The tax subsidy the private sector pension now receives annually has already provided the private pension sector with more cash each year than it has paid out in payments to those in retirement. The result is that the situation has already arisen where every single penny of pension paid in this country is at cost to the state.
He’s measuring tax relief now against pensions being paid now.
But the correct calculation is tax relief now as against pensions to be paid from the funds that have received the tax relief. And at that point we’ve also got to work out what will be the tax paid on those pensions so that we can deduct that from the amount of tax relief being offered.
No, I’ve no idea either but that is at least the beginning of getting the sums right.
But on this occasion she cannot avoid responsibility precisely because her role is constitutional and it is the. constitution that is in jeopardy. She does, therefore, have to act. It is her duty to reject Johnson’s call, which has the sole purpose of denying parliament its proper role.
If she does not do so then I think they days when she has a role are over.
And in that case there is no justification for the civil list.
Her Majesty should think long and hard: I’d suggest there is rather a lot at stake here for her and her legacy as well as the rest of us.
In the United Kingdom, the Civil List was, until 2011, the annual grant that covered some expenses associated with the Sovereign performing their official duties, including those for staff salaries, State Visits, public engagements, ceremonial functions and the upkeep of the Royal Households. The cost of transport and security for the Royal Family, together with property maintenance and other sundry expenses, were covered by separate grants from individual Government Departments. The Civil List was abolished under the Sovereign Grant Act 2011.
That expansion of the universities to include Islington Technical College was a really great idea, wasn’t it.
A pension tax trap has hit the Armed Forces, as leaders say it has affected thousands of service personnel. A former defence minister revealed that some senior soldiers had even spurned promotions rather than face a financial loss as a result of the pension rules.
Between 2017 and 2018 there were 3,840 members of the armed forces pension scheme who breached their annual tax-free pensions savings limits.
Earlier this month the Treasury said it would review the controversial tax rules on pensions introduced by the former chancellor, George Osborne, which sees higher earners restricted from putting more than £10,000 annually into pensions without facing taxes.
Marginal tax rates really do actually matter…….
A famous theorem in economics states that a competitive enterprise economy will produce the largest possible income from a given stock of resources. No real economy meets the exact conditions of the theorem, and all real economies will fall short of the ideal economy—a difference called “market failure.” In my view, however, the degree of “market failure” for the American economy is much smaller than the “political failure” arising from the imperfections of economic policies found in real political systems. The merits of laissez-faire rest less upon its famous theoretical foundations than upon its advantages over the actual performance of rival forms of economic organization.
If only it were possible to beat this point into him.
Looking around the world, we don’t have any examples of countries with successful model of state-run economic organization that have consistently over the long-term provided a higher level of standard of living or faster growth than the many countries with market-based systems–that is, not just a different set of constraints and rules to a fundamentally market-oriented economy, but a genuinely different model where the economy is run primarily through the political system. That fact tends to confirm Stigler’s suggestion that real-world political failures in economic management can be severe.
Richard Murphy says:
August 23 2019 at 12:28 pm
But those in public life have a duty to educate themselves
Does being part of civil society mean being in public life?
That is spot on. The absurdity that is faced by almost everyone around this country is that what is recycled, and how, varies considerably from place to place. This has to end. If it’s worth recycling then doing so must be enforced and nothing less than a national framework will do. That’s what a Green New Deal requires.
A rigorous examination of what’s “worth recycling”? Bring it on.
Assuming that it will in fact be a rigorous examination of course.
Richard Murphy says:
August 21 2019 at 10:54 am
You can give a reason
But you can’t explain how to do it and honour our commitments
Nor can you explain how we are still a nation or why you think we passed our sovereignty to the EU when very clearly we never have, in the slightest
So as an argument that’s so full of holes and so not based on truth or reality it takes us nowehere
So. Let us consider the Vodafone tax case. Where Murph was vehement that massive amounts of tax were being dodged. As Richard Brooks was alleging. And English law was stating that those profits in a Luxembourg company in Luxembourg were taxable in the UK. Controlled Foreign Companies, dontchaknow. And the EU demurred. They said that under EU law such profits were not taxable in the UK.
We have a conflict between UK and EU law. Sovereignty is rather defined by whose law wins in such circumstances.
And the second. Murph decided that the UK should adopt passport based taxation. It was gently – if sneeringly – pointed out that he couldn’t do that, not regarding other EU countries that is. Would go against free movement of peeps. He accepted that – eventually. UK cannot pass a law to do x because it has given up its sovereignty on that issue.
As, of course, with trade etc.
Now, of course, it’s possible to argue that it’s all worth it. But the statement ” you think we passed our sovereignty to the EU when very clearly we never have, in the slightest” is clearly and obviously colei.
Capital gains tax Entrepreneurs Relief does, in essence, reduce the rate of gains tax by those who sell privately owned businesses. In most situations they pay 10% on their gains rather than 20%. The tax rate is halved.
In the last year for which data is available the relief cost as much as the tax paid on these disposals, or £2.36 billion. Of this £1.73 billion went to just 4,000 people, at a tax savings of more than £430,000 each, on average.
That is wholly unjust. It is a simple boost to those already wealthy. Remember, these people had by definition just picked up gains of in excess of £4 million each. And as I have argued before, the relief makes no sense. It does not encourage entrepreneurial activity at all. It encourages short-termism and selling out rather than developing entrepreneurial activity, both of which are the opposite of what the UK needs.
Nothing about this relief makes any sense at all. It has to go.
Rule number one in economics. Incentives matter.
A corollary of which is that we get less of those things which we tax. Because that reduces the incentive to do those things which are taxed.
We like people being entrepreneurs. They end up – as Bill Nordhaus pointed out – keeping about 3% of the total value created by their endeavours. The other 97% largely flows to consumers in the form of the consumer surplus. We like people working hard to make us richer. Therefore we let them keep more of the already trivial portion of the value created they get to keep in order to create that greater incentive to crack on with it.
This does not make sense in what manner?
The biggest claim made by Brexiteers right now is that Remainers do not understand them. If only we tried a bit harder it would be obvious what this is all about, they say.
It’s about national pride; democracy; taking back control; having our own laws; deciding who lives here.
I think those are their claims. Tell me if there are more. Just don’t mention economics: it does not come into it.
D’ye think the Spudmeister has even heard of Patrick Minford?
It did continue. For a bit:
Richard Murphy says:
August 20 2019 at 10:20 am
The UK has reasonable residence rules now: I have to say that as I helped shape them
We simply do not need domicile to be fair to those arriving or temporary residents : tho0se issues are covered without alternation being required
There is no base cost to entry for people now and there would not be from the change
Laurence Parry says:
August 20 2019 at 10:34 am
I also helped draft the residence rules (apart from the split year treatment, which is rubbish)
Richard Murphy says:
August 20 2019 at 11:02 am
I do not recall your involvement
August 20 2019 at 11:30 am
You helped shape the non-dom rules?
I can’t find any mention of you in the formulation of non-dom rules at all. All I can find is you saying repeatedly that they should be changed.
So if you helped write the rules, why did you do such a bad job of it?
Richard Murphy says:
August 20 2019 at 1:29 pm
I helped write the current U.K. residency rules
A slight difference there
August 20 2019 at 2:31 pm
I can’t find any record of you writing the residency rules, or indeed being involved in that process at all either.
Other than writing a few blogs about it anyway. I can check the House of Commons library if needed.
Could you point us to where you say you had so much input? Because I can’t find any record of you at all in this process.
Richard Murphy says:
August 20 2019 at 3:08 pm
You clearly do not know how advisory teams work
And that is also your last comment here because you are a troll
Most concerning of all, however, to the Corporate Accountability Network is the fact that this change of heart by the leaders of American business, whilst welcome, includes no suggestion as to how these new priorities will be evidenced or how they will be reported upon. The Corporate Accountability Network believes that unless corporate accounting is reformed so that businesses must report to all their stakeholders then words such as these will be largely meaningless. Our aims is to ensure that the accounts of limited companies are available to all who want to view them, and in a format that might supply them with the information that they need to understand the activities that it undertakes from the user’s perspective as a stakeholder of the company.
Replace “CAN” and “Corporate Accountability Network” with “I, Spud!” – so also “our” and you’ve about got it.
It is almost absurd that when we face a global heating crisis what is of concern in the UK energy market is the fate of small companies trying to make a buck out of a failed system of energy privatisation that has very largely led to consumer rip off, limited real energy supply transformation, and a system so lacking in co-ordination that it can be claimed that when these companies fail people are left without energy suppliers when glaringly obviously the supply to their properties still exists.
If we are to get serious about tackling global heating the nineteen-eighties obsession with energy market reforms needs to be replaced with energy policy intended to deliver zero net carbon as the only issue of real priority.
And in the process we should also have single, fair, tariffs for all so that the age of rip-off ends forever.
This is what the Green New Deal requires. And we need it now.
One single price for all electricity taken from the network. So, no cheaper electricity when there’s lots of it about. Meaning no load balancing when the sun shines and the wind blows. We can throw out all those smart meters then, the entire plan to deal with intermittentcy.
Or if that’s not what he means, tariffs allowing for different prices at different times, it’s still remarkable, isn’t it? A supposed economist arguing that competition doesn’t increase efficiency over time….
I’ve been using a tool which tells me how often something is searched for. “What is Modern Monetary Theory” appears to get 260 searches a month.
Won’t Richie be pissed that no one cares?
This low tax rate creates a number of perverse incentives. ….. Third, it reduces the impact of fiscal policy as tax incentives and allowances have limited value.
Low tax rates are bad because the distortions introduced into asset allocation by stupid government are reduced.
George Osborne’s tax policies have cost Britain billions, because the super-rich are fleeing the country and taking their wealth with them, statistics have revealed.
The number of non-doms – those not legally domiciled in the UK but who obtain tax advantages here – fell to a record low of 78,300 last year, from 98,500 in the previous year, figures from HM Revenue and Customs show.
The amount of tax directly contributed by non-doms fell from £9.5 billion to £7.5 billion over the same period. Experts said that a string of tax policies introduced under the former chancellor were principally to blame.
Because of course people don’t move for tax reasons and even if they do it’s a very small number of people and they’re the sort who only increase inequality so it’s good they go. So there.
Let me offer an alternative explanation that I think much more likely than this deeply politically driven hype from the firms servicing this declining market.
It costs to be a non-dom. The charge can be as much as £60,000 a year. It increases the longer a person claims to be non-domiciled.
My suggestion is a simple one. The non-doms might not be leaving. Instead I suspect they may just be choosing to pay their taxes in the UK.
Because £60,000 a year is a lot of money people will volunteer to pay more?
OK, about which the Senior Lecturer tells us that:
I would suggest that the answer is simple: it is growing inequality that is creating this situation, plus a structural change in the way that wealth is held.
Now let me be clear, households is all households so in principle this should not be the case, since the ranking should be indifferent to wealth. But if the wealthy hold more of their assets through companies and pension funds invest ever more widely outside the UK, whilst the links between asset owners and their assets becomes ever harder to trace because of nominee holdings, then the likelihood that there will have been a shift of apparent asset holding out of the so-called household sector and into other categories is high. The result is that the net insolvency of a great many UK households becomes much more apparent.
The sectoral balances are the flows between the different parts of the economy. It’s the net change in any one period.
Insolvency is of course the stock position, not the flow. With household wealth (yes, net of liabilities) at whatever it is, £9 trillion or summat, we don’t have evidence that the British household sector is net insolvent.
Stocks and flows matey….
This post by me was on The Conversation, a blog reserved exclusively for academics,
The comments section is not – unlike one or two others we could mention – so reserved.