2015 Election - antidotes?

I think I'd move over the border where prescriptions are free.

I would be paying £64 a month for my prescriptions.

Eloethan. It was really a response to those who believe that the answer to all our economic woes is to collect every penny of tax due, an impossible aim which would cost more than the sum raised to even get 75% of the way.

I was talking only about personal taxation, but it could be extended to all taxation. Just have a tax free amount and then pay tax on every £ earned thereafter. Possibly a flat rate of tax. This would not stop the government offering grants, benefits etc but none of it would come through the tax system as tax allowances.

I would also combine NI with taxation. This would mean that those over pension age would continue to pay NI but it would help spike the guns of those saying that we benefit from services like the NHS but make no contribution.

We could also get rid of all those bells and whistles attached to pensions, Winter fuel allowance, free TV licences, bus travel concessions, even free prescriptions. Instead up the level of Pension credit by £20 - 30 or whatever is needed so that those on low pension incomes are fully compensated for their loss of all these extras. This would make more people qualify for PC at higher incomes while better off pensioners (of which I am one) would be put on the same tax basis as their sons and daughters and would need to pay for all these extras out of their current income. This again would make the many justified complaints that older people are being protected from the worst affects of the current economic situation which others are suffering.

I keep hearing how this is the longest ever election campaign there's been, but who decides when it started, and what was the difference between the first day of the campaign and the previous day?

Flickety What do you mean by a more basic tax system?

Do you mean dispensing with tax incentives that are supposed to encourage individuals and businesses to invest in areas they would not normally invest in?

I'm just wondering because, having worked in tax barristers' chambers, I know there are volumes and volumes of tax rule books, and these are constantly being updated. The system is massively complex and cumbersome, and tax barristers earn unimaginably vast amounts of money advising clients on how to use the rules - through the setting up of various schemes - to pay as little tax as possible.

Aside from getting rid of tax concessions on contributions to pension schemes, ISAs, etc., are there any other ways you feel the tax system should be simplified?

I spent many years working for the Revenue in tax-collection. It was a principle that tax can only be properly collected with the consent of the taxed and if the tax is fair. It is relatively easy to collect tax via PAYE and VAT but not so easy as regards businesses and the very rich. When you have a government which actively conspires with those elements, tax collection becomes very unfair. Then us ordinary folk start to question why we should pay tax when the rich do not and get away with it. This has all been made much worse by the activities of the well-known international business sharks, who trade just inside the boundaries of legality, using concessions agreed with compliant governments. That has got to stop.

Eloathan, that is tax from all sources including corporate evasion. I was discussing personal and indirect taxation as a response to Durhamjen's comments about getting the wealthy to pay all the tax they owe. I then extended it to cover indirect taxes because these are mainly paid by individuals and small businesses.

But we need to remember that, short of having every taxpayer permanently accompanied 24/7 by their own personal tax inspector, you will never collect every £ of taxation due. I would think that we would be lucky to collect even half the amount unpaid at a reasonable cost.

The best way to improve the system and collection is to have a much more basic and simple tax system, with no tax allowances for anything, not even pensions, just tax all income regardless of special needs or pleading.

www.taxresearch.org.uk/Blog/2015/01/06/at-the-oecd-today/

Nearly £100 billion in avoidance and evasion, Flickety. That would help quite a lot. Of course the government would have to take on many more tax inspectors. I've never understood why they got rid of so many and closed tax offices down, unless they did not seriously want to collect the tax due.
They definitely earn more than their pay.

Anticipation followed by anti-climax after 7th May!

A trip to Antigua sounds anticing enticing.

Flickety I'm no economics expert but this is an extract from a report in the International Business Times of September 2014:

"New research by Tax Research LLP, on behalf of the Public and Commercial Services Union, shows that the tax gap - defined as "the difference between the tax that should be paid in the UK if the tax system worked as parliament and HMRC intended, and the amount actually paid" - topped £119bn in 2013-14 and "is rising steadily".

"... the research's author Richard Murphy recommended that the UK government introduce wholesale reform to its tax law to incorporate avoidance strategies, and "the introduction of country-by-country reporting for multinational corporations" combined with "a reversal of the cuts to staff in HMRC and at Companies House.

"In June, HMRC closed all of its 281 Face to Face Enquiry Centres, months after it had also announced the loss of 8,000 jobs, to come by early 2015."

Antidotes... anecdotes... Antipodes... Antilles...

Is debate ever finished?

Finished? Whatever gave you that idea, whitewave?

Oh! I thought this debate was sort of finished? haven't time to think this evening will look at it tomorrow.

If everything in your post is true, FlicketyB, and I have no reason to doubt that it is, then it should be referred to every time someone gives their opinion that the country's debt problem would be solved overnight if only unpaid taxes were collected.

Thank you for such a knowledgeable and reasoned post.

If the government were to obtain every unpaid or evade or avoided penny of tax from anyone earning above the average wage the sum raised would be about £14 billion. A significant figure but less than 15% of the annual deficit and since we are never going to reach the point where no-one ever fails to pay every penny of tax due, even with far more stringent tax gathering we will be lucky if the actual figure of extra tax collected reaches £10 billion.

The item where most tax is avoided (£20 billion) is indirect taxes, VAT and Excise duty and, of course that is mainly avoided by the mass of the population. Smuggled cigarettes and tobacco, paying workman cash for a price reduction, farm diesel in the car, small businesses siphoning some of the takings before VAT into the housekeeping each week. Barter arrangements where no money changes hands. A kitchen fitter fits a kitchen for free and the flooring contractor whose kitchen has been fitted recarpets the kitchen fitter's living room. Fraud, just as likely to be the poor as the rich.

It is nice to think that all our problems can be solved by squeezing the rich but actually they can only be solved by squeezing everybody.

Antidotes or Anecdotes, I think we may have many of them, quite looking forward to the 'discussions' from A Distance....

Neither did Balls , Brown and Miliband for heavens sake.

The government borrowed £108 billion in 2013, but it did not have to. It preferred not to pursue those rich people who do not pay their taxes. If it had done, it might not be in the fix it is in.

whitewave Debt is debt is debt. If you borrow, whether at a personal, corporate or government level, the money has to be paid out of future income with interest.

If your income is £20 and you spend £21, you are in big trouble. If your income is £612 billion and your expenditure is £720 billion (UK government expenditure and income in 2013, www.theguardian.com/news/datablog/2013/mar/20/budget-2013-tax-spending-visualised ) you are are also in big trouble. Remember this is an annual figure. In 2013 the government had to borrow £108 billion to meet their expenditure commitments. In the years before it borrowed more and in the years up to about 2020 it hopes to reduce the deficit. Think about it, over 10 years we are borrowing, probably in excess of £1,000 billion. Interest payments alone are costing the government £43 billion a year, nearly as much as the annual deficit.

If a person's debt gets too big they go bankrupt. If a country's debt gets too big and you become a basket case like Greece became then you are bailed out on condition that you undertake externally imposed drastic cuts. In Greece. The length of this post to date would increase four or five fold if I were to list all the measures imposed on Greece, but the details can be found at www.bbc.com/news/business-13940431 but for a taster interest rates rose to over 10%, public sector wages were cut by 20%, pensions in excess of £800 a month were cut by 20%, those under 50 who are likely to have a pension over £800 a month will have their entitlement cut by 40%.

The numbers may be bigger but the results are the same.

Yes, whitewave, the Tories used the world financial problems as an excuse to push through their vicious, divisive agenda for social change. It hasn't worked and now they're panicking because we have seen through their paper-thin piffle. The sooner we dump them in the trash-can of politics the better.

Cheers! see you (almost certainly) for the next debate! Keeps the brain ticking over.

whitewave

In response to your post to me

We do have a AAA rating with Standard and Poor , a fact I knew and obviously Ana too.

I accept that we have AA+ with others but your post was incorrect.

My belief is the 'double dil' recession you mentioned was eventually proven to be incorrect but the recession figures for 2008 were revised in the opposite direction and were much worse than reported.

How long before Standard and Poor and the others will alter their present ratings is any bodies guess, the Euro is battling away and I think Greece will leave this year. The fact we have an election in May is said to be causing 'jitters' and most countries are seeing a downturn in production on the cards for 2015 even in China.

We will each have our opinions as to which party we think will/can run the economy better and I guess there will never be a meeting of minds. 'Perhaps' after May we will see as it looks like a Labour/SNP coalition being the government of the day if the numbers being spoken of come true. There by hangs another debate

FLICK you can't treat all debt the same ( Mr Micawber) financial sector debt is very different to government debt where bonds are sold on the market.

When the recession hit in 2008 the government initially pursued expansionist fiscal policies, and there was no panic on the bond market. The vigorous counter-cyclical and interventionist action taken by the Labour Government had a real effect on confidence which meant that output and unemployment did not fall nearly as much as it could have, and by 2010 growth was positive. It was Labour's stated intention to get rid of the deficit within 8 years.

However, the Tories maintained that it should be got rid of in 4 years. Something they have clearly failed to do This resulted a a self induced panic and was a key factor in the double dip recession with the Tory government pursuing unnecessarily strict austerity measures. The pace was self defeating and unnecessary, and has lead to no or little growth throughout this parliament.
The Tory painting a grim view of public finances is motivated by an ideology in pursuit of a smaller state.
Undoubtedly a more balanced view would have resulted in less rash policies and we would not now be looking at panic in the NHS, Food banks, housing crises local public spending cuts etc on such a large scale

My thoughts entirely, FlicketyB, although expressed so much better!

(The UK still has triple A rating with Standard and Poor, BTW)