Surprise, surprise!

Discussion in 'Just Talk' started by longboat, May 2, 2017.

  1. You can't argue with nuffink, pal...:rolleyes:
  2. btiw2

    btiw2 Screwfix Select

    I'm impressed that you know what a whole group of people do and don't understand based on nothing but their political affiliation, an affiliation that you don't even share.

    That's like a superpower Harry!

    If you can make such predictions about whole groups of people then perhaps you should write horoscopes.

    Using numbers? Good man.

    Public spending: £772 billion [1]

    There are 41 million people aged 16-64 [2].

    So what's a "fair share"?
    Let's share out £772 billion and we need every person aged 16-64 to pay roughly £19k per annum in tax[3].

    If there's a household of two people then the fair share is approximately £38K in tax (include VAT, fuel duty, and if they own a company include corporation tax too - these are all contributions they make).

    If a household (and if they have a child who's a student then don't forget we'll need their £19K too) pays less than that it doesn't make them scroungers, freeloaders or sponges - it makes them average.

    So it has to be the wealthy and those with high earnings to pay more than their "fair share" to make up for everyone else. Great, we agree on that.

    I haven't checked the numbers, but I imagine most middle class families are paying less than their fair share.

    I expect most "lefties" understand this too (assuming the lefties aren't those "weird numbers are just, like, your opinion maaan" style lefties).

    It's just maths, but let's not forget quite how high that "fair share" number is to many people.

    Good for you. Many people work hard at work and don't get to enjoy a comfortable lifestyle. I'm glad that things worked out for you.

    Chuckle. Did you think that unbroken chain of *ahem* reasoning deserved a "therefore"?
    Sorry, continue...

    Okay, so where does the money get spent? Now we run into the problem.

    There are 12 million people over the age of 65.

    So why is this a problem?
    It's because we have fewer workers trying to find more and more money every year for the largely economically inactive.
    I'm not saying this is a bad thing, just that it's a thing.

    Currently pensions and health are roughly a third of that £772 billion, so roughly a third of spending is spent nearly exclusively on old people.
    Pensions: 14% (Excludes elderly care payments, disability, housing benefits and other benefits paid to pensioners)
    Health: 18%

    The proportion of old people in the population is expected to rise as[4]:
    • more baby boomers reach retirement age
    • there have been lower fertility rates following the baby boom
    • old people are living longer
    • lower future immigration reduces the labour pool.

    To put those other percentages in perspective.
    Unemployment benefits: 0% [5][6]
    Net EU contribution: 1%

    Health spending per capita has been relatively flat, but the demands increase every year.
    Old people are much more likely to need health services and the health services they receive tend to be much more expensive than for younger people.

    Bear in mind that pensioners want roads, defence, police, environmental services etc too (although education - at 13% of spending? Not so much), so we aren't done with pensioner spending with just those two numbers.

    Any party that tells you it can cut tax is telling you they can cut spending.

    Are there possible efficiency saving? Sure (although difficult to see where they come from in pension payments), but nowhere near enough to counteract the inherent demographic problem.
    No politician can get away from a shrinking working population supporting an increasingly aging population.

    Japan has already entered this economic nightmare (aging population, low birthrate, low immigration).
    We're not there yet, but we're moving into it.

    So what to do?
    • Dramatically raise the retirement age?
    • Reduce or freeze pensions?
    • Get more mothers out of the home, rescind early retirement, close the universities?[7]
    • Stop treating cancer and other diseases associated with aging?
    • Logan's run style euthanasia?
    • Re-introduce child labour?
    • Ban contraception?
    • More immigration?
    • ...or tax the proportionally shrinking working population more.
    None of these will (or probably should) be listed in a manifesto.

    These are serious economic questions that aren't as simple as "tax is bad".

    I'm sure some "righties" understand that too.

    Oh, so there is a solution. Build the economy. That's it?
    No real plan other than reducing tax which means you have to grow the economy by even more?
    The problem is that there's lots of data show that cutting tax doesn't work as a plan to build the economy.
    It was a nice idea, it's just a shame the experiment showed it doesn't work.
    I just hope the whole post-brexit boom hypothesis works, because there don't seem to be any other options.

    I agree - except when the slagging off is funny.


    Guffaw! Probably not.
    But I guess we'll find out eh?

    [1] Source: PESA 2016
    [2] Source: ONS labour market
    [3] Source: Arithmetic
    [4] Source: ONS population projections
    [5] Rounded to the nearest percentage unemployement benefit at £2.7 billion is 0%. What can I say? Rounding is funny like that.
    [6] The unemployed may also get housing allowance, child benefit and child tax credits - but pensioners may get housing allowance, and the modestly middle class can sometimes get those benefits too.
    [7] The 41 million includes people aged between 16-64 who aren't currently active in the labour force. These measures would change that, basically force everyone to work.

  3. Most of that is down to logic.

    But well done to you for sitting down to that and adressing it all, with the facts and figures.

    I am impressed
  4. Harry Stottle

    Harry Stottle Screwfix Select

    That's a very comprehensive analysis bttw2 and I do agree with lots of your points. I'd just like to make a few more:
    It's true that old people are a burden, unfortunately most of us will be old eventually and it's no use expanding the younger generation because they'll be old too eventually, so we'll need an even bigger younger generation and so on. The problem stems from the start of the welfare state where earners paid the non earners, what should have happened is that the earners payments should have been ring fenced for when they got older. Nothing can be done now, and I don't have a solution other than to raise retirement age for state pensioners. Part of the problem is Gordon Brown's raid on private pensions that has decimated the final salary pension schemes, schemes that took a lot of load off state pension provision, maybe it would help the cause if his raid was reversed, although the money's been spent. Gordon Brown, behind his veneer of "prudence", caused many of today's problems
    It's no good hammering the wealthy either and making judgements about what's a fair contribution, the only real solution is to pitch taxes at the point where revenue is maximised, once that point is passed, revenue falls.
    It's an indisputable fact that lower taxes encourage business investment, it's that which expands the economy, raising taxes just drives business away.
  5. btiw2

    btiw2 Screwfix Select

    It's the "and so on" that's not true.
    The current demographics are unusual. There's the baby boom followed by the invention of the contraceptive pill (and other societal changes).
    We need to get past the boomer bump and then stabilize.

    As opposed to? Non-earners paying for earners?
    ...or perhaps we just don't pay for the non-earners? Devil take the hindmost.
    Every household where those of working age aren't contributing £19K per annum each in tax are supposed to be penalized?

    How does this reduce the state pension or healthcare costs?

    We can argue about the fairness of this (taking from wealthier pensioners to give to poorer and sicker ones), but as it stands your argument is nonsense (if you want to reduce debt).
    State pensions aren't means tested. So there's no taking "the load off" is there?
    Gordon Brown's measure raised tax revenue, reducing the debt you claim to care about.

    It's no good making judgments about fair contributions?
    Why not?
    It seems to me that this is at the heart of political economics.

    We've already done the maths to see that we have to get the money off the wealthy because the poor and middle class can't afford it.
    Whether that's "hammering" or not, I'll leave to people who prefer adjectives over data.

    Yes, but what is CERTAINLY disputed is that it maximizes government revenue. Which is your (dubious) claim.

    If we want the society we have (and I don't want to wade through poor, sick pensioners on my way to work) then it needs to be paid for.
    We need to maximize tax revenue to pay for it.

    We need to look at the Laffer curve[1] for this.
    The Laffer curve illustrates:
    If the tax rate is too high then business close and economic activity moves to hidden sectors (the black economy, cash-in-hand etc).
    If the tax rate is very low then business may thrive (until the infrastructure collapses) but it doesn't matter because the percentage share the government takes is too low.

    The Laffer curve was borne to show that tax rates in the 70s were too high. We're not in the 70s any more.
    This curve has two sub-optimal ends you know.

    There's a balance - and it's a balance that has to be carefully and responsibly worked out.
    It has to be worked out using numbers and evidence instead of a political knee jerk to appeal to the swivel-eyed "don't like tax" crowd.

    If you're interested in a rational discussion about this (don't laugh DA - it could happen).

    Then we can perhaps discuss different Laffer style curves for different tax types.
    High corporate tax tends to discourage manufacturing sectors[2] but not on service sectors[3].
    High corporate tax coupled with capital allowances can actually encourage investment (companies re-invest profits to avoid paying the higher tax).
    Personal tax has a very different curve. High personal taxes are resented (and may increase tax avoidance) but are difficult for most people to avoid by moving overseas.
    There's evidence that to maximize revenue personal tax rates are currently sub-optimal (by being too low) in many countries[4].

    ...or we could just blame and disparage political parties for their solutions without looking at the underlying problem they're trying to solve.

    [2] You may need to refer to a history book for references about manufacturing in the UK

    If you only read one paper - make it [4]. At least read the abstract eh?
    Deleted member 33931 likes this.
  6. Yes but - I think you'll find all our woes are doon to Broon.

    (Soz, the rational argument has yet to begin... :oops:)
  7. Harry Stottle

    Harry Stottle Screwfix Select

  8. Harry Stottle

    Harry Stottle Screwfix Select

    Congratulations again bttw2 on a comprehensive and interesting set of rebuttals. It's a refreshing change from the disconnected rantings of some other people who post comments, although I have to say I don't agree with some of your sentiments, they do make for interesting reading and I have to thank you for the depth of your analysis.
  9. I can translate that for you if you like...


    (Yes, crude, but that's all it deserves.)
  10. btiw2

    btiw2 Screwfix Select

    You're welcome, and thank you the discussion.

    I agree that we disagree, but I find that's more productive than agreeing to disagree and thereby refusing to engage.
    Deleted member 164349 likes this.
  11. btiw2

    btiw2 Screwfix Select

    Do you think that was a helpful post DA?

    Fingers on lips until you have something useful to contribute.

  12. So what about taxation policy on the big companies then. The multi nationals really.

    Personal taxation and small, and medium company taxation is always very emotive.
  13. Phil the Paver

    Phil the Paver Screwfix Select

    :p:p:p we have a new Headmaster.:p:p:p
  14. btiw2

    btiw2 Screwfix Select

    We could discuss what we'd like, or the options are being offered in the election.

    We have the manifestos. I'm reading the Conservative manifesto now.
  15. Phil the Paver

    Phil the Paver Screwfix Select

    If the Labour one was remotely possible it would be brilliant.
    The Lib Dem one is comical. 2nd referendum :p
    The Tory one, haven't heard it all yet so no comment.
  16. btiw2

    btiw2 Screwfix Select

    Really? I thought the Labour manifesto was quite detailed but you need to look in a separate document[1] showing their working out: 9660_17 HMT Manifesto pamphlet .pdf

    I would like more detail in some areas, and disagree with some numbers in others, but on the whole I was impressed that they said what they wanted and how they were paying for it.

    It's then up to the electorate to decide whether they want a load more houses, more money for the NHS... and to pay the higher taxes needed.

    It made me laugh too, although for a different reason.
    Page 1 basically says "look - we all know the Conservatives are going to win, but what the hell, here's a manifesto anyway".

    There's disappointing little detail. It's full of feel good statements[2], but there's not much meat.

    If you liked Labour's infrastructure investment, then don't worry, the Conservatives have one too (albeit much, much smaller)[3].
    Conservatives want old people to pay for their own care (until they can't afford it), Labour want the money to come out of increased taxation[4].

    I'm waiting to see if the Conservatives release a costed version of it.

    [1] With footnotes. I like footnotes.
    [2] It's like listening to Jerusalem whilst eating a Sunday roast at a village pub with cream scones on the side. It couldn't be more Jingoistic without tattooing it unto a bulldog.
    [3] I like infrastructure investment, but I want to know what I'm getting for my money, and that the money will be largely spent in the UK (but I like helicopter drops).
    [4] It seems right that, if people can afford it, then they pay for their own care. I'm a little concerned that some old people will avoid seeking the care they need as they won't want to take it from their [grand]childrens' inheritance.
    But I don't know much about this area and how it works in practice.
    Jord86 likes this.
  17. Dr Bodgit

    Dr Bodgit Super Member

    "Conservatives want old people to pay for their own care (until they can't afford it), Labour want the money to come out of increased taxation"

    That's an interesting observation. If true, it would seem the Tory pledge is more left wing than Labour's.

    Having people pay for their own care, up to a limit, means (a) the richer are paying more (b) the poor pay nothing (c) people take responsibilities for their well being. The Labour view seems to be the general public should pay for out, which includes those less well off and certainly those with less than £100k assets. That seems to be "less fair" than the Tory policy.

    "I'm a little concerned that some old people will avoid seeking the care they need as they won't want to take it from their [grand]childrens' inheritance"

    Why would that concern you? Its a personal choice and doesn't affect you.
  18. btiw2

    btiw2 Screwfix Select

    Yes, I agree that financially it does seem (in some ways) more left wing, in other ways more libertarian.
    It's an interesting idea, isn't it?
    There could be differences in how it's carried out and perceived (Labour's branding theirs as something like a national social care service).

    There are two answers to that:
    In general, I don't want people to suffer (even if they choose to).
    But personally, I think my Dad would have avoided getting care if he knew it would cost him money.
    He avoided free care, so I'm fairly sure he would have avoided care he had to pay for.
    My Dad's not alive, so I suppose it doesn't affect me now, but it would have been painful for me to see him in that position.
    Does that make sense? I'm not sure I've explained it well.
  19. btiw2

    btiw2 Screwfix Select

    The manifesto says that the number is £23,250 at the moment, but doesn't cover care in the home, and I get the impression that they're changing it to take the money after the person has died (rather than sell the house from under them).

    But, as I said, I don't really know much about how this works in practice at the moment.

    I try not to have strong views on things I don't know much about - anyone here could easily convince me that both, either or neither solution is good.

    Regardless, it's good to see all the parties trying to address (assuming they are) something that will increasingly be a problem in our aging society.
  20. Dr Bodgit

    Dr Bodgit Super Member

    But that's his choice. If I choose to suffer, then let me. Or if I choose to have decent care in my old age and leave my offspring nothing, then let me.

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