I noted that although the UK press made nothing of it, Johnson (who was born in NYC, but who not too long ago relinquished his American citizenship for tax avoidance reasons) could only send a pre-recorded message to this year’s London’s 9/11 commemorations. What was he doing yesterday? The Downing St website doesn’t list any official engagements for that day.
Most of those who died that day were either working in the financial sector or were ‘first responders’, two sectors albeit for differing reasons one would have thought he’d want to flag up and actively support. So , where was Plague Island’s PM?
Working hard on how to con his MP’s into agreeing to pass legislation that takes money from those least able to pay for the benefit of the more well off.
@Jane_Williamson. Other than putting up the higher rate of income tax to 50p which would not raise nearly enough I not sure where else is could come from…any realistic suggestions
Actually under Corbyn Labour propsed a very well researched, fully costed (£10.8bn), fair and workable proposal for a National Care Service modeled on the NHS, including free personal care for the over-65s, an end to 15-minute-maximum home visits, and an increase in the carer’s allowance. The independently-audited ‘grey book’ proposals for raising this money were also agreed to be perfectly viable: taxing capital gains and dividends at income tax rates would yield £14bn.
In general terms, Labour’s tax proposals then – income tax increase on earnings over £80,000, return corporation tax to 2010 levels, removing the upper earnings limit on national insurance, as well as aligning capital gains tax rates with income tax - would have done no more than bring the UK’s tax regime in line with something like typical rates among its near Continental neighbours - and bring UK public services and infrastructure up to the level we enjoy on the Continent too.
But at a deeper level, of course - as economists have come to understand over just the last decade or so - the whole idea that tax ‘pays for’ public services is misconceived.
I’m not especially in favour of that one. Admittedly that is because it would hit me personally quite hard as it would a lot of middle income earners. Closing tax loopholes, typically used by higher earners who can afford to employ expert accountants would raise as much, or more, money in a much fairer way. But I guess that would hurt Tory supporters & donors, and Johnson and Sunak would never do that.
I think it is an anachronism though - I would prefer that it were rolled into income tax.
But that would rob the government of a vehicle to surreptitiously raise taxes.
Also tax loopholes are, in general, all “government sanctioned” and using them is a way of tax avoidance (which is legal if arguably immoral) as opposed to tax evasion (which is illegal).
The root of the problem is attitude…and in particular that of the right wing of the Tory Party colliding with the expectations of the wider population. The former want low taxes aka the Republican party of U.S (egged on by D. Telegraph, D Mail, Express etc) and latter want social and public services similar to mainland Europe.
These are in reality mutually exclusive, you get what you are prepared to pay for…in Boris land that’s not a lot.
Agree with most of the recent comments here. The problem with NI is that it’s one of the least progressive taxes - it would indeed be better to wrap it up in income tax. It’s also true that people in the UK (misled by the media) want both low tax and high services.
The more fundamental mistake, however, is the whole idea that taxes ‘pay for’ public services.
This is wrong in so many ways I don’t know where to begin - yet it’s so often repeated in the UK media as if it’s true that everybody there seems to just take it for granted.
Here is the accurate way to conceptualise public spending:
The state (or state bank) creates money to pay for public services.
Under certain circumstances, and if the new money does not enhance the productive capacity of the economy, the creation of the new money can sometimes lead to inflation.
In this case, tax is used to remove the inflationary pressure.
That’s it. That’s what taxation does: it controls inflation. Nothing to do with ‘paying for’ anything. And the wealthier you are, the more you benefit from taxation, since it protects the value of your assets.
A lot of the misapprehension came from Thatcher’s ‘handbag economics’ - the idea that state finances are like household budgets - still believed by the know-nothing wing of the Tory Party and its media.
But you only have to think about it for 2 seconds to see the analogy is false:
Households don’t create money out of nothing - economies do!
When a household spends money, it goes out of the household - but most spending in economies just circulates through other households - and is taxed again and again.
Not to mention the fact that money is always social anyway - it never really ‘belongs’ to anyone, nor is it ever ‘earned’ except on the back of socialised infrastructure (education, law, roads, health, etc).
There was a particularly clear example today of how misleading the usual reporting of all this is.
There’s a scheme in Northern Ireland to give everybody - over 1.4 million people - a £100 high-street shopping voucher. The BBC reported the ‘cost’ of the scheme to be roughly £145million - totally ignoring the obvious fact that as soon as people actually start spending the vouchers it starts coming back in taxation of its circulation: VAT on the shop sales, NI and PAYE of the shop staff, etc, etc; and when in turn they spend their wages… VAT, PAYE, etc, etc.
It is, I guess, the old problem that a simple but wrong statement trumps a complex but correct statement.
However the biggest source of new money in developed economies like the UK and US is the issue of debt by banks and credit card companies.
Also the government sort-of produces a balance sheet so you could say there was a budget deficit - but then sleight of hand comes in and some of the debt does, indeed, disappear as new money is created (some £745 billion since 2009).
The take home message though is that national economies do not work like household ones.
As so often, Aditya Chakrabortty comes up with the best analysis of the NI care levy…
The plan Johnson has adopted is essentially that presented to David Cameron by the economist Andrew Dilnot. At the time, civil servants conducted an impact assessment of the policy. I have not seen it mentioned once in the past few days, yet the report makes eye-opening reading. It shows that most of the billions spent on the plan would go on testing families for their eligibility and other bureaucracy. The number of people who would benefit was “almost 100,000 individuals”. In other words, most of the £5.4bn promised for social care in this package will go on paperwork and 100,000 homeowners.
This plan will do nothing about those 15-minute visits made by carers on zero-hours contracts. It will not put a penny extra in care workers’ pockets. It will do nothing about how the sector has been squeezed by multinational private equity consortiums. It is not intended to: it is a very expensive insurance policy for a tiny number of people.
And by the time you count the Employer’s extra NI contribution of the same, that’s 2.5% the government is taking = £1 in every £40 anyone earns. That’s outrageous.
The £86,000 cap on maximum resources taken for care is also only a cap on pure care services eg does not apply to the majority board and lodging component which can be what the care home / private equity wants.
Lastly I am quite disturbed as to why was this announced now outside of the usual budget presentation cycle. I would expect this measure to be announced in the normal way alongside all other fiscal measures all together in the upcoming Budget announcement. So we can see how much we’re being ripped off by as a whole.
Are no lessons to be learned from history? Crush the lower classes too much and they are liable to rise up and ease your shoulders from the burden of keeping your head off the ground.
One of my friends just commented that the appointment of Truss as Foreign Secretary is demonstration enough that the UK no longer has a foreign policy - but actually I don’t think this government has any policies. As Chakrabortty pointed out, this care plan is just a rehash of an old (discarded) Cameron plan - much as its brexit deal simply rehashed the EU’s original proposal on Northern Ireland (discarded by May).
I’m inclined to think they don’t care about any policy, haven’t got any ideas, see it all as a joke, and just want to gain more power and wealth for themselves and their cronies.
Not just ‘post-truth politics’ - it’s post-politics politics!
