New Energy Price Guarantee - a fair measure for all or a slightly unfair redistribution?

MattMattMattUK

brewerdave said:

@MattMattMattUK - don't bother to put yourself forward for MP at the next General Election -your taxation "policy" would mean your deposit would be lost !!

I agree the public would note vote for it, that does not mean it is not the right thing to do. It works very well in Germany, Netherlands, Scandinavia etc. and it would be regarded as entirely normal and sensible, they have far better public services and an overall higher standard of living because of it. In the UK people seem to vote with a very short term and selfish outlook, that is why we end up with the poor services we have. 

The_Green_Hornet

MattMattMattUK said:

brewerdave said:

@MattMattMattUK - don't bother to put yourself forward for MP at the next General Election -your taxation "policy" would mean your deposit would be lost !!

I agree the public would note vote for it, that does not mean it is not the right thing to do. It works very well in Germany, Netherlands, Scandinavia etc. and it would be regarded as entirely normal and sensible, they have far better public services and an overall higher standard of living because of it. In the UK people seem to vote with a very short term and selfish outlook, that is why we end up with the poor services we have. 

Germany, Netherlands, Scandinavia etc. all have coalition governments where compromise is needed to govern for everybody whereas the UK has a winner takes it all system. That will need to be changed first.

casjen

MattMattMattUK said:

brewerdave said:

@MattMattMattUK - don't bother to put yourself forward for MP at the next General Election -your taxation "policy" would mean your deposit would be lost !!

I agree the public would note vote for it, that does not mean it is not the right thing to do. It works very well in Germany, Netherlands, Scandinavia etc. and it would be regarded as entirely normal and sensible, they have far better public services and an overall higher standard of living because of it. In the UK people seem to vote with a very short term and selfish outlook, that is why we end up with the poor services we have. 

You constantly decry those worse off than you....

We are not selfish in the UK.

And our services are excellent considering the demand on them..

 Live elsewhere in one of those countries you admire so much.

matelodave

The_Green_Hornet said:

MattMattMattUK said:

brewerdave said:

@MattMattMattUK - don't bother to put yourself forward for MP at the next General Election -your taxation "policy" would mean your deposit would be lost !!

I agree the public would note vote for it, that does not mean it is not the right thing to do. It works very well in Germany, Netherlands, Scandinavia etc. and it would be regarded as entirely normal and sensible, they have far better public services and an overall higher standard of living because of it. In the UK people seem to vote with a very short term and selfish outlook, that is why we end up with the poor services we have. 

Germany, Netherlands, Scandinavia etc. all have coalition governments where compromise is needed to govern for everybody whereas the UK has a winner takes it all system. That will need to be changed first.

without getting into politics, we did have a coalition government for a while and TBH it tried to be all things to all men (or women etc) and didn't really achieve all that much because in the end it didn't really satisfy anybody. Just my opinion.

Perhaps it needed a lot more time to get its act together and to show people what might have been possible. I'm not sure myself

brewerdave

MattMattMattUK said:

brewerdave said:

@MattMattMattUK - don't bother to put yourself forward for MP at the next General Election -your taxation "policy" would mean your deposit would be lost !!

I agree the public would note vote for it, that does not mean it is not the right thing to do. It works very well in Germany, Netherlands, Scandinavia etc. and it would be regarded as entirely normal and sensible, they have far better public services and an overall higher standard of living because of it. In the UK people seem to vote with a very short term and selfish outlook, that is why we end up with the poor services we have. 

Unfortunately you are absolutely right that, as a population,  we think of things in the short term - I would argue mainly because our political system has always worked on short term ideas and returns -MPs give it about 2 years of a new Government and then start working for their/their Party's re-election - how many 5 or 10 year plans actually ever get carried thru to fruition ? 

Chrysalis

MattMattMattUK said:

Chrysalis said:

MattMattMattUK said:

lisyloo said:

I’d like to question this idea that we’re all equally liable to repay.
I'm going to retire in a few years a lower my tax and NI contributions.
sweeping generalisation of course but doesn’t this burden fall disproportionately on the young or in more general terms future tax payers.
I guess the devil may be in the detail of exactly how it’s going to be collected.

It falls disproportionately on the young in general, as well as higher earners. Those who do not make a net contribution will not be repaying it at all. It appears it will be added to the national debt, which is serviced from general taxation, so again the burden falls on net contributors. 

It is insane that Truss is proposing tax cuts when we are still borrowing to cover day to day expenditure, that's even before she adds £150-200 billion with this scheme, even more so when the bottom two thirds of taxpayers have the lowest effective rate of income taxation in the EU (ok, I know we unfortunately left. Also the top third have the fifth highest).

The UK has one of the worst inequality in the western world, our top 50%

The UK does have higher inequality than some countries, less than others, we are 73rd on a list of 180 countries, hardly "one of the worst".

Chrysalis said:

our top 50% are currently under taxed 

The top third of earners have the fifth highest rate of income taxation in the EU, our top rate is 48.25%, in Germany it is 47.475%, France 49%, Norway 46.4% and Ireland 49%. We are slightly above average in terms of our top rate of tax compared to major economies.

Chrysalis said:
and bottom 10% over taxed. 

The bottom 10% do not have their income taxed and because of our benefits system means that they have an effective negative rate of income taxation. Additionally because of the way that VAT works, with the exclusions we apply VAT in the UK functions in a progressive way even though it is applied at a flat rate. The bottom two thirds have the lowest rate of income taxation in the EU, the lowest of any major economy, the lowest of any advanced economy.

Chrysalis said:
I think this is a lot down to our wealthiest massively resisting tax increases more than they do in Germany, France etc. 

In the UK depending on how the question is asked 80-90% of people support raising income taxes, however less than 10% support raising their level of income taxation, they want things to be paid for by "someone else". The Wealthiest are already paying a comparable rate to the wealthiest in Germany or France, it is the bottom two thirds of earners who pay considerably less in income taxation in the UK than they to in France or Germany. France has the same rate of VAT as we have, but also apply VAT to food (at a reduced rate), Germany has a VAT rate of 19%, lower than ours, but also apply VAT at 7% to most foods. Germany and France have comparable levels of property taxation. Germany has slightly higher corporation tax, France has corporation tax quite a bit higher (30%) but actually collects less in corporation tax than the UK despite having a slightly bigger economy. It is not the wealthiest that do not pay enough tax.

Chrysalis said:
We have too much regressive and not enough progressive taxes. 

The UK has one of the most progressive taxation and benefits system in the world, overall our tax system is more progressive than those of Germany or France.

Chrysalis said:
Truss has took us backwards sadly, 

Truss has or will take us backwards in many ways, tax cuts being one of them, she should be raising all levels of income taxation and slashing the tax free allowance. 

Chrysalis said:
we badly needed the corp tax rise

The corporation tax rise was not really needed, it would have been somewhat helpful, but we also need to reform corporate taxes, the UK corporate tax system does little to nothing to encourage investment, compared to those of Germany or Norway which actively benefit businesses who invest in plant, equipment, R&D, training etc. Corporation tax of around 20% is probably about right, or 25% with reforms to the way investment in the business is taxed, but it is not a major issue overall.

Chrysalis said:
and the NI changes she made are regressive.

The National Insurance changes Truss has made are regressive when taken in isolation, however our income taxation system is still highly progressive, just slightly less highly progressive than it would have been with Sunak's National Insurance rise.

Chrysalis said:

I do agree with the decision to put it on general taxation instead of future energy bills, 

I do not agree with passing the burden on to future generations, since 1999 the UK has lived beyond it's means, borrowing money for the benefit of those now and relying on future generations to repay that debt. Taxes in the UK need to rise for everyone, the abolition or near abolition of the tax free allowance, the merging of IC and NI so higher income pensioners to not avoid paying it (as well as a simplified tax system) and putting 4% on the base rate of income taxation 2% on the higher rate and 1.25% on the additional rate.

Chrysalis said:
putting the SOLR costs on the SC was a horrific decision.

It was not "horrific" it was reasonably sensible at that point in time.

For reference borrowing and government debt is normal practice.

https://equalitytrust.org.uk/scale-economic-inequality-uk
https://www.statista.com/statistics/872472/gini-index-of-the-united-kingdom/
https://www.theguardian.com/inequality/2017/oct/11/uk-no-further-forward-on-tackling-gender-inequality-eu-league-table-shows

Do you think people in the bottom 10% pay no tax?  Have I misunderstood something? so they pay none of these?

VAT
Fuel Duty
Council tax

The one thing I probably agree with you on is that government rarely see past the next election and as such we are extremely short termist.  That short termism has led to progressive taxes been over cut though.

MattMattMattUK

casjen said:

MattMattMattUK said:

brewerdave said:

@MattMattMattUK - don't bother to put yourself forward for MP at the next General Election -your taxation "policy" would mean your deposit would be lost !!

I agree the public would note vote for it, that does not mean it is not the right thing to do. It works very well in Germany, Netherlands, Scandinavia etc. and it would be regarded as entirely normal and sensible, they have far better public services and an overall higher standard of living because of it. In the UK people seem to vote with a very short term and selfish outlook, that is why we end up with the poor services we have. 

You constantly decry those worse off than you....

I do not "decry" those worse off than me, or those better off than me, or those in a similar position to me. I take issue with those who take a selfish view towards the society that they live within.

casjen said:

We are not selfish in the UK.

As a whole the electorate is, the majority consistently votes in it's own short term (sometimes very short term) interests. Compared to the continent where people seem to take a much more pragmatic, long term view. People in the UK do not want to pay more tax to cover childcare for example, however in countries where childcare is provided by the state through taxation the net cost is lower and the outcomes for women in the workplace are better.

casjen said:

And our services are excellent considering the demand on them..

Our services are ok, they are not excellent, they are funded to a much lower level than those of our continental neighbours. That does not mean those who work within them to not work hard or do their best, but the NHS for example has worse outcomes, is less efficient and has considerably longer wait times than Germany, France or Scandinavia where they fund their health services properly, there are similar issues in education, social care etc. 

casjen said:

Live elsewhere in one of those countries you admire so much.

I like elements of the UK, my family and friends are here, so it makes much more sense to improve the UK, for the benefit of all, rather than flee abroad and watch the UK decline from afar. 

MattMattMattUK

Chrysalis said:

MattMattMattUK said:

Chrysalis said:

MattMattMattUK said:

lisyloo said:

I’d like to question this idea that we’re all equally liable to repay.
I'm going to retire in a few years a lower my tax and NI contributions.
sweeping generalisation of course but doesn’t this burden fall disproportionately on the young or in more general terms future tax payers.
I guess the devil may be in the detail of exactly how it’s going to be collected.

It falls disproportionately on the young in general, as well as higher earners. Those who do not make a net contribution will not be repaying it at all. It appears it will be added to the national debt, which is serviced from general taxation, so again the burden falls on net contributors. 

It is insane that Truss is proposing tax cuts when we are still borrowing to cover day to day expenditure, that's even before she adds £150-200 billion with this scheme, even more so when the bottom two thirds of taxpayers have the lowest effective rate of income taxation in the EU (ok, I know we unfortunately left. Also the top third have the fifth highest).

The UK has one of the worst inequality in the western world, our top 50%

The UK does have higher inequality than some countries, less than others, we are 73rd on a list of 180 countries, hardly "one of the worst".

Chrysalis said:

our top 50% are currently under taxed 

The top third of earners have the fifth highest rate of income taxation in the EU, our top rate is 48.25%, in Germany it is 47.475%, France 49%, Norway 46.4% and Ireland 49%. We are slightly above average in terms of our top rate of tax compared to major economies.

Chrysalis said:
and bottom 10% over taxed. 

The bottom 10% do not have their income taxed and because of our benefits system means that they have an effective negative rate of income taxation. Additionally because of the way that VAT works, with the exclusions we apply VAT in the UK functions in a progressive way even though it is applied at a flat rate. The bottom two thirds have the lowest rate of income taxation in the EU, the lowest of any major economy, the lowest of any advanced economy.

Chrysalis said:
I think this is a lot down to our wealthiest massively resisting tax increases more than they do in Germany, France etc. 

In the UK depending on how the question is asked 80-90% of people support raising income taxes, however less than 10% support raising their level of income taxation, they want things to be paid for by "someone else". The Wealthiest are already paying a comparable rate to the wealthiest in Germany or France, it is the bottom two thirds of earners who pay considerably less in income taxation in the UK than they to in France or Germany. France has the same rate of VAT as we have, but also apply VAT to food (at a reduced rate), Germany has a VAT rate of 19%, lower than ours, but also apply VAT at 7% to most foods. Germany and France have comparable levels of property taxation. Germany has slightly higher corporation tax, France has corporation tax quite a bit higher (30%) but actually collects less in corporation tax than the UK despite having a slightly bigger economy. It is not the wealthiest that do not pay enough tax.

Chrysalis said:
We have too much regressive and not enough progressive taxes. 

The UK has one of the most progressive taxation and benefits system in the world, overall our tax system is more progressive than those of Germany or France.

Chrysalis said:
Truss has took us backwards sadly, 

Truss has or will take us backwards in many ways, tax cuts being one of them, she should be raising all levels of income taxation and slashing the tax free allowance. 

Chrysalis said:
we badly needed the corp tax rise

The corporation tax rise was not really needed, it would have been somewhat helpful, but we also need to reform corporate taxes, the UK corporate tax system does little to nothing to encourage investment, compared to those of Germany or Norway which actively benefit businesses who invest in plant, equipment, R&D, training etc. Corporation tax of around 20% is probably about right, or 25% with reforms to the way investment in the business is taxed, but it is not a major issue overall.

Chrysalis said:
and the NI changes she made are regressive.

The National Insurance changes Truss has made are regressive when taken in isolation, however our income taxation system is still highly progressive, just slightly less highly progressive than it would have been with Sunak's National Insurance rise.

Chrysalis said:

I do agree with the decision to put it on general taxation instead of future energy bills, 

I do not agree with passing the burden on to future generations, since 1999 the UK has lived beyond it's means, borrowing money for the benefit of those now and relying on future generations to repay that debt. Taxes in the UK need to rise for everyone, the abolition or near abolition of the tax free allowance, the merging of IC and NI so higher income pensioners to not avoid paying it (as well as a simplified tax system) and putting 4% on the base rate of income taxation 2% on the higher rate and 1.25% on the additional rate.

Chrysalis said:
putting the SOLR costs on the SC was a horrific decision.

It was not "horrific" it was reasonably sensible at that point in time.

For reference borrowing and government debt is normal practice.

https://equalitytrust.org.uk/scale-economic-inequality-uk
https://www.statista.com/statistics/872472/gini-index-of-the-united-kingdom/
https://www.theguardian.com/inequality/2017/oct/11/uk-no-further-forward-on-tackling-gender-inequality-eu-league-table-shows

Debt and borrowing at a level during times of need is normal, borrowing for investment is normal. The UK has been borrowing to cover day to day costs since 1999 and Truss is borrowing even more to allow her to cut taxes. In the short term that is bad, in the long term it is economically disastrous. 

Chrysalis said:

Do you think people in the bottom 10% pay no tax?  Have I misunderstood something?

I did not say that they pay no tax, I said that they do not pay net tax, they receive more in benefits than they pay in tax, so they have a negative taxation rate even before you account for a proportion of service that they receive from the state, so yes, you have misunderstood, I expect deliberately. 

Chrysalis said:

so they pay none of these?

VAT
Fuel Duty
Council tax

The lowest 10% of earners pay very little VAT because most of their expenditure goes on food which attracts no VAT, rent which attracts no VAT, water which attracts no VAT and energy which only attracts 5% VAT, so overall they pay very little VAT. The bottom 10% of earners often do not generally own private vehicles so on average pay very little in Fuel Duty. They will also have their Council Tax pay for via the benefit system, so not paying it themselves. 

Chrysalis said:

The one thing I probably agree with you on is that government rarely see past the next election and as such we are extremely short termist.  That short termism has led to progressive taxes been over cut though.

The UK tax system is more progressive than that of Germany, France, Spain, Italy, Netherlands, Norway, Sweden, Finland etc. Progressive Taxes have not been "over cut", our tax system has actually got more progressive in nearly every year for the last thirty years, with a slight regression in the last two years due to inflation and then a future slight regression if Truss implements her tax cuts. 

michaels

THe use of NI rather than income tax seems to be regressive.

Short term thinking:  the extremely popular energy price 'freeze' is basically the govt taking a loan of £5000 on behalf of every household in order to spread the cost of current expenditure on energy.  If the loan was explicitly at the household level, how many would be so enthusiastic?

Chrysalis

MattMattMattUK said:

The UK tax system is more progressive than that of Germany, France, Spain, Italy, Netherlands, Norway, Sweden, Finland etc. Progressive Taxes have not been "over cut", our tax system has actually got more progressive in nearly every year for the last thirty years, with a slight regression in the last two years due to inflation and then a future slight regression if Truss implements her tax cuts. 

What do you consider as progressive taxation?

Historical treasury income is showing a constant shift from ability to pay taxes to consumption taxes, you making statements at complete odds to reality its as if we living in alternate universes.

I find your statements on low earners interesting as if you feel you have a complete understanding of them.  The problem is I think you dont such as the assumption they dont use cars.

Curious, do you find which of these most progressive?

1 - Taxation that wealthier people pay a higher %.
2 - Taxation that is a flat % of income.
3 - Taxation that is a flat amount.

SC is a flat amount of course per billpayer akin to #3, takes no account of usage or number of earning adults living at the property and you felt it was a good way to recover SOLR costs.

Also I didnt misunderstand you deliberately, tax is tax.  Tax is I look at what you pay, I ignore any tax credit reimbursement, benefits, NHS treatment etc.  That to me is a logical way to look at it, however I found your "net tax" idea interesting, its the first time I have come across someone looking at it that way, seems a odd selfish way to look at it but thats just me.