Politics Thread (encompassing Brexit) - 21 June 2017 onwards

[Guest]

1 hour ago, KingGTF said:

@DJ Barry Hammond

 

Optimal curve theory (Laffer Curve) does only consider maximising government revenue from that particular tax and I believe that there was a study that said that could actually be as high as 70% (in the US) but the problem with such a theory is it only ever limited to an individual tax whereas we should be looking at growth-optimising levels of tax which is sort of what the Rahn Curve does (but then you lose the micro aspect). Anyway, I see what you're saying whereby investment becomes an effective tax avoidance measure in simple terms. But that surely works on the assumption that shareholders/corporations only seek to maximise their returns when taxes are higher. So why, when taxes are higher do they have incentive to increase their returns but at a lower rate are happy to take the profits and not maximise returns. Simplifying it down, my firm turns over £100m and pre-tax profit is £10m. At a 15% rate, why am I happy to just pocket the £8.5m in the knowledge I haven't invested and so I make the same next year, but at 25% I decide to invest £1m, end up with £6.75m this year but make more next year and in subsequent years. In both cases it doesnt matter if you know your ROI (which, in net terms, will actually be lower when the tax is higher so is therefore less appealing) but I only choose to invest to maximise future returns when tax is higher. Maybe this idea works if shareholders incur a time cost to increasing their returns, like you see for labour with the backwards bending supply curve, but they don't.

 

I agree there probably is a optimal point that balances investment with tax revenue for the government but I would speculate that neither maximises government revenue, maximises investment, nor probably maximises growth. That's just logic with trade offs. There is then of course the deadweight loss of corporation tax.

 

I don't know about the usefulness of comparisons with Ireland. I'm not sure it's possible to deny that corporation tax has played a role recently. Yeah they suffered in the crisis still but as many on here are quick to point out, it was a global crash and one that Ireland was deeply wedded to because of its construction boom and being tied to the Euro. You can look at the fact that their productivity levels shot up when they drastically cut it but it was nothing special (the UK hasn't benefitted so much but maybe time differences account for that a little) and FDI was massive but actually FDI as a result of big multinationals headquartering themselves in your country is not particularly beneficial and possible economically inefficient. I haven't ever read up on specific examples to know enough about the Irish case and it's not a country that has ever interested me or most people I imagine 

 

It's not theory, it's true. A corporation is a legal entity that is legally responsible for the tax but it doesn't pay the tax. Eventually someone, somewhere has to pay the tax. People pay taxes and any tax is going to affect their economic behaviour.

 

Of course, from a public choice point of view, corporation tax is an easy tax and is useful for governments from a political standpoint. But actually corporation tax is problematic because of "demoralisation costs" that are basically the cost of perceptions that a corporation doesn't pay its fair share. That has both a political and economic cost. And anyway, I'm not sure the argument that corporation tax is good politically, because the lines of burden are blurred, is a particularly good reason for its existence. It's inefficient, highly distortionary, and not actually particularly effective at raising revenue. Anyway, it's pretty obvious i'd prefer reform more than anything and am therefore not necessarily supporting this race to the bottom that seems to have erupted amongst the OECD.

 

 

@LiberalFox

Well they love consumption taxes basically. That and 'poll' taxes actually. Some forms of property tax are also favourable I believe. Tax is an interesting one because actually there's a broad agreement across the spectrum. 

I, personally, back a flat-rate consumption tax, made progressive by a negative income tax. That seems a long shot at the moment though.

A redistributive tax hand-out to increase the income of the poor? Wow, i didn't expect that tbh. Not sure the right would be happy with this as it feels a bit....well....socialist? 

 

Taxation does seem incredibly complicated. A simpler and more transparent system would probably be a good thing in principle though i fear the devil is in the detail and it may not be possible to have a short tax code (some think tank or lobby group came up with a proposal for flat rate income tax that was 417 pages long a couple of years ago).

[Buce]

 

Rise in life expectancy rise has ground to a halt since austerity - report slams miserly spending on health and social care:

 

https://www.theguardian.com/society/2017/jul/18/rise-in-life-expectancy-has-stalled-since-2010-research-shows

[Guest]

5 minutes ago, Buce said:

 

Rise in life expectancy rise has ground to a halt since austerity - report slams miserly spending on health and social care:

 

https://www.theguardian.com/society/2017/jul/18/rise-in-life-expectancy-has-stalled-since-2010-research-shows

Real life consequence of austerity. 

 

It should be remembered that, if growth continued on its predicted path prior to the financial crisis of 2008, the economy would be £300bn bigger than it is today. A big if i realise. The current deficit is around £50bn. The point I'm making is that if a return to growth had been fuelling the government's decisions, rather than curbing the size of government, we could well have cleared all the deficit without the need to risk public health. 

[Guest Foxin_mad]

 

39 minutes ago, Buce said:

 

Rise in life expectancy rise has ground to a halt since austerity - report slams miserly spending on health and social care:

 

https://www.theguardian.com/society/2017/jul/18/rise-in-life-expectancy-has-stalled-since-2010-research-shows

 

More hyperbole! Shit Left wing newspaper uses soundbite to make trashy misleading headline to blame austerity which is complete bollocks. YAAAAAAAAAWWWWWWWWWWN! This part is particularly fascinating.

 

"Marmot, who has also advised the World Health Organisation, did not claim that the introduction of austerity had led directly to life expectancy stagnating. But he highlighted that “miserly” levels of spending on health and social care in recent years – at a time of rising health need linked to the ageing population – had affected the amount and quality of care older people receive."

[Sharpe's Fox]

32 minutes ago, toddybad said:

Real life consequence of austerity. 

 

It should be remembered that, if growth continued on its predicted path prior to the financial crisis of 2008, the economy would be £300bn bigger than it is today. A big if i realise. The current deficit is around £50bn. The point I'm making is that if a return to growth had been fuelling the government's decisions, rather than curbing the size of government, we could well have cleared all the deficit without the need to risk public health. 

3.1% annual growth before Tories lied there way in then it fell to 0.3%. Gordon Brown was thought a madman at first but then the whole west copied his fiscal stimulus strategy, except George Osbourne smh.

[Guest Foxin_mad]

37 minutes ago, toddybad said:

Real life consequence of austerity. 

 

It should be remembered that, if growth continued on its predicted path prior to the financial crisis of 2008, the economy would be £300bn bigger than it is today. A big if i realise. The current deficit is around £50bn. The point I'm making is that if a return to growth had been fuelling the government's decisions, rather than curbing the size of government, we could well have cleared all the deficit without the need to risk public health. 

 

We would have been bankrupt by now like Greece! Cap in hand.

 

1 minute ago, Sharpe's Fox said:

3.1% annual growth before Tories lied there way in then it fell to 0.3%. Gordon Brown was thought a madman at first but then the whole west copied his fiscal stimulus strategy, except George Osbourne smh.

Greece a shining example. Remember in 2010, the money actually ran out! The IMF would have been running us, we would be bankrupt. Everyone in the public sector would not have been paid for months, businesses would have collapsed, many people would have lost their homes it would have been fantastic!

 

Which western countries ran a deficit, sold their gold at record lows and then spent a shit tonne of cash they didn't have? Socialist France is still ****ed and now they saw sense and voted out the socialists, Germany has a shit tonne of gold and was not running a budget deficit, Italy and Spain are still ****ed and have record unemployment levels! America has god knows how many trillion of debt it can never pay back. Seems like a great fiscal stimulus to me!

[Buce]

9 minutes ago, Foxin_mad said:

 

 

More hyperbole! Shit Left wing newspaper uses soundbite to make trashy misleading headline to blame austerity which is complete bollocks. YAAAAAAAAAWWWWWWWWWWN! This part is particularly fascinating.

 

"Marmot, who has also advised the World Health Organisation, did not claim that the introduction of austerity had led directly to life expectancy stagnating. But he highlighted that “miserly” levels of spending on health and social care in recent years – at a time of rising health need linked to the ageing population – had affected the amount and quality of care older people receive."

 

The same headline on the shit, left wing Independent and the biased BBC:

 

http://www.independent.co.uk/news/uk/home-news/life-expectancy-uk-professor-sir-michael-marmot-leveled-off-deeply-concerned-a7846221.html

 

http://www.bbc.co.uk/news/health-40608256

 

and all over the internet news.

[Guest Foxin_mad]

Just because he is deeply concerned doesn't make it true unless you want it too. It could be that people are eating too many McDonalds happy means FFS.

 

"Marmot, who has also advised the World Health Organisation, did not claim that the introduction of austerity had led directly to life expectancy stagnating"

 

So even he admits its bollocks. Just a storm in a tea cup. Again. Its one mans opinion ceased upon by those who have a political agenda.

 

Its probably natural for it to level off or slow at some point, it can not just shoot up forever and the Human body is a limitation, but lets blame austerity because we can:

 

http://www.bbc.co.uk/news/health-37552116

Edited 18 July 2017 by Foxin_mad

[Innovindil]

http://www.bbc.co.uk/news/business-40642254

 

Makes sense when the £ has remained fairly stable for a while, no? Not sure why inflation would continue going up after all the businesses have passed on the lower exchange rate losses already. 

[Strokes]

3 minutes ago, Innovindil said:

http://www.bbc.co.uk/news/business-40642254

 

Makes sense when the £ has remained fairly stable for a while, no? Not sure why inflation would continue going up after all the businesses have passed on the lower exchange rate losses already. 

But but but brexit!

[Buce]

4 minutes ago, Strokes said:

But but but brexit!

 

[Sharpe's Fox]

Damn ignore function really does work

[Guest Foxin_mad]

So record employment and lowering inflation. Not bad.

 

Meanwhile, those naughty corrupt students potentially voted for comrade Corbyn twice.

 

http://www.telegraph.co.uk/news/2017/07/17/did-students-vote-twice-corbyn-watchdog-demands-urgent-action/

 

 

[Innovindil]

Seems like the inflation drop was down somewhat to fuel prices falling. 

 

Any word from that willy puller who said it would rocket to £2.50/l? 

[Rincewind]

Those sort of figures given out by governments remind me of a joke. A bloke is in hospital to have a leg amputated. The next morning the surgeon says sorry we took the wrong leg off but the good news is the other one is getting better.

I wonder how many more people there are doing ZHC part time and work programmes? 

Anyway all this has been covered before so only repeating the same stuff. Gets boring after a while. Government figures support the present government. What a surprise. Would they tell us that they are fecking every thing up and shafting the ordinary bloke? I take anything politicians say with a pinch of salt.

[Guest MattP]

26 minutes ago, Foxin_mad said:

So record employment and lowering inflation. Not bad.

 

Meanwhile, those naughty corrupt students potentially voted for comrade Corbyn twice.

 

http://www.telegraph.co.uk/news/2017/07/17/did-students-vote-twice-corbyn-watchdog-demands-urgent-action/

I was going to say it's a surprise about inflation but it shouldn't be, we've become that used to scaremongering now we shouldn't expect things to go as badly as they are predicted! 

 

On the latter story, anyone who did vote twice needs to go to prison. 

 

The polls are slightly encouraging at minute, Labour struggling to stay ahead, no evidence so far that Corbyn can turn this popularity into a solid lead that will see him as the PM.

 

2 minutes ago, Innovindil said:

Seems like the inflation drop was down somewhat to fuel prices falling. 

 

Any word from that willy puller who said it would rocket to £2.50/l? 

[Guest]

1 hour ago, toddybad said:

Real life consequence of austerity. 

 

It should be remembered that, if growth continued on its predicted path prior to the financial crisis of 2008, the economy would be £300bn bigger than it is today. A big if i realise. The current deficit is around £50bn. The point I'm making is that if a return to growth had been fuelling the government's decisions, rather than curbing the size of government, we could well have cleared all the deficit without the need to risk public health. 

 

50 minutes ago, Foxin_mad said:

 

We would have been bankrupt by now like Greece! Cap in hand.

 

Greece a shining example. Remember in 2010, the money actually ran out! The IMF would have been running us, we would be bankrupt. Everyone in the public sector would not have been paid for months, businesses would have collapsed, many people would have lost their homes it would have been fantastic!

 

Which western countries ran a deficit, sold their gold at record lows and then spent a shit tonne of cash they didn't have? Socialist France is still ****ed and now they saw sense and voted out the socialists, Germany has a shit tonne of gold and was not running a budget deficit, Italy and Spain are still ****ed and have record unemployment levels! America has god knows how many trillion of debt it can never pay back. Seems like a great fiscal stimulus to me!

And you wonder why i get angry with you sometimes. Take off the blinkers. We would not have gone 'bankrupt' simply be trying to continue growing. Every other country on the planet moved away from Osbornomics and most are are back to normal with wages above where they were and managed growth. Here in Britain wages are where they were 13 years ago and we're still cutting despite obvious problems in areas as important as health and education. The loonies have taken over the asylum.

[Guest MattP]

5 minutes ago, toddybad said:

And you wonder why i get angry with you sometimes. Take off the blinkers. We would not have gone 'bankrupt' simply be trying to continue growing. Every other country on the planet moved away from Osbornomics and most are are back to normal with wages above where they were and managed growth. Here in Britain wages are where they were 13 years ago and we're still cutting despite obvious problems in areas as important as health and education. The loonies have taken over the asylum.

Fake news, just off the top of my head Ireland went further than Osborne in terms of cuts, corporation tax reduction and recovered more quickly from their huge debts than any other country just a few years earlier.

 

Which country with a similar deficit to GDP ratio and national debt to us at the time of the crash should we have followed?

 

Very few to compare in terms of similar economics.

Edited 18 July 2017 by MattP

[Rincewind]

Mankind was doing fine. Ordinary people living day to day just wanting to toddle along look after the familes and be nice to others. Then politicians came along and ruined everything.

[Guest MattP]

3 minutes ago, Rincewind said:

Mankind was doing fine. Ordinary people living day to day just wanting to toddle along look after the familes and be nice to others. Then politicians came along and ruined everything.

I suppose if you ignore the human sacrifice, the killing of any other tribe who wanted to hunt your food and the genocide of anyone who was different Mankind was doing just fine. 

 

I have a feeling any peace back then was due to population density rather than a lack of politicians. 

[Buce]

2 minutes ago, MattP said:

I suppose if you ignore the human sacrifice, the killing of any other tribe who wanted to hunt your food and the genocide of anyone who was different Mankind was doing just fine. 

 

I have a feeling any peace back then was due to population density rather than a lack of politicians. 

 

One of those rare occasions where we agree, Matt.

 

Plenty of historical evidence that Mans' inhumanity has always been with us.

[Guest Foxin_mad]

25 minutes ago, toddybad said:

 

And you wonder why i get angry with you sometimes. Take off the blinkers. We would not have gone 'bankrupt' simply be trying to continue growing. Every other country on the planet moved away from Osbornomics and most are are back to normal with wages above where they were and managed growth. Here in Britain wages are where they were 13 years ago and we're still cutting despite obvious problems in areas as important as health and education. The loonies have taken over the asylum.

We would have gone bankrupt spending money we didn't have when the money ran out.

 

Who says we would have grown or continued to grow, its pure fantasy. I would like one example of a shining beacon of socialist economic fiscal policy that sold its gold, had a massive debt and deficit and that has spent its way out of the recession and is still booming, has low unemployment, comparatively low inflation, and has taken 2/3rd of any budget deficit it is running? Please provide, and I am happy willing to investigate and be proved wrong.

 

Germany doesn't count by the way as they didn't sell their gold, or run a pre crash deficit or have trillions of debt. Also the Scandinavian countries are fundamentally different to us, and are social democracies much like the UK.

 

This is what angers me, you continue to pedal an argument but no one here can give me an example of a successful socialist state such as the one Corbyn and McDonnell are advocating, mainly because there is not and never will be one. The philosophy whilst admirable amongst a number of fine people such as your good self is unfortunately fundamentally flawed.

Edited 18 July 2017 by Foxin_mad

[Guest MattP]

https://www.theguardian.com/politics/2017/jul/17/most-labour-members-want-uk-to-remain-in-single-market

 

Quite an interesting little read. This shows what a hard job the Labout front bench are going to have over the next couple of years.

 

Quote

Support for Britain to remain in the EU single market and customs union is overwhelming among Labour party members, according to a poll showing that more than eight out of 10 think the UK should stay in Europe’s key trading blocs.

The figures, from research carried out as part of the Party Members Project funded by the Economic and Social Research Council and shared exclusively with the Guardian, also show heavy backing for a second referendum.

The figures could pile pressure on Jeremy Corbyn over his party’s position on Brexit, which is currently against maintaining full single market membership, because he is determined to give members a bigger voice.

The Labour leader told his party’s MPs on Monday night that the party had 560,000 members whom he wanted to be actively engaging with.

 

 

The bit at the bottom of the article is interesting as well, 77% of Labour members are now from the ABC1 class and it has an average age of 53 (something you never imagine given it's the youth we are told have swarmed to Corbyn) - the political boundaries really are changing.

 

They really are in a tough position here, the affluent membership and the young are seriously pro-Europe, yet the northern heartlands where they pick up the majority of their vote is seriously anti-EU, will be very interesting to see how this plays out.

[Guest]

13 minutes ago, MattP said:

Fake news, just off the top of my head Ireland went further than Osborne in terms of cuts, corporation tax reduction and recovered more quickly from their huge debts than any other country just a few years earlier.

 

Which country with a similar deficit to GDP ratio and national debt to us at the time of the crash should we have followed?

 

Very few to compare in terms of similar economics.

Fake news  You're turning into Donald Trump Matty!

Why would we look for a country with a similar GDP to debt ration to follow? That makes no economic sense - looking at two pretty unimportant numbers and ignoring whether our economies are similar in any other way.

Having the debt just means paying some interest (more than worthwhile as I've said before but I'm not looking at that avenue of argument right now) - the amount of interest we are currently paying is pretty average in terms of %GDP for the UK over time. The deficit is simply a snapshot of the income and outgoings at any given moment - it says nothing about direction of travel on its own. I'll also point out that debt level/deficit says nothing about the underlying strength of an economy - Malta has a smaller debt level and larger surplus than Germany. 

What both me and you would like to see is the deficit number getting smaller. What we disagree on is how to get there. You appear to prefer immediate cuts and I prefer initial investment (potentially increasing the deficit at first) in order to stimulate growth. 

Looking at economies like Germany and France and what appear striking to me is our reliance on the service sector. Germany is obviously the EU's biggest success story and that success has been based on a diverse economy and highly skilled workforce. It seems obvious to me that we need to diversify our economy and spend much more on education and training. One of the Labour policies I liked most was a national education service with lifelong learning opportunities. This will obviously take some money but will allow us to widen what we offer as a nation and take on the likes of Germany in technical industries. I really fear us trying to lock down on financial services-based economy at a time when Brexit risks seeing jobs and business moving oversees (to what extent we won't know for some time). To not try to widen our economy at a time of risk - whether or not you see Brexit as a problem doesn't undermine the fact that there is a risk of it going wrong - would seem to be to be grossly negligent. 

[Guest]

35 minutes ago, Foxin_mad said:

We would have gone bankrupt spending money we didn't have when the money ran out.

 

Who says we would have grown or continued to grow, its pure fantasy. I would like one example of a shining beacon of socialist economic fiscal policy that sold its gold, had a massive debt and deficit and that has spent its way out of the recession and is still booming, has low unemployment, comparatively low inflation, and has taken 2/3rd of any budget deficit it is running? Please provide, and I am happy willing to investigate and be proved wrong.

 

Germany doesn't count by the way as they didn't sell their gold, or run a pre crash deficit or have trillions of debt. Also the Scandinavian countries are fundamentally different to us, and are social democracies much like the UK.

 

This is what angers me, you continue to pedal an argument but no one here can give me an example of a successful socialist state such as the one Corbyn and McDonnell are advocating, mainly because there is not and never will be one. The philosophy whilst admirable amongst a number of fine people such as your good self is unfortunately fundamentally flawed.

I didn't advocate the politics of Corbyn/McDowell in my post. I simply said that focusing on cuts rather than growth is not a good thing. You can believe that and not be a socialist. You can believe that and be a Tory.

What has the gold got to do with it?

The only Chancellor in the past 60 years to have run a multiple year surplus was Gordon Brown. The deficit just prior to the financial crisis was smaller than the deficit being run by the Tory government in the mid 1990s. I'm not particularly saying that is a good thing, just pointing out the historical context. 

 

 

 

Edited 18 July 2017 by Guest