This is an interesting definition

Howard Reed says:
December 15 2017 at 7:58 pm
I agree with pretty much all of this – the only thing I would say is that Scotland doesn’t need a tax rise from a macroeconomic perspective but it *will* probably need to raise more tax if the SNP are serious about rolling back austerity. The Condem/Tory policy of increasing the personal allowance from £6,475 in 2010-11 to £12,000 or more by 2020 is a huge giveaway going mainly to the better off and has been funded by cuts to essential services. Reversing those cuts is going to require tax increases of some sort (although it should be possible to do this in a progressive manner with the extra tax take falling largely on the better off).

The economic definition of austerity is that the budget deficit is deliberately made smaller. Or, if you prefer, that the difference between tax collected and spending decreases. Neither are quite the exact definitions. But that’s the general idea. It’s the gap between collection an spending which is stimulatory or contractionary, austerity being that contraction.

So here we have an economist (yes, Reed is) insisting that higher taxation reduces austerity, that lower taxes increase it.

All very tutti nello stato, isn’t it?

23 comments on “This is an interesting definition

  1. Ah – we’re in tartan tuber mode again: The SNP took a necessary step yesterday and the messaging was correct. But it has to be a lot more courageous to deliver growth for Scotland as well.

    Here’s a possibly useful neologism for consideration:
    Natilingus derived from the Latin natis, -is, (f) a buttock.

  2. “budget deficit is deliberately made smaller” than what?
    Than what the person saying it would like
    Or smaller than before the crash
    Or smaller than that record year for overspending of 09/10 when receipts were 77p for every £1 of spending, which would be a bit like saying Roger Federer is now shit because he’s no longer playing at his highest ever level.

  3. The Condem/Tory policy of increasing the personal allowance from £6,475 in 2010-11 to £12,000 or more by 2020 is a huge giveaway going mainly to the better off

    Letting the lowest earners keep more of their wages is a giveaway to the better off?

  4. I’ve had this discussion with Jolyon Maugham before. From and innumerate lawyer to an innumerate ‘economist’. As a propionate of heir income the low paid benefit far more than those on higher pay. Reducing the basic rate band would reverse any benefit to higher paid people, but this dorsn’t occur to Reed, Murphy and Maugham. But then it wouldn’t, all they know is some body isn’t getting taxed and that is just BAD. No matter that the somebody is earning less than the national living wage, just TAX THEM.

  5. We’ve received a Xmas card from a Scottish friend. He’s long said he’d retire to England. He now has.

    He had the decency to get his card to us before we wasted bawbees posting ours to his old address. Sound man!

  6. The Condem/Tory policy of increasing the personal allowance from £6,475 in 2010-11 to £12,000 or more by 2020 is a huge giveaway going mainly to the better off

    What?

    These people are worse than morons.

  7. Theo – true but the connection with NATs was too tempting, although I accept both you and Surrepitious have the same precise target in your crosshairs. For my part, I am allowing the tuberous slobberer greater latitude.

  8. Increasing the tax allowance only benefits those people earning more than the tax allowance. It does not benefit the poor who earn less.

    Part time workers, low income self employed, carers looking after relatives or friends, unemployed – they don’t benefit from something whose change is beyond their income.

  9. The people frotting themselves into a frenzy over the SNP’s little tax charade are ignoring that any “cut” to the lower earners is being eclipsed by the rises in council tax being imposed because the SNP government is cutting local council funding.

    Brilliantly cynical move by the SNP: make local councils choose between cutting services* (boo! Nasty local councils!) or raise council tax (boo! Nasty local councils!). Meanwhile the beneficent SNP government cuts income tax, builds motorways and bridges (yay! Independence now!)

    *before any cries of “good, diversity co-ordinators need cut” etc, these cuts mean that essential local services (bins, road repairs, care) are suffering.

  10. So because it doesn’t help the very lowest Martin, it only helps the rich? Nice thinking you have there.

    In fact it helps the vast majority of people with low incomes.

  11. He does have a point, none of the tax changes since 2010 have affected me as my income is below the threashold.

  12. @GlenDorran, December 16, 2017 at 8:20 pm

    before any cries of “good, diversity co-ordinators need cut” etc, these cuts mean that essential local services (bins, road repairs, care) are suffering.

    That is a deliberate choice made by the council as they value providing cushy jobs/salaries for their “friends” rather than providing the services the taxpayers pay for and expect.

  13. q.v. Washington Monument Syndrome. When central government is impertinent enough to cut funding, bureaucrats assert their power by making the cuts as visible and painful as possible.

  14. Jgh,

    “He does have a point, none of the tax changes since 2010 have affected me as my income is below the threashold.”

    Which would you prefer, welfare or negative income tax? Or something else?

  15. JGH:

    If a tax cut for those earning from £100,000 to £250,000 was proposed I presume then that you would not say that it helped the rich — on the basis that those over £250,000 were not helped, and if the very richest aren’t helped then a policy isn’t helping the rich. Because that’s the argument being extended here.

    The people gaining most are those well under the median. That it isn’t everyone under the median doesn’t stop that being true.

    Also, many of those currently under the allowance will rise up at some point above it. Those above it are unlikely to drop below it.

  16. Let’s not forget that for those earning over £100k the personal allowance tapers down to zero, reaching nil at £120k. Thus those earning the most benefit not a jot from an increase in the personal allowance.
    Also the £100k threshold has been fixed since it was introduced in the dying days of Brown’s government – fiscal drag anyone?
    If Gideon had any principles he’d have removed this aberration post 2015 election.

  17. I think there is a point about the gains of those earning between £43k and £100k. In that range you get all the benefit of the personal allowance rise, and you keep the option of offloading income into a pension with the 40% saving and can get it back at 20%, with 1/4 tax free, when you’re 55.
    Cutting NI or merging NI into income tax, and devolving minimum wage setting to local authorities are the new things to help the lower earners, but the government has set its course.

  18. “q.v. Washington Monument Syndrome.” How wordy Americans are. In the NHS it’s called ‘shroud waving’.

Leave a Reply

Name and email are required. Your email address will not be published.