Politics Thread (encompassing Brexit) - 21 June 2017 onwards

[Guest]

8 minutes ago, Facecloth said:

GDP is the monetary measure of the market value of all the produce and services a country produces in a particular time period. Bugger all to do with where we sell it to. You seem to be talking simply about exporting and bringing money into the economy from abroad.

The point I was trying to make (badly) is that if a bookies makes more on terminals, that money isn't being spent on something else by those customers, so that doesn't produce a gain.

[Strokes]

1 minute ago, toddybad said:

The point I was trying to make (badly) is that if a bookies makes more on terminals, that money isn't being spent on something else by those customers, so that doesn't produce a gain.

You could make that argument about any transaction.

[Guest Kopfkino]

Just now, Strokes said:

You could make that argument about any transaction.

Namely ones where an inefficient government crowds out the private sector 

[Guest]

2 minutes ago, Kopfkino said:

Namely ones where an inefficient government crowds out the private sector 

The efficient private sector hasn't done so well on the east coast line, or in the failed academies, or in providing energy without huge subsidies, or in paying their employees enough to live on without benefits. 

[The Doctor]

7 minutes ago, toddybad said:

The point I was trying to make (badly) is that if a bookies makes more on terminals, that money isn't being spent on something else by those customers, so that doesn't produce a gain.

So no-one has ever got into unmanageable debt through a gambling addiction? 

[Guest Kopfkino]

11 minutes ago, toddybad said:

The efficient private sector hasn't done so well on the east coast line, or in the failed academies, or in providing energy without huge subsidies, or in paying their employees enough to live on without benefits. 

 

Genuinely no idea what you're on about, and most likely neither do you

[Rogstanley]

1 hour ago, Izzy Muzzett said:

What’s the difference between CEO wage increases and PL footballer wage increases?

 

If you want to attract the top talent, you have to pay the market rate. 

 

People argue they’re ‘privileged’ but would quite happily swap places with them if they could. 

 

Problem is most people aren’t prepared to work hard, grow their network and take risks like these high achievers are.

 

Its mainly jealousy and resentment really..

The difference is that football is a reasonably efficient meritocracy where Wayne from Toxteth has just as much chance of reaching the top as Tarquin from the Wentworth Estate, while big company CEO’s are still overwhelmingly chosen from a select group of people with specific backgrounds.

 

The reality of the situation is that no amount of hard work, talent, networking or risk taking will get you a top CEO job if you’re from the wrong background or don’t get a massive slice of luck.

 

Most top CEO’s don’t take any risk with their own money and nor do they necessarily work any harder than anybody else. 

 

You’ve also missed the point I made in my first paragraph which is that CEO pay has risen massively despite there being no increase in responsibility nor improvement in performance, so what are today’s CEO’s doing that yesterday’s didn’t that justifies the continuous massive pay increases?

 

Nothing. It’s a cartel where they all scratch each other’s backs. Open your eyes for goodness sake.

[Izzy]

3 minutes ago, Rogstanley said:

The difference is that football is a reasonably efficient meritocracy where Wayne from Toxteth has just as much chance of reaching the top as Tarquin from the Wentworth Estate, while big company CEO’s are still overwhelmingly chosen from a select group of people with specific backgrounds.

 

The reality of the situation is that no amount of hard work, talent, networking or risk taking will get you a top CEO job if you’re from the wrong background or don’t get a massive slice of luck.

 

Most top CEO’s don’t take any risk with their own money and nor do they necessarily work any harder than anybody else. 

 

You’ve also missed the point I made in my first paragraph which is that CEO pay has risen massively despite there being no increase in responsibility nor improvement in performance, so what are today’s CEO’s doing that yesterday’s didn’t that justifies the continuous massive pay increases?

 

Nothing. It’s a cartel where they all scratch each other’s backs. Open your eyes for goodness sake.

Like I said, mainly jealousy and resentment 

[Rogstanley]

9 minutes ago, Izzy Muzzett said:

Like I said, mainly jealousy and resentment 

To be clear I’m not jealous of nor harbour any resentment towards talented people who work hard and earn a good living.

 

I’m not even jealous of people who, thanks to their background end up in top-CEO positions despite having no more than middling talent or work ethic.

 

My specific issue here is a system that continuously awards massive pay increase to a tiny minority while the vast majority have to suffer a decade of pay cuts.

 

Edited 3 December 2017 by Rogstanley

[Guest]

Check out @johnmcdonnellMP’s Tweet:

 

[Strokes]

22 minutes ago, toddybad said:

Check out @johnmcdonnellMP’s Tweet:

 

Laffer curve.

[Guest]

16 minutes ago, Strokes said:

Laffer curve.

You don't actually know what you're talking about do you?

There's no agreement over where the point of inflection is between rising taxes and tail off.

Taxes rose despite corporation tax falling because the banks when from losing multi billions to become normal businesses again, as well as a whole host if other reasons. Once posted on this before but you obviously weren't interested.

[Strokes]

Just now, toddybad said:

You don't actually know what you're talking about do you?

A bit rich after today pal.

Just now, toddybad said:

There's no agreement over where the point of inflection is between rising taxes and tail off.

Taxes rose despite corporation tax falling because the banks when from losing multi billions to become normal businesses again, as well as a whole host if other reasons. Once posted on this before but you obviously weren't interested.

If tax cuts have been made and tax receipts have gone up, despite as you have put it ‘’a stuttering economy’’ I’d say the laffer curve is the right answer. 

[Guest]

4 minutes ago, Strokes said:

A bit rich after today pal.

If tax cuts have been made and tax receipts have gone up, despite as you have put it ‘’a stuttering economy’’ I’d say the laffer curve is the right answer. 

Funnily enough I tend to believe people who know what they're talking about more than those who just follow their preferred crowd

https://www.ft.com/content/ca3e5bd2-2a7e-11e7-9ec8-168383da43b7

 

 

[Strokes]

2 minutes ago, toddybad said:

Funnily enough I tend to believe people who know what they're talking about more than those who just follow their preferred crowd

https://www.ft.com/content/ca3e5bd2-2a7e-11e7-9ec8-168383da43b7

 

 

Who was it you were believing about how GDP worked? funnily enough my preferred crowd got that one right.

 

By the way thats behind a paywall.

Edited 3 December 2017 by Strokes

[Guest MattP]

4 hours ago, toddybad said:

GDP is effectively a measure of the total money in the economy. 

 

If a bookies ramps up profits that money is coming from within the economy - a profit for them is a loss to somebody else. It doesn't create any money.

 

North Sea oil would only increase GDP if it was sold overseas and profits from those sales brought in new money to our economy.

 

Profits are not the same thing as gdp.

 

18 minutes ago, toddybad said:

You don't actually know what you're talking about do you?

Within the space of 4 hours.

 

Incredible stuff.

[Buce]

[Guest]

10 minutes ago, MattP said:

 

Within the space of 4 hours.

 

Incredible stuff.

Nice one Matty, after 6 months of waiting you finally got me talking crap

 

15 minutes ago, Strokes said:

Who was it you were believing about how GDP worked? funnily enough my preferred crowd got that one right.

 

By the way thats behind a paywall.

The laffer curve is the graphical representation of a theory which sounds quite possible - that there is a point at which tax is so high it receipts start to fall.

 

Laffer did not set a figure for where that point is so just saying "laffer curve" is pure idiocy.

 

The FT article is copied below. 

 

UK corporation tax receipts surged to a record high during the past financial year despite the main rate falling from 30 per cent in 2008 to 19 per cent today.

Linking tax cuts to higher revenues is a theory once derided by George H W Bush, the former US president, as “voodoo economics”. But if that is not the cause for the bumper receipts, what are the factors responsible?

UK economy has grown, and profits with it

Official public finance data, published on Tuesday, found the UK government had raised £56bn from corporation tax during the 2016-17 financial year, a 21 per cent increase from the previous year.

 

In part, this is because the government has changed the date of when corporation tax payments appear in the figures in a way that has flattered this year’s tax take. However, on a purely cash basis receipts increased by a still impressive 12.6 per cent. The Office for Budget Responsibility, the government’s fiscal watchdog, expects them to increase even further as more small companies pay their tax.

Some of the increase can be explained by rising corporate profits. According to the Office for National Statistics, the net rate of onshore companies’ profitability reached 12.7 per cent in 2016 — the highest level since 1999. Profitability has successively risen from a rate of 8.8 per cent in 2009 during the recession following the financial crisis.

Matt Mealey, a partner at EY, the professional services firm, said the fall in the value of the pound after the EU referendum had played its part in boosting profitability because it had helped exporters who earn revenues in foreign currencies but whose costs are priced in sterling.

In 2013, the Treasury tried to estimate how much of the cost of the corporate tax cuts would be recouped as a result of increased growth. It predicted the rate cuts would push up profits, wages and consumption, which would all tend to bring in extra taxes. As a result, it suggested the cost of the corporate tax cut in lost revenue would fall “by between 45 per cent and 60 per cent in the long term”.

Banks are paying more corporate tax

Banks’ corporate tax payments have increased markedly since their low in 2011-12. Andrew Packman of PwC, the professional services firm, said: “As the banks’ profitability recovers, we are expecting very significant increases in the tax paid by banks.”

Tighter restrictions introduced in April 2016 on carrying forward losses to offset profits has pushed up receipts by an amount the government has estimated at £330m.

The figures also include £1.1bn paid by banks following the introduction of the 8 per cent surcharge on their profits in January 2016. But takings from the bank levy, which is based on lenders’ balance sheets, declined from £3.4bn to £2.9bn in the year to 2017 as the government reduced the rate.

Weak investment spending

Companies can offset some of their investments against their profits to reduce their tax bill. The idea is to give them a tax incentive to make more investment. For this reason the OBR has a rule of thumb that a 1 per cent increase in business investment leads to £50m less in tax receipts.

But business investment fell by 2 per cent in 2016, according to the ONS. This was good news for the public finances, which received more in corporation tax revenue, despite being bad news for the overall economy.

Crackdown on avoidance

Related article

UK shelves changes to dividend tax, non-doms and digital tax

More than 70 clauses in finance bill put on hold until after the election

The impact of a global crackdown on “base erosion and profit shifting” agreed in October 2015 is likely to have swelled tax receipts. Businesses have been unwinding complicated structures that shifted profits to low-tax countries, such as “hybrid” structures that took advantage of differences in different countries’ tax rules.

In the year to April 2016, HM Revenue & Customs intensified its investigations into multinationals’ cross-border deals, pushing up their potential exposure by 60 per cent to nearly £4bn. They are also likely to have collected significant revenues from accelerated payment notices, which require tax avoiders to pay disputed tax up front before the dispute over the legality of the avoidance scheme is settled.

The ‘Google’ tax

The tax take from big companies is also likely to reflect new legislation — the “Google tax” — that was introduced to stop companies diverting profits overseas. Formally known as the diverted profits tax, it was originally expected to bring in £270m last year. The revenues have been incorporated into the corporation tax receipts.

Edited 3 December 2017 by Guest

[Webbo]

Quote

In 2013, the Treasury tried to estimate how much of the cost of the corporate tax cuts would be recouped as a result of increased growth. It predicted the rate cuts would push up profits, wages and consumption, which would all tend to bring in extra taxes. As a result, it suggested the cost of the corporate tax cut in lost revenue would fall “by between 45 per cent and 60 per cent in the long term”.

So, if I'm reading this right, a cut in corporation tax is good for the economy and brings in extra revenue?

[Strokes]

4 minutes ago, toddybad said:

Nice one Matty, after 6 months of waiting you finally got me talking crap

 

The laffer curve is the graphical representation of a theory which sounds quite possible - that there is a point at which tax is so high it receipts start to fall.

 

Laffer did not set a figure for where that point is so just saying "ladder curve" is pure idiocy.

I was just winding you up, you know how you hilariously do sometimes?

4 minutes ago, toddybad said:

 

The FT article is copied below. 

 

UK corporation tax receipts surged to a record high during the past financial year despite the main rate falling from 30 per cent in 2008 to 19 per cent today.

Linking tax cuts to higher revenues is a theory once derided by George H W Bush, the former US president, as “voodoo economics”. But if that is not the cause for the bumper receipts, what are the factors responsible?

UK economy has grown, and profits with it

Official public finance data, published on Tuesday, found the UK government had raised £56bn from corporation tax during the 2016-17 financial year, a 21 per cent increase from the previous year.

 

In part, this is because the government has changed the date of when corporation tax payments appear in the figures in a way that has flattered this year’s tax take. However, on a purely cash basis receipts increased by a still impressive 12.6 per cent. The Office for Budget Responsibility, the government’s fiscal watchdog, expects them to increase even further as more small companies pay their tax.

Some of the increase can be explained by rising corporate profits. According to the Office for National Statistics, the net rate of onshore companies’ profitability reached 12.7 per cent in 2016 — the highest level since 1999. Profitability has successively risen from a rate of 8.8 per cent in 2009 during the recession following the financial crisis.

Matt Mealey, a partner at EY, the professional services firm, said the fall in the value of the pound after the EU referendum had played its part in boosting profitability because it had helped exporters who earn revenues in foreign currencies but whose costs are priced in sterling.

In 2013, the Treasury tried to estimate how much of the cost of the corporate tax cuts would be recouped as a result of increased growth. It predicted the rate cuts would push up profits, wages and consumption, which would all tend to bring in extra taxes. As a result, it suggested the cost of the corporate tax cut in lost revenue would fall “by between 45 per cent and 60 per cent in the long term”.

Banks are paying more corporate tax

Banks’ corporate tax payments have increased markedly since their low in 2011-12. Andrew Packman of PwC, the professional services firm, said: “As the banks’ profitability recovers, we are expecting very significant increases in the tax paid by banks.”

Tighter restrictions introduced in April 2016 on carrying forward losses to offset profits has pushed up receipts by an amount the government has estimated at £330m.

The figures also include £1.1bn paid by banks following the introduction of the 8 per cent surcharge on their profits in January 2016. But takings from the bank levy, which is based on lenders’ balance sheets, declined from £3.4bn to £2.9bn in the year to 2017 as the government reduced the rate.

Weak investment spending

Companies can offset some of their investments against their profits to reduce their tax bill. The idea is to give them a tax incentive to make more investment. For this reason the OBR has a rule of thumb that a 1 per cent increase in business investment leads to £50m less in tax receipts.

But business investment fell by 2 per cent in 2016, according to the ONS. This was good news for the public finances, which received more in corporation tax revenue, despite being bad news for the overall economy.

Crackdown on avoidance

Related article

UK shelves changes to dividend tax, non-doms and digital tax

More than 70 clauses in finance bill put on hold until after the election

The impact of a global crackdown on “base erosion and profit shifting” agreed in October 2015 is likely to have swelled tax receipts. Businesses have been unwinding complicated structures that shifted profits to low-tax countries, such as “hybrid” structures that took advantage of differences in different countries’ tax rules.

In the year to April 2016, HM Revenue & Customs intensified its investigations into multinationals’ cross-border deals, pushing up their potential exposure by 60 per cent to nearly £4bn. They are also likely to have collected significant revenues from accelerated payment notices, which require tax avoiders to pay disputed tax up front before the dispute over the legality of the avoidance scheme is settled.

The ‘Google’ tax

The tax take from big companies is also likely to reflect new legislation — the “Google tax” — that was introduced to stop companies diverting profits overseas. Formally known as the diverted profits tax, it was originally expected to bring in £270m last year. The revenues have been incorporated into the corporation tax receipts.

So, the economy isn’t doing as bad you have been telling us then? And they are tackling tax avoidance according to that. 

[Webbo]

1 minute ago, Strokes said:

 

So, the economy isn’t doing as bad you have been telling us then? And they are tackling tax avoidance according to that. 

That must be the second time in 6 months that he's been talking crap.

[Strokes]

Just now, Webbo said:

That must be the second time in 6 months that he's been talking crap.

What do we win if we find the third? 

[Guest]

Just now, Strokes said:

I was just winding you up, you know how you hilariously do sometimes?

So, the economy isn’t doing as bad you have been telling us then? And they are tackling tax avoidance according to that. 

Well a 18 months ago my arguments may not have resonated so much regarding low growth, records personal debt etc. But now they clearly do. It'd be really quite difficult to convince me that falling real wages is a sign of a strong economy.

 

But do you see what I mean about corporation tax take being due to lots of factors?

[Webbo]

1 minute ago, Strokes said:

What do we win if we find the third? 

Give it a minute or 2 and we'll probably find out.

[Strokes]

3 minutes ago, toddybad said:

 

But do you see what I mean about corporation tax take being due to lots of factors?

Yeah the economy is a complicated thing, it’s easy to look foolish discussing it.