Viking Supporters Co-operative
Viking Chat => Off Topic => Topic started by: normal rules on September 03, 2021, 10:55:30 am
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the government are looking at hiking National Insurance social security contribution rates by between 1 and 2 percentage points in return for capping the amount an individual would have to spend on social care costs in their lifetime.
The move would break a 2019 election promise not to raise the rate of income tax, the VAT sales tax or National Insurance.
Let the Tory party bashing commence. (Again)
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Point 1 this impacts the less well off more than an income tax rise would.
Point 2, I'm not sure many people can stomach further taxes. There has to be better options.
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BFYP.
Point 2 encapsulates the schizophrenic issue at the heart of the UK socioeconomic thinking throughout my life.
We want Scandinavian quality services.
We want American tax levels.
At some point you have to decide which is the better form of society, and move that way with ALL it implies.
Me, I'm not going to criticise tax rises to pay for a social care system that has been gutted. But as you say, putting this on NI is designed to protect the very rich and those who take income without working. That is copperplate Tory policy.
And consider what the outcry would have been if Corbyn had come to power promising no tax rises - then raised tax.
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Easy for you to say. It's the young that get fleeced. A graduate for example is massively more stung already and this is just yet another addition to that, not to mention house prices.
Of course things need to be paid for but they choose a tax that impacts the well off and elderly less proportionately (or not at all if a retiree).
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I applaud it and wouldn't object to an incremental tax increase either.
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A fairer tax would be to legalise the drug industry and tax that, it would make the people rich and poor who will be the biggest number of people in the future to suffer from bad health pay for the pleasure.
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They should up the rate for all the people who have been sat at home for a year on furlough while the rest of us have been going to work.
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I think all economic plans were scrapped when we shelled out billions on Covid.... The country won't be pressing the re-set button anytime soon.
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Perhaps it might help the shortfall in the money needed to house the Afghans that have been brought here. The treasury estimates the cost of helping those coming to the UK over the next 10 years could be more than £2.5bn.
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Perhaps it might help the shortfall in the money needed to house the Afghans that have been brought here. The treasury estimates the cost of helping those coming to the UK over the next 10 years could be more than £2.5bn.
But let's not forget that when they take up employment many of those will be contributing to the UK through taxes... just like the Europeans who entered pre-covid.
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It wasn’t a criticism of them. Just an observation of the cost.
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Easy for you to say. It's the young that get fleeced. A graduate for example is massively more stung already and this is just yet another addition to that, not to mention house prices.
Of course things need to be paid for but they choose a tax that impacts the well off and elderly less proportionately (or not at all if a retiree).
BFYP
I've been calling for more support for younger people and more taxation on very comfortable, well off older people (of which I'm now one) since before your balls dropped.
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I would support the measure, if we want services we need to pay for them
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Easy for you to say. It's the young that get fleeced. A graduate for example is massively more stung already and this is just yet another addition to that, not to mention house prices.
Of course things need to be paid for but they choose a tax that impacts the well off and elderly less proportionately (or not at all if a retiree).
BFYP
I've been calling for more support for younger people and more taxation on very comfortable, well off older people (of which I'm now one) since before your balls dropped.
And consecutive governments from both main parties didn't give a shit.
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I disagree on the really big strategic decisions. I was warning you back in 2010 when you were fiercely supporting Austerity that the cost of that stupid, stupid policy was going to be borne by your generation and that the better off older people would be protected. That's precisely what has come to pass.
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Easy for you to say. It's the young that get fleeced. A graduate for example is massively more stung already and this is just yet another addition to that, not to mention house prices.
Of course things need to be paid for but they choose a tax that impacts the well off and elderly less proportionately (or not at all if a retiree).
BFYP
I've been calling for more support for younger people and more taxation on very comfortable, well off older people (of which I'm now one) since before your balls dropped.
Define “well off” please. Genuine question.
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Easy for you to say. It's the young that get fleeced. A graduate for example is massively more stung already and this is just yet another addition to that, not to mention house prices.
Of course things need to be paid for but they choose a tax that impacts the well off and elderly less proportionately (or not at all if a retiree).
BFYP
I've been calling for more support for younger people and more taxation on very comfortable, well off older people (of which I'm now one) since before your balls dropped.
Define “well off” please. Genuine question.
It's a moveable feast. How long is a piece of string? Anyone who doesn't have to worry about surviving to the next pay day is to some extent "comfortable" and has the potential to pay for better services. But what I'm really thinking about is the small proportion of the population that owns disproportionately large amounts of our wealth.
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I don’t have to worry about surviving to the next pay day thankfully. I must be “well off”.
There was a time though when I was younger with young kids, I’d left the forces and moved jobs, for a huge pay cut, and struggled. So much so Im ashamed to say I sold my campaign medals to make ends meet. God I regret that now, as I have tried desperately to get them back, but alas, some collector has them in a drawer somewhere. One of them is quite rare too. :(
So I know what not being well of is. Times were hard for a good few years. I was on first name terms with my bank manager!
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I, too, am well off, now retired and a headteacher's pension , receiving inheritance from my and wife's family wills ( my wife's family lived in Sussex, mine in Thorne, so a massive difference), as a triple lock pensioner I am happy to pay lots more in income tax, most of my wealth is due to unearned income on property. Years ago when teaching the bank called us in about our overdraft and suggested selling our house, a real low point.
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I disagree on the really big strategic decisions. I was warning you back in 2010 when you were fiercely supporting Austerity that the cost of that stupid, stupid policy was going to be borne by your generation and that the better off older people would be protected. That's precisely what has come to pass.
I'm not sure that's the issue though. It wasn't the Tory government that created initially large student debt or fuelled a boom in the housing market. Indeed I graduated the week David Cameron won the election.
It's not about me though I'm more than comfortable moreso than most people my age particularly in this area. It's about those who are not in my position in more expensive parts of the country. Frankly there's far better methods than a tax to impact the under 65s and lower paid.
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BFYP, I am protected as an older person, I don't need the protection now
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Instead of individuals taxing companies like Amazon and the like correctly on the profits
they make on sales in this country would be a better idea.
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Agree with that Selby, but I am still prepared to pay more in tax for NHS etc as I may need it, see it as an insurance policy.
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To be honest, I feel sure that tax hikes are inevitable.
Covid has to be paid for and the increase in world refugees, like the Afghans for example, all has to be covered somehow.
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Number of billionaires in UK increased by 25% during covid - with a collective wealth of £597 billion
https://www.standard.co.uk/news/uk/uk-rich-list-sunday-times-billionaires-wealth-rise-pandemic-b936423.html
and you support raising income tax/NI for people on minimum wage!
(I also agree with Selby but it needs to go further and look at companies in tax havens - which is why these new tax dodging Freeports are a bad idea)
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Number of billionaires in UK increased by 25% during covid - with a collective wealth of £597 billion
https://www.standard.co.uk/news/uk/uk-rich-list-sunday-times-billionaires-wealth-rise-pandemic-b936423.html
and you support raising income tax/NI for people on minimum wage!
(I also agree with Selby but it needs to go further and look at companies in tax havens - which is why these new tax dodging Freeports are a bad idea)
Wilts, if you are saying that I support raising taxes on people on minimum wage I have to ask you why you are saying that.
All I said is that taxes have to rise.
No specifics from me but inevitably somewhere this or the next government or the one after that, have to raise taxes somewhere.
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somewhere over the rainbow .........................
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:zzz:
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I would happily pay more tax to create a better world for others but find it annoying and demoralising when we see how much money is wasted by successive governments. It seems at times that it is just expected and accepted by those in power.o
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I would increase air passenger duty, and for long haul flights and first class massively, and introduce a similar tax on cruises.
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I would happily pay more tax to create a better world for others but find it annoying and demoralising when we see how much money is wasted by successive governments. It seems at times that it is just expected and accepted by those in power.o
It's quite interesting to see how many support this kind of stance Idler and yet the tories whom usually leave the country in more debt are the party that steadfastly refuse to increase taxes. Their latest manifesto said no increase in taxes, NI or VAT.
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Wait up chaps - I've had an idea
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If you have more money than you need there is nothing wrong with you choosing a Charity of your choice,Cancer Research etc and donating money, that's what I do and I know that the money is being used in a way that is benefitting others. Just make sure you have enough income etc for your own care things can go wrong health wise very quickly when you are older,and again if you are in a position to pay for your own care you are benefiting others less fortunate.
My neighbours wife went into care and it is costing him £800 per week.
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I would increase air passenger duty, and for long haul flights and first class massively, and introduce a similar tax on cruises.
Not sure why you would choose that option selby, it would just make the average guy in the street more miserable because he can't take his wife and kids on holiday and won't raise that much money anyway.
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I would in theory be in favour of an increase in tax to specifically fund the 'social care' crisis which is looming given our ageing population.
However I would not be in favour of an increase in NI. As argued by others on here it is a regressive tax. Will the 2% rise also be applied at the higher rate I wonder?
Now though is not the time to raise taxes. We are in the middle of an economic recovery after the pandemic. Like most recoveries in this country it is being fuelled by consumer spending. An increase in taxes now could choke off some of the recovery.
By all means put in the extra expenditure now but delay the tax rise until the recovery is complete, especially given how low interest rates are right now. In terms of tax take this may even be optimal given the link between tax revenues and economic performance.
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Soeaking purely from a personal point of view, I have not paid NI since I retired nearly 20 years ago at 51. With my pensions I am comfortably off and would have no objection to paying NI. Perhaps it should be levied on anyone with a retirement income of say over 30k would that be fair? I think so
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Wait up chaps - I've had an idea
I'm surprised no one on the Opposition benches mentioned that lie when the Clown was justifying it in Parliament!
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Soeaking purely from a personal point of view, I have not paid NI since I retired nearly 20 years ago at 51. With my pensions I am comfortably off and would have no objection to paying NI. Perhaps it should be levied on anyone with a retirement income of say over 30k would that be fair? I think so
I would increase air passenger duty, and for long haul flights and first class massively, and introduce a similar tax on cruises.
Not sure why you would choose that option selby, it would just make the average guy in the street more miserable because he can't take his wife and kids on holiday and won't raise that much money anyway.
Agree - bit baffling to tax travel to support social care.
Whatever is introduced, I hope that it is fair to all. I'm guessing it will be some sort of tiered system with higher payments to the well off - who ironically probably have private medical care - and lesser to those in low paid jobs. Those on benefits will obviously be exempt. I hope there is some sort of contribution from the pensions of those who are retired and comfortable - again perhaps somehow tiered to protect those who are elderly and still struggling.
Whatever is announced there will obviously be outcry's from some who will feel it is unfair - although it is without doubt something that needs to be addressed. Let's see if Boris can put forward a plan..... :unsure:
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That's the problem with ni, those earning over 50k proportionately are hit less and that doesn't sit right with me. They should just have added to income tax which is much fairer.
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That's the problem with ni, those earning over 50k proportionately are hit less and that doesn't sit right with me. They should just have added to income tax which is much fairer.
The Tories have never been about fairness. They have always expected the many to subsidise the few. And the few keep voting them in!
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That's the problem with ni, those earning over 50k proportionately are hit less and that doesn't sit right with me. They should just have added to income tax which is much fairer.
The Tories have never been about fairness. They have always expected the many to subsidise the few. And the few keep voting them in!
Would there be enough of the few to vote them in if some of the many didn’t vote for them as well though.
I might be wrong but it does seem logical to me.
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That's the problem with ni, those earning over 50k proportionately are hit less and that doesn't sit right with me. They should just have added to income tax which is much fairer.
The Tories have never been about fairness. They have always expected the many to subsidise the few. And the few keep voting them in!
You can't just limit it to the tories, Gordon Brown as labour chancellor did the exact same thing 20 years ago.
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That's the problem with ni, those earning over 50k proportionately are hit less and that doesn't sit right with me. They should just have added to income tax which is much fairer.
The Tories have never been about fairness. They have always expected the many to subsidise the few. And the few keep voting them in!
This few must be the majority as they wouldn’t be in power otherwise
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1.25% rise to NI just been announced.
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NI also funds the state pension, I bet theres no rise there though, theres already rumours of the Triple Lock being abolished because the next rise in April will be a big one
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NI also funds the state pension, I bet theres no rise there though, theres already rumours of the Triple Lock being abolished because the next rise in April will be a big one
Not at all correct. It went up 2.5% this year and even with the change it would be 2.5% next. This is the problem with the triple lock (which is flawed). Last year the 3rd element general wage growth was tiny due to Covid so not a factor. That impact is now reversed so becomes a huge growth this year. Hence why it is flawed as it has no statistical smoothing. There's other methods they could use but the single year viewpoint makes it completely volatile with no safeguard for an odd year (such as this). Thus essentially pensioners could get a huge 8-10% increase because of the recovery in the general population when they never had that hit in the first place.
This is a good summary below'
How State Pension was uprated
Which part of the triple lock kicked in?
April 2012 5.2% Inflation (CPI)
April 2013 2.5%Guaranteed minimum
April 2014 2.7% Inflation (CPI)
April 2015 2.5% Guaranteed minimum
April 2016 2.9% Average earnings
April 2017 2.5% Guaranteed minimum
April 2018 3% Inflation
April 2019 2.6% Wage growth
April 2020 3.9% Wage growth
April 2021 2.5% Guaranteed minimum
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For the record, I entirely agree that we need to raise tax to pay for social care.
But this, coming from a Govt that campaigned only 20 months ago saying they would not raise taxes this Parliament is a breathtaking breaking of a promise.
I guess we can ignore the next Tory manifesto, because it clearly means nothing.
And just consider the furore if Corbyn had won in 2019 by promising not to raise taxes, then proceeded to raise taxes on the poorest workers within 2 years.
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Yes, a tax increase is fine provided that it is not regressive.
NI is the least suitable method of raising this resource, because of the way the burden falls on the young and the low waged.
Income tax would be fairer across the board, but in the broader consideration there needs to be a wealth tax on the top echelon to return resources to social provision.
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In an ideal world the folk who were furloughed should be affected by the rise & the poor buggers who worked through it all, shouldn't be affected.
I was furloughed, by the way!
Fully aware that it doesn't work that way, mind.
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For the record, I entirely agree that we need to raise tax to pay for social care.
But this, coming from a Govt that campaigned only 20 months ago saying they would not raise taxes this Parliament is a breathtaking breaking of a promise.
I guess we can ignore the next Tory manifesto, because it clearly means nothing.
And just consider the furore if Corbyn had won in 2019 by promising not to raise taxes, then proceeded to raise taxes on the poorest workers within 2 years.
Covid is a fair excuse which most will accept, but it's not a very conservative policy to increase taxes.
The interesting aspects are in the details;
1. The impact on businesses at employer contributions go up too - for those not familiar the employer pays NI as well as the amount we see deducted from our payslips, it's something like 13.8% off the top of my head.
2. It appears to be accross the board so applies above the 50k threshold too.
3. The impact vs an income tax hit is actually thus stronger. Because of point 1 the employee would pay less tax than an income tax hit in theory as the government would have had to raise taxes by more - that's a fair point, but you could argue various other income tax changes could have achieved something similar.
Granted what this likely will do is see lower wage rises as that's how employers will claw it back (an accountant when making these decisions doesn't look at net wages but full gross cost) - the hit is seen more in higher paid employees too. This could breed a problem of below inflation wage increases over the next year or two. Ironically this change just reverses a lot of the gains in personal allowances we've seen over the years.
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COVID has nothing to do with this, and if the Govt try to use that as an excuse, they are deceiving.
COVID is a short term hit to the finances, which is addressed by temporary increases in borrowing. Care costs are semi-permanent increases in current account costs and have to be paid from taxation.
The thing is, EVERYONE with an ounce of understanding of this issue has known for years that taxes would have to rise to sort out the care system. In their 2019 manifesto, Labour set out what it thought the costs and the necessary tax increases would be. The Tories said there would be no increases in income tax or NI.
Politicians eh? They are all the same aren't they?
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COVID has nothing to do with this, and if the Govt try to use that as an excuse, they are deceiving.
COVID is a short term hit to the finances, which is addressed by temporary increases in borrowing. Care costs are semi-permanent increases in current account costs and have to be paid from taxation.
The thing is, EVERYONE with an ounce of understanding of this issue has known for years that taxes would have to rise to sort out the care system. In their 2019 manifesto, Labour set out what it thought the costs and the necessary tax increases would be. The Tories said there would be no increases in income tax or NI.
Politicians eh? They are all the same aren't they?
It actually does, the new legislation doesn't actually pay for care in the next few years, that's worth noting. They could also argue the money for this was there but spent (wasted in some cases) in other ways on Covid.
Again I'm not necessarily in favour of this increase given the continued wastage by government which now has the state at the largest size in a generation.
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I don’t pretend to know much about tax, however from what I understand here, the people who weren’t entitled to support during the pandemic ie Company Directors, are now being asked to pay increased tax on share dividends?
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So where does this leave the so called pay rise for NHS staff?
The increase in NI will eat into the minimal increase given to NHS staff after Covid, alongside the fall in value due to cost of living increases.
Give miserly with one hand, take back with the other.
This will do nothing for staff morale and recruitment to the sector.
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Yes, a tax increase is fine provided that it is not regressive.
NI is the least suitable method of raising this resource, because of the way the burden falls on the young and the low waged.
Income tax would be fairer across the board, but in the broader consideration there needs to be a wealth tax on the top echelon to return resources to social provision.
I’m with you on this albie.
An income tax rise would be fairer and the extremely well off wouldn’t notice a bigger hit to them than the average person would.
On other points being raised, of course covid costs have made a difference to that promise by BJ.
It has undoubtedly changed the governments plans and they have had to fund stuff that they couldn’t possibly have been able to factor in at that time.
The triple lock potential high increase could also be solved by government limiting it to say 2.5% or thereabouts so that it can continue in future years.
Those people who are whining about the young paying the older people’s pensions should also remember that today’s pensioners were doing the same thing throughout their working lives too.
Hopefully, one day, they will get the benefit of the same system.
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BFYP
The point I'm making is that we will still need to pay large amounts for care costs every year, well after COVID is a far distant memory. Essentially COVID is a big one-time capital cost, whereas care is a big permanent, annual current cost. You can pay for capital costs through long term borrowing, not through tax income. You have to pay current costs through tax income. So conflating the two is calculated to deceive. But it does sound superficially plausible.
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1.25% rise to NI just been announced.
So if you earn minimum wage of roughly £300 you are paying £3.75 extra which is about the price of pint, but if it’s helping the health service I’m all for it .
No doubt there will be the usual suspects upset with my opinion, but it is my opinion
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So where does this leave the so called pay rise for NHS staff?
The increase in NI will eat into the minimal increase given to NHS staff after Covid, alongside the fall in value due to cost of living increases.
Give miserly with one hand, take back with the other.
This will do nothing for staff morale and recruitment to the sector.
As a follow up, it looks like inflation is going towards 4% this year;
https://www.theguardian.com/business/2021/aug/05/bank-of-england-uk-inflation-interest-rates-prices
So the NHS pay rise of 3% is reduced by the NI increase to 1.75% before inflation.
Add in the 4% forecast for inflation, and the pay rise for NHS staff is actually a real terms pay CUT of 2.25%, for some of those on low pay to start with.
In what world is that reasonable or fair?
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No Draytonian because you don't pay NI on the first £184 per week wage.
So the person earning £300/week will face an additional bill of 1.25% of £112 which is about £1.40.
Of course, someone earning £1500 per week pays a lot more NI. But what really matters in fairness of taxation is not how much you pay, but what you pay as a proportion of the money that is left each week when you've put a roof over your head, shoes on your kids' feet and food on the table. And in that sense, increasing NI hits the lower paid workers far harder than it hits higher paid ones. And it doesn't hit people who earn without being employed at all (people who live off investments or rental income) because they don't pay NI. This is a massively unfair way to heap the burden onto workers and protect the comfortably wealthy. But it really was ever thus from the Tories.
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For example someone who owns and rents out a dozen houses and lives off that income will not pay a penny to the new care sector costs because they don't pay NI on their rental income. Their care costs will be subsidised by hospital cleaners and call centre workers who WILL pay the increased NI.
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BFYP
The point I'm making is that we will still need to pay large amounts for care costs every year, well after COVID is a far distant memory. Essentially COVID is a big one-time capital cost, whereas care is a big permanent, annual current cost. You can pay for capital costs through long term borrowing, not through tax income. You have to pay current costs through tax income. So conflating the two is calculated to deceive. But it does sound superficially plausible.
Of course it's a narrative I don't disagree. It only builds up that way because of choice of the government doesn't it? It's not as simple as A pays for B, C pays for D etc etc and doesn't need to be, big picture and all. Of course it would be better if the capital expenditure promoted growth in the economy and thus increased the tax take naturally wouldn't it?
So where does this leave the so called pay rise for NHS staff?
The increase in NI will eat into the minimal increase given to NHS staff after Covid, alongside the fall in value due to cost of living increases.
Give miserly with one hand, take back with the other.
This will do nothing for staff morale and recruitment to the sector.
As a follow up, it looks like inflation is going towards 4% this year;
https://www.theguardian.com/business/2021/aug/05/bank-of-england-uk-inflation-interest-rates-prices
So the NHS pay rise of 3% is reduced by the NI increase to 1.75% before inflation.
Add in the 4% forecast for inflation, and the pay rise for NHS staff is actually a real terms pay CUT of 2.25%, for some of those on low pay to start with.
In what world is that reasonable or fair?
And therin lies the problem, pay the NHS more you need to fund it and the challenge that I mentioned months ago and was blooming obvious. Don't increase the NHS funding then pay the staff more giving 0 benefit to the system. Something has to give somewhere and it's the public who pays for it in the end in just about every example.
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For example someone who owns and rents out a dozen houses and lives off that income will not pay a penny to the new care sector costs because they don't pay NI on their rental income. Their care costs will be subsidised by hospital cleaners and call centre workers who WILL pay the increased NI.
Equally apply that and where is the cost going? Rents, so again they don't lose out do they but the persons renting do (who are probably said cleaners and call centre workers).
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BFYP,
It is not the public who pay for it though, it is certain sections of the community who pay disproportionately to their available resources.
A NI hike is a bigger slice of the disposable income of those on low pay.
The principle is wrong, the burden should fall to those who can most afford it, not those who struggle to make ends meet.
A wider discussion needs to be had about the tax system in the UK, it is badly in need of a review and a root and branch overhaul.
Rather than adding to a tax system which is regressive, and looks to the tax objectives of the 1970's, the system must reflect the weightings of the new economy.
Digital services, off shore tax avoidance, and the need to decarbonise are all priorities not properly supported within the current tax framework.
It is time that they were!
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Easy for you to say. It's the young that get fleeced. A graduate for example is massively more stung already and this is just yet another addition to that, not to mention house prices.
Of course things need to be paid for but they choose a tax that impacts the well off and elderly less proportionately (or not at all if a retiree).
BFYP
I've been calling for more support for younger people and more taxation on very comfortable, well off older people (of which I'm now one) since before your balls dropped.
Define “well off” please. Genuine question.
Well off = to be able to replace the most expensive thing you own with cash and still have enough left in the bank to get it fixed……..is how a colleague put it!
I don’t understand it either, but it seems simple!
I retired last October at the ripe old age of 58 ……….And love it!
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BFYP
The point I'm making is that we will still need to pay large amounts for care costs every year, well after COVID is a far distant memory. Essentially COVID is a big one-time capital cost, whereas care is a big permanent, annual current cost. You can pay for capital costs through long term borrowing, not through tax income. You have to pay current costs through tax income. So conflating the two is calculated to deceive. But it does sound superficially plausible.
Of course it's a narrative I don't disagree. It only builds up that way because of choice of the government doesn't it? It's not as simple as A pays for B, C pays for D etc etc and doesn't need to be, big picture and all. Of course it would be better if the capital expenditure promoted growth in the economy and thus increased the tax take naturally wouldn't it?
So where does this leave the so called pay rise for NHS staff?
The increase in NI will eat into the minimal increase given to NHS staff after Covid, alongside the fall in value due to cost of living increases.
Give miserly with one hand, take back with the other.
This will do nothing for staff morale and recruitment to the sector.
As a follow up, it looks like inflation is going towards 4% this year;
https://www.theguardian.com/business/2021/aug/05/bank-of-england-uk-inflation-interest-rates-prices
So the NHS pay rise of 3% is reduced by the NI increase to 1.75% before inflation.
Add in the 4% forecast for inflation, and the pay rise for NHS staff is actually a real terms pay CUT of 2.25%, for some of those on low pay to start with.
In what world is that reasonable or fair?
And therin lies the problem, pay the NHS more you need to fund it and the challenge that I mentioned months ago and was blooming obvious. Don't increase the NHS funding then pay the staff more giving 0 benefit to the system. Something has to give somewhere and it's the public who pays for it in the end in just about every example.
BFYP
I entirely agree about using capital expenditure to push up growth. That is the core principle of how Keynesian stimulus works in a depressed economy. And as I've torn my hair out about numerous times, THE most stupid economic policy of modern times was the way in which Austerity was focussed on slashing Govt capital expenditure when the economy hadn't recovered from the Great Recession, thus knocking growth flat for three years and making the 2010s the worst decade of GDP and wage growth since the Napoleonic Wars.
The interesting thing from here is that if Johnson has one thing right, it is a belief in stimulus spending. But Sunak appears to be an old fashioned Austerian who still prioritises debt above boosting economic growth. Who wins that argument will define the rest of the decade for us.
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What is NI ?
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So where does this leave the so called pay rise for NHS staff?
The increase in NI will eat into the minimal increase given to NHS staff after Covid, alongside the fall in value due to cost of living increases.
Give miserly with one hand, take back with the other.
This will do nothing for staff morale and recruitment to the sector.
As a follow up, it looks like inflation is going towards 4% this year;
https://www.theguardian.com/business/2021/aug/05/bank-of-england-uk-inflation-interest-rates-prices
So the NHS pay rise of 3% is reduced by the NI increase to 1.75% before inflation.
Add in the 4% forecast for inflation, and the pay rise for NHS staff is actually a real terms pay CUT of 2.25%, for some of those on low pay to start with.
In what world is that reasonable or fair?
From that Guardian article:
Inflation is forecast to hit 4% this year as Britain’s robust recovery from the pandemic accelerates at a blistering pace, the Bank of England has said.
I will be absolutely amazed if this forecast turns out to be right.
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BFYP,
It is not the public who pay for it though, it is certain sections of the community who pay disproportionately to their available resources.
A NI hike is a bigger slice of the disposable income of those on low pay.
The principle is wrong, the burden should fall to those who can most afford it, not those who struggle to make ends meet.
A wider discussion needs to be had about the tax system in the UK, it is badly in need of a review and a root and branch overhaul.
Rather than adding to a tax system which is regressive, and looks to the tax objectives of the 1970's, the system must reflect the weightings of the new economy.
Digital services, off shore tax avoidance, and the need to decarbonise are all priorities not properly supported within the current tax framework.
It is time that they were!
I do actually fundamentally agree and I'm no tax expert (I am married to one though - yes dinner table conversations are great fun).
I'm sure there are many papers or articles proposing these types of things, but many will be far too radical to be implemented and it's 12 years since I last studied tax. The biggest one I fully agree with is electronic sales taxes and increased costs for online retailers to level the playing field. There's also question marks around multinationals that surely should be answered (Amazon etc). The biggest standout income one for me is the lack of a sliding scale, the cliff edges for middle income earners are crazy. Why take on a higher job if you lose a significant amount of it, there becomes a point it isn't worth it.
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So what is NI contribution?
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https://www.theguardian.com/business/2021/sep/07/bank-of-england-saunders-inflation-interest-rate-rise
A more recent article, seems to be rowing back on the expectations of the extent of any future inflation already.
I really can't see a "blistering" recovery in the offing. Covid is likely to prove more sticky than that. And recent news is the Chinese recovery is already slowing, hampered by Covid and elevated energy prices proving a drag. That's going to set the tone for the global recovery.
I would bet they'll need more stimulus before they dare raise interest rates.
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Ok….clearly the question was worded wrong…
Why should a wealthy man/woman pay National Insurance Contributions?
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Ok….clearly the question was worded wrong…
Why should a wealthy man/woman pay National Insurance Contributions?
It's just tax with a different name basically.
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Ok….clearly the question was worded wrong…
Why should a wealthy man/woman pay National Insurance Contributions?
It's just tax with a different name basically.
But tax for what?
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There's no such thing as a tax "for" anything. Governments impose taxes on who and what they choose. They spend on who and what they choose. No specific tax is ever ringfenced to pay for anything specific. It all goes into a big pot to pay for all the expenditure
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No government is brave enough to admit that our basic rate of tax is 33.8% so the term National Insurance will remain. NI is tax it's just that only people who earn their income pay it.
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There's no such thing as a tax "for" anything. Governments impose taxes on who and what they choose. They spend on who and what they choose. No specific tax is ever ringfenced to pay for anything specific. It all goes into a big pot to pay for all the expenditure
Ok …
So why is it called NATIONAL INSURANCE CONTRIBUTION.?
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It is much worse than that Funk. It's a tax on lower end wages. Anyone earning more than £50k per year pays less NI on every pound they earn above that level.
So this is how it works.
Someone earning £500/week pays £37.92 NI. That is 7.6% of their wage.
Someone earning £5000/week pays £174.62 NI - 3.5% of their wage.
Taxes that charge the rich a smaller percentage than the poor are called "regressive". NI is about as regressive as it gets. It protects the wealthy and hammers the less wealthy.
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There's no such thing as a tax "for" anything. Governments impose taxes on who and what they choose. They spend on who and what they choose. No specific tax is ever ringfenced to pay for anything specific. It all goes into a big pot to pay for all the expenditure
Ok …
So why is it called NATIONAL INSURANCE CONTRIBUTION.?
Because it was brought in to help balance the books when the Welfare State was founded. But NI income is not designed to, and never does perfectly balance Welfare spending.
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There's no such thing as a tax "for" anything. Governments impose taxes on who and what they choose. They spend on who and what they choose. No specific tax is ever ringfenced to pay for anything specific. It all goes into a big pot to pay for all the expenditure
Ok …
So why is it called NATIONAL INSURANCE CONTRIBUTION.?
Because it was brought in to help balance the books when the Welfare State was founded. But NI income is not designed to, and never does perfectly balance Welfare spending.
I guess it worked when introduced when we had a population pyramid that actually resembled a pyramid
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So does NI go into the NHS pot or the Pensions pot?
Or no pot at all…
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So the manifesto promise was broken because of Covid? Aye, social care wasn't in the shit before Covid. :silly:
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So the manifesto promise was broken because of Covid? Aye, social care wasn't in the shit before Covid. :silly:
Is anyone saying that Glyn.
It is fair to say that covid has caused lots of expenditure which wouldn’t normally have been required and perhaps some of that money would have gone to providing care.
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So the manifesto promise was broken because of Covid? Aye, social care wasn't in the shit before Covid. :silly:
Is anyone saying that Glyn.
It is fair to say that covid has caused lots of expenditure which wouldn’t normally have been required and perhaps some of that money would have gone to providing care.
Boris said Covid was the reason he's breaking his promise not to raise NI to fund social care, in his speech in the Commons. And social care was a problem way before covid happened.
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So the manifesto promise was broken because of Covid? Aye, social care wasn't in the shit before Covid. :silly:
Is anyone saying that Glyn.
It is fair to say that covid has caused lots of expenditure which wouldn’t normally have been required and perhaps some of that money would have gone to providing care.
Boris said Covid was the reason he's breaking his promise not to raise NI to fund social care, in his speech in the Commons. And social care was a problem way before covid happened.
I’m not sure what you mean by that.
Edit.
I have retread your post and I think you are backing up my earlier post.
Yes, social care has been a problem for many years, agreed.
But money used to get us through covid surely could have been earmarked to help alleviate the social care problems.
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So does NI go into the NHS pot or the Pensions pot?
Or no pot at all…
It all goes in to one big pot and then gets split up in to many other pots, it's not s one for one relationship. Worth noting national insurance is also a tax on business not just people so it's more than just a direct income tax. Nothing mentioned if this applies to class 1a (paid by employers on bik but not employees).
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Well at least we got 25 million people paying the increase to get the books balanced then…..for a minute I thought it was a bad thing there!
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You want to know why this is being paid for through NI increases?
1) Over 65s overwhelmingly don't pay NI.
2) Over 65s overwhelmingly vote Tory.
I wonder what over 65s think of this policy?
https://mobile.twitter.com/YouGov/status/1435268292168531972
Yep that's right. They support it 68:23.
They used to call this "pork barrel politics" in the USA. Corrupt politicians buying the support they needed to win votes by pouring money into their voters' pockets, paid for by everyone else.
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So the manifesto promise was broken because of Covid? Aye, social care wasn't in the shit before Covid. :silly:
Is anyone saying that Glyn.
It is fair to say that covid has caused lots of expenditure which wouldn’t normally have been required and perhaps some of that money would have gone to providing care.
Boris said Covid was the reason he's breaking his promise not to raise NI to fund social care, in his speech in the Commons. And social care was a problem way before covid happened.
I’m not sure what you mean by that.
Edit.
I have retread your post and I think you are backing up my earlier post.
Yes, social care has been a problem for many years, agreed.
But money used to get us through covid surely could have been earmarked to help alleviate the social care problems.
The money to get us through covid has been borrowed and is part of the national debt. They were never going to borrow to fund social care.
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You CANNOT borrow to fund current costs like social care or defence or education or health.
If you could, every country would borrow to have a top grade army and schools and hospitals.
You have to pay for current expenses through taxes. Exactly as Labour said at the last Election. And the Tories repudiated.
But politicians eh? All the same.
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''The lost decade: the hidden story of how austerity broke Britain''
It's not so hidden now of course and should be seared into everyone's brain.
''What happened in the UK between 2010 and 2020 will scar us for the rest of our lives. David Cameron’s Conservatives, only just victorious in the 2010 election, sold austerity as a necessary response to the 2008 financial crash. The exact social consequences of these cuts were spelled out last week in Michael Marmot’s report for the Institute of Health Equity: for the first time in a century, life expectancy has stopped growing and for women in poor areas actually fallen.
Meanwhile, the UK got older, with no plan for the decade’s 25% rise in those aged over 65. Social care was a can kicked down the road; as a result, 1.5 million frail old people get no care at all: at the end of the decade, the Johnson government’s response was to deny visas to care staff from abroad, as they earn too little to reach a new £25,600 threshold''
https://www.theguardian.com/society/2020/mar/03/lost-decade-hidden-story-how-austerity-broke-britain
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Looks like this has gone down like a sack of shit in the country. Tories' poll figures have fallen off a cliff. Down 4-6% in a week. YouGov, which had the Tories 16% ahead in June and 13% ahead in July now has Labour in the lead.
Funny old game, politics.
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Looks like this has gone down like a sack of shit in the country. Tories' poll figures have fallen off a cliff. Down 4-6% in a week. YouGov, which had the Tories 16% ahead in June and 13% ahead in July now has Labour in the lead.
Funny old game, politics.
It's interesting to see the directions from early June where the tories have gone steadily down to as you say with the off the cliff bit and labour has steadily risen except for a hiccup in August then up. Starmer would be reasonably happy with that, a steady increase over 3 months. I guess wages in the country-non metropolitan centres are generally lower and there is plenty of time for people to work out who is going to pay in the end.
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From the BBC.
The majority of the £36bn fund raised by the rise over the next three years will go towards tackling the backlog of NHS cases, which has worsened during the Covid pandemic.
A smaller portion of the money - £5.4bn over the next three years - will also go towards changes to the social care system.
I hadn't realised this. So all the stuff I posted last week about how A tax rise is inevitable because it is funding current costs as so much bullshit. Sunak has chosen to tax workers essentially to fund a short term capital cost, to keep borrowing down
This is a truly dreadful decision and they deserve a huge kicking for it.
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If increasing a regressive tax in employees NI and a tax on employing people (employers NI) weren't bad enough.
Doing these things during an economic recovery based largely on the consumer spending of lower/middle income groups is economic stupidity. Especially given interest rates are so low.
Why are they doing this now? Politics. They hope people will have forgotten about this in 3 years come the next election.
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It's an obsession on the Right. Because running up debt is essentially a future tax on the wealthy.
When Cameron said in 2010 that Austerity was morally necessary because it was unfair to leave "our children" to pay back the debt, he really DID mean "OUR children". As in HIS children and the children of other very wealthy people.
And here we are again. An extremely wealthy Chancellor choosing to hammer low paid workers rather than have the very wealthy pay.
This might be forgotten by the next election. Or it might become a totem.
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This decision by the Tories represents a huge opportunity for the Labour Party esp in the face of the Tories 'levelling up' agenda which they will lead on in the 'Red Wall' seats they won at the last election.
Also a big test of Keir Starmer's (so far questioned) effectiveness as leader.
To win the next election Labour need to ensure the memory of this decision is firmly in people's minds when they enter the polling stations.
But 3 years is a long time - which is what the Tories are banking on by doing this now rather than more sensibly (for the country if not their own prospects) in a year or so post-recovery.