Non-partisan mini-budget predictions thread

kinger101

MK62 said:

In the end, no matter what they do, some are going to be saying "ouch".......but  the government need to remember that there is a cost-of-living issue at the moment, coupled with an impending recession and many are already feeling the squeeze - the chancellor has little room for any more tax rises on the majority at this time.......which is why he might go more for spending cuts and other money saving measures, such as reliefs and allowances, which won't hit the majority directly in the pocket now.

I feel that's a circular argument though.  Freezing allowances will mean tax rises for the majority via fiscal drag.  E.g someone earning £15,000 getting a 5% pay rise from April would be paying £486 income tax this year (3.24 % overall) compared to £636 next year (which is 4.04%).  They're paying more tax, despite the fact their income has declined in real terms.

 

hallmark

Jeremy Hunt is saying "everybody will pay more tax".

The only way that happens is if he raises VAT.  So either he's talking out of his rectum or VAT will be increased.

kinger101

hallmark said:

Jeremy Hunt is saying "everybody will pay more tax".

The only way that happens is if he raises VAT.  So either he's talking out of his rectum or VAT will be increased.

I think he's referring to the frozen allowances/thresholds.  He'll be more upfront about the fact that this means paying more tax for nearly everyone.  It's not impossible that the NI rate increase might be bought back, but maybe limited to the 2% and employers. 

But I don't think raising VAT is likely at all given the impact it would have on inflation.

Millyonare

fizio said:

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..

It's only a matter of time.

Take a look at those tiny roadside cameras snapping a surveillance photo of you, your passengers and your number plate every 1-10 miles 😉

MK62

kinger101 said:

MK62 said:

In the end, no matter what they do, some are going to be saying "ouch".......but  the government need to remember that there is a cost-of-living issue at the moment, coupled with an impending recession and many are already feeling the squeeze - the chancellor has little room for any more tax rises on the majority at this time.......which is why he might go more for spending cuts and other money saving measures, such as reliefs and allowances, which won't hit the majority directly in the pocket now.

I feel that's a circular argument though.  Freezing allowances will mean tax rises for the majority via fiscal drag.  E.g someone earning £15,000 getting a 5% pay rise from April would be paying £486 income tax this year (3.24 % overall) compared to £636 next year (which is 4.04%).  They're paying more tax, despite the fact their income has declined in real terms.

 

I wasn't really referring to the Personal allowance - it's already frozen until 2026, so all he can do is extend the freeze, which won't affect anyone's pocket now, at least not more than was already planned (unless he actually reduces it - but that would be unexpected and a major surprise).

I totally agree about this freeze though......and it's disproportionate effect on lower income groups.

sammyjammy

DoublePolaroid said:

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. 

Being an MP is about being a public servant not making money, if you pay more it doesn't mean you get better candidates, i give you Jared O'Mara, took Nick Clegg's seat from him, what a mess.

sammyjammy

hallmark said:

Jeremy Hunt is saying "everybody will pay more tax".

The only way that happens is if he raises VAT.  So either he's talking out of his rectum or VAT will be increased.

Or adds the 5% VAT they cut on petrol back in?  Just filled up my car just in case.

Ocelot

phillw said:

dunstonh said:

Bearing in mind the constant reminders that we must address the debt and that there will be lots of pain, my prediction is that there will be zero reductions in MP's salaries or lavish expenses.

MPs are woefully underpaid in this country. That is why you either get high net worth individuals at one end or low skilled people at the other.     

MPs aren't underpaid. It attracts rich people, because they like power and making even more money.

Indeed. The basic salary may not seem huge to some, but they can claim up to 250,000 each on expenses every year, including employing their spouses on huge salaries, and having two houses paid for.

Nebulous2

Ocelot said:

phillw said:

dunstonh said:

Bearing in mind the constant reminders that we must address the debt and that there will be lots of pain, my prediction is that there will be zero reductions in MP's salaries or lavish expenses.

MPs are woefully underpaid in this country. That is why you either get high net worth individuals at one end or low skilled people at the other.     

MPs aren't underpaid. It attracts rich people, because they like power and making even more money.

Indeed. The basic salary may not seem huge to some, but they can claim up to 250,000 each on expenses every year, including employing their spouses on huge salaries, and having two houses paid for.

Absolute rubbish. The expenses you are referring to are an allowance from which they need to rent an office and pay members of staff. 

I’d also appreciate it if you could elaborate on the ‘two houses.’ 

My understanding is that those who live some distance from London get their expenses paid to travel to and live in London during the week. There were some dodgy occurrences where they bought homes in London and got their mortgages paid rather than renting accommodation, but I understand that has been stopped. 

Millyonare

MK62 said:

kinger101 said:

MK62 said:

In the end, no matter what they do, some are going to be saying "ouch".......but  the government need to remember that there is a cost-of-living issue at the moment, coupled with an impending recession and many are already feeling the squeeze - the chancellor has little room for any more tax rises on the majority at this time.......which is why he might go more for spending cuts and other money saving measures, such as reliefs and allowances, which won't hit the majority directly in the pocket now.

I feel that's a circular argument though.  Freezing allowances will mean tax rises for the majority via fiscal drag.  E.g someone earning £15,000 getting a 5% pay rise from April would be paying £486 income tax this year (3.24 % overall) compared to £636 next year (which is 4.04%).  They're paying more tax, despite the fact their income has declined in real terms.

 

I wasn't really referring to the Personal allowance - it's already frozen until 2026, so all he can do is extend the freeze, which won't affect anyone's pocket now, at least not more than was already planned (unless he actually reduces it - but that would be unexpected and a major surprise).

I totally agree about this freeze though......and it's disproportionate effect on lower income groups.

For balance, it is worth noting that the "lower income groups" in the UK already pay just about the least tax in the entire industrialised world. It is possible to earn £1000+ per month and not pay a bean in tax. The UK tax system is already incredibly favourable to entry-level workers. By some international standards, believe it or not, UK entry workers are very under-taxed (not over-taxed).