Starmergeddon: They Came And Ate Us

[Biffer]

Like I said:

I suppose like all the other spouses and children of Labour establishment figures who become Labour MPs he could just be a really strong interview candidate who stood out in the rigorously meritocratic selection process.

Saying it twice doesn't make it any less stupid. Sue Gray wasn't a Labour establishment figure when this happened.

Also, just for the hell of it, are we pretending that having contacts and knowing the right people hasn't formed the basis of our political system for a few hundred years? Being the son of someone respected in politics is going to be a boon. That's inarguable.

Pretending there's the stench of corruption over the selection and success of a politician because a family member later joined the party is desperate stuff, though.

It's just a desperate play of the 'all the same' narrative to try to benefit the tories.

[Stranger]

The tory press is truly pathetic

[Biffer]

Investors and entrepreneurs saying the chancellor should raise more from CGT and the HMRC analysis of decreased revenues is wrong.

https://www.theguardian.com/uk-news/202 ... SApp_Other

[C T]

Investors and entrepreneurs saying the chancellor should raise more from CGT and the HMRC analysis of decreased revenues is wrong.

https://www.theguardian.com/uk-news/202 ... SApp_Other

CGT has to go up, and I say that as someone who will need to pay it in about a year.

As a real example: In 2022, I joined a company share scheme. I put in £3'000, they put in £1'000. That is currently worth £8'000. I'll likely sell them when I can (this time next year), would rather not but circumstance dictate etc.

Anyway, the 4k that me/the company put in isn't taxable. You get a 3k allowance, so I'll only pay CGT tax on 1k. 10% or 20% depending on where the 1k takes the person to tax bracket wise.

So that's £100 or £200 CGT, on 4k that I've literally done nothing to earn. And I'm in a privileged position to own shares, no idea what the stats are but I imagine a large percentage of the population don't.

I see it as a tax that helps out more privileged people, no doubt there is nuance somewhere of course.

[Sandstorm]

It's also time to change the Income Tax bands, they haven't been tweaked seriously in almost 20 years.

Increase the minimum tax-free amount to £20k so everyone, including the lowest paid, benefit.
Then increase the other bands by a couple of percent and create a new highest rate band for £150k+ earners.

[Biffer]

It's also time to change the Income Tax bands, they haven't been tweaked seriously in almost 20 years.

Increase the minimum tax-free amount to £20k so everyone, including the lowest paid, benefit.
Then increase the other bands by a couple of percent and create a new highest rate band for £150k+ earners.

Have you actually costed that?

[Sandstorm]

It's also time to change the Income Tax bands, they haven't been tweaked seriously in almost 20 years.

Increase the minimum tax-free amount to £20k so everyone, including the lowest paid, benefit.
Then increase the other bands by a couple of percent and create a new highest rate band for £150k+ earners.

Have you actually costed that?

Of course not!! I'm not an Economist or maths-type.

Seriously, giving people on low wages an extra 5k a year means they'll spend it, growing the economy.

[Biffer]

It's also time to change the Income Tax bands, they haven't been tweaked seriously in almost 20 years.

Increase the minimum tax-free amount to £20k so everyone, including the lowest paid, benefit.
Then increase the other bands by a couple of percent and create a new highest rate band for £150k+ earners.

Have you actually costed that?

Of course not!! I'm not an Economist or maths-type.

Seriously, giving people on low wages an extra 5k a year means they'll spend it, growing the economy.

Well, there's the problem - if you want that cut in tax intake, you have to replace it or cut costs. It's fine to say it's what you'd like to see, but you have to then accept the costs it'll incur. Raising the personal allowance by that much, about 60%, would leave a hole of about £80billion in tax income for the treasury. You'd need to raise the higher band to nearly 100% to make up for that amount of money. Or implement £80 billion of cuts across government services. That's pretty much the entire education budget. Or grow the economy by roughly 20% in one tax year (which is obviously not going to happen).

[weegie01]

Investors and entrepreneurs saying the chancellor should raise more from CGT and the HMRC analysis of decreased revenues is wrong.

https://www.theguardian.com/uk-news/202 ... SApp_Other

My wife has spent her career advising companies on tax. Many of these make the people quoted look like corner shops. She begs to differ.

[Biffer]

If anyone wants to do some messing around with numbers of how much tax cuts costs, there are illustrative examples here

https://www.gov.uk/government/statistic ... ate-limits

High level govt spending here

https://ifs.org.uk/taxlab/taxlab-key-qu ... pend-money

And an FT tool here

https://ig.ft.com/chancellor-game/

Might give a better idea of how much things actually cost and what the impact of what you think is a good idea would actually be.

[Biffer]

Investors and entrepreneurs saying the chancellor should raise more from CGT and the HMRC analysis of decreased revenues is wrong.

https://www.theguardian.com/uk-news/202 ... SApp_Other

My wife has spent her career advising companies on tax. Many of these make the people quoted look like corner shops. She begs to differ.

The key problem here is that the treasury won't release the assumptions that they've based their projection on, so it's not possible to have a real discussion on how accurate their figures are. They just expect them to be taken as gospel. Without that it's just a he said she said exercise. I just wanted to highlight that there are multiple opinions out there and it's not as simple as it's been portrayed.

Here's that IPPR report

https://www.ippr.org/articles/low-capit ... repreneurs

It's focused on entrepreneurs not investors, which is apparently what both flavours of government want to encourage. They also ask the question about whether passive asset ownership and active entrepreneurship should qualify for the same tax break.

[shaggy]

Investors and entrepreneurs saying the chancellor should raise more from CGT and the HMRC analysis of decreased revenues is wrong.

https://www.theguardian.com/uk-news/202 ... SApp_Other

CGT has to go up, and I say that as someone who will need to pay it in about a year.

As a real example: In 2022, I joined a company share scheme. I put in £3'000, they put in £1'000. That is currently worth £8'000. I'll likely sell them when I can (this time next year), would rather not but circumstance dictate etc.

Anyway, the 4k that me/the company put in isn't taxable. You get a 3k allowance, so I'll only pay CGT tax on 1k. 10% or 20% depending on where the 1k takes the person to tax bracket wise.

So that's £100 or £200 CGT, on 4k that I've literally done nothing to earn. And I'm in a privileged position to own shares, no idea what the stats are but I imagine a large percentage of the population don't.

I see it as a tax that helps out more privileged people, no doubt there is nuance somewhere of course.

Shares can be a very significant part of the overall package for an employee. Changes to CGT will take a year or two to percolate through but it will impact a good percentage of the workforce and could be 1000s that would need to move to wages, which is the aim I would imagine.

[Biffer]

Investors and entrepreneurs saying the chancellor should raise more from CGT and the HMRC analysis of decreased revenues is wrong.

https://www.theguardian.com/uk-news/202 ... SApp_Other

CGT has to go up, and I say that as someone who will need to pay it in about a year.

As a real example: In 2022, I joined a company share scheme. I put in £3'000, they put in £1'000. That is currently worth £8'000. I'll likely sell them when I can (this time next year), would rather not but circumstance dictate etc.

Anyway, the 4k that me/the company put in isn't taxable. You get a 3k allowance, so I'll only pay CGT tax on 1k. 10% or 20% depending on where the 1k takes the person to tax bracket wise.

So that's £100 or £200 CGT, on 4k that I've literally done nothing to earn. And I'm in a privileged position to own shares, no idea what the stats are but I imagine a large percentage of the population don't.

I see it as a tax that helps out more privileged people, no doubt there is nuance somewhere of course.

Shares can be a very significant part of the overall package for an employee. Changes to CGT will take a year or two to percolate through but it will impact a good percentage of the workforce and could be 1000s that would need to move to wages, which is the aim I would imagine.

Depends whether your employee share scheme is purely designed to avoid tax or whether you think, at a wider scale, it helps to improve overall company performance and therefore share price. You don't have to make it equivalent to income tax, just reduce the disparity. There's still an incentive.

[robmatic]

The current CGT regime is also a big incentive for buy-to-let and responsible for some of the distortions in the housing market. Landlords for years have been leveraging up with as much debt as they can so they can cash in on all those lovely jubbly capital gains on multiple properties.

[Paddington Bear]

https://x.com/DanNeidle/status/1846867834955018459

A good thread on marginal rates and how completely bonkers they have become. Really ought to be addressed

[Sandstorm]

Have you actually costed that?

Of course not!! I'm not an Economist or maths-type.

Seriously, giving people on low wages an extra 5k a year means they'll spend it, growing the economy.

Well, there's the problem - if you want that cut in tax intake, you have to replace it or cut costs. It's fine to say it's what you'd like to see, but you have to then accept the costs it'll incur. Raising the personal allowance by that much, about 60%, would leave a hole of about £80billion in tax income for the treasury. You'd need to raise the higher band to nearly 100% to make up for that amount of money. Or implement £80 billion of cuts across government services. That's pretty much the entire education budget. Or grow the economy by roughly 20% in one tax year (which is obviously not going to happen).

Cheers mate

[robmatic]

The current CGT regime is also a big incentive for buy-to-let and responsible for some of the distortions in the housing market. Landlords for years have been leveraging up with as much debt as they can so they can cash in on all those lovely jubbly capital gains on multiple properties.

Ah, it looks like buy-to-let and second home owners will not be included in the changes to CGT. The UK is a joke, it really is. 14 years of Tories being economically pro-mentalist and then the 'sensible' party come in to reward malinvestment.

[sefton]

I see today’s papers are suggesting they will freeze the tax thresholds beyond 2028, with the suggestion that this doesn’t break their promise of no extra taxation for the working person, which is sophistry at best, but is really just duplicitous.

They won’t be getting my vote again under this current leadership if they do carry this out.

[Biffer]

I see today’s papers are suggesting they will freeze the tax thresholds beyond 2028, with the suggestion that this doesn’t break their promise of no extra taxation for the working person, which is sophistry at best, but is really just duplicitous.

They won’t be getting my vote again under this current leadership if they do carry this out.

So what do you want cut?

[robmatic]

I see today’s papers are suggesting they will freeze the tax thresholds beyond 2028, with the suggestion that this doesn’t break their promise of no extra taxation for the working person, which is sophistry at best, but is really just duplicitous.

They won’t be getting my vote again under this current leadership if they do carry this out.

The problem here is that the promise was nonsense, because the UK has an aging population and a tax burden that will therefore inevitably increase on the diminishing share of the population that is in work, but the great British public won't vote for any political party that is honest about it.

[sefton]

I see today’s papers are suggesting they will freeze the tax thresholds beyond 2028, with the suggestion that this doesn’t break their promise of no extra taxation for the working person, which is sophistry at best, but is really just duplicitous.

They won’t be getting my vote again under this current leadership if they do carry this out.

So what do you want cut?

Don’t be ridiculous, as if that is the only option.

[Biffer]

I see today’s papers are suggesting they will freeze the tax thresholds beyond 2028, with the suggestion that this doesn’t break their promise of no extra taxation for the working person, which is sophistry at best, but is really just duplicitous.

They won’t be getting my vote again under this current leadership if they do carry this out.

So what do you want cut?

Don’t be ridiculous, as if that is the only option.

OK, what tax do you want increased?

[sefton]

So what do you want cut?

Don’t be ridiculous, as if that is the only option.

OK, what tax do you want increased?

Again, you’re trying to break it down to a simplistic dichotomy, whilst ignoring the crux of my point which was that Starmer said they would not increase taxation on the working person and by retaining the point at which people start paying tax and the point at which they start paying the higher rate, if they do indeed do this this, then that is exactly what they would be doing.

[Raggs]

I thought, at least in the proper leadup to the election, they just refused to answer questions on raising tax. Instead talking about how they were going to also generate funds. I don't recall them saying they wouldn't, and took their silence to rather suggest they would, they just didn't know what and how much.

[sefton]

I thought, at least in the proper leadup to the election, they just refused to answer questions on raising tax. Instead talking about how they were going to also generate funds. I don't recall them saying they wouldn't, and took their silence to rather suggest they would, they just didn't know what and how much.

https://news.sky.com/video/we-will-not- ... s-13152164

Instead we could get stealth tax rises.

[Raggs]

I thought, at least in the proper leadup to the election, they just refused to answer questions on raising tax. Instead talking about how they were going to also generate funds. I don't recall them saying they wouldn't, and took their silence to rather suggest they would, they just didn't know what and how much.

https://news.sky.com/video/we-will-not- ... s-13152164

Instead we could get stealth tax rises.

He's pretty clear there, no income tax, vat, or national insurance increases.

Freezing thresholds is not a tax rise. It's not a tax break, but it's definitely not a rise (and they haven't done it yet either).

[sefton]

I thought, at least in the proper leadup to the election, they just refused to answer questions on raising tax. Instead talking about how they were going to also generate funds. I don't recall them saying they wouldn't, and took their silence to rather suggest they would, they just didn't know what and how much.

https://news.sky.com/video/we-will-not- ... s-13152164

Instead we could get stealth tax rises.

He's pretty clear there, no income tax, vat, or national insurance increases.

Freezing thresholds is not a tax rise. It's not a tax break, but it's definitely not a rise (and they haven't done it yet either).

It’s a tax rise, you’re paying more tax from one year to the next year, particularly those who are then paying tax or being pulled into the higher rate. Just look at the increase of those now in the 40% tax rate as against the number before fiscal drag started.

[Biffer]

You can equally argue it's not rise. Dont recall anyone howling about it being a rise when the Tories left it at the same level.

[lemonhead]

Any party worth a comfortable majority would simply reverse the NI cut amongst other things and be done with it.

As it stands they appear to be keeping their word (however inconsequential it may be in real terms) on this, so the money has to come from somewhere. Answers gratefully received.

[Rhubarb & Custard]

I thought, at least in the proper leadup to the election, they just refused to answer questions on raising tax. Instead talking about how they were going to also generate funds. I don't recall them saying they wouldn't, and took their silence to rather suggest they would, they just didn't know what and how much.

https://news.sky.com/video/we-will-not- ... s-13152164

Instead we could get stealth tax rises.

He's pretty clear there, no income tax, vat, or national insurance increases.

Freezing thresholds is not a tax rise. It's not a tax break, but it's definitely not a rise (and they haven't done it yet either).

I wish they'd just break their manifesto pledges on this.

By not doing so they're ignoring some of the best and fairest ways to raise the money they need to raise. If they pay a price for not having been honest during the campaign so be it, better than doing something less sensible/fair now, yes they can push some of it off on the Tories, but not all.

Also not raising thresholds is an increase in tax, just a sneakier one. But whatever, I'll be left annoyed they're not raising thresholds and the amount of income tax. I've some sympathy with Labour, they get a harder time on this in the media and public narrative than the Tories, but such is life

[dpedin]

https://news.sky.com/video/we-will-not- ... s-13152164

Instead we could get stealth tax rises.

He's pretty clear there, no income tax, vat, or national insurance increases.

Freezing thresholds is not a tax rise. It's not a tax break, but it's definitely not a rise (and they haven't done it yet either).

I wish they'd just break their manifesto pledges on this.

By not doing so they're ignoring some of the best and fairest ways to raise the money they need to raise. If they pay a price for not having been honest during the campaign so be it, better than doing something less sensible/fair now, yes they can push some of it off on the Tories, but not all.

Also not raising thresholds is an increase in tax, just a sneakier one. But whatever, I'll be left annoyed they're not raising thresholds and the amount of income tax. I've some sympathy with Labour, they get a harder time on this in the media and public narrative than the Tories, but such is life

It's amazing how quickly folk have forgotten why we are having to have this debate about how we get the country out of the fiscal shithole it is in. If the Tories hadn't led us into 14 years of austerity which destroyed growth, led us into a failed Brexit which hits the economy by £40b a year plus another £25b divorce bill and hadn't spent £37b on a failed Test, Track & Trace response or written off £7b of bad debts during Brexit, etc then we might be in a better position. The Tories have led the UK to the brink of bankruptcy, involved themselves in mass corruption and destroyed most of our public services (Water & sewage, NHS, education, housing, etc) and are now standing on the sidelines shouting that Starmer is lying because he said he would freeze thresholds or increase employer NI, Even worse he got tickets to see Taylor Smith and his deputy Rayner danced in Ibiza!

The right wing press has captured the nation once again, just like they did with Brexit, feeding them lies and half truths and stoking fears about the coming budget. Why the hell is everyone worried about IHT or , as in the Mail headlines today, Air Passenger duty when the vast majority of them won't ever have £1m of Inheritance to be taxed and are unlikely to be able to afford an overseas holiday? The desire to leave the EHCR won't go away either, despite being pushed by a Mail non dom owner living in France and whose profits are funneled through a Jersey trust to a Bermuda-registered offshore entity.

This budget will be painful but it has to target a fairer distribution of wealth and leveling the disparity between earned and unearned incomes, tax avoidance loopholes need addressed particularly stopping the flood of money to overseas tax havens and make everyone pay their fair share of tax. Why should Sunak only pay an effective tax rate of 23% of his £2.2m income in 2023 much less than someone on £100k salary who will pay c33%?

[sefton]

How does freezing the tax thresholds for another two years serve that redistribution?

[dpedin]

How does freezing the tax thresholds for another two years serve that redistribution?

I didnt say it did!

[Raggs]

Fixing CGT and inheritance taxes will effect the redistribution a lot more than increasing the lowest tax bracket by a grand.

[robmatic]

Fixing CGT and inheritance taxes will effect the redistribution a lot more than increasing the lowest tax bracket by a grand.

I am not hugely confident in either CGT or IHT getting fixed.

[sefton]

How does freezing the tax thresholds for another two years serve that redistribution?

I didnt say it did!

But that is what we’ve been discussing.

[Rhubarb & Custard]

He's pretty clear there, no income tax, vat, or national insurance increases.

Freezing thresholds is not a tax rise. It's not a tax break, but it's definitely not a rise (and they haven't done it yet either).

I wish they'd just break their manifesto pledges on this.

By not doing so they're ignoring some of the best and fairest ways to raise the money they need to raise. If they pay a price for not having been honest during the campaign so be it, better than doing something less sensible/fair now, yes they can push some of it off on the Tories, but not all.

Also not raising thresholds is an increase in tax, just a sneakier one. But whatever, I'll be left annoyed they're not raising thresholds and the amount of income tax. I've some sympathy with Labour, they get a harder time on this in the media and public narrative than the Tories, but such is life

It's amazing how quickly folk have forgotten why we are having to have this debate about how we get the country out of the fiscal shithole it is in. If the Tories hadn't led us into 14 years of austerity which destroyed growth, led us into a failed Brexit which hits the economy by £40b a year plus another £25b divorce bill and hadn't spent £37b on a failed Test, Track & Trace response or written off £7b of bad debts during Brexit, etc then we might be in a better position. The Tories have led the UK to the brink of bankruptcy, involved themselves in mass corruption and destroyed most of our public services (Water & sewage, NHS, education, housing, etc) and are now standing on the sidelines shouting that Starmer is lying because he said he would freeze thresholds or increase employer NI, Even worse he got tickets to see Taylor Smith and his deputy Rayner danced in Ibiza!

The right wing press has captured the nation once again, just like they did with Brexit, feeding them lies and half truths and stoking fears about the coming budget. Why the hell is everyone worried about IHT or , as in the Mail headlines today, Air Passenger duty when the vast majority of them won't ever have £1m of Inheritance to be taxed and are unlikely to be able to afford an overseas holiday? The desire to leave the EHCR won't go away either, despite being pushed by a Mail non dom owner living in France and whose profits are funneled through a Jersey trust to a Bermuda-registered offshore entity.

This budget will be painful but it has to target a fairer distribution of wealth and leveling the disparity between earned and unearned incomes, tax avoidance loopholes need addressed particularly stopping the flood of money to overseas tax havens and make everyone pay their fair share of tax. Why should Sunak only pay an effective tax rate of 23% of his £2.2m income in 2023 much less than someone on £100k salary who will pay c33%?

I agree with a lot of that, but I'd still prefer they make sensible decisions in the here and now, and better methods of collecting more tax in more equitable manner necessitate they break their campaign pledges. Trying to stick to the campaign pledges is messier, comes with more loopholes, and doesn't raise as much money. I would agree overall the tax system needs a lot of work, and too actually I'd like them to be addressing where wealth is held across society, partly out of fairness, but as much in the interests of making capital available to the active economy. Why we never have political discussions around this is how much money there is, this is where it's assigned, here's how much one might want to redistribute and here's the model by which that can be done, well that I don't know

[Paddington Bear]

Leaving aside the morality and ethics of hiking IHT, I have a suspicion that the headlines of a 50% rate will drive a lot of people to their nearest accountant/solicitor and might well be another entry for the Big Book of Labour Ideas to Raise Money That Actually Don’t.

[robmatic]

Leaving aside the morality and ethics of hiking IHT, I have a suspicion that the headlines of a 50% rate will drive a lot of people to their nearest accountant/solicitor and might well be another entry for the Big Book of Labour Ideas to Raise Money That Actually Don’t.

I don't think it will make much difference either way beyond a headline and a perception as so few people pay IHT and avoidance levels must already be pretty entrenched with gifting and trusts.

It is also fairly meaningless as a redistributive policy as BOMAD is actually where the socially significant intergenerational wealth transfers are happening, but hey ho.

[Tichtheid]

IHT payments will increase as the housing market pushes more estates above the half million pound threshold - that’s a fair amount of tax-free cash.

As things stand you can leave everything to your spouse without tax, you can leave up to £325k to you children without taxation, that threshold increases to £500k if you leave them a house too.

I see that as being a fairly generous allowance - half a million quid tax-free?
There's even a way for a couple to pass on a million quid tax-free, again this involves property as opposed to, say, stocks and shares.