UK Tax and Spend

[Griffin NoName]

We have this curious thing that happens in the autumn called the Pre-Budget - the Actual Budget is in March - I'm not sure why they opted for calling pre - sometimes I think it should be called the Post-Budget, and at present I am toying with the idea it should be called Beyond-Budgeting.

Enough of such quibbling. Tomorrow is Pre-Budget Day. We all get a public holiday to get over the shock.

The rumours are circling about what it will contain. This year it is supposed to have kick-start-the-economy as its central theme.

The latest is lower VAT so the underclasses and the impoverished can buy their Christmas presents (which are already going for peanuts as stores have innovated pre-chistmas sales with huge discounts). Porbably another missed opportunity for abolishing VAT on sanitary towels which are not just for Christmas.

But my main quibble is with the rumour that there will be tax cuts for low and middle incomes on the grounds that they will spend the extra money in their paypackets. To me, this is fundamentally flawed. Of course they will spend the money - if you don't have enough to live on, what else would you do?  It's just yet another way of exploiting this group of people. I feel morally outraged.

And it is feeble at that. The amount of extra spend will be (relatively) small given that the amount of increased tax-free income will be small given that the wages for the group are low. A much better answer would be to increase taxes on the rich along with a compulsory order that they must spend the same percentage of their taxed income. But as usual the Government will remain trapped in the "we cannot alienate the rich" or the "country will go to the dogs" school of capitalism.

[beagle]

But my main quibble is with the rumour that there will be tax cuts for low and middle incomes on the grounds that they will spend the extra money in their paypackets. To me, this is fundamentally flawed. Of course they will spend the money - if you don't have enough to live on, what else would you do?  It's just yet another way of exploiting this group of people. I feel morally outraged.

I never know when you're being ironic these days...

[Griffin NoName]

But my main quibble is with the rumour that there will be tax cuts for low and middle incomes on the grounds that they will spend the extra money in their paypackets. To me, this is fundamentally flawed. Of course they will spend the money - if you don't have enough to live on, what else would you do?  It's just yet another way of exploiting this group of people. I feel morally outraged.

I never know when you're being ironic these days...

The point was ironic, but I wasn't being. I do find it a miserable fact of life that any government can be so sure that extra money in the pay packet will definitely get spent through necessity - when this does not apply equally to the whole community.

And, my conjecture is in print this morning in the Gruaniad - they seem to think that the extra spend will not be enough.

of course, could be they have access to my computer......or are TFM forum lurkers.....

[beagle]

So The Guardian is falling out of love with Labour Policy? I'm wondering how long the Obama honeymoon will last before they go back to hating the U.S.

[Sibling Zono (anon1mat0)]

I'm wondering how long the Obama honeymoon will last before they go back to hating the U.S.

The day the first bomb falls...

[anthrobabe]

This summer past there was a big 'economic stimulus' here in the good old United States. Every person who filed an income tax return last year was eligible (with income limits) the max amount was 1200 dollars and the least 300 dollars:
I received $300-- single mother, 1 qualifying dependant, near poverty line income.(according to the rules it should have been $600 due to the qualifying dependant- still haven't heard back from Uncle Sam on my request for explanation yet)
A co-worker and her husband- each makes twice my salary at minimum plus she gets $800 a month in child support received $1200 each
so folks in fact economic stimulus packages still benefit the wealthy

at least they haven't just handed the checkbook over to the automakers here yet- the industry tried to get it but got roadblocked for a bit- they must submit a 'plan' to congress on how the money will be spent-- give the lawyers and spin doctors a couple of weeks and then the vaults will be thrown open. When they had their big meeting in Washington they were asked if they would give up their private corporate jets and fly home like regular folks
big surprise
no takers
but we've just got to bail them out people
sad to see the idea is catching on globally Griffin

[beagle]

The Auto stuff was reported here.

So How much money do you need next year? 

Dunno.

What's your plan to restructure?

Dunno.


Labour's plan is hugely high risk IMHO. Even if it works at all it will suck in imports from countries who aren't borrowing to spend.

[anthrobabe]

So they flew into Washington to beg for taxpayer money on their private jets
got called on it
Washington Post

here's another kicker
it's not their fault

Quote from above linked Washington Post article by Dana Milbank:
"It was a display of stone-cold tone-deafness by the automaker chiefs. In their telling, they have no responsibility for the auto industry's current mess. Threatening the nation with economic Armageddon if they are not given government aid, they spent much of the session declaring what a fine job they've been doing in Detroit.

"Chrysler really is the quintessential American car company!" Chrysler's Nardelli boasted.

"We have products that are winning car and truck of the year regularly," General Motors' Wagoner proclaimed.

"We are equal to or better than Honda and Toyota," Ford's Mulally added. "Every new vehicle that we make, whether it's small, medium or large, is best in fuel efficiency. The given is safety. And we have more, at Ford, more five-star quality and safety ratings than any other automobile."

Committee Chairman Barney Frank (D-Mass.) cut him off. "Thank you, Mr. --"

"And the best value!" Mulally blurted out.

"Commercials can go later," the chairman proposed. "

(just an aside-- Nardelli has offered to take a pay cut to $1 a year as a gesture- watch for further news)

[Sibling Zono (anon1mat0)]

I'm thorn on the subject, on one side they have been incredibly incompetent, refused to innovate, placed as much roadblocks to change their current lines, played with credit lines in an irresponsible way, etc, etc, etc. Their own past irresponsibility became a burden (mostly on their old pension plans) and now it becomes almost impossible for them to turn around their companies, and some analysts claim that a bailout will only delay the inevitable bankruptcy.

On the other hand, my wife works for a company that provides parts to the big 3 and now she has a rational fear of losing her job.

With the current climate even Toyota is having a hard time and I don't see how these companies will be able to survive in their present form.

[Griffin NoName]

OK, I'll start with humour.

I do have some sympathy with this one.



Copyright Steve Bell 2008 - Guardian

[Griffin NoName]

And I'll continue with questions?

Re. the VAT ** cut instead of rise ** scandal

IF the clerical outing was a suggestion several months ago (18 mths) was it even relevant to now in its conception?

Isn't it appropriate to discuss ALL options - ie. if a VAT rise was not considered at all within perhaps some other wider context of other changes - wouldn't that be lack of exploring all possible ways ?
  ---- who defines and how what is "presented" to be "discussed" and by WHOM ? --- does ANYONE actually know enough to scandalimise?

Am I naive?

*** I am pondering these questions in a number of areas at present so the VAT issue happens to fall within them

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

The question of VAT rising to ?18% when the temp 15% expires (as a rake more in ? is that consistent with 15% as a rake more in? haha) as a balancing act as per Cameron speak (?not Osbourne?) is a separate issue to above questions. Do not confuse. I have other questions altogether on this aspect.

[Sibling Chatty]

The "stimulus" checks here were a JOKE.

The wealthy get bigger checks, and may spend or may save...

You want to see some stimulus to the economy?? Wanna see that money MOVE?

Give every person that lives on disability or SS only, or that has a below 150% poverty level (adjusted to family size) income $5,000 and see how fast that flies into the damn economy.

Hell, some of us might be able to afford some luxuries, like...heat, or food, or--dentistry!! Although I will admit, food choices will be easier when it's a choice of which damn jar of babyfood.

At the lower income levels, ANYTHING, even a few dollars/Euros/pounds is a blessing.

I've never understood HOW trickle-down is supposed to work economically, except in the actual "P*ss on 'em" sense that it comes across.

[beagle]

Labour is betting the whole farm (and party) on this one...

British government debt is now harder to insure than some bank debt. Considering Britain is one of only two countries never to have defaulted on sovereign debt that's quite an achievement.  Oh, and Germany has said it's not going to try throwing money at the problem, because it didn't work in the 70s. 
What's the German for Deja Vu Swato?

[Sibling Zono (anon1mat0)]

The "stimulus" checks here were a JOKE.

The whole premise of giving money away is deeply flawed, the rich save and the middle class waste-spend in stuff that isn't even manufactured here (wonderful way to stimulate the Korean, Taiwanese, Chinese, Japanese and even the Mexican and German economies ). I agree with Chatty that the poor will be more likely to spend that money locally (health, food) or basic stuff that they rarely can afford (like clothes although those aren't manufactured here anymore), but even then there is a good percentage that will go to waste-spending.

I've been listening that Obama's plan is to spend in infrastructure (which makes sense given that it's money we had to spend anyway) but the down side is that it takes time to get the projects moving and the money out of the door.

The other thing is a bit more heretic and involves a real nationalization of the banks to ensure that lending is available to businesses and consumers for mortgages. The problem there is one of careful administration to avoid wasting money or lend it to those that either don't need it or can't repay.

[Griffin NoName]

Ripping Question Time on TV tonight. Zero support for VAT stupidity - audience and panel - except for the Labour MP.

In fact, if they'd left the pre-budget to the audience it might have worked. Not of course that we have yet seen it fail......

And the late night politics show was more interested in lap dancing and the Tory (unsanctioned?) police arrest - they've let him go home now as long as he makes himself available in Feb. Nice touch, they had a comedian in to talk about the economy and how he will be a better person for being taxed more along the lines of burghers of Calais.