Politics Thread (encompassing Brexit) - 21 June 2017 onwards

[LiberalFox]

21 minutes ago, MattP said:

Churchill certainly wasn't perfect, but he was the figurehead of our country when we avoided being taken over by probably the most evil set of people ever to walk the planet, so of course he's going to be seen as a hero.

 

Unless you look at it through a very tainted window, Che and the people like him weren't exactly on the right side of history when you look at the regimes he supported and the ones he opposed. Not many Americans try and swim the ocean to escape to a new life in Cuba. It's a bit of a red line for me to say someone has a positive influence on a country where a significent proportion of the population are then prepared to die to try and escape it.

 

Although it's impossible for me to really give a neutral viewpoint on this as my close friendd in the states married into a Cuban family and I now know the personal stories of those that suffered at the hands of Castro and the people around him.

 

Thanks, I have a very extensive reading list already but I'd certainly give that a go.

 

Churchill probably isn't a fantastic comparison because he was a war leader in this country. It's right to recognise the importance of defeating Nazi Germany and its allies. A lot of Liberals dislike the use of controversial figures for symbolism especially when they are foreign and not completely understood by the public. Having an interest in controversial figures like Guevara is good, using Guevara's image simply as a brand is actually a bit disrespectful.    

[Kopfkino]

4 hours ago, toddybad said:

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. 

 

I'm not quite sure that Brown's surplus had much to do with him, nor would I be looking to praise it if I was a Labour supporter. The manifesto in 1997 committed him to keeping to Conservative spending plans for the following 2 years (actually managed it for about 3) and he was massively helped on 00/01 by the genius game theory model that delivered an impressive revenue from the 3G phone signal spectrum auction. Add that to the fact that Labour's economic advisors admitted that Brown had the best economic inheritance of any chancellor in living memory. 

 

12 hours ago, toddybad said:

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).

 

I don't think it's sensible for anyone to dismiss some kind of basic income, it's not useful to anyone for the poor to be so desperately poor and left to completely fend for themselves. It has to be accompanied by a severe reduction in the welfare state, preferably a removal of it, and other supply side reforms. An NIT is efficient, removes a whole host of bureaucracy, allows complete freedom for the recipient, and in theory could remove the need for a minimum wage, all of which the right would love. However, I don't necessarily complete buy the existing proposals for it but I'm not particularly well versed in tax design so I wouldn't know how to alter it either.

 

I don't understand why it has to be so complex, it needs major reform no matter which way government decides to go with it. A policy that is supposed to simplify things needed 417 pages to explain. I don't really support an income tax (it's palatable) and I really don't support a flat rate income tax unless it's super low. It should be low but higher income earners should still pay more. I do hope eventually, with advances in technology and a cashless, that we have a consumption tax that is immediately siphoned off to government at the point of purchase.

 

 

[LiberalFox]

How does a negative income tax work? Does it mean under a certain amount that the state effectively tops up pay? I tend to prefer a universal income as I assume you still need to be earning something in order to benefit from negative income tax.

[Kopfkino]

It's not really too dissimilar to UBI.

 

So with an NIT, you set a level of income that you deem to be the minimum sufficient amount that a person would need to live on. For simplicity, we'll say 10k. You then set a negative tax rate for earnings below that, say 50%. If I'm earning 0 a year, my I have, for tax return purposes, a negative income of 10k a year. So -50% of -10k is 5k, so the state gives my 5k every year. If I am working and earn 5k, then I have a negative income of 5k and -50% of -5k is 2.5k, so I receive a payment of 2.5k to supplement my 5k from working. Now admittedly, this does mean that the basic income given to you is less than what might be required to live. Now the NIT might not actually be optimal but it should be better than the bureaucratic welfare system, which has all sorts of problems, that it replaces. For a start, whilst an effective marginal tax rate of 50% seems high (For every £1 earned, the subsidy decreases by 50p) it is lower than the EMTR that exists with welfare now. There's a piece that shows a single mother working 30 hours a week would have an EMTR of 93% and with UC, it is expected the average will be 75%. 

 

I acknowledge the UBI as an alternative solution but it would have higher disincentives to work, and it seems highly inefficient to give high earners an amount of money to just tax it back off them with the endowment effect possibly coming into play(I believe this is also creates demoralisation costs). NIT has many of the benefits of UBI but it's a part subsidy rather than a full payment I suppose.

 

[Guest]

6 hours ago, Foxin_mad said:

It is now, it seems to be the new norm. I think its wrong but I am sure there are many think tanks and professors who say otherwise. There are many many tory policies I disagree with, I mainly just think Corbyn and Socialism is a very dangerous path to take.

 

There must be a mixed approach. Businesses are crying out for skilled staff, then they have to be willing to fund the training.

 

Again the classic case of despite differing views there is some common ground, and I do agree we need modern, green energy and new technologies, we need to encourage more R&D Work. I would start by making the Severn estuary tidal barrage happen, and cancel Hinckley point. A green infrastructure project such as that could make a huge difference to the nation and it sets out our intentions to the world.

 

Well Fox, it seems we've find something we can both wholeheartedly support. This is the future we have to have. 

[LiberalFox]

1 hour ago, KingGTF said:

It's not really too dissimilar to UBI.

 

So with an NIT, you set a level of income that you deem to be the minimum sufficient amount that a person would need to live on. For simplicity, we'll say 10k. You then set a negative tax rate for earnings below that, say 50%. If I'm earning 0 a year, my I have, for tax return purposes, a negative income of 10k a year. So -50% of -10k is 5k, so the state gives my 5k every year. If I am working and earn 5k, then I have a negative income of 5k and -50% of -5k is 2.5k, so I receive a payment of 2.5k to supplement my 5k from working. Now admittedly, this does mean that the basic income given to you is less than what might be required to live. Now the NIT might not actually be optimal but it should be better than the bureaucratic welfare system, which has all sorts of problems, that it replaces. For a start, whilst an effective marginal tax rate of 50% seems high (For every £1 earned, the subsidy decreases by 50p) it is lower than the EMTR that exists with welfare now. There's a piece that shows a single mother working 30 hours a week would have an EMTR of 93% and with UC, it is expected the average will be 75%. 

 

I acknowledge the UBI as an alternative solution but it would have higher disincentives to work, and it seems highly inefficient to give high earners an amount of money to just tax it back off them with the endowment effect possibly coming into play(I believe this is also creates demoralisation costs). NIT has many of the benefits of UBI but it's a part subsidy rather than a full payment I suppose.

 

 

That makes sense. Thank you for writing that out. As you say there isn't a massive difference and the aim of the NIT you described is roughly the same as the UBI. 

[DJ Barry Hammond]

2 hours ago, LiberalFox said:

 

That makes sense. Thank you for writing that out. As you say there isn't a massive difference and the aim of the NIT you described is roughly the same as the UBI. 

 

Those would be fine if governments were looking for purely the best system... but the reality is, they also use tax to 'direct desirable behaviour' and curry favour with strong blokes of voting groups.

Edited 18 July 2017 by DJ Barry Hammond

[DJ Barry Hammond]

 

Having popped into the 'Absolute' thread, it got me thinking that incidents of theft related crime and worrying vilence related incidents seem to be very prominent in the news at the moment. 

 

Knowing that crime and civil unrest can largely relate to overall society problems, I thought I'd check the latest published crime figures from the ONS, which featured the below quote within the summary;

 

https://www.ons.gov.uk/peoplepopulationandcommunity/crimeandjustice/bulletins/crimeinenglandandwales/yearendingdec2016

 

Quote

However, there appeared to be smaller but genuine increases in some of the lower volume but higher harm categories of police recorded violence, including homicide and knife crime. There were also small increases in some offences where recording practices are less likely to have been a driving factor. For example, it is likely that recent rises in burglary and robbery reflect some genuine increases in crime. However, these recent increases should be seen in the context of substantial falls in such crime over the longer-term.

 

Now this is no doubt stating the obvious, but this and other factors (inflation / wage suppression / growing inequality) sadly indicate that this country is in overall decline ?

[Kopfkino]

Interesting... https://blogs.spectator.co.uk/2017/07/the-tax-trap-why-a-70k-family-isnt-much-wealthier-than-a-minimum-wage-family/ 

[Guest]

25 minutes ago, KingGTF said:

Interesting... https://blogs.spectator.co.uk/2017/07/the-tax-trap-why-a-70k-family-isnt-much-wealthier-than-a-minimum-wage-family/ 

No problem at all with tax credits and in work benefits being reduced if employers are forced to pay their staff enough to actually live on. This would increase the poorer families income without the need for in work benefits to subsidise poor wages.

[The Floyd]

1 hour ago, KingGTF said:

Interesting... https://blogs.spectator.co.uk/2017/07/the-tax-trap-why-a-70k-family-isnt-much-wealthier-than-a-minimum-wage-family/ 

Was going to post this yesterday. Quite astonishing that the maximum housing benefit for Hackney is over £18,000.

[Innovindil]

43 minutes ago, toddybad said:

No problem at all with tax credits and in work benefits being reduced if employers are forced to pay their staff enough to actually live on. This would increase the poorer families income without the need for in work benefits to subsidise poor wages.

Easily solution eh. Raise minimum wage to 70k/year.

 

Sorted. 

[LiberalFox]

2 hours ago, KingGTF said:

Interesting... https://blogs.spectator.co.uk/2017/07/the-tax-trap-why-a-70k-family-isnt-much-wealthier-than-a-minimum-wage-family/ 

Misses the point and then admits it can't think of a solution. 

 

[Guest]

 

2 hours ago, Innovindil said:

Easily solution eh. Raise minimum wage to 70k/year.

 

Sorted. 

 

It isn't exactly free market economics to allow the state to subsidise wages is it?

The right expect us to believe that we have to allow business to pay poverty wages (which the state has to top up), reduce corporation tax to tax haven levels and allow fat cat wages to spiral ad infinitum without them being further taxed. Apparently this is the way to make the country prosperous. If we'd known this we could have just kept things as they were in the 1800s. 

[Kopfkino]

2 hours ago, toddybad said:

 

 

It isn't exactly free market economics to allow the state to subsidise wages is it?

The right expect us to believe that we have to allow business to pay poverty wages (which the state has to top up), reduce corporation tax to tax haven levels and allow fat cat wages to spiral ad infinitum without them being further taxed. Apparently this is the way to make the country prosperous. If we'd known this we could have just kept things as they were in the 1800s. 

 

So the problem is state intervention lowering the reservation wage (tax credits don't really subsidise wages) and the solution is more state intervention to correct the state's intervention.

[Mike Oxlong]

[Webbo]

2 minutes ago, Mike Oxlong said:

Good to see Call Me Dave is a Leicester fan.

[Guest]

3 minutes ago, KingGTF said:

 

So the problem is state intervention lowering the reservation wage (tax credits don't really subsidise wages) and the solution is more state intervention to correct the state's intervention.

They do subsidise wages, precisely by lowering the reservation wage. Removing state intervention (tax credits+other in work benefits) wouldn't have the immediate effect of increasing wages though. Millions would go hungry and it would cause untold harm across the country but people would also continue to take work at a level below which they could live on simply to get hold of cash. You can't remove one state intervention without adding the other. I suspect this relates to our general difference in terms of you tending to support completely free market economics and me tending to support state intervention as I see no evidence of free market economics actually having good outcomes. 

[Mike Oxlong]

1 minute ago, Webbo said:

Good to see Call Me Dave is a Leicester fan.

Once a blue always a blue

 

 

 

 

 

[Kopfkino]

19 minutes ago, toddybad said:

They do subsidise wages, precisely by lowering the reservation wage. Removing state intervention (tax credits+other in work benefits) wouldn't have the immediate effect of increasing wages though. Millions would go hungry and it would cause untold harm across the country but people would also continue to take work at a level below which they could live on simply to get hold of cash. You can't remove one state intervention without adding the other. I suspect this relates to our general difference in terms of you tending to support completely free market economics and me tending to support state intervention as I see no evidence of free market economics actually having good outcomes. 

 

What about the smartphone or computer you used to make your posts?....Okay point taken

[The Floyd]

27 minutes ago, toddybad said:

They do subsidise wages, precisely by lowering the reservation wage. Removing state intervention (tax credits+other in work benefits) wouldn't have the immediate effect of increasing wages though. Millions would go hungry and it would cause untold harm across the country but people would also continue to take work at a level below which they could live on simply to get hold of cash. You can't remove one state intervention without adding the other. I suspect this relates to our general difference in terms of you tending to support completely free market economics and me tending to support state intervention as I see no evidence of free market economics actually having good outcomes. 

There are plenty of examples to the contrary. Singapore - second of the economic freedom index - also holds the number two spot for GDP per capita. Switzerland and Australia can also be found within the top five of the index, both of which I'd suggest are economically competent. 

Edited 19 July 2017 by The Floyd

[Guest]

18 minutes ago, KingGTF said:

 

What about the smartphone or computer you used to make your posts?....Okay point taken

 

13 minutes ago, The Floyd said:

There are plenty of examples to the contrary. Singapore - second of the economic freedom index - also holds the number two spot for GDP per capita. Switzerland and Australia can also be found within the top five of the index, both of which I'd suggest are economically competent. 

Come on, that's a bit lame. I've written a response and, right at the end, I've said that I probably see it different to KGTF because of how we see the world and, instead of going over the response part, you've just gone straight to the last sentence. We could both find examples of good and bad I'm sure - now let's get back to wages and why the state needs to subsidise them. Does the state subsidise wages in Singapore, Switzerland or Australia? And is it a good thing if they do or don't?

[The Floyd]

56 minutes ago, toddybad said:

 

Come on, that's a bit lame. I've written a response and, right at the end, I've said that I probably see it different to KGTF because of how we see the world and, instead of going over the response part, you've just gone straight to the last sentence. We could both find examples of good and bad I'm sure - now let's get back to wages and why the state needs to subsidise them. Does the state subsidise wages in Singapore, Switzerland or Australia? And is it a good thing if they do or don't?

That's because your last sentence was hyperbolic, the rest was fairly subjective. 

 

For what it's worth, I have no issues with government subsidising wages for those who alternatively would face long-term unemployment i.e. by giving firms financial incentives to take such people on, but as KGTF already pointed out, tax credits do not subsidise wages.

 

Regarding wages in Switzerland and Singapore, it's arguable that the economic success of the two are hinged upon not having a minimum wage, something which I'm sure you vehemently oppose. I believe Singapore subsidises wages similarly to what I suggested above - by having a wage credit scheme whereby the government co-fund 40% of wage increases given to Singapore citizen employees earning a gross monthly wage of $4,000 and below. 

 

[Guest]

1 minute ago, The Floyd said:

That's because your last sentence was hyperbolic, the rest was fairly subjective. 

 

For what it's worth, I have no issues with government subsidising wages for those who alternatively would face long-term unemployment i.e. by giving firms financial incentives to take such people on, but as KGTF already pointed out, tax credits do not subsidise wages.

 

Regarding wages in Switzerland and Singapore, it's arguable that the economic success of the two are hinged upon not having a minimum wage, something which I'm sure you vehemently oppose. I believe Singapore subsidises wages similarly to what I suggested above - by having a wage credit scheme whereby the government co-fund 40% of wage increases given to Singapore citizen employees earning a gross monthly wage of $4,000 and below. 

 

KGTF talked about the reservation wage - the wage at which people will take jobs - I'd suggest that having tax credits and therefore artificially reducing the reservation wage IS subsidy of wages.  

[Kopfkino]

39 minutes ago, toddybad said:

KGTF talked about the reservation wage - the wage at which people will take jobs - I'd suggest that having tax credits and therefore artificially reducing the reservation wage IS subsidy of wages.  

 

It is a subsidy of wages in that respect yes. I just presumed, given it's the often-used argument, you were saying it's subsidising employers in the sense they pay lower wages because they know tax credits will make the wage up to be a better wage.

 

So the point is, actually the free market produces a good outcome because it doesn't create an oversupply which forces wages down.

 

Tax credits was the state intervening to correct state intervention and now you think we need state intervention to correct the failures of the state intervening to correct the failure of state intervention

Edited 19 July 2017 by KingGTF