Food for thought.

[tut]

£12 billion from cigarettes.

tut

[Titanium S1 111S (gla)]

I think of myself as a fairly significant contributor to running the country. I pay more tax than most but a lot less than many. I resent the money which is taken out of my pocket but I can live with it. I am not sure that I could live with an increase to take account of my share of the extra £120bn. I say that both because it would very seriously hit my lifestyle (and perhaps push me to finding a job abroad) and because I don’t think I get value for money just now.

Playing devil’s advocate and perhaps being a bit selfish I am not sure what I, as part of the squeezed middle, get out of UK PLC.

Health Care; I appreciate that the NHS does a reasonable job, particularly in acute care, but the truth is that me and mine would be better off under a US system where we would have top notch private health insurance. Harsh but true!

Law and Order; Yes, OK, I suppose so.

Defence; while I respect what they do, my sister is an army officer, I don’t think we should have been in Afghanistan or Iraq. In my view we should stop trying to play with the big boys, keep our heads down and our young men in one bit.

Welfare; thankfully don’t need it just now/yet, but if I did I would be less than happy with a supposed insurance scheme which I have paid very heavy premiums for and which pays out a derisory sum which is in no way linked to those premiums. Frankly job seekers allowance would be no good to me, it wouldn’t cover any meaningful portion of my commitments.

Education; it seems to me that less and less is provided by the state and that parents have to do more and more. The chances of the cost of university for any of my unborn children being picked up by the state must be pretty close to zero. All thing’s being equal I would take a tax reduction and open a savings account with the difference.

Pension; I am not optimistic about even what is currently being offered being available by the time I get there. As above,give me the money and i'll save it up.

These are only a few examples but I suspect that similar observations can be made of most of the provision.

I realise the above is a bit right wing and I really don’t want a US style system but it seems like I am putting a lot in and getting nothing out. While all that is happening the economy is shrinking and my income with it.

I wonder how many SE’ers are content with what they get for their tax contribution?

Moan ended.

[tut]

I think that I get excellent value for my £39/month Income Tax donation.

tut

[robin]

Only mentioned that as it was part of the presentation in tut's link. By no means a political snipe. I just think it is useful to grasp the scale of the problem we face - an ageing population with costs escalating. I agree with you other points though.

And I agree with this point - the general level of taxation has to stay in proportion to the size of the welfare state - this government is making noises about trying to budget for these costs, but I cannot quite get my head around whether it's just noise or whether the numbers actually add up (increased retirement age + flat rate pension = fully funded benefit, or not?).

Cheers,
Robin

[robin]

right wing rant ... only kidding

Inevitably the "middle classes" fund most of the system and take least benefit from it. It's the way it works. The time to fix it is when we have a period of growth ... then we can invest heavily in reducing our tax burden ... in the medium term there is no prospect of substantial growth and it can only spell pain for the ordinary middle class families who are not really geographically mobile.

I don't want to pay my "share" of the 120billion either ... but if that's where we end up, I guess I'll have to pay, because I don't want to live anywhere else.

Cheers,
Robin

[pete]

When you look at people who carried large mortgages into the 2008 crisis, they've been laughing all the way to the bank, assuming they haven't lost their jobs of course. They ought to have been using the excess cash liberated by reduced interest payments to pay off their loans. Of course they've probably spunked it on a third annual holiday.

Only three?

[robin]

I was excluding the likes of mckeann from this survey

[mckeann]

I feel that the only way the UK will pull through is with Europe by it side. That's why I'm helping the euro stay afloat.


Your welcome

[Sanjøy]

I feel that the only way the UK will pull through is with Europe by it side. That's why I'm helping the euro stay afloat.


Your welcome

Don't forget your contributions to the car buying industry on others behalf's

[graeme]

It's my (limited) understanding that taxes at the point of consumption have the lowest deadweight cost. e.g. £1 raised in VAT costs the economy, say, £1.10, and taxes on capital have the highest deadweight costs e.g. £1 raised through corporation tax reduces GDP by perhaps £1.20 or more. The extra 10p or 20p is the lost benefit to the economy by removing that £1 from it, to spend on filling potholes or paying a few nurses or whatever. It's hugely complex because of the horrendous feedback effects Robin mentioned back there somewhere (nurses pay income tax), so facts are hard to come by. But it makes sense to me that the closer you remove tax from the point of consumption, the lower the chance that that same tax could have been reinvested to create some other benefit, or more likely moved somewhere abroad before it can be taxed.

So it follows that the "best" tax mix would be lots of consumer taxes (high income tax, high VAT, £10/pint beer etc) and a very low effective rate of corporation tax to make sure mobile, fungible assets stays in the UK and work harder.

How popular such a tax mix would be in the UK, with Joe Public demanding cheap fags and petrol, and the Daily Mail screaming, "Tax Big Business" (see Amazon and Starbucks nonsense for details), I think we can all predict. Clearly no government in our partisan democracy could ever put such a scheme in place long enough for it to have an effect without getting sacked at the next election. Yet again, democracy reduces everything to sh*tty decisions and we wallow in our own averageness.

Interestingly, from what I can gather, this sort of tax mix is pretty much what Jabba-the-Salmond has in mind for a devolved tax solution for Scotland, so maybe we'll get to be part of the experiment. Scotland becomes an attractive tax haven for businesses, which brings better paying jobs, which improves our individual wealth, so we can all pay more taxes for better services. I'm up for that. Not independance, just devolved taxes I mean. Whether Joe Public will be able to grasp the beauty of it while his tax bills go up in proportion to his lifestyle while business seems to be getting a free ride... We'll see.