Liz Truss’s time is up

[teuchter]

By the way, I'd like someone who really knows about this stuff, to go through everything here

Income Tax factsheet

www.gov.uk

And comment on which statements are basically true, and which are misleading or selective in the information they present.

For example

Currently the 45% rate is higher than the top national rate of Income Tax for G7 countries like the US and Italy. And it is higher than social democracies like Norway.

I'm aware that the income tax rate isn't the end of the story ... there is a whole bunch of other stuff to do with pensions and national insurance and other things that actually determine how much anyone is "taxed" but it's so complicated I end up giving up trying to understand it all.

 

[Orang Utan]

Excuse me if I’m being dim as economics make my head spin - we’ve cut income tax for rich people and are funding this by borrowing from those very same rich people, so all Truss/Kwarteng have done is turn a tax into a massive loan that we might not be able to pay back if the economy continues to tank?

 

[littlebabyjesus]

It's just cherrypicking. The UK's top rate is higher than some countries, lower than others, but picking out oil-rich Norway is disingenuous. 45% is lower than the rest of Scandinavia, so 'social democracies like Norway' means Norway, and, um, Norway.

 

[Storm Fox]

It's fairly basic isn't it - taxing people's earnings reduces the incentive for them to do work. Reduce tax, increase incentive. More work. More stuff for everyone.

The say that the general "more stuff for everyone" outweighs any effect of the stuff being concentrated in the hands of not everyone.

What a sad, mean-spirited, fucked up worldview. If you are lucky enough to be earning enough to be in the highest tax bracket, you should be happy to pay a bit more for those less fortunate than yourself and contribute a bit more to society. If it wasn't for society that wealth wouldn't exist.

 

[PR1Berske]

From Guido (so obvious caveats)

With the pound bouncing around all over the place, backbenchers already rebelling and a 30-point poll lead for Labour, Tory MPs are seemingly receiving increasing emails from constituents asking when they might be allowed to have their say on the new government. In answering these voters’ inquiries, staffers’ eyebrows have been raised after they received guidance from their Parliamentary Research Unit, a Conservative Party briefing team in parliament who feed lines to MPs’ caseworkers based on information from departments, ministers and SpAds. The line they’ve been sent in full:

“At this moment, it is my understanding that the Government intends to stick to the election timeline of January 2025, whereby a general election will be held.”

Guido’s sure activists, MP hopefuls and journalists alike will be joyous at the thought of a January election. Like 2019’s December campaign without the hope of Christmas to get you through…

 

[teuchter]

What a sad, mean-spirited, fucked up worldview.

If someone genuinely believes it, then it's not mean-spirited.

 

[Storm Fox]

If someone genuinely believes it, then it's not mean-spirited.

What a sad, mean-spirited deluded, fucked up worldview.

FTFM

Trickle down has been show time and time again not to work.

 

[two sheds]

Truss believes the established principle that rich people need more money as incentive to work while poor people need less, doesn't she?

 

[littlebabyjesus]

If someone genuinely believes it, then it's not mean-spirited.

What people choose to believe can say a lot about them, though.

The basic formulation is pretty questionable anyway. Reducing the income of the poor (whether by increasing their taxes, cutting wages or increasing their costs) gives them incentive to work more as they have to put in more hours to make ends meet. Yet reducing the income of the rich is supposed to make them work less.

 

[littlebabyjesus]

Truss believes the established principle that rich people need more money as incentive to work while poor people need less, doesn't she?

Problem is that we're just not unequal enough.

 

[ska invita]

Given that the Tories know this as well as we do, asking and trying to work out what is going on here seems worthy of serious thought and debate. And, as you say, working out where our side goes now.

My reaction to that is there is no such things as The Tories - its a coalition of cunts - a full spectrum - this lot seem to be a very particularly batshit sect within the larger party. I'm not sure if they are that invested in that earlier levelling up hot air etc strategy. I think theyve got their own vision and whatever fresh hell it is theyre going to run with it. I also don't put it past them to turn things around, play some culture war cards, war with the EU, god knows what etc, before the election comes around. A long long way to go yet.

 

[prunus]

It's fairly basic isn't it - taxing people's earnings reduces the incentive for them to do work. Reduce tax, increase incentive. More work. More stuff for everyone.

The say that the general "more stuff for everyone" outweighs any effect of the stuff being concentrated in the hands of not everyone.

Ok, so following that through (not arguing with you per se, just playing with the idea); it can only apply to people who can actually control how much they work; most people have very little control over that (I believe?).

Anyway, so what we should see in the short? medium? term therefore is an uptick in productivity per capita (though not per hour worked, that’s likely to tick down, marginal utility and so on), would that be right? So let’s call that GDP per capita, or over a short enough time frame GDP.

Great, GDP is going to go up.

GDP is about £2.2t, uk tax take is about 30% of that. So if GDP goes up 5%, tax take goes up about £35b. So we need a GDP increase of about 6.5% to just break even on the £45b cost of the tax cuts. Does that sound about right?

 

[Karl Masks]

Truss believes the established principle that rich people need more money as incentive to work while poor people need less, doesn't she?

I think she believes she is capable of being leader, is ambitious, and leaves it to other people to do the thinking and provide the ideology. Only a lazy mind would accept such tired economic orthodoxy given how utterly it's been debunked

 

[Karl Masks]

Looking forward to the coverage if the tory conference

Yes

 

[teuchter]

Ok, so following that through (not arguing with you per se, just playing with the idea); it can only apply to people who can actually control how much they work; most people have very little control over that (I believe?).

Anyway, so what we should see in the short? medium? term therefore is an uptick in productivity per capita (though not per hour worked, that’s likely to tick down, marginal utility and so on), would that be right? So let’s call that GDP per capita, or over a short enough time frame GDP.

Great, GDP is going to go up.

GDP is about £2.2t, uk tax take is about 30% of that. So if GDP goes up 5%, tax take goes up about £35b. So we need a GDP increase of about 6.5% to just break even on the £45b cost of the tax cuts. Does that sound about right?

My understanding is that it's something like that in principle but I've no idea about the numbers.

It would be interesting to see it argued out with someone who fully believes in it all, something that will never happen on urban75 because they would get written off as a despicable heartless monster before such a discussion were to take place.

 

[littlebabyjesus]

My understanding is that it's something like that in principle but I've no idea about the numbers.

It would be interesting to see it argued out with someone who fully believes in it all, something that will never happen on urban75 because they would get written off as a despicable heartless monster before such a discussion were to take place.

Nah. They'd be countered with counter arguments, that's all. Have you seen the bitcoin thread? Rabid r/w libertarian anti-state nutters with mad ideas have been banging on about those ideas for pages and pages and pages. Plenty have argued with them. Nobody has stopped them from posting.

But sometimes a shit idea is just a shit idea, and the intellectual arguments in its favour are just bad. We're not missing something important here.

 

[Raheem]

It's just cherrypicking. The UK's top rate is higher than some countries, lower than others, but picking out oil-rich Norway is disingenuous. 45% is lower than the rest of Scandinavia, so 'social democracies like Norway' means Norway, and, um, Norway.

Think Norway also has a wealth tax, so comparing income tax rates is completely misleading.

 

[not-bono-ever]

Referencing trickledown reaganomics whatevs is all fine but it was a lifetime ago. In financial terms, it was Carboniferous era stuff and we are in the economic Holocene now. Need perspective when referencing the past

 

[Wilf]

By the by, another lead over 30% - Omniss.

Opinion polling for the next United Kingdom general election - Wikipedia

en.wikipedia.org

Tories will be proper shitting it this weekend. Another (small but relevant) dimension of this is how truss comes across as a person. A deeply unsympathetic person doing horrible things to you >>>> astronomical Labour leads.

 

[littlebabyjesus]

Think Norway also has a wealth tax, so comparing income tax rates is completely misleading.

Probably. The best way to compare countries' taxes is to compare the overall tax take as a proportion of GDP. The UK is medium-low by European standards. This table is from 2019. Norway is indeed higher, so yes, they collect their tax in other ways.



There's quite a major trend in there. With a couple of striking exceptions, the richer countries tend to have higher taxes than the poorer countries (higher in terms of percentage and much higher in terms of absolute amounts).

 

[andysays]

My understanding is that it's something like that in principle but I've no idea about the numbers.

It would be interesting to see it argued out with someone who fully believes in it all, something that will never happen on urban75 because they would get written off as a despicable heartless monster before such a discussion were to take place.

What you're referring to here is Urban75's lack of empathy for ordinary people who favour borrowing billions to slash taxes for the highest earners on the spurious and self-serving idea that it will somehow stimulate investment and boost the economy.

ETA "millions" corrected to "billions"

 

[teuchter]

Nah. They'd be countered with counter arguments, that's all. Have you seen the bitcoin thread? Rabid r/w libertarian anti-state nutters with mad ideas have been banging on about those ideas for pages and pages and pages. Plenty have argued with them. Nobody has stopped them from posting.

But sometimes a shit idea is just a shit idea, and the intellectual arguments in its favour are just bad. We're not missing something important here.

I haven't followed that thread. But "rabid r/w libertarian anti-state nutters" might not be the best representatives for fairly conventional conservative views on taxation.

Although these recent changes are being talked about as if they are somehow radical, I don't see that they are more than twiddling of dials on a system that most people seem ok with in principle:

• you can get paid different amounts for doing different things
• you get taxed a percentage of what you get paid
• the more you get paid, the higher that percentage is

Nothing that's been announced changes any of that.

Kwarteng / Truss seem to think adjusting two dials (lower rate from 20% to 19% and highest rate from 45% to 40%) is a good idea, loads of people don't.

You can look at their "ideology" and do an ad absurdium thing and say if they really believe this why don't they just make all tax 1% or something.

But anyone who doesn't believe that we should do something like equalise all pay (of course some people do think that) kind of agrees to some extent with Kwarteng/Truss don't they?

By that I mean, even if you think tax rates should be (for example) 0% / 10% / 40% / 80% instead of 0% / 20% / 40% / 45% then you are still subscribing to some of the same basic ideas. Basic ideas about people being incentivised by the amount of money they can earn.

This is why I don't really see why some people are willing to consider the ideas behind these kinds of approaches as so whacky and obviously irrefutably wrong that they just can't get their head around how someone else could believe in them at all, and start inventing conspiracy theories to explain it.

 

[PR1Berske]

 

[not-bono-ever]

Let’s firm up the barricades of free choice and defeat the communist scum

 

[Kevbad the Bad]

Let’s firm up the barricades of free choice and defeat the communist scum

And make global warming go away by ignoring it.

 

[maomao]

By that I mean, even if you think tax rates should be (for example) 0% / 10% / 40% / 80% instead of 0% / 20% / 40% / 45% then you are still subscribing to some of the same basic ideas. Basic ideas about people being incentivised by the amount of money they can earn.

Nonsense. None of my reasons for taxation have anything to do with incentivising people to work at all.

 

[Raheem]

I haven't followed that thread. But "rabid r/w libertarian anti-state nutters" might not be the best representatives for fairly conventional conservative views on taxation.

Although these recent changes are being talked about as if they are somehow radical, I don't see that they are more than twiddling of dials on a system that most people seem ok with in principle:

• you can get paid different amounts for doing different things
• you get taxed a percentage of what you get paid
• the more you get paid, the higher that percentage is

Nothing that's been announced changes any of that.

Kwarteng / Truss seem to think adjusting two dials (lower rate from 20% to 19% and highest rate from 45% to 40%) is a good idea, loads of people don't.

You can look at their "ideology" and do an ad absurdium thing and say if they really believe this why don't they just make all tax 1% or something.

But anyone who doesn't believe that we should do something like equalise all pay (of course some people do think that) kind of agrees to some extent with Kwarteng/Truss don't they?

By that I mean, even if you think tax rates should be (for example) 0% / 10% / 40% / 80% instead of 0% / 20% / 40% / 45% then you are still subscribing to some of the same basic ideas. Basic ideas about people being incentivised by the amount of money they can earn.

This is why I don't really see why some people are willing to consider the ideas behind these kinds of approaches as so whacky and obviously irrefutably wrong that they just can't get their head around how someone else could believe in them at all, and start inventing conspiracy theories to explain it.

It's not that the particular tax rates are inherently headbanger extremist. We've had a 40% top rate before, and even a 10% starting rate, without it crashing the economy.

The nuts part is the overall cash figure of £45 billion, annually, funded by borrowing. The "theory" being that this pays for itself by stimulating enormous economic growth. Except it isn't proper economics, it's the type of thing you might see on YouTube.

 

[littlebabyjesus]

It's not that the particular tax rates are inherently headbanger extremist. We've had a 40% top rate before, and even a 10% starting rate, without it crashing the economy.

The nuts part is the overall cash figure of £45 billion, annually, funded by borrowing. The "theory" being that this pays for itself by stimulating enormous economic growth. Except it isn't proper economics, it's the type of thing you might see on YouTube.

I don't have a problem with govt borrowing per se. Others are right of course when they point out that a l/w govt would also be punished by the markets for borrowing to nationalise, for example. Labour governments aren't allowed to do this kind of thing.

My problem is with the basic iniquity of the whole thing. The rich aren't taxed enough. That's a moral point, not an economic theory one.

 

[Raheem]

I don't have a problem with govt borrowing per se. Others are right of course when they point out that a l/w govt would also be punished by the markets for borrowing to nationalise, for example. Labour governments aren't allowed to do this kind of thing.

My problem is with the basic iniquity of the whole thing. The rich aren't taxed enough. That's a moral point, not an economic theory one.

Yes, it's also a ridiculously unfair and socially damaging proposal, but that's not why it has caused the meltdown it has.

 

[Jeff Robinson]

Revisionist Starmer Clique Smashing Barbaric Truss-Kwarteng Clique