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But now we are a few years on. Where is the evidence it has been effective? It’s witchcraft.
well we haven't had another subprime crash since they brought it in!
pretty hard to say its definitely reduced risk taking as it was just one of several measures taken to avoid a repeat of the sub prime fiasco & the practice of massive rewards for endlessly chopping up debt via derivatives to the point that when the original debt was called in no one knew who owed what to who, meaning the global banking system stopped lending to anyone because they couldn't trust their own or anyone elses balance sheets, instigating a global crisis that arguably weve never recovered from....
certainly theres evidence that banking execs that got bigger bonuses took biggers risks for doing that (which is not really surprising)
and that banks that took bigger risks were the ones that crashed hardest (also not surprising)
https://www.cambridge.org/core/journals/journal-of-financial-and-quantitative-analysis/article/abs/executive-compensation-and-business-policy-choices-at-us-commercial-banks/AE40559214A82BF61517BDFD1F7A9C83#https://www.sciencedirect.com/science/article/abs/pii/S0304405X18300655
Kimbers: again you mistake individual incentives for institutional risk, and institutional risk for systemic risk. Banks are supposed to fail now and again. that's okay. The problems come when banks become too big (or systemically important) to fail.
the pay to be shifted back to bonuses (with all the downsides)
Downsides...that there is no evidence have been avoided by the ban?
I still find it astounding there isn’t a limit to Prime Minister resignations in one term without consequences.
But then we would have to admit we are electing a party and leader rather than a bunch of people who just happen to hang out together and amiably decide on who they want to be the first amongst equals.
Plus its not really one of those scenarios which have come up before. Dont think its got beyond two before (outside of case where there was a temporary PM whilst the new one came home).
I did have a quick search for it and was amused by an article written when Cameron had said he wasnt going to do three terms (pre referendum).
Has the line
"Since the Second World War there have been almost as many changes of PM from within the same party as there have as a result of a general election (six during a parliament, seven as a result of an election)."
Needs a bit of an adjustment.
you mistake individual incentives for institutional risk, and institutional risk for systemic risk.
if multiple individuals take risks with dodgy deals that puts the institution at risk....
and likewise if all the institutions do it then the whole system is at risk...
Backstabbing "friends", sacrificial lambs, and panic last minute window-dressing, it's all there in the crises-ridden Tory Party.
Will throwing Jeremy Hunt under the bus save Rishi Sunak's sorry arse?
Plus Ex Prime Minster can’t be too bad on the Cv.
But you can hardly lie about how well you did the job though can you although that is not why loads of companies will be paying him £100K a year for 5 minutes work a year to be on the board.
Will throwing Jeremy Hunt under the bus save Rishi Sunak’s sorry arse?
If only there was a recent example of sacking your chancellor to save your own skin, so he could see if that kind of thing worked.
Will throwing Jeremy Hunt under the bus save Rishi Sunak’s sorry arse?
He wants rid of Jeremy Hunt because he knows that he won’t let him just re-enact Mad Lizzie and Kamikwasi’s insane mini-budget as the headbangers in the party are demanding
That’s how far through the looking glass the present Tory party now are. They all still believe that that madwoman was right and it was some lefty conspiracy that foiled her masterplan
Sunak (purely to pacify the backbench loons) is now proposing spending billions and billions on abolishing inheritance tax and giving a tax break bonanza to higher earners.
None of this is funded or remotely feasible in the present climate and Hunt will be reminding him of this unfortunate fact
So he’s toast, obviously. This lot don’t deal in reality, after all, only right wing dogma. They’re still trying to maintain Brexit was a good idea, despite the mountains of evidence to the contrary.
He’ll probably appoint Grant Schapps as chancellor, who’ll do and say whatever he’s told. Or maybe a surprise comeback for the Mad Queen herself?
This government is now so unhinged and desperate, god only knows what they’ll do next
I see 'Tech Bro' Rishi is ignoring everything going on around him and is instead back in his comfort zone.... giving a job interview for him to do a Clegg next summer speech on AI during the course of which he managed to say absolutely nothing other than "in't AI BRILIIAAAAAAANT?!!!"
giving a tax break bonanza to higher earners.
Depends on what that means though. If it's abolishing the 45p rate then it won't win him many votes. If it's raising the threshold of the 40p rate to something like 100k then it'll be massively popular. Do the latter and he can go into the next election claiming Labour are the party of high tax who want to punish middle income families.
claiming Labour are the party of high tax who want to punish middle income families.
Thats going to take some front, even for him, when we have the highest tax burden since the 1950's
I think he knows he's lost the next election already so between now and next year its going to be a fire sale of giveaways to their funders and mates, which the incoming labour administration is going to be saddled with the bill for
Oh... and at the risk of opening up this old chestnut again - up to 100k pa salary is most definitely not 'middle income'
up to 100k pa salary is most definitely not ‘middle income’
100k would be the threshold (it was an arbitrary number BTW), the rate at which people pay the high rate is 50k, which is a lot different to 100k. In the next 5 years there's going to be an awful lot more people paying the high rate. If they hike the threshold then that would massively benefit lots of middle earners in the 50-60k band. The very people who will be thinking of voting for Starmer.
*sigh*
A quick google tells me that 15% or workers earn above 50k a year. Obviously as you get towards 100k pa then you're into low single figures.
These people are, by no stretch of the imagination, 'middle' earners. They are high earners and thus the only people the Tory's are interested in representing
If it’s raising the threshold of the 40p rate to something like 100k then it’ll be massively popular. Do the latter and he can go into the next election claiming Labour are the party of high tax who want to punish middle income families.
Peak Singletrackworld bubble speak. Doesn't mean leading Tories wouldn't do it though. They mix in bubbles that are way more out of touch than any of us.
A tax break for the well off, that doesn't really come into effect 'till after the next election (be it inheritance tax or top rate tax) is very, very likely. Announce it, and then challenge Labour to reverse the decision. Then, when/if you lose, you're already starting the long slog towards the following election as the low tax pro economy party (people can forget a scary amount in five years). If you do happen to win... you can just make the real middle and lower income workers pay to fill the gap you've created anyway.
I don't get how you can promise tax cuts for the already wealthy and then expect to be able to fund anything and somehow decide that the answer is to tell the country that there is no money for anything, benefits have to be cut, nurses and teachers and rail workers can't possibly get a pay rise, we can't afford HS2....
A tax break for the well off, that doesn’t really come into effect ’till after the next election (be it inheritance tax or top rate tax) is very, very likely. Announce it, and then challenge Labour to reverse the decision. Then, when/if you lose, you’re already starting the long slog towards the following election as the low tax pro economy party (people can forget a scary amount in five years). If you do happen to win… you can just make the real middle and lower income workers pay to fill the gap you’ve created anyway.
(H)unt and Rishi are teeing up a very simple win for labour here - raise the entry threshold for tax. That's the one that is penalising the most people. Reversing an announced policy on higher rate of tax for the most well off would probably gain them votes
When you see headlines like this it is a true measurement of how punitive and immoral the fiscal policies of the conservatives really are
Depends on what that means though. If it’s abolishing the 45p rate then it won’t win him many votes. If it’s raising the threshold of the 40p rate to something like 100k then it’ll be massively popular. Do the latter and he can go into the next election claiming Labour are the party of high tax who want to punish middle income families.
Can you imagine the cost of this, have you seen just how many people have been added to the 40% tax paying cohort over the last few years?
When I first started paying higher rate tax in the early 90's it meant that I was a 'very good' earner (1 in 30) whereas now it just means a 'good' earner (1 in 10) and within a few years it'll ne even higher due to frozen allowances AND high inflation.
When you see headlines like this it is a true measurement of how punitive and immoral the fiscal policies of the conservatives really are
Channel 4 news did an in-depth feature on 'destitution' and what the Dickensian reality is of life in Sunaks 'food bank' Britain today for millions of people. The number of people officially classed as 'destitute' by the Joseph Rowntree foundation has doubled in the last five years. A figure I'm sure this lot couldn't give a toss about.
It certainly puts discussions about what constitutes 'middle income' into perspective and the need for tax cuts for high earners. We all know who'll be picking up the tab for that. Those at the very bottom of the pile, as usual.
I don’t get how you can promise tax cuts for the already wealthy and then expect to be able to fund anything and somehow decide that the answer is to tell the country that there is no money for anything, benefits have to be cut, nurses and teachers and rail workers can’t possibly get a pay rise, we can’t afford HS2….
Because they're working on the principle few (including many MPs) understand taxes don't fund spending.
And we will go around in circles until someone steps up and deals with this.
A Tax is a drain of money out the non-government sector that's all it is operationally. (it's much more politically of course.)
Both parties are totally stuck, cannot move an inch because abusing the Tax and Spend rhetoric.
Basically you spend money into existence - it moves to the private sector and some rich asset monkey mops it up and it doesn't really circulate. (instead of spending the cash on societal needs.) Taxes try and adjust the re-balance but because neither party wants grow the economy from the state upwards - we, most of us on here - will end up with less of a good place to live in.
This is only going to get worse - Labour or Tory.
And if you really believe the government can't encourage this - ask yourself why it is able (via its Bank) to pay people with money 5% ish - out of thin air? And add money to people who already have money.
Super monetarist turd David Buik was on LBC explaining how we should cut taxes on Bankers Bonuses because they're wealth creators *SIGH*. Yes get this - the Bankers can create money apparently (despite the fact the government is the monopoly issuer of £) - and it trickles down for us if we don't tax them as much.
We are learning nothing.
When I first started paying higher rate tax in the early 90’s it meant that I was a ‘very good’ earner (1 in 30) whereas now it just means a ‘good’ earner (1 in 10) and within a few years it’ll ne even higher due to frozen allowances AND high inflation.
Which is why it would be hugely popular among the voters who the tories want to stop voting for labour. For someone who earns 60k a year, being taken out of the 40p rate is worth about 2k a year (assuming I've got my sums right). A lot of those people will vote for that for no other reason than they need the money.
Perhaps the people in the higher tax band are in that higher band because they are possessed of enough intelligence to ask why they've been paying more tax in the first place?
And concluding it was because Rishi Sunak froze their tax allowances, then the government under Mad Lizzie embarked on suicidal uncosted tax cuts for high earners which put a large explosive device in the centre of the economy.
If Rishi essentially announces the same policy as Truss in the Autumn statement, which looks increasingly likely, what makes him think that the reaction of the market will be any different this time?
Wasn't he the one who spent his leadership campaign against Liz pointing out that this was economic insanity?
Now, because he's terrified of her unhinged disciples on his back benches, he's going to cross his fingers and hope it doesn't go quite as badly this time around. I don't know about you but I can't see a re-run of that being a vote-winner with many with a general election looming, given the catastrophic economic chain-reaction it'll likely trigger. The whole thing seems like total desperation, particularly if he has to sack Jeremy Hunt for doing what he himself did to Truss and warned that this policy is complete and utter lunacy
dazh - and it'll cost how much?
Remember, a Tory 'promise' is just a lie that's not happened yet.
How about this? Zero income tax on your main job. BUT corporation tax increase depending on how much you pay your staff. That way, no-one gets to look at their payslip and feel hard done by when they see the money taken off. Net result, exactly the same.
And concluding it was because Rishi Sunak froze their tax allowances, then the government under Mad Lizzie embarked on suicidal uncosted tax cuts for high earners which put a large explosive device in the centre of the economy.
There's a massive difference between raising the threshold to cancel out the freeze since 2021 and abolishing it altogether. I'm pretty certain raising the threshold by say 20-30k would be almost completely ignored by the markets. Also don't forget that the sort of people on 50-60k are also more likely to be the holders of decently sized mortgages who will be signicantly hit by the increase in interest rates. They'll see raising the 40p threshold as redressing some of the damage done by Truss. Politically it's a no-brainer for Sunak to raise the 40p threshold, and it's a no-brainer for labour to stick to it.
...and a pure coincidence that you'd benefit, yeah?
How about this? Zero income tax on your main job.
The obvious solution to tax is to remove income tax and tax consumption, wealth and capital gains. That way those who work and save won't be unduly punished, and those with money and assets who choose to live more consumerist lifestyles pay more. It won't ever happen though because people are too brainwashed into the idea that taxing income is the only way to do it.
Well, that's one way to bring the economy to a halt, and reward those with large disposable income to hoard wealth.
I’m pretty certain raising the threshold by say 20-30k would be almost completely ignored by the markets.
And why exactly would the market reaction be any different from last time? Its still effectively a tax cut for high earners, it'll still cost billions and its still completely unfunded, unless you announce huge cuts to public sector spending at the same time. So that will mean increased borrowing at a time when interest on that borrowing (thanks largely to Mad Lizzie) is hugely more expensive than it was 12 months ago, when it triggered the markets going into meltdown
So, if you could talk us through your logic? Feel free to show your working out in the margins...
…and a pure coincidence that you’d benefit, yeah?
If you take the cost of living, energy bills and interest rates into account I'd still be massively negative compared to pre-2021. For me raising the threshold would have little impact, but yes it would help a little. I'm not talking about me though because there's no way I'd ever vote tory even if they promised to abolish the high rate altogether. There are however lots of people who would, which is why Sunak will/should do it, and why labour won't oppose it.
If you could talk us through your logic?
The markets flipped out at Truss's tax cuts not just because they were 'unfunded' (which is a stupid phrase, the govt can fund anything it likes as people like me and rone keep telling you), but because it was part of the overall cavalier approach Truss and Kwarteng signalled without the necessary confidence in the markets that they had a clue what they were doing. Remember the bond yields didn't really start to go crazy until Kwarteng stupidly said 'this is just the start' and then the whole herd mentality panic kicked in. Even then the govt could have ridden it out if it wasn't for the pension funds needing a bailout because they completely failed to manage their future exposure to interest rate rises.
I'm not saying Sunak/Starmer would be wholly trusted by the markets, but done in the right way targeted tax cuts would barely register. In fact the markets are normally very supportive of tax cuts because they think it will result in more investment and entrepreneurship, or at the very least more consumption.
Anyway, who doesn't want to pay less tax?
The markets flipped out at Truss’s tax cuts not just because they were ‘unfunded’ (which is a stupid phrase, the govt can fund anything it likes as people like me and rone keep telling you)
Oh christ! Please don't summon him to mansplain that to us again for the 7 millionth time 😂
In fact the markets are normally very supportive of tax cuts because they think it will result in more investment and entrepreneurship, or at the very least more consumption.
There is absolutely no evidence that tax cuts for the rich result in any more investment and entrepreneurship*, just more consumption, which will just fuel inflation? Isn't that what the Bank of England has been trying to combat with ever increasing interest rates since the last car crash? Which has got us to where we are now?
I still don't see any difference in what Sunak is proposing - hugely expensive, unfunded tax cuts, purely to the benefit of high earners - so fail to see how the reaction of the markets will be any different this time. The countries finances are now in an even more perilous state than they were 12 months ago, courtesy of the Lizzie and Rishi tag team so theres even less room for manoeuvre
* you do quite often seem to default to parroting neo-liberal economic theories, despite claiming to hate them
The whole way tax works should be changed - it should be logarithmic based on consumption.
At present too many very rich people / businesses pay very little. Wealth is barely taxed compared to income. Just constantly slapping more tax on paye is not going to solve any of the major funding issues.
Anyway, who doesn’t want to pay less tax?
I don't. Tax cuts aren't a route to making my life better. Improving this country is. Especially health, education, social services, transport, trade... I'll stop there, the short list is quite long.
What do I want to see? Start with a Taxation system the rich can't bypass.
There is absolutely no evidence that tax cuts for the rich result in any more investment and entrepreneurship
And yet that has been the consensus on fiscal policy for around 40 years. Are you suggesting that the 'markets' have suddenly decided that neo-liberal free-market economics is nonsense?
The countries finances are now in an even more perilous state than they were 12 months ago
How are they in a perilous state? Serious question BTW. Or are you just repeating what politicians and economists tell you who have a vested interest in sustained austerity and low growth?
I don’t. Tax cuts aren’t a route to making my life better. Improving this country is.
That's extremely generous of you Kelvin. The trouble is more tax doesn't automatically translate to a 'better' country. It's about what the govt wants to do and how it does it, not whether it can raise the money (for the nth time).
What do I want to see? Start with a Taxation system the rich can’t bypass.
Agreed. When they close the loopholes and scams to ensure all the millionaires and billionaires pay what they're supposed to, then they can come and ask me for more. Until then they can f*** right off.
How are they in a more perilous state? Have you been living in a cave for the last 12 months?
How are they in a more perilous state? Have you been living in a cave for the last 12 months?
I'm asking you binners. Why do *you* think the country's finances are in a perilous state? Is it the value of the pound, the national debt, the deficit, interest rates, the tax burden? Or is it median wages, inflation and the cost of living? Seems to me everyone accepts austerity and high tax because politicians tell them there is no money, even though it's a load of bollocks.
Is it the value of the pound, the national debt, the deficit, interest rates, the tax burden?
All of the above
Anyway... I'll leave it there. We'll just wait for your mate to turn up and you can have your usual little chat between yourselves about your Weimar Republic, money-printing economic policy 😂
All of the above
Why are you concerned about the value of the pound, the national debt and the deficit? Assuming you buy most of what you buy in this country, the value of the pound has very little impact on you. The national debt and deficit has almost no direct impact on you. In fact if there was an active effort from the govt to pay back the national debt (ie running a surplus not a deficit) we'd be in a massive recession and you'd almost certainly be affected by that. You're worrying about the wrong stuff basically.
for the nth time
And yet plenty of people out there either don't understand or don't accept mmt. Why is that? Conspiracy and vested interest? Even here, despite your explanations (maybe I've missed them) either don't cut through or you haven't be able to explain thoroughly. Rone put a few links up a while back but maybe I'm just too thick to understand (entirely possible!)
If you just print money that's fine at home. What happens to your currency's value and what happens when you need materials, goods, and services from outside of your economy?
Anyway… I’ll leave it there.
Binners a few posts ago you asked me to explain, so I did. Now you're not interested when I ask the reasons for your opinion? 😕
Assuming you buy most of what you buy in this country, the value of the pound has very little impact on you
We're net importers are we not? If the currency devalues our ability to buy overseas reduces?
Grow your own lettuce Del. While you're at it, please start up an insulin making facility for diabetics.
And yet plenty of people out there either don’t understand or don’t accept mmt.
And yet that's the way things work. They might not understand it, but they do accept it, because that's the reality. If they didn't accept it then surely they'd be on the streets objecting to it? Was there massive opposition to the UK govt paying everyone's wages in 2020, or questioning where the money comes from to fight wars or bail out banks? There wasn't, because most people know that the govt isn't limited by what it raises in tax. They might question what the govt spends it's money on and why they don't get enough of it, but hardly anyone questions where it comes from.
Bollocks! People accepted the money so they could carry on buying food but they're also accepting austerity now because they believe it needs paying for!
If the currency devalues our ability to buy overseas reduces?
It also improves our ability to export which sustains hundreds of thousands if not millions of jobs in the manufacturing and services sectors. If you work in those sectors having a job is a much bigger impact on your life than the price of lettuces and tomatoes.