Cost of Living Crisis

You're ok RT, I think you would be surprised on how much we could agree with each other, lots of us, again me included, feel that we are for one reason or another, politically homeless ...

 

Theres nothing wrong with governments borrowing and spending money, provides it's on the right things. Spending on infrastructure and industry pump primes the economy, creating a multiplier effect that creates jobs and economic growth. This is exactly what most other countries did after the bankers crashed the global economy, which is why they all recovered much faster than we did.
Our stupid government, by contrast, slashed and burned, making a bad situation worse. They have achieved the triple whammy of massively growing national debt, decimating public services and making most of the population worse off. Yet still people think of the Tories as the economically competent party and Labour as the profligate one. It's a total myth. The Tories couldn't manage a piss-up in a brewery.

 

Well simply is because that's not what their plan is in the medium term.

Their plan was to be "carbon free" in terms of energy production by 2035 and it has been for nearly a year. Before that the exact same plan was in place for 2050 but was brought forward.

https://www.gov.uk/government/news/plans-unveiled-to-decarbonise-uk-power-system-by-2035,

The short term impact of a review on fracking doesn't really fit but in general the two proposals are almost word for word the same with the dates changed.

 

It's just frankly ridiculous.

People may be worse off overall because OTHER global factors cause prices to increase but th reduction in the basic rate of income tax benefits everyone.

Any change in any rate will benefit people who earn more - that's just simply how percentages work. No change in an tax rate will benefit lower earners more in pounds and pence because they have less money to start with,

And I agree the ridiculous amounts of borrowing have spooked the markets and rightly so.

But lets not pretend that a tax cut for everyone is really just a tax cut for the rich. Remember when honesty in politics was important?

 

They cut the top rate of tax benefiting the average top rate earner another £50,000 whereas the lower rate payer gets on average £250

I find it amazing how you sing the tunes of the Tory party whatever the weather. Its weird.

 

The average top rate earner get an extra £50k?

You'll have to show your workings for that one I think!!

I'd like a simpler tax system and a lower tax burden overall, that will include both high and low earners.

 

Thats some nice double think there Tony.

"im not murdering this guy so much as saving everyone else from being murdered"

You love having the Torys in power. You and your ilk. You love having betters and yet feeling mighty above those around you who have less. You dont subscribe to science. You dont like foreigners. You dont like paying tax or helping out the needy.

Pure blue working class tory. Thats you.

 

I read it somewhere last week - cba digging it out.

But if you factor in the tax cut needs to be shored up with 47billion in borrowing and your own number of 650000 top rate earners. Then its actually around £72,000 on average.

 

Your have a way with words I'll give you that .

 

I doubt you did but fair enough.

Mate, your maths is all over the place. Cutting the top rate of tax isn't costing £47bn. You'd probably get a better understanding of the issues if you could get the right figures, it's like when we were talking student loans before and you were all over the place!

Oh, and as for "backing the Tories at every turn" I actually hate that they've increased borrowing to do these tax cuts but in general i like putting more money in people pockets.

 

https://uk.news.yahoo.com/mini-budget-outrage-tax-cuts-highest-earners-10000-112426141.html?guccounter=1&guce_referrer=aHR0cHM6Ly93d3cuZ29vZ2xlLmNvbS8&guce_referrer_sig=AQAAAHMHd-F_NWF7xLGGqPNhdawlMUOdJzxwlIwp09k0lo_5oAyQJonRqbxNEpE3tflhLijBPg4MwGvRMd-_E2h0y7NNugdmCalR0ney0Sh4Qg85GI2Ia9bGGWJ_CAu9k3zjSMO2msjRO4Ceqxka-tc9VHEh5R2aYZmvQdPCwIvierbc

IIRC the student loans points I made were correct

 

Sorry, but you can't just deal with the tax cuts in isolation, without factoring in their impact as a whole. The financial markets have (predictably) reacted to Truss and Kwarteng's massive gamble with a great big raspberry. Clearly no one outside the Tory right wing believes that these tax cuts are going to offset the borrowing, let alone grow the economy in the way the government desperately hopes they will.

So now we have interest rates quadrupling almost overnight and predicted to go even higher. So the price of fuel, food and mortgages is going to go further through the roof, making most people far worse off than if the tax cuts had never happened.

The only people who'll be better off are the rich, who are benefitting disproportionately from the abolition of the top rate tax band.

Just because you want to see a simpler tax system doesn't mean that it's necessarily the correct way to go. The cost of living impact of the spiralling interest rates and plummeting pound is clearly going to outweigh the modest tax cut for most people.

I knew that Truss was going to be a disaster of a PM. But even I didn't expect her to be up shit creek without a paddle quite so rapidly.

 

That very clearly missed out the important word of "average". I take it back, it's not your maths, it's actually your reading.

Nope I don't think you did. When I pointed out a graduate earning £27k (I think) paid back £9 a month you were extremely disbelieving of it and it wasn't the only error, which came down to a misunderstanding of how marginal tax rates work.

 

I agree. I can't see how the borrowing can be paid off as a result of the tax cuts. I'm less worries about the financial markets though (because - a - they're largely global with most currencies dropping against the $ and the markets don't like uncertainty at all whether the impacts turn out to be positive or negative in the long terms) but fully agree on the borrowing.

All these things were going to happen eventually, they're happening in the states too in terms of interest rates.

I can't help feeling to be honest that we're at the tip of an iceberg generally where we went through the 2000s enjoying a bubble and when they ended no amount of local policy could stop it. The reaction to covid maybe created a different sort of bubble across the West and no amount of tinkering is going to stop what comes next.

But the only people who benefit from the tax cuts are not the rich, I'll benefit by a couple of hundred quid from the 19% rate and I'm certainly not rich. The rich benefit the most from any rate reduction because they earn the most to start with but as I said not every decision on tax has to punish the rich.

 

Ah, ok. So the panic on the Tory back benches and the blanket media coverage of the falling pound and spiralling interest rates is just part of an overall trend is it? I don't think so. It's clear that the global financial community has zero confidence in our government's economic preferences and is reacting accordingly.

Yes, people on average incomes will, ostensibly be around £200 pa better off from the standard rate tax cut, but that will be more than wiped out by the effects of the falling pound and rising interest rates on food, fuel, mortgages etc, which are a direct consequence of the unfunded tax cuts.

The only people likely to get more back in tax cuts than they are losing in rising prices are those at the top who are getting a much bigger tax cut than the rest of us.

 

You have to wonder why the Tories went down the route of austerity in 2010 when lending was at an all time low, yet now lending is on the rise its fine to burden the country for decades to come with regards their future lending.

 

What do you mean it's not part of an overall trend around the world? Just go have a look. The Euro is following an almost identical trajectory over the last month and last 5 days. Which one of these is the Euro and which is the pound.





The Euro isn't alone either. Take any major currency and compare it against USD and you will see the same thing.

Look at the interest rates in the US where they increased to 3.25% last week. They're all showing the exact same trends. Stop looking at everything in a silo. Not all of this can be caused by a budget in the UK can it, something else is clearly happening.

The backbenchers are up in arms because (like me) they don't see that amount of borrowing as having a positive end game. The media are up in arms because causing panic pays their bills rather than actually explaining the detail - I'm sure we don't need to be told this anymore!!

And I'm glad we got to the point where we've agreed that the tax cuts do have benefits for everyone even if there are other costs (several of which are global, several of which are already increasing) that will likely wipe this out. Of course the rich will get more back because they already earn more but in the grand scheme of things is a small part of wider cuts rather than an average top rate payer getting £50k as some seem to understand it.

 

I said I had read it last week and then i did a quick google and showed you at least one example. The IFS website states that it will be on the range of between £22,000 and £60,000 which you could average out to be significantly high. It states that the range does not include super high earners. Just go to their website and have a look if you dont believe me.

As for the student loans I pay more than £9 a month back. Maybe its the loan I had back in 2004. Not wrong by any means.

 

Ahhh, love it, crack on....

 

It showed am example of someone saying millionaire will make 50k (which makes sense since that roughly 5% of a million)

But nowhere does it say that the average top rate tax payer pays that.