Proposed £100k ISA lifetime limit

hallmark

IanManc said:

Linton said:

hallmark said:

Do those figures include everybody who works in public service regardless how it's described?  For example council workers?  people who work in any of the endless Trusts? Quangos? People who work for private companies that carry out almost nothing but work on Government contracts?  Contractors and consultants working for Government departments? I was amazed when I found out from a friend who works at OFGEM just how many of these there are, and how much they're paid.

I honestly don't know so this is an actual question, not a rhetorical one.   But I would be very surprised if they they're all included in official figures.  If you have them, please provide a breakdown of the figures.

I dont know the precise definitions either but I will leave that exercise to you. If you wish to dispute data from an authoritative source like the ONS you need to put together a pretty strong case.

The number of public employees isn't being disputed. The point is that a lot of jobs that were done by public employees have now been outsourced, so people like cleaners and catering staff in hospitals and government departments, for example, stopped being "public employees" overnight when the outsourced contracts came into effect, even though they were the same people doing the same jobs in the same place for the same money, all of which was ultimately funded by taxation.

Precisely.

And tbh, re providing a pretty strong case, I'd argue that if you're don't know the precise data it's a pretty weak place from which to tell other people to check the data.

We all know that Governments of every colour love to manipulate figures, so (unfortunately) the Govt run ONS is of limited use when you want to the real story.  As a simple example, the way inflation is counted by the ONS has been continually revised and always with the end result that it appears much lower than if the figures were calculated the old way.

coastline

hallmark said:

IanManc said:

Linton said:

hallmark said:

Do those figures include everybody who works in public service regardless how it's described?  For example council workers?  people who work in any of the endless Trusts? Quangos? People who work for private companies that carry out almost nothing but work on Government contracts?  Contractors and consultants working for Government departments? I was amazed when I found out from a friend who works at OFGEM just how many of these there are, and how much they're paid.

I honestly don't know so this is an actual question, not a rhetorical one.   But I would be very surprised if they they're all included in official figures.  If you have them, please provide a breakdown of the figures.

I dont know the precise definitions either but I will leave that exercise to you. If you wish to dispute data from an authoritative source like the ONS you need to put together a pretty strong case.

The number of public employees isn't being disputed. The point is that a lot of jobs that were done by public employees have now been outsourced, so people like cleaners and catering staff in hospitals and government departments, for example, stopped being "public employees" overnight when the outsourced contracts came into effect, even though they were the same people doing the same jobs in the same place for the same money, all of which was ultimately funded by taxation.

Precisely.

And tbh, re providing a pretty strong case, I'd argue that if you're don't know the precise data it's a pretty weak place from which to tell other people to check the data.

We all know that Governments of every colour love to manipulate figures, so (unfortunately) the Govt run ONS is of limited use when you want to the real story.  As a simple example, the way inflation is counted by the ONS has been continually revised and always with the end result that it appears much lower than if the figures were calculated the old way.

Well getting back to investment ISA's the markets trawl through the data every minute. Right or wrong how it's developed or manipulated they react . Basically since last summer the US inflation figures have slowed and the expectations of interest rate rises have also slowed. Equities have gained as a result more than 10% from lows. That's all we've got as investors so we'll just have to swing along with it.

hallmark

coastline said:

hallmark said:

IanManc said:

Linton said:

hallmark said:

Do those figures include everybody who works in public service regardless how it's described?  For example council workers?  people who work in any of the endless Trusts? Quangos? People who work for private companies that carry out almost nothing but work on Government contracts?  Contractors and consultants working for Government departments? I was amazed when I found out from a friend who works at OFGEM just how many of these there are, and how much they're paid.

I honestly don't know so this is an actual question, not a rhetorical one.   But I would be very surprised if they they're all included in official figures.  If you have them, please provide a breakdown of the figures.

I dont know the precise definitions either but I will leave that exercise to you. If you wish to dispute data from an authoritative source like the ONS you need to put together a pretty strong case.

The number of public employees isn't being disputed. The point is that a lot of jobs that were done by public employees have now been outsourced, so people like cleaners and catering staff in hospitals and government departments, for example, stopped being "public employees" overnight when the outsourced contracts came into effect, even though they were the same people doing the same jobs in the same place for the same money, all of which was ultimately funded by taxation.

Precisely.

And tbh, re providing a pretty strong case, I'd argue that if you're don't know the precise data it's a pretty weak place from which to tell other people to check the data.

We all know that Governments of every colour love to manipulate figures, so (unfortunately) the Govt run ONS is of limited use when you want to the real story.  As a simple example, the way inflation is counted by the ONS has been continually revised and always with the end result that it appears much lower than if the figures were calculated the old way.

Well getting back to investment ISA's the markets trawl through the data every minute. Right or wrong how it's developed or manipulated they react . Basically since last summer the US inflation figures have slowed and the expectations of interest rate rises have also slowed. Equities have gained as a result more than 10% from lows. That's all we've got as investors so we'll just have to swing along with it.

We live in a very weird world currently macro-wise.  Market watchers are so obsessed with what the Fed does that most things that would traditionally be viewed as good (for example strong US jobs figures) are interpreted as meaning the Fed will stay hawkish, and markets fall.  Conversely, any bad data that is deemed likely to make the Fed take a more doveish stance sees markets jump up.

I'm bearish on shares but I have perma-bear tendencies so I'm forcing myself to keep dripping regardless.  At least bonds are a viable option now.

Kaizen917

If they seriously think of that ISA limit without turning it into a blatant tax grab, its gotta be at least twice that proposed 100k (or perhaps 100k for each cash and investment isa). Even at 200k, Im reluctant to brand someone as "very" rich (definitely a well off individual but nothing crazy).

As things are developing, inflation and the yearly limit stuck at 20k are already doing their bit

Albermarle

The £100K proposal was from a think tank, AFAIK no government spokesperson, or even the Labour Party has ever mentioned it.

There are though generally increased rumblings about tax breaks that disproportionately benefit the better off, such as in the pensions area.

fizio

I am not against this in principle as I do agree that there are quite a few tax breaks that provide a disproportionate benefit to the better off (eg pensions salary sacrifice etc) when the govt is desperately short of cash. The model of pensions LTA with various protection levels seems sensible along with the option to freeze at current levels for those with £1m+. I say this as someone who would be affected and was also hit by LTA

hallmark

fizio said:

I am not against this in principle as I do agree that there are quite a few tax breaks that provide a disproportionate benefit to the better off (eg pensions salary sacrifice etc) when the govt is desperately short of cash. The model of pensions LTA with various protection levels seems sensible along with the option to freeze at current levels for those with £1m+. I say this as someone who would be affected and was also hit by LTA

By definition, pretty much ALL tax breaks disproportionately benefit the better off because in general those people pay more tax.

Lots of people pay no tax at all, so tax avoidance mechanisms will never benefit them.

The problem with these types of think tanks is their idea of fairness is entirely predicated on who has what, and not who has paid what.  That allows them to achieve the neat trick of vilifying the people who have often paid most into the system.

ColdIron

Suppose that once a week, ten men go out for beer and the bill for all ten comes to £100. If they paid their bill the way we pay our taxes, it would go something like this...

The first four men (the poorest) would pay nothing.
The fifth would pay £1.
The sixth would pay £3.
The seventh would pay £7.
The eighth would pay £12.
The ninth would pay £18.
And the tenth man (the richest) would pay £59.　
So, that's what they decided to do.
 
The ten men drank in the bar every week and seemed quite happy with the arrangement until, one day, the owner caused them a little problem. "Since you are all such good customers," he said, "I'm going to reduce the cost of your weekly beer by £20." Drinks for the ten men would now cost just £80.
 
The group still wanted to pay their bill the way we pay our taxes. So the first four men were unaffected. They would still drink for free but what about the other six men? The paying customers? How could they divide the £20 windfall so that everyone would get his fair share? They realized that £20 divided by six is £3.33 but if they subtracted that from everybody's share then not only would the first four men still be drinking for free but the fifth and sixth man would each end up being paid to drink his beer.　

So, the bar owner suggested that it would be fairer to reduce each man's bill by a higher percentage. They decided to follow the principle of the tax system they had been using and he proceeded to work out the amounts he suggested that each should now pay.

And so, the fifth man, like the first four, now paid nothing (a100% saving).
The sixth man now paid £2 instead of £3 (a 33% saving).
The seventh man now paid £5 instead of £7 (a 28% saving).
The eighth man now paid £9 instead of £12 (a 25% saving).
The ninth man now paid £14 instead of £18 (a 22% saving).
And the tenth man now paid £49 instead of £59 (a 16% saving).　
Each of the last six was better off than before with the first four continuing to drink for free.　

But, once outside the bar, the men began to compare their savings. "I only got £1 out of the £20 saving," declared the sixth man. He pointed to the tenth man, "but he got £10!"　
"Yeah, that's right," exclaimed the fifth man. "I only saved a £1 too. It's unfair that he got ten times more benefit than me!"　

"That's true!" shouted the seventh man. "Why should he get £10 back, when I only got £2? The wealthy get all the breaks!"　

"Wait a minute," yelled the first four men in unison, "we didn't get anything at all. This new tax system exploits the poor!" The nine men surrounded the tenth and beat him up.　

The next week the tenth man didn't show up for drinks, so the nine sat down and had their beers without him. But when it came time to pay the bill, they discovered something important - they didn't have enough money between all of them to pay for even half of the bill!　

And that, boys and girls, journalists and government ministers, is how our tax system works. The people who already pay the highest taxes will naturally get the most benefit from a tax reduction. Tax them too much, attack them for being wealthy and they just might not show up anymore. In fact, they might start drinking overseas, where the atmosphere is somewhat friendlier.　

Albermarle

It's a very good story/analogy.

Maybe for completeness you could add an 11th man, who was even richer than the 10th man, but due to his non dom status and clever tax accountants, shell companies in the Virgin Islands etc did not pay for his beer, just like the poorer ones.

arnoldy

hallmark said:

There are interesting stats (that annoyingly I can't find easily to illustrate my point) which show the number of public sector employees per person in the USA today compared to in the 50s.  It's astronomical (and a reasonably safe bet that the same applies in the UK).   

Fully agree. Our local UK primary school has 140 pupils, every morning about 14 - 16 cars turn up. Which implies there are at least 14 people, probably a few more employed. 30 years ago there would have been 5 classes of 28, a head, a caretaker, and two dinner ladies - total 8. You do have to squint at what they all do, especially as standards seem to be slipping all the time.