Non-partisan mini-budget predictions thread

Millyonare

dunstonh said:

talexuser said:

I find it hard to understand how we have gone from a position of Osbourne austerity went too far and was self defeating which was widely said until recently, to now we need the same again. But then I don't understand Kwarteng saying his budget was not responsible for the present situation.

That period wasnt real austerity.  It was austerity in name only.   They announced things then backtracked or delayed.  There were cuts but they were not at a level to genuinely be classed as austerity.    

Yup, "austerity" and "cuts" were (very) clever catchphrases, hammed up by the far-Left to antagonise the ruling Tory party. The catchy phrases were staggeringly effective at manipulating and propagandizing public perception. Total UK debt actually doubled in the 2010s (no austerity).

And the catchphrases keep on coming. Now, in the 2020s, we always have a "crisis" or "emergency", even if the economy is the fastest-growing in the G7, national debt payment near historical lows, and effectively full employment (no crisis).

We live in an era of almost unprecedented (and highly effective) socio-economic propaganda!

DoublePolaroid

Whilst I’m a cynic and absolutely agree with Douglas Adams’ tongue-in-cheek view that people who seek power are probably the most temperamentally least suited to actually wield it, I’m happy to accept the view that MP’s could be paid more. 

I can’t however get on board with the view that they’re rubbish because their pay is too low. Their income is in the same ballpark as NHS surgeons and whilst, like every other walk of life, some surgeons are better than others, nobody thinks surgeons must be rubbish because they’re paid the same as all those feckless MP’s.

Pay is roughly correlated with rareness of ability. It’s partly why PL footballers get paid what they do - they’re in an absolutely tiny fraction of people who can perform to that level (and they generate their own income which is why I have no issue with what they get). The average surgeon has somewhat less rare, but still uncommon abilities which require years and years of education and training, which explains why they get paid a good wage. Technically anybody can be an MP, it doesn’t actually require much more than a pretty basic education, which is relatively unique for a job paying what it does.

To circle back to Adams, I think many MP’s seem to have sketchy competence less because of insufficient pay and more because the sort of person who so confidently thinks they have what it takes to run the country is probably more likely than average to be a victim of Dunning-Kruger. On the worst end of the scale, the job self-selects delusional narcissists. 

Millyonare

CGT tax = up
Divvy tax = up
Pension tax = up
Second-home owner tax = up
Contractor tax = up
Income tax (fiscal drag) = up
Top-rate income tax = up
NI tax = up
Council tax = up
Car tax = up
Hybrid car tax = up
Electric car tax = up

kinger101

Tax:

All thresholds frozen to gain more via fiscal drag (e.g. income tax thresholds, pension thresholds, ISA etc).
No changes to pension rules (too complicated)
Dividend tax aligned with standard income tax rates (20/40/45).  
Removal of £2K dividend allowance
CGT rates increased to 20/40, 28/40
Fuel duties frozen
Alcohol and tobacco duties increased
No changes to stamp duty
VAT on all types of glue capable to sticking people to tarmac increased to 1000%.

Benefits
Working age benefits increased by CPI
Pension increased by slightly less than CPI (say 8%).

Capital spending
Sizewell C goes ahead
HS2 scaled back.

mebu60

CGT increased 10/18 to 20, 20/28 to 40/45 is my expectation unfortunately.
I think the threshold will change too but I'm going to buck the trend by suggesting it increases from 12300 to 12750 rather than decreases.
Then CGT and income tax will be fully aligned :-(

MK62

Albermarle said:

Specifically, if we had 650 adults in charge, instead of 650 power-hungry narcissists, the Tories could have said
"clearly manifesto commitments to not raising income tax, NI or VAT were made prior to Covid and the ruinously expensive policy of lockdown.  Therefore we're chucking those in the bin."
Labour in turn, could have replied "we fully supported lockdown, so that's fair enough".

 when we look at our leaders we are really looking at our own reflection in a mirror, especially in a democracy, where leaders are elected into office by the people they lead.

One small issue with that though.......few people got to elect Liz Truss, and even fewer "elected" Rishi Sunak......

fizio

Latest info also seems to suggest the era of ‘going electric’ on cars is going to be less tax efficient.
Road tax for electric plus big increase be BIK for electric company car drivers
At least there is no talk for road pricing per mile
Can’t really complain as its been a good run for past 5+ years..

kinger101

dunstonh said:

westv said:

So no budget predictions so far then.

Basically, if you are on benefits then you are going to be fine.   
If you have any wealth, you are going to be stuffed.  
And God forbid if you are a business owner.   You are going to get crucified.  

 I would not be surprised to see either 1) the allowance to be removed entirely or 2) the rate to be harmonised with income tax. Dividends have been under attack since 2014 with an ever increasing ratchet on something that had been untaxed for basic rate taxpayers (if we ignore the silly notional credit thing)

The reason dividend tax is lower is because the earnings linked to it have already had corporation tax paid against them at 19%.   Next year CT rises to 19% on the first £50k, 26.5% on the next £200k and 25% thereafter.

If they tax dividends under income tax, that would mean company earnings being taxed at upto 26.5% + upto 45%.    Why would anyone want to own a company with that level of taxation?

The workaround they can use is different rules for business owners and angel investors.  There's no rule saying money is only taxed once.

MattMattMattUK

I think they will hit investors, business owners and pension savers most, with rises to CGT, Dividend Tax and cuts to pension contribution tax breaks. There will be a windfall tax on energy producers, but it will probably be for theatre rather than revenue and will largely be avoidable using buybacks and future investment. 

What I think should happen is cutting of the personal allowance (cutting to £2,500 pa would raise around £45 billion).
Abolishing the dividend allowance but no increase in rates. 
Non-domiciled tax status abolished (would raise £10-35 billion depending on behavioural changes).
Dividend tax charged on all dividend paid to non-UK taxpayers (many other countries already do this and nearly all offer credits to their own taxpayers on foreign paid dividend so it should not cause any dip in inward investment, would likely raise around £30 billion).
Combining Income Tax and NI into one overall combined Income Tax rate.
Allowing Council Tax to be raised by up to 10% for the next three years. 
Increase in Alcohol tax, but with the original plan to align taxes by alcohol percentage brackets. 
Increase tobacco tax significantly.
Increase fuel duty.
National equalisation of housing benefit, with the aim for a national fixed rated by 2030 (encourages people to move to where they can afford to live, just as those who pay for our own homes already have to do).
Raise benefits and pensions in line with inflation and commit to do so for the remainder of the parliament, but abolish the triple lock.
Probably a load more as well, but those are the obvious ones.

DannyCarey

My guess is the Tories will make sure they cover themselves first then they will screw everyone as much as they can get away with.