The new Energy price ceiling of £2,500 - some questions on reflection about winners and losers.

artyboy

gj373 said:

There are no winners. Only varying degrees of loss. The biggest losers are the as yet unborn taxpayers who will see no benefit but be paying this back over many years. It has always been thus.

And it's that point which is making me feel as though I want to accelerate some aspects of estate planning, so my kids (and putative grandkids) don't actually end up paying for the largesse that is being bestowed upon me. Which in reality isn't that much because I was smart/lucky enough to get on a good fix before all this insanity started...

SnakePlissken

SnakePlissken said:

Deleted_User said:

[Deleted User] said:

Deleted_User said:

Deleted_User said:

There aren't that many massive mansions with swimming pools and stables, but there are a lot of under-insulated detached homes owned or occupied by people with lower and middle incomes.

I'd rather accidentally give the subsidy to some that don't need it, than deliberately not give it to people who do.

Do you think that it is impossible to distinguish between the two via a limit on the amount of energy use subsidised per home or by any other means available to the government. That to exclude the high energy costs of mansions with swimming pools and stables would inevitably have caused poorly insulated bungalows to be excluded.

Also as I have pointed out the subsidy is not targeted at need and is a subsidy per kWh not a cash grant. It provides the greatest help to the highest users regardless of how excessive to need their use is. Not the greatest help to those with heating costs they cannot afford for example due to being elderly and living in a poorly insulated bungalow.

Impossible? No.

An inefficient use of time and resources to address an issue that isn't much of a problem in the grand scheme of things?  Yes.

What time and resources?

A simple upper limit on the energy use subsidised per home would be simplicity itself.

While even a far more complex system based on housing type, age and size would also be easy to implement as the government data already exists and is used for the new warm homes discount scheme. Which is done automatically with no need to apply.

Isn't much of a problem?

It's throwing away vast amounts of taxpayers money on people who have excessive use.

Money that could instead be targeted at need.

Do you know what the admin costs would be on any form of means testing

In scotland prior to scrapping prescription charges in Scotland, around 25% to 33% was used on adminstering the scheme. This normal for most means testing.

Have you thought of another far far far simpler way  and administration for it is already in place, so no extra costs....

Raise income taxes and add new bands with different rates.

That way money for cap  given to richer people who do not need it, heating swimming pools or otherwise; the money can be easily recouped.

Its only because Bampot Truss is ideologically opposed to tax that this is not being considered. Similarly to why windfall tax  is discounted

To clarify adding additional income tax bands and rates is easily acheivable with no need to invlove energy companies. It is very simple thing  to do.

In Scotland where income tax is devolved the rates and bands were tweaked several years ago to be more progressive and tax the higher earners more than the lowest earners. With 2 new income tax bands added.

lisyloo

SnakePlissken said:

SnakePlissken said:

Deleted_User said:

[Deleted User] said:

Deleted_User said:

Deleted_User said:

There aren't that many massive mansions with swimming pools and stables, but there are a lot of under-insulated detached homes owned or occupied by people with lower and middle incomes.

I'd rather accidentally give the subsidy to some that don't need it, than deliberately not give it to people who do.

Do you think that it is impossible to distinguish between the two via a limit on the amount of energy use subsidised per home or by any other means available to the government. That to exclude the high energy costs of mansions with swimming pools and stables would inevitably have caused poorly insulated bungalows to be excluded.

Also as I have pointed out the subsidy is not targeted at need and is a subsidy per kWh not a cash grant. It provides the greatest help to the highest users regardless of how excessive to need their use is. Not the greatest help to those with heating costs they cannot afford for example due to being elderly and living in a poorly insulated bungalow.

Impossible? No.

An inefficient use of time and resources to address an issue that isn't much of a problem in the grand scheme of things?  Yes.

What time and resources?

A simple upper limit on the energy use subsidised per home would be simplicity itself.

While even a far more complex system based on housing type, age and size would also be easy to implement as the government data already exists and is used for the new warm homes discount scheme. Which is done automatically with no need to apply.

Isn't much of a problem?

It's throwing away vast amounts of taxpayers money on people who have excessive use.

Money that could instead be targeted at need.

Do you know what the admin costs would be on any form of means testing

In scotland prior to scrapping prescription charges in Scotland, around 25% to 33% was used on adminstering the scheme. This normal for most means testing.

Have you thought of another far far far simpler way  and administration for it is already in place, so no extra costs....

Raise income taxes and add new bands with different rates.

That way money for cap  given to richer people who do not need it, heating swimming pools or otherwise; the money can be easily recouped.

Its only because Bampot Truss is ideologically opposed to tax that this is not being considered. Similarly to why windfall tax  is discounted

To clarify adding additional income tax bands and rates is easily acheivable with no need to invlove energy companies. It is very simple thing  to do.

In Scotland where income tax is devolved the rates and bands were tweaked several years ago to be more progressive and tax the higher earners more than the lowest earners. With 2 new income tax bands added.

So you’d catch everyone hard working on paye and miss all the rich toffs getting their income from dividends?

[Deleted User]

That 19%, 20%, 21% Scottish tax band thing is a complete joke.  Oh look, we're super progressive, we've saved a tiny bracket of people £20.

SnakePlissken

lisyloo said:

SnakePlissken said:

SnakePlissken said:

Deleted_User said:

Deleted_User said:

Deleted_User said:

Deleted_User said:

There aren't that many massive mansions with swimming pools and stables, but there are a lot of under-insulated detached homes owned or occupied by people with lower and middle incomes.

I'd rather accidentally give the subsidy to some that don't need it, than deliberately not give it to people who do.

Do you think that it is impossible to distinguish between the two via a limit on the amount of energy use subsidised per home or by any other means available to the government. That to exclude the high energy costs of mansions with swimming pools and stables would inevitably have caused poorly insulated bungalows to be excluded.

Also as I have pointed out the subsidy is not targeted at need and is a subsidy per kWh not a cash grant. It provides the greatest help to the highest users regardless of how excessive to need their use is. Not the greatest help to those with heating costs they cannot afford for example due to being elderly and living in a poorly insulated bungalow.

Impossible? No.

An inefficient use of time and resources to address an issue that isn't much of a problem in the grand scheme of things?  Yes.

What time and resources?

A simple upper limit on the energy use subsidised per home would be simplicity itself.

While even a far more complex system based on housing type, age and size would also be easy to implement as the government data already exists and is used for the new warm homes discount scheme. Which is done automatically with no need to apply.

Isn't much of a problem?

It's throwing away vast amounts of taxpayers money on people who have excessive use.

Money that could instead be targeted at need.

Do you know what the admin costs would be on any form of means testing

In scotland prior to scrapping prescription charges in Scotland, around 25% to 33% was used on adminstering the scheme. This normal for most means testing.

Have you thought of another far far far simpler way  and administration for it is already in place, so no extra costs....

Raise income taxes and add new bands with different rates.

That way money for cap  given to richer people who do not need it, heating swimming pools or otherwise; the money can be easily recouped.

Its only because Bampot Truss is ideologically opposed to tax that this is not being considered. Similarly to why windfall tax  is discounted

To clarify adding additional income tax bands and rates is easily acheivable with no need to invlove energy companies. It is very simple thing  to do.

In Scotland where income tax is devolved the rates and bands were tweaked several years ago to be more progressive and tax the higher earners more than the lowest earners. With 2 new income tax bands added.

So you’d catch everyone hard working on paye and miss all the rich toffs getting their income from dividends?

Do you know ahat percentage of uk population that is perchance?

Capital gains tax already  taxes income from shares, if you want we could decrease the threshold to 2k income. 

But how would you then target those who have built up isa share holdings as these are tax free?


Share dividends are also used by a lot of pension schemes from councils to companies.
How do younavoid penalising a person on 25000 pension sheme?

Anyone earning over 40000 is in richest 25% in the uk.


https://www.mygov.scot/income-tax-rates-and-personal-allowances

If you raise taxes on those above 45000 and again at over 150000 and again at over 500000 and then  over 1 million  thats hardly penalising hard working ordinary people.

Miser1964

Deleted_User said:

That 19%, 20%, 21% Scottish tax band thing is a complete joke.  Oh look, we're super progressive, we've saved a tiny bracket of people £20.

And needless to say the expected increase in tax 'take' in Scotland is hundreds of millions of £s less as people re-organise their tax-affairs. The Laffer curve is unknown to the SNP who are driven by the politics of spite and envy.

High tax rates in Scotland bring in £200m less, says IFS

pochase

SnakePlissken said:

Anyone earning over 40000 is in richest 25% in the uk.


https://www.mygov.scot/income-tax-rates-and-personal-allowances

If you raise taxes on those above 45000 and again at over 150000 and again at over 500000 and then  over 1 million  thats hardly penalising hard working ordinary people.

How do you get the idea that an income of £40000 qualifies you to be in the top 25% income bracket.

A family of four for example needs to earn £60000 after taxes to fall into that bracket

With a household after tax income of £1120 per week, you have a higher income than around 77% of the population - equivalent to about 50.8 million individuals.

 

lisyloo

SnakePlissken said:

Plisyloo said:

SnakePlissken said:

SnakePlissken said:

Deleted_User said:

Deleted_User said:

Deleted_User said:

Deleted_User said:

There aren't that many massive mansions with swimming pools and stables, but there are a lot of under-insulated detached homes owned or occupied by people with lower and middle incomes.

I'd rather accidentally give the subsidy to some that don't need it, than deliberately not give it to people who do.

Do you think that it is impossible to distinguish between the two via a limit on the amount of energy use subsidised per home or by any other means available to the government. That to exclude the high energy costs of mansions with swimming pools and stables would inevitably have caused poorly insulated bungalows to be excluded.

Also as I have pointed out the subsidy is not targeted at need and is a subsidy per kWh not a cash grant. It provides the greatest help to the highest users regardless of how excessive to need their use is. Not the greatest help to those with heating costs they cannot afford for example due to being elderly and living in a poorly insulated bungalow.

Impossible? No.

An inefficient use of time and resources to address an issue that isn't much of a problem in the grand scheme of things?  Yes.

What time and resources?

A simple upper limit on the energy use subsidised per home would be simplicity itself.

While even a far more complex system based on housing type, age and size would also be easy to implement as the government data already exists and is used for the new warm homes discount scheme. Which is done automatically with no need to apply.

Isn't much of a problem?

It's throwing away vast amounts of taxpayers money on people who have excessive use.

Money that could instead be targeted at need.

Do you know what the admin costs would be on any form of means testing

In scotland prior to scrapping prescription charges in Scotland, around 25% to 33% was used on adminstering the scheme. This normal for most means testing.

Have you thought of another far far far simpler way  and administration for it is already in place, so no extra costs....

Raise income taxes and add new bands with different rates.

That way money for cap  given to richer people who do not need it, heating swimming pools or otherwise; the money can be easily recouped.

Its only because Bampot Truss is ideologically opposed to tax that this is not being considered. Similarly to why windfall tax  is discounted

To clarify adding additional income tax bands and rates is easily acheivable with no need to invlove energy companies. It is very simple thing  to do.

In Scotland where income tax is devolved the rates and bands were tweaked several years ago to be more progressive and tax the higher earners more than the lowest earners. With 2 new income tax bands added.

So you’d catch everyone hard working on paye and miss all the rich toffs getting their income from dividends?

Do you know ahat percentage of uk population that is perchance?

Capital gains tax already  taxes income from shares, if you want we could decrease the threshold to 2k income. 

But how would you then target those who have built up isa share holdings as these are tax free?


Share dividends are also used by a lot of pension schemes from councils to companies.
How do younavoid penalising a person on 25000 pension sheme?

Anyone earning over 40000 is in richest 25% in the uk.


https://www.mygov.scot/income-tax-rates-and-personal-allowances

If you raise taxes on those above 45000 and again at over 150000 and again at over 500000 and then  over 1 million  thats hardly penalising hard working ordinary people.

No I don’t know the % but thats not usually a factor when we are discussing fairness.

a lot of wealthier people are not employees, they will be operating limited companies.
it’s common for contractors to take about £9k income so they don’t pay national insurance.

I don’t have answers, just pointing out it’s not that easy and there are ways of avoiding tax
e.g. Couple paying basic rate dividend tax rather than income tax or salary sacrifice into pensions.
ironically these tax breaks are available to and afforded by the better off.
poorer people can’t afford to put £40k into their pension to avoid income tax and NI.

Ultrasonic

For me, the logical way to counter the criticism of higher energy users gaining most would be to recoup at least a large proportion of the subsidy via higher unit prices in the future. That way those who benefit more will pay back more. Increasing VAT on energy bills would largely have the same effect, but not quite as well due to the VAT on standing charges.

SnakePlissken

pochase said:

SnakePlissken said:

Anyone earning over 40000 is in richest 25% in the uk.


https://www.mygov.scot/income-tax-rates-and-personal-allowances

If you raise taxes on those above 45000 and again at over 150000 and again at over 500000 and then  over 1 million  thats hardly penalising hard working ordinary people.

How do you get the idea that an income of £40000 qualifies you to be in the top 25% income bracket.

A family of four for example needs to earn £60000 after taxes to fall into that bracket

With a household after tax income of £1120 per week, you have a higher income than around 77% of the population - equivalent to about 50.8 million individuals.

 

Have not found exact figures for £40000 yet.

But £54000 is in the top 11%

https://www.statista.com/chart/20092/how-much-pay-makes-you-a-top-earner-in-the-uk/