Richard Murphy says:
January 17 2024 at 1:16 pm
So tell me what is wrong with equalising cgt and income tax rates?Or with chjrghing an invetsment incomne surcharge that means that those with investment income pay the equivalent of NIC?
Or equalising all tax reliefs on pensions?
Or, remocing VAT exemption on fi9nancial services?
Just start with them (worth £50 billion) and tell me wy they are unfair when in fact, right now, each of these subsidise the wealthy?
Everyone who disagrees with you is banned from commenting at your blog. So it’s a little difficult, you know?
1. Equalising CGT nd income tax rates would include inflation adjustments to input prices which would *reduce* CGT receipts
2. You don’t get pensions from n investment income surcharge
2b There is an upper limit on income subject to NICs
3. Tax relief IS equal – you don’t pay tax on the income you don’t receive
3b Then all employees should pay tax on employer’s pension contributions
4 Financial services do not get relief on VAT on inputs
«chjrghing an invetsment incomne»
You can tell somehow that he feels strongly about this.
Off topic, but I’m reading reporting of Javier Milei’s speech at Davos. It’s fucking glorious. He’s mounting a staunch defence of capitalism and excoriating rent seeking elites. Well said that man.
I don’t know if he’s going to pull off a recovery, but when was the last time we had a PM or president in any country who actually defended the market economy?
I wish him the very best of luck.
Well a colleague of mine had a go although I understand that his follow-up didn’t make it through screening. Another colleague has, I understand, made an attempt to continue the conversation.
Just suppose an incoming Labour gov implemented these proposals.
Does anybody actually believe that this would be enough extra spending money?
Does anybody actually believe this would be spent wisely?
Anyway why do this when Murphy seemed to claim (recently at least), that government could just print all the money it needs with no bad consequences whatsoever?
@John77 – “then all employees should pay tax on employer’s pension contributions”
You’d think so wouldn’t you. But Spud has decided that employer contributions are not part of this, showing how little he thinks things through.
If someone is on (say) £100k a year and gets reduced tax relief on (say) £10k pension contributions, it doesn’t take a genius to work out that if employer contributions aren’t part of Spud’s proposed tax changes the answer would be for the employer and employee to agree that the employee’s salary should be reduced to £90k and the employer’s pension contribution increased by £10k.
Not sure if ‘Paul Mansfield’ is of this parish but a great effort nonetheless.
Paul Mansfield says:
January 17 2024 at 1:51 pm
equalising all tax reliefs on pensions
As Mr Wallace says, this doesn’t hit the really wealthy – who are hardly likely to be limiting their savings for future pensions to the £60k a year allowed anyway. It does hit the middle classes hard and you haven’t thought through the effect on public sector workers. Consider a nurse on £50k a year. The employer ‘equivalent’ amount being for her pension is around £12,000. Currently there’s no tax charge but by limiting tax relief to 20% you’ve now created a 20% tax charge for her on that. You’ve added £2,400 tax to the tax bill of a middle class nurse. Well done. As for doctors, they’d be retiring early in their droves.
remocing VAT exemption on fi9nancial services?
Would effect everyone and put up everyone’s costs, not just ‘the wealthy’.
“what is wrong with equalising cgt and income tax rates?”
Because they are fundamentally different things. £100k earned over 10 years is taxed over 10 years. A £100k capital gain accrued over 10 years is taxed only in the year the gain crystallises. You don’t even consider indexation.
And because when you invest you risk losing what you invest. If you’re going to be taxed the same as if you just stick it in the bank and earn interest, why bother taking the risk? You said you want to encourage investment, this wouldn’t do that.
Most of your measures would impact the lives of ambitious aspiring young people far more than the already super wealthy. You’d be telling them there was no point in trying to better themselves by taking away all the tax breaks you’ve had the chance to benefit from throughout your life.
+5
Reply
Richard Murphy says:
January 17 2024 at 2:33 pm
Politely, of course there are tax reliefs on a nurse’s own pension contribution
We are not talking employer contributions here
And as for financial services, whi do you think buys them?
And as for CGT, a pound in the pocket is a pound in the pocket and should be taxed the same irrespestive of source.
And – none of what I am suggestinmg will have almost any imapct at all on 90+% of people, whilst not a single person I ever met in my years as an accountant ever said tax was a disincentive to work
So you are talking dogmatic nonsense. Or drivel, if you prefer.
What a truly pathetic figure he is. Oh for a javier Milei style figure here to destroy all the ‘academic institutions’ and taxpayer funded sock puppets who give him sustenance!
It’s also worth reiterating that most people with any brain would assess the impact of his proposed changes as yielding zero, not £150.1 billion. And even in the unlikely event it yielded anything it would be a one-off, never to be recovered again.
“not a single person I ever met in my years as an accountant ever said tax was a disincentive to work”
a.) This sounds extraordinarily unlikely.
b.) I’ve met loads of them. In my early career I remember someone turning down a promotion as it would put them £200 over the 40% tax threshold. The money wasn’t worth the hassle to them.
I look forward to the screaming when people on minimum wage full time (23,876 for 40 hours after April 2024 when the hourly rate goes to 11.44) come up against the threshold for repaying student loans (22015 currently for some loan types).
Just wait and guffaw at the predictability of it all as the low paid ask if they can cut to 37 hours.
Incentives matter. Can’t remember who said that, but it seems Spud never heard it.
“not a single person I ever met in my years as an accountant ever said tax was a disincentive to work”
Maybe he hasn’t met any of the doctors who decided to retire early when they were faced with large tax bills arising because their pensions hit the lifetime allowance.
Maybe he never had a client say “how can I reduce my tax bill”.
Maybe he’s full of shit.
“not a single person I ever met in my years as an accountant ever said tax was a disincentive to work”
Proof that he never had any clients.
@ Matt
He *did* have *some* clients, but they were all narcissistic actors for most of whom high pay was to brag about, not to save up for their old age