I know that the membership has just been announced, and that it hasn't even met yet, but I would like to offer one word of premature advice to the Silk Committee – Don't do what the press assumes that you are going to do, do not look at tax raising powers for the National Assembly!
Raising is an ambiguous word.
To raise taxes suggests to most of us that the level of taxation will go up, in the sense that VAT has risen from 15% to 20%, and that raising the price of a pint of beer means charging £3 a pint rather than £2.50 a pint etc
In the political world raising taxes means collecting money for the purpose of running government. So in an oxymoronic way a government that cuts taxes by 90% would still be a government that "raises" taxes.
Any public consultation on the Assembly having the ability to raise taxes will be met with howls of protestation, because none of us want our taxes raised in the colloquial sense of them being made higher!
To avoid complication and to have honest consultation the Commission must look at tax setting or tax levying powers for the Assembly, not tax raising powers!
And those of us who belive that the Assembly should have some direct responsibility for its own financial situation should avoid the trap of using the term tax raising.
Normally pedantry is petty, in this case pedantry is important.
Showing posts with label Tax. Show all posts
Showing posts with label Tax. Show all posts
14/10/2011
29/12/2010
I'm not a Graduate - but I benefit from an University Education
I had some legal difficulties to deal with earlier this year, so I contacted my solicitors Guthrie, Jones and Jones. Mr Guthrie Mr Jones and Mr Jones are all graduates.
I have had a chest infection over Christmas. Dr Jayaram has prescribed an antibiotic, which has made me better.
Gareth Hughes (a graduate Accountant) and co has helped me with my accounts.
My children will go to school next week and be educated by a host of teachers educated in the humanities and the sciences to degree level.
Having dealt with my legal, medicinal, financial and parental problems I was relieved to go home and relax in front of the telly and watch Bethan Gwasnas BA in a most entertaining telly programme.
I don't have a university degree, but I clearly benefit from university education!
Shouldn't I pay my share for that education?
Guthrie, Jones, Jones, Jayram, Hughes the teachers and Gwanas are all paid more than I am, but because they are paid more than me they already pay more tax than me - it is called income tax!
Despite not having a degree, - me and mine benefit from university education. I find the idea that we shouldn't pay our part for that benefit, by passing our debt in to student loans, quite obnoxious!
I have had a chest infection over Christmas. Dr Jayaram has prescribed an antibiotic, which has made me better.
Gareth Hughes (a graduate Accountant) and co has helped me with my accounts.
My children will go to school next week and be educated by a host of teachers educated in the humanities and the sciences to degree level.
Having dealt with my legal, medicinal, financial and parental problems I was relieved to go home and relax in front of the telly and watch Bethan Gwasnas BA in a most entertaining telly programme.
I don't have a university degree, but I clearly benefit from university education!
Shouldn't I pay my share for that education?
Guthrie, Jones, Jones, Jayram, Hughes the teachers and Gwanas are all paid more than I am, but because they are paid more than me they already pay more tax than me - it is called income tax!
Despite not having a degree, - me and mine benefit from university education. I find the idea that we shouldn't pay our part for that benefit, by passing our debt in to student loans, quite obnoxious!
16/09/2010
An Alternative to Public Sector Cuts?
There was an interesting article on the Politics Show yesterday, in which Profesor Greg Philo of Glasgow University (about 1hr:29 mins into the programme) argued that the state deficit could be abolished by a one-off tax on the wealthiest 10% of the population, rather than through the cuts agenda that almost all politicians of all stripes seem to be seeing as inevitable. The Profs' ideas are promulgated on the Glasgow Media Group's website.
Because I believe that government interferes too much in the life of the individual, I would support some state spending being reduced even if the government had zero deficits or even if it made a healthy profit.
I have some doubts about the practicality of taxing the best tax avoiders in order to raise revenues! There would have to be a series of preliminary laws to tighten tax avoidance and the donations made to political parties by massive tax avoiders, before any collection of such a tax could be practical – something that neither Labour or Conservative recipients of tax avoiders largess will support!
And there is the perennial problem of taxing success. Untaxed money can go back into business and wealth creation, creating better businesses and more wealth (and more taxes in its wake). Taxes tend to get swallowed up in bureaucracy and bumf and administration rather than in economic growth.
On the other hand I don't want to see my local school close, fewer police on the beat; monthly bin collection, or my aged parents' old age pensions slashed either. If a one off tax on the super rich can avoid those then I'm all for it!
Whatever the merits or the faults of Prof Philo's proposals, it is good to see an alternative to the cuts agenda offered by most parties in the last election. The Glasgow Media proposal should have been offered as an alternative to voters during the election by a major party. Agree or disagree a party proposing and another party opposing would have given the electorate a real choice!
Because I believe that government interferes too much in the life of the individual, I would support some state spending being reduced even if the government had zero deficits or even if it made a healthy profit.
I have some doubts about the practicality of taxing the best tax avoiders in order to raise revenues! There would have to be a series of preliminary laws to tighten tax avoidance and the donations made to political parties by massive tax avoiders, before any collection of such a tax could be practical – something that neither Labour or Conservative recipients of tax avoiders largess will support!
And there is the perennial problem of taxing success. Untaxed money can go back into business and wealth creation, creating better businesses and more wealth (and more taxes in its wake). Taxes tend to get swallowed up in bureaucracy and bumf and administration rather than in economic growth.
On the other hand I don't want to see my local school close, fewer police on the beat; monthly bin collection, or my aged parents' old age pensions slashed either. If a one off tax on the super rich can avoid those then I'm all for it!
Whatever the merits or the faults of Prof Philo's proposals, it is good to see an alternative to the cuts agenda offered by most parties in the last election. The Glasgow Media proposal should have been offered as an alternative to voters during the election by a major party. Agree or disagree a party proposing and another party opposing would have given the electorate a real choice!
21/06/2010
Why is VAT a regressive tax?
I admit that I am not very good at sums and that I am easily confused by economic arguments. So I hope that somebody will be able to explain a comment made by Roger Williams on Sunday's Politics Show and by David Milliband on today's Daily Politics - that raising VAT is a regressive tax because it falls most heavily on the poorest in society.
If a poor person spends £20,000 a year and a rich person spends £200,000 I would have thought that the richer person would pay at least 10 times as much in purchase taxes than the poorer person. Because VAT is a purchase tax that is only charged on luxury goods, with essential goods being exempt, I would also have thought that it stands to reason that the richer person would spend a greater percentage of his money on luxuries whilst the poorer person would spend a large proportion of his money on tax exempt essentials. If this is the case then the richer person will pay even more in tax. This doesn't appear regressive or disproportionate to me; it appears to be fair and proportionate. So how do Mr Williams and Mr Milliband come to the opposite conclusion to me?
If a poor person spends £20,000 a year and a rich person spends £200,000 I would have thought that the richer person would pay at least 10 times as much in purchase taxes than the poorer person. Because VAT is a purchase tax that is only charged on luxury goods, with essential goods being exempt, I would also have thought that it stands to reason that the richer person would spend a greater percentage of his money on luxuries whilst the poorer person would spend a large proportion of his money on tax exempt essentials. If this is the case then the richer person will pay even more in tax. This doesn't appear regressive or disproportionate to me; it appears to be fair and proportionate. So how do Mr Williams and Mr Milliband come to the opposite conclusion to me?
26/02/2010
A Devoloution Precept?
Love him or loath him one can count on Guto Bebb to raise interesting points of view. Two of his latest posts on Tax and Borrowing Powers for Wales are a case in point (apparently a third is iminent). Agree or disagree with Guto, he always raises important issues worthy of debate.
The second in the series deals with weather a Devolved Wales could have tax varying powers, it is not surprising that Guto thinks not:
One of the difficulties people in the UK have with border problems is that having lived as an Island or collection of Islands, for so long we forget that these border problems are things that most countries have dealt with for a very long time. Having large populations living close to boarders with other countries is actually the norm. If Belgium, Luxembourg, Norway, Sweden, Switzerland, Spain, Portugal etc can overcome such difficulties then England, Wales and Scotland can too if they choose to go their separate ways.
But looking at the conundrum Guto raises from a Devolutionist view rather than a Nationalist one, I feel that there is a moral problem with having this level of government that has the power to spend money, but cannot be held to account for raising any of the money that it spends.
I love my free bus pass, I love the fact that I can use the swimming pool free of charge. You might argue that paying for these services means that less is spent on education, but the fact that I have these services means that I don't go to school so if I want to be selfish what care I. If providing the services meant an extra £X on my tax bill I might think differently.
The Boston Tea Party was about no taxation without representation – isn't representation without fiscal responsibility just as bad?
Even if all Guto's comments about the difficulties of differing tax systems between England and Wales are accepted, there is a way in which Wales could have fiscal responsibility.
On top of my Council Tax from Conwy Council, I have to pay a precept for the North Wales Police and a precept from my parish council.
Couldn't the Assembly also raise a precept?
Since the inception of Council Tax, Welsh councils have charged £200-£600 less than many English councils, doesn't this leave wiggle room for the Assembly to raise some of its own money through a devoloution precept?
A £100 band D Assembly precept would still make living in a band D house in Flintshire a lot cheaper than living in a band D house ascross the road in Cheshire, but would give, not tax raising powers, but tax raising responsibility to the Assembly.
The second in the series deals with weather a Devolved Wales could have tax varying powers, it is not surprising that Guto thinks not:
"Around 85% of the Welsh population live within 50 miles of the English border. This is crucial and makes a separate tax system in Wales a damaging prospect for all of us"
One of the difficulties people in the UK have with border problems is that having lived as an Island or collection of Islands, for so long we forget that these border problems are things that most countries have dealt with for a very long time. Having large populations living close to boarders with other countries is actually the norm. If Belgium, Luxembourg, Norway, Sweden, Switzerland, Spain, Portugal etc can overcome such difficulties then England, Wales and Scotland can too if they choose to go their separate ways.
But looking at the conundrum Guto raises from a Devolutionist view rather than a Nationalist one, I feel that there is a moral problem with having this level of government that has the power to spend money, but cannot be held to account for raising any of the money that it spends.
I love my free bus pass, I love the fact that I can use the swimming pool free of charge. You might argue that paying for these services means that less is spent on education, but the fact that I have these services means that I don't go to school so if I want to be selfish what care I. If providing the services meant an extra £X on my tax bill I might think differently.
The Boston Tea Party was about no taxation without representation – isn't representation without fiscal responsibility just as bad?
Even if all Guto's comments about the difficulties of differing tax systems between England and Wales are accepted, there is a way in which Wales could have fiscal responsibility.
On top of my Council Tax from Conwy Council, I have to pay a precept for the North Wales Police and a precept from my parish council.
Couldn't the Assembly also raise a precept?
Since the inception of Council Tax, Welsh councils have charged £200-£600 less than many English councils, doesn't this leave wiggle room for the Assembly to raise some of its own money through a devoloution precept?
A £100 band D Assembly precept would still make living in a band D house in Flintshire a lot cheaper than living in a band D house ascross the road in Cheshire, but would give, not tax raising powers, but tax raising responsibility to the Assembly.
22/10/2009
Beer and Fags and Plastic Bags
The European Court of Justice has decided that Ireland, France and Austria cannot set minimum prices for tobacco products. At the moment tobacco prices in many countries, including the UK, have a great deal of variation. A packet of 20 fags can cost between £4 and £6.50. When governments use taxes to try and discourage smoking for health reason many smokers can absorb the price increase by switching to a cheaper brand, which they do rather than giving up, making the reasoning behind the health tax defunct. The EU, however, argues that binding prices restricted manufacturers’ freedom to set prices, thereby posing a risk to free competition.
Jeff at SNP Tactical Voting notes how this could have a knock on affect on plans for minimum prices for alcohol proposed by the Scottish Government. Although Nicola Sturgeon claims that the decision will not affect the alcohol proposals, like Jeff I'm not convinced.
Another knock on affect could be on National Assembly plans to reduce the use of plastic bags. A number of countries have tried to reduce the use of bags by taxing them. In some US states one has to pay a tax of between 5c and 17c for each bag issued, for example. However, the National Assembly has no tax raising powers so their plastic bag tax plan is in effect a minimum pricing plan where shops will be forced to sell bags at a set price. So the Assembly might have to think again about this policy in light of the EU's ruling.
Jeff at SNP Tactical Voting notes how this could have a knock on affect on plans for minimum prices for alcohol proposed by the Scottish Government. Although Nicola Sturgeon claims that the decision will not affect the alcohol proposals, like Jeff I'm not convinced.
Another knock on affect could be on National Assembly plans to reduce the use of plastic bags. A number of countries have tried to reduce the use of bags by taxing them. In some US states one has to pay a tax of between 5c and 17c for each bag issued, for example. However, the National Assembly has no tax raising powers so their plastic bag tax plan is in effect a minimum pricing plan where shops will be forced to sell bags at a set price. So the Assembly might have to think again about this policy in light of the EU's ruling.
23/09/2009
In favour of "The Politics of Envy"
The buzz term on Tory blogs this week is The Politics of Envy. I have seen the term on so many Tory blogs that I can only suspect that it has been sent out by Tory HQ's propaganda office as The word of the Week.
The Politics of Envy, apparently, is to support any policy that suggests that billionaires should pay more tax than those on the national minimum wage - a shocking idea according to Tory central blog control.
Sorry to disappoint my "New Tory" friends but I am sticking to the old fashioned idea of one nation conservatism, that people should be taxed according to their means!
The Politics of Envy, apparently, is to support any policy that suggests that billionaires should pay more tax than those on the national minimum wage - a shocking idea according to Tory central blog control.
Sorry to disappoint my "New Tory" friends but I am sticking to the old fashioned idea of one nation conservatism, that people should be taxed according to their means!
29/10/2008
Should the licence fee be abolished?
Glyn Davies asks if the TV licence fee should be abolished in light of the Jonathon Ross and Russell Brand incident. In as much as both should be sacked (saving the licence payers' £25 million quid); I'm not sure that the incident is, in itself, relevant to the licence fee debate.
Since the election of Tony Blair a number of people on the right have suggested that the BBC should lose the licence because of a perceived BBC bias towards the Government. To be balanced and impartial (as this blog always is) its fair to say that some on the left perceive the Beeb to be biased from a different perceptive.
Many of those who are opposed to the licence fee aren't actually opposed to the fee, they want to privatise the BBC. They know that the fee that we all hate is an easier target than the institution which is still loved and respected by many.
Whatever the pros and cons of having a nationalised TV station the idea of paying for it through a licence fee is really old fashioned and inefficient.
When the original Radio Licence was introduced in 1922 it was a fair method of taxation. Very few people owned private radios, it was only fair that those who owned the sets paid the costs of broadcasting. The same can be said for the introduction of the TV element of the licence fee in 1946 and the colour supplementary fee in 1968. Today, however, those who don't own the means of accessing tv services by any means (including computers and mobile phones) are a minuscule minority.
The separate government department, the bureaucracy, the collection fees, the defaulters and tracing unit, the TV warning adverts, the detection vans, the court time and the prison sentences that cost more per day than the cost of a single licence, seem to me to be a huge waste of resources for what would amount to a 0.3p in the pound increase in general taxation.
Whatever the right or wrongs of the BBC itself, funding it through such an antiquated and inefficient form of taxation as an individual licence fee, is clearly past its sell by date.
Since the election of Tony Blair a number of people on the right have suggested that the BBC should lose the licence because of a perceived BBC bias towards the Government. To be balanced and impartial (as this blog always is) its fair to say that some on the left perceive the Beeb to be biased from a different perceptive.
Many of those who are opposed to the licence fee aren't actually opposed to the fee, they want to privatise the BBC. They know that the fee that we all hate is an easier target than the institution which is still loved and respected by many.
Whatever the pros and cons of having a nationalised TV station the idea of paying for it through a licence fee is really old fashioned and inefficient.
When the original Radio Licence was introduced in 1922 it was a fair method of taxation. Very few people owned private radios, it was only fair that those who owned the sets paid the costs of broadcasting. The same can be said for the introduction of the TV element of the licence fee in 1946 and the colour supplementary fee in 1968. Today, however, those who don't own the means of accessing tv services by any means (including computers and mobile phones) are a minuscule minority.
The separate government department, the bureaucracy, the collection fees, the defaulters and tracing unit, the TV warning adverts, the detection vans, the court time and the prison sentences that cost more per day than the cost of a single licence, seem to me to be a huge waste of resources for what would amount to a 0.3p in the pound increase in general taxation.
Whatever the right or wrongs of the BBC itself, funding it through such an antiquated and inefficient form of taxation as an individual licence fee, is clearly past its sell by date.
13/03/2008
The Budget Lies
Having read a few of the early internet editions of today's papers, the consensus on the budget seems to be that it was boring. So boring that some MPs slept through it.
The papers say that the budget was boring as if boring budgets are a bad thing! I disagree a boring budget is a good budget in my view.
I can remember the 1970's when budget day was interesting, not because it was exciting, but because it was terrifying. People who had no interest in politics would rush home from work to hear how bad a budget was. Income tax and purchase tax rises could mean that wage packets would be cut and prices up within weeks. School and Sunday School trips would be cancelled because working class people could no longer afford the fees as a direct result of a budget. Workers would go into work in fear on the day after a budget because they didn't know if jobs would be cut or whole factories closed as a result of budget announcements. I hope I never have to live through the terror of interesting budgets again.
My main criticism of this budget is the pathetic spin that is included in it. Taxes are raised in some areas and presented as lifestyle changing measures rather than the income raising measures that they are.
If you can afford a fiver for a packet of fags today, you'll be able to find £5.11 for a packet tomorrow. Indeed as the difference between the cheapest and most expensive cigarettes is over £2 you can absorb the 11p difference by changing brands. The claim that the 11p increase is a tax aimed at improving peoples health by encouraging them to quit is a blatant fallacy.
Then there is the lie that having to pay £1000 tax for the first year only on a brand new 4X4 is an environmental tax. Bollocks! If you can afford £60,000 for a brand new Range Rover an extra £1k is nothing. Does the Chancellor really believe that fewer 4X4s will be sold because of this measure? Of course he doesn’t, he just wants easy cash from the people who will carry on buying them regardless.
And then there is the 4p on a pint of beer to reduce binge drinking. If I go out on a fifteen pint of strong lager binge tonight, it is going to cost me 60p less than it will next week! Woo! Sixty Pee - I might stay in next Friday, or drink less - I don't think so!
If the chancellor really wanted to change lifestyles then £11 on a pack of fags, £4 on a pint of beer and £30k on a Range Rover might have done it. The taxes raised are not lifestyle changing tax hikes, he knowss it and we know it.
I don't think that the tax rises that he made are particularly bad. I don't mind paying 4p more for a pint in order to enable those who move from benefits into work to continue to get housing benefit, freeing them from the benefits trap. I'll buy an extra half of mild next Tuesday to help the cause! But why oh why couldn't he be honest?
The fallacy of the chancellor's lifestyle lies are so obvious, they do nothing but bring politics into disrepute.
Alistair Darling could have raised the same taxes honestly and shown himself and his party in a better light by being honest. :
I need more money to help poor families. I'm going to tax those who can afford the luxuries of cigarettes, booze and fast cars, to pay for more family tax credits etc and I am going to make sure that those recipients who squander extra poverty payment on such luxuries pay the whole benefit back to the treasury in taxes
Honest, fair, social democratic and something few would complain about!
So why did he have to lie?
The papers say that the budget was boring as if boring budgets are a bad thing! I disagree a boring budget is a good budget in my view.
I can remember the 1970's when budget day was interesting, not because it was exciting, but because it was terrifying. People who had no interest in politics would rush home from work to hear how bad a budget was. Income tax and purchase tax rises could mean that wage packets would be cut and prices up within weeks. School and Sunday School trips would be cancelled because working class people could no longer afford the fees as a direct result of a budget. Workers would go into work in fear on the day after a budget because they didn't know if jobs would be cut or whole factories closed as a result of budget announcements. I hope I never have to live through the terror of interesting budgets again.
My main criticism of this budget is the pathetic spin that is included in it. Taxes are raised in some areas and presented as lifestyle changing measures rather than the income raising measures that they are.
If you can afford a fiver for a packet of fags today, you'll be able to find £5.11 for a packet tomorrow. Indeed as the difference between the cheapest and most expensive cigarettes is over £2 you can absorb the 11p difference by changing brands. The claim that the 11p increase is a tax aimed at improving peoples health by encouraging them to quit is a blatant fallacy.
Then there is the lie that having to pay £1000 tax for the first year only on a brand new 4X4 is an environmental tax. Bollocks! If you can afford £60,000 for a brand new Range Rover an extra £1k is nothing. Does the Chancellor really believe that fewer 4X4s will be sold because of this measure? Of course he doesn’t, he just wants easy cash from the people who will carry on buying them regardless.
And then there is the 4p on a pint of beer to reduce binge drinking. If I go out on a fifteen pint of strong lager binge tonight, it is going to cost me 60p less than it will next week! Woo! Sixty Pee - I might stay in next Friday, or drink less - I don't think so!
If the chancellor really wanted to change lifestyles then £11 on a pack of fags, £4 on a pint of beer and £30k on a Range Rover might have done it. The taxes raised are not lifestyle changing tax hikes, he knowss it and we know it.
I don't think that the tax rises that he made are particularly bad. I don't mind paying 4p more for a pint in order to enable those who move from benefits into work to continue to get housing benefit, freeing them from the benefits trap. I'll buy an extra half of mild next Tuesday to help the cause! But why oh why couldn't he be honest?
The fallacy of the chancellor's lifestyle lies are so obvious, they do nothing but bring politics into disrepute.
Alistair Darling could have raised the same taxes honestly and shown himself and his party in a better light by being honest. :
I need more money to help poor families. I'm going to tax those who can afford the luxuries of cigarettes, booze and fast cars, to pay for more family tax credits etc and I am going to make sure that those recipients who squander extra poverty payment on such luxuries pay the whole benefit back to the treasury in taxes
Honest, fair, social democratic and something few would complain about!
So why did he have to lie?
07/08/2007
Tax is "Labour Money"
Mrs Thatcher use to be fond of reminding us that there is no such thing as Government Money, every Government Penny is actually a Tax Payer's Penny.
Not according to Dai Havard MP. The Money spent on public services isn't tax payers' money, it isn't even Government money it is Labour Money
So when you pay VAT on your Mars Bar tomorrow, put petrol tax in your car, cringe at the amount of tax deductions that are on your payslip etc, you will be pleased to know that you aren’t paying your fair share towards the public good, you are actually making a donation to the Labour Party!
How arrogant can the Labour Party get before the people of Wales (including Adam Price) see through it? !!!!!!
Not according to Dai Havard MP. The Money spent on public services isn't tax payers' money, it isn't even Government money it is Labour Money
So when you pay VAT on your Mars Bar tomorrow, put petrol tax in your car, cringe at the amount of tax deductions that are on your payslip etc, you will be pleased to know that you aren’t paying your fair share towards the public good, you are actually making a donation to the Labour Party!
How arrogant can the Labour Party get before the people of Wales (including Adam Price) see through it? !!!!!!
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