"were all in this together" "

[El Presidente]

So these opor people are home owners? - how are then classed as poor?

Surely poorer people are more likely to rent and any maintainance would be carried out by the landlords and wouldn't be paid for by the tenants.

A lot of them are pensioners. But never mind, after you have taken away their 'luxuries' such as booze, fags, fuel and biscuits they won't have much of a reason to carry on will they?

 

[El Presidente]

Thank goodness someone is doing something about it.

Err......who is that someone and what have they done about it?

 

[Guy Fawkes]

A lot of them are pensioners. But never mind, after you have taken away their 'luxuries' such as booze, fags, fuel and biscuits they won't have much of a reason to carry on will they?

Equity release schemes if things are desperate?

Because they are a pensioner doesn't neccessarily make them poor too either (a common mistake)

 

[El Presidente]

Equity release schemes if things are desperate?

So after a lifetime working to pay off their mortgage your solution is for them to..........take out another mortgage.

 

[beorhthelm]

A lot of them are pensioners. But never mind, after you have taken away their 'luxuries' such as booze, fags, fuel and biscuits they won't have much of a reason to carry on will they?

well aparently after the luxuries they aren't buying any actual food or heating, so im surprised they're still going.

 

[El Presidente]

well aparently after the luxuries they aren't buying any actual food or heating, so im surprised they're still going.

They are only doing it out of spite

 

[Guy Fawkes]

So after a lifetime working to pay off their mortgage your solution is for them to..........take out another mortgage.

Whats the point of people saving all their life if they arn't going to use any of it in their old age but expect to be kept at the tax payers expense instead

Equity release plans – also called lifetime mortgages, home reversion or home income plans – are a way of releasing cash, whether to buy that new car, to pay for a holiday or home improvements, or simply to make daily life more comfortable. These schemes essentially allow you to borrow money against the value of your home, with the debt being repaid from the sale proceeds after your death.

How equity release plans work - While there are a range of different schemes offering lump sums and/or regular income, they all work on the same principle: they lend you a part of your home’s value in return for a share of the proceeds when you die.

 

[ROSM]

How dare people buy houses and want to maintain or improve them and then expect to live in them when they retire and have paid their debts off.

I tink I've heard it all now. the spectre of caring one nation conservatism is alive and well and living on nsc

 

[ROSM]

Err......who is that someone and what have they done about it?

that would be the nice Mr Cameron and the intellectual giant that is the Chancellor of the Exchequer. They've done a lot since coming into office and the money markets are really impressed with them.

 

[Guy Fawkes]

How dare people buy houses and want to maintain or improve them and then expect to live in them when they retire and have paid their debts off.

I tink I've heard it all now. the spectre of caring one nation conservatism is alive and well and living on nsc

What about savings or other assets they may have? - should pensioners assets be safeguarded and the tax payer pay to keep them, and pay for any holidays etc regardless of how wealthy the pensioner was?

What about non home owning pensioners, should they be given a home to maintain or improve in their old age or should they go whistle in the wind because they don't count or are just considered unimportant

What about normal non pensioner earners, should they have their assets such as houses safeguarded in times when they may have lost their income (redundancy), or do they have to still find another job quickly or have to sell?

And what about non home owners and those who are starting out now and will never be able to afford to buy their own home, should they think its fair that they have worked hard all their life and have little or nothing to show for it, and no real assets to live of in old age.

 

[ROSM]

What about savings or other assets they may have? - should pensioners assets be safeguarded and the tax payer pay to keep them, and pay for any holidays etc regardless of how wealthy the pensioner was?

What about non home owning pensioners, should they be given a home to maintain or improve in their old age or should they go whistle in the wind because they don't count or are just considered unimportant

What about normal non pensioner earners, should they have their assets such as houses safeguarded in times when they may have lost their income (redundancy), or do they have to still find another job quickly or have to sell?

And what about non home owners and those who are starting out now and will never be able to afford to buy their own home, should they think its fair that they have worked hard all their life and have little or nothing to show for it, and no real assets to live of in old age.

sorry I think you've finally jumped the shark on this. Nobody is advocating what you're saying - nobody is saying they should be 'kept' or maintained by the state. What they are saying is demonstrating how VAT is a regressive tax and that Beach Hut's brainless comment about reduced mortgage payments being used to offset increasing vat doesn't hold water.

 

[Guy Fawkes]

sorry I think you've finally jumped the shark on this. Nobody is advocating what you're saying - nobody is saying they should be 'kept' or maintained by the state. What they are saying is demonstrating how VAT is a regressive tax and that Beach Hut's brainless comment about reduced mortgage payments being used to offset increasing vat doesn't hold water.

Seemed to me that having to sell on their property asset to fund their lifestyle choices in retirement wasn't seen as fair to me by these posts.

So after a lifetime working to pay off their mortgage your solution is for them to..........take out another mortgage.

How dare people buy houses and want to maintain or improve them and then expect to live in them when they retire and have paid their debts off.

 

[beorhthelm]

What they are saying is demonstrating how VAT is a regressive tax

sorry to be a pain, but only claimed not yet demonstrated. i've shown how the regressive arguement doesnt stack up, and all ive seen in return is that people might also spend on home improvments (which apparently doesnt come out of peoples normal weekly budget somehow.) We have wandered of on some tangent, but i thought thats because the elderly dont get enough coverage, and we're going to rely on "facts" unchallenged, rather than experience.

 

[drew]

i think you miss the point, or do you accept these numbers are realistic? who can live on £10 food and energy? nearer £50. meanwhile £500 would be a massive weekly food and energy bill, i'd expect half that at a push without going onto VAT items (thats £50 energy plus £50 food per person for family of 4). so 1.25% increase for the poor example and 1.875% for the rich example. as i say, all depends how those numbers are arrived at.

Are you being deliberately obtuse?

Oh dear - lets ignore income tax and CGT both of which are higher than VAT !

The debate is about whether the rich will suffer as much as the poor and in particular whether the VAT increase will hit the poorer by a greater percentage than the rich. The whole debate could diversify into tax avoidance planning which the rich can afford and the poor can't but that's not the point of this thread.

It goes back further than that and a cheap shot. The main banks were regulated by a body set by the government that failed to do their job or the rules were wrong.

I don't blame any business for stretching the rules as they will, I have first hand experience and it is not pleasant in my view what goes on.

Deregulation that commenced with the Tories in their previous government.

Spot on. Don't forget too that Labour/Brown prior to the crash wanted the banks (in the UK) to operate, internationally, the way they did to increase their profit so that tax revenues increased for the treasury and to offer, domestically, credit to unrealistic customers (Northern Rock 110+% mortgages with no deposit for e.g)(exactly how many of these 110% mortgages were defaulted then? It was the loss of confidence caused by the sub prime market and toxic debt that caused the problems.) to create an unsustainable housing market bubble giving an illusionary sense of affluence amongst the people, while also allowing increased revenue for the treasury with stamp duty's from sales in this housing market boom. Brown encouraged (well he certainly made zero attempt to discourage or stop with legislation) the UK banks to operate the way they did and ultimately as Chancellor and then First Lord of the treasury the buck stops with him and at the end of the day the sh1t hit the fan on his watch.

However, the banks liquidities problem of 2008 was really the starting gun for the global problems wasn't it the other way round, the sub prime mortgages caused the loss of confidence and the subsequent liquidity problems of British banks. Ask yourself how many repossessions there have been in the UK over and above the normal rate pre credit crunch?and in the UK this was hopefully dealt with by 1Q09. The problem for the UK is that the markets demand we as a nation do something about that £150BN otherwise they will do to us what they have done to Greece and Ireland (Portugal next??). Thank goodness someone is doing something about it.

There is no way the markets will do to us what happened to Greece and Ireland, that was just scaremongering on the part of the conservatives in order that they could drive through policies based on their ideaology rather than economic necessity.

Thanks for that. I see that the research is presented in a more balanced way than I had been led to believe. The expenditure approach is an interesting way of measuring the impact, although even then I think it's a struggle to truly describe it as progressive. I wonder if the 2.2% number comes around due to them excluding some benefit measures or similar.

I'm not suggesting that the IFS are not impartial or anything like that. However this research is carried out by one or more individuals, who are bound to have their own views, etc. which often emerge in this kind of work. I have read plenty of academic papers which contain exactly the same kind of bias.



I actually wrote a long riposte to your initial post (#104) but NSC decided to delete it for me rather than posting. You state that the debt was 43% of GDP in 1997 and then would be 57% without the bank bailout. That's a 14% increase over 11(?) years, which is a fair old rate, especially when you consider that GDP grew by around 3% per annum over the same period. You also defend the increase post-2002 by saying that it went on needed infrastructure; however I'd imagine that if the infrastructure was that desperately required surely it would have been initiated as soon as Labour came into power, rather than five years later?

However that wasn't really the point of my post (#115). Labour's spending was not reckless necessarily because of the size of it, but more because they were actually doing it, when a more sensible policy may have been to put some of it aside for a rainy day. Gordon's folly was seemingly truly believing that he had reached the end of boom and bust; then, when the bust inevitably arrived there wasn't a freely available pot of money to spend to help us out of it.

UK GDP in 1997 was $1.359 trillion. In 2007 it had doubled to $2.799 trillion. (source http://www.google.com/publicdata?ds=wb-wdi&met=ny_gdp_mktp_cd&idim=country:GBR&dl=en&hl=en&q=gdp+uk+data ) That's a bit more than 3% per annum!

 

[El Presidente]

Whats the point of people saving all their life if they arn't going to use any of it in their old age but expect to be kept at the tax payers expense instead

Where did I say they should be kept at the taxpayers expense? We shall have to agree to disagree, you feel that giving the likes of Philip Green 'only' £720m out of his annual dividend is too harsh on him, and I feel that expecting pensioners and the poor to pay a proportionately greater increased tax burden than the richest in society is inequitable.

 

[El Presidente]

UK GDP in 1997 was $1.359 trillion. In 2007 it had doubled to $2.799 trillion. That's a bit more than 3% per annum!

No it isn't, you are ignoring the movement between sterling and the dollar in that period.

 

[beorhthelm]

Are you being deliberately obtuse?

not at all. do you accept the numbers given by the IFS? or please show me where my maths or assumptions are incorrect, i've probably missed something but no one has yet highlighted it.

There is no way the markets will do to us what happened to Greece and Ireland, that was just scaremongering

really? why is that, UK too big? like in 1992...

 

[drew]

No it isn't, you are ignoring the movement between sterling and the dollar in that period.

True. But even taking that into account, doesn't it far exceed the 3% annual growth referred to by Sten?

 

[Barrel of Fun]

This is a good article...

BBC News - Who, What, Why: What happens to £9.99 when VAT rises?

 

[El Presidente]

True. But even taking that into account, doesn't it far exceed the 3% annual growth referred to by Sten?

I don't think so. The exchange rate in 1997 was about £1=$1.40, the rate in 2009 was about £1=$1.95.

$1.359Tn at 3.2% compound growth for 10 years gives $1.862Tn, multiply by the change in purchasing power (1.95/1.4) takes us to $2.6Tn. Given that my numbers are oversimplified a little leeway takes you to $2.8Tn

Sten's a professional economist I believe (apologies to him if I am wrong on this), and his comments are usually spot on as he takes a mid-Atlantic approach, so I'm with him on this.