[Finance] Cut tax or leave alone?

[Herr Tubthumper]

I’ve been reading off and on a book called “Why the Germans do it better” or something similar. There is a whole section in it about German unification where the East was way behind the West in all sorts of ways - infrastructure and everything else. They actually over a number of years increased taxes in order to pay for it….. and the Germans were happy to pay it according to the writer. So anyone who is commenting that cutting taxes means you can’t do levelling up is ABSOLUTELY 100% bang on right. Which is what Red Wall MPs are currently warning about, I think.

Correct. The Solidaritätszuschlag (solidarity tax) is a ring-fenced additional tax and has been in place since 1991 and is currently 5.5%; it was 7.5% originally.

 

[DavidinSouthampton]

Correct. The Solidaritätszuschlag (solidarity tax) is a ring-fenced additional tax and has been in place since 1991 and is currently 5.5%; it was 7.5% originally.

Thanks for the detail. I didn’t have the book with me. But I remember being amazed at how high the tax was, but that people realised it was necessary.

 

[Herr Tubthumper]

Thanks for the detail. I didn’t have the book with me. But I remember being amazed at how high the tax was, but that people realised it was necessary.

No problem. It was supposed to be abolished for everyone bar higher tax payers around now, but this has gone quiet since Covid.

 

[CheeseRolls]

In the past couple of years we have had two chancellors who have taken advantage of non-dom status to avoid paying tax in this country. It is splitting hairs whether it was them or spouses. Now we have a chancellor who is going to have to quietly pay HMRC to avoid being exposed for tax EVASION, not avoidance EVASION! I don't know what is wrong with people in this country that this is in anyway acceptable. Why can't we start by making sure that the people who are making decisions here actually have a stake in the country?

Tax cuts are possible through increased borrowing or cutting public spending. Everyone of these chancers needs to be cross questioned in detail about the consequences of such cuts.

 

[NooBHA]

You don’t understand what tax actually is for.

That's a strange one to be levelled at me

 

[BenGarfield]

In the past couple of years we have had two chancellors who have taken advantage of non-dom status to avoid paying tax in this country. It is splitting hairs whether it was them or spouses. Now we have a chancellor who is going to have to quietly pay HMRC to avoid being exposed for tax EVASION, not avoidance EVASION! I don't know what is wrong with people in this country that this is in anyway acceptable. Why can't we start by making sure that the people who are making decisions here actually have a stake in the country?

Tax cuts are possible through increased borrowing or cutting public spending. Everyone of these chancers needs to be cross questioned in detail about the consequences of such cuts.

Tax cuts are not dependent on either increased borrowing or cutting public spending . You dont understand how government finance actually works. As the issuer of the pound, the UK central goverment does not need our money in the form of either tax or borrowing to fund its expenditure. Individuals and businesses, the currency users, do however.

 

[Barnet Seagull]

I think it's a little bit strange that a lot of people are so accepting of stamp duty and don't seem to question it. It's effectively a windfall tax on home buyers. If we have to have it, I'd personally prefer to see it on sellers.

Although it's in regard to the stamp duty holiday, this is worth a read https://www.lse.ac.uk/geography-and...stamp-duty-holiday-LSE-London-Report-2021.pdf

 

[beorhthelm]

Tax cuts are not dependent on either increased borrowing or cutting public spending . You dont understand how government finance actually works. As the issuer of the pound, the UK central goverment does not need our money in the form of either tax or borrowing to fund its expenditure. Individuals and businesses, the currency users, do however.

we should be increasing tax to control inflation, right?

 

[Driver8]

Tax cuts are not dependent on either increased borrowing or cutting public spending . You dont understand how government finance actually works. As the issuer of the pound, the UK central goverment does not need our money in the form of either tax or borrowing to fund its expenditure. Individuals and businesses, the currency users, do however.

You mean they just need to give the magic money tree a shake?

Increasing money supply leads to inflation, as we can now see.

 

[BenGarfield]

You mean they just need to give the magic money tree a shake?

Increasing money supply leads to inflation, as we can now see.

I take it you are perhaps are an adherent to one of Maggie Thatcher`s gurus, Milton Friedman`s dictum that "Inflation is always and everywhere a monetary phenomenon". Are you talking about government spending or the money produced by banks through loans? How are you defining the money supply?

 

[BenGarfield]

we should be increasing tax to control inflation, right?

As one of a package of measures probably but not solely.

 

[Tim Over Whelmed]

A couple of ideas on taxation:

Raise the tax free limit to £16,500
Increase the basic rate by 1 p
Increase the higher rate by 2 p
Add 10% additional tax to all purchases online, paid directly to HMRC at the transaction point
Review the effectiveness of SEIS & EIS tax free schemes
Make all dividend payments Employee related for tax purposes for anyone who holds more than 5% of the company's equity

 

[CheeseRolls]

Tax cuts are not dependent on either increased borrowing or cutting public spending . You dont understand how government finance actually works. As the issuer of the pound, the UK central goverment does not need our money in the form of either tax or borrowing to fund its expenditure. Individuals and businesses, the currency users, do however.

Every day is a school day on NSC. There was me thinking the Bank of England was operating monetary policy at arms length from government.

 

[Withdean11]

Guernsey doesn’t have the NHS. This is a list of charges in A&E

View attachment 149927

Considerably cheaper per year than N.I for the average person then.

 

[BenGarfield]

Every day is a school day on NSC. There was me thinking the Bank of England was operating monetary policy at arms length from government.

No the Bank of England is not independent when it comes to monetary policy.

HM Treasury is the sole shareholder of the Bank of England following nationalisation in 1946. Section 4(1) of the Bank of England Act 1946 declared the right of HM Treasury to “...give such directions to the Bank as, after consultation with the Governor of the Bank, they think necessary in the public interest”. The Bank of England Act 1998 - commonly understood to represent the granting of ‘independence’ to the Bank - added the clause “except in relation to monetary policy”. HM Treasury retains a public interest power to give directions to the Bank regarding monetary policy, sets the Bank’s financial stability objectives, appoints or approves all of the members of the Monetary Policy Committee, and has been closely involved with most prominent monetary policy initiatives since 2008.

 

[Thunder Bolt]

Considerably cheaper per year than N.I for the average person then.

If you're healthy, yes. Not everyone is so lucky.