Should I forgive the Conservatives?

Indeed which is why it is better to talk about taxable income elasticity rather than a simplified graphical illustration – a point I always make when this comes up.

The fact that TIE is difficult to measure does not negate its utility. Yes, its hard. Yes, it changes. But it just happens to important…..

FWIW, best estimates suggest that it is <50p but folk like round numbers. The 50p tax rate was a cheap stunt/trap that has now become part of the narrative. It should be given that status….

@grum the US does have basic healthcare and welfare, it’s just struck at a very different level to the UK/most of Europe.

@tmh I think 50% is important as it’s half, the concept of paying half / more than half in tax is pretty significant psychologically – our top rate of tax is 45 + 2 + 12.8 = 59.8% (including employers NI)

Economists, especially academic ones, are all about creating models and curves to demonstrate their theories. We shouldn’t deride Laffer for doing just that. You can draw all the curves you like but if their is a neighboring country with lower taxes business and people will move at some point. Also once they have moved it will take an increasing incentive for them to return.

@footflaps there where plenty of economists, business people, market traders who saw 2007/8 crises coming. I personally positioned my business at the time for a crises but significantly underestimated the severity. The fact we are still feeling the consequences of 2007/8 is no surprise to me, we discussed it being a 10+ year recovery. This is one of the things shaping my political views, we are in no way shape for form ready to embark on increased spending. We are still at risk of a major slowdown in Europe which could be triggered by Greece or a major disruption caused by a collapse in China (now a major consumer of Western goods and where there are staggering levels of debt/leverage – sound familiar ?)

Economists, especially academic ones, are all about creating models and curves to demonstrate their theories. We shouldn’t deride Laffer for doing just that.

I’m not deriding Laffer for doing that – I am deriding people for taking this very simple model and treating it like it has some relation to how real people in a real economy behave. This is the kind of oversimplification that was shown to be wrong decades ago. Now economists have got the message (e.g. Noble [sic] Prize for Kahnemann and Tversky).

jambalaya – Member

@nickc – Indeed I worked there for 3 years but its the world’s most successful economy, they must be doing something right ?

What a bizarre conclusion if you are equating size with success.

It has as much to do with the size of population as anything else.

Using your criteria Brazil has a considerably more successful economy than Australia, which must mean therefore that the Brazilians are doing something right which the Australians aren’t.

Any ideas what that might be jambalaya ?

Two thirds of economists say Coalition austerity harmed the economy

Of 33 economists surveyed by the Centre for Macroeconomics two thirds disagreed with the proposition that the Government’s policies since 2010 have had a “positive effect” on the economy.

“Premature austerity has damaged UK welfare and as I and others argued at the time, delaying consolidation would have left the UK in a much stronger position than it is today” said John Van Reenen of the London School of Economics.

“The only interesting question is how much GDP has been lost as a result of austerity” said Simon Wren-Lewis of the University of Oxford.

Richard Portes of the London Business School said the UK’s recovery since 2013 was a consequence of the Government’s easing of austerity. “The recovery is aborted immediately after austerity begins, then [there is] revival when it is (semi-covertly) relaxed” he noted.

http://cfmsurvey.org/surveys/importance-elections-uk-economic-activity

No. They are a bunch of c unts. I don’t need five pages of bletherings to explain that.

I found out yesterday that the US doesn’t have statutory sick pay. Mental.

What a bizarre conclusion if you are equating size with success.

I am not equating overall size with success but things like GDP per head, quality of life.

@Lifer, many things are different there, eg 2 weeks of holiday in your first year on a job with none for the 6 months. Typical max holiday entitlement 4 weeks. Max 2 years unemployment benefit.

@ernie, we could have had less austerity and even greater debts. The unknown was whether those debts could have been sustained, we rely on investors buying our government debt, if they stop we are in a Greek type situation. This government took the view that it wasn’t prepared to take that risk. France tried to avoid austerity and that’s been a disaster.

http://cfmsurvey.org/surveys/importance-elections-uk-economic-activity

see recession thread, but note

Richard Portes of the London Business School said the UK’s recovery since 2013 was a consequence of the Government’s easing of austerity

Headlines, headlines…..!!

Jambas, at least Hollande “talked” about the necessary supply side reforms. Our lot prefer to tinker with the symptoms. But since they mis-diagnose the causes (Blame the WBankers) that is hardly surprising!