wrong, but didn't Cameron refer to a 'pensions apartheid', as the average worked paid more to fund these pensions than they saved into their own?).

kinger101

antrobus wrote: »

What do you mean by turnover?

Many people use the term 'turnover' to mean sales. The value of goods or services supplied is just another term for sales.

In any case, the value of goods or services supplied for VAT purposes, and the value of goods or services supplied for accounting purposes can be quite different. Accountants often put some effort into reconciling VAT turnover with Sales turnover. Just in case those bar stewards from HMRC start asking questions.:)

Technically, it's not a turnover tax as it's only paid on the proportional value added. Although the consumer is paying 20%, the supplier deducts the input tax on the cost of the goods and services they incur.