I can't help but feel a certain sympathy for Johnson's views. The social and economic impacts of lockdown will be felt by the young for years - even decades - to come, while those who it was primarily intended to protect will be dead and gone in a fraction of that time - indeed, many already are.
But it was ever thus. The young are always expected to make sacrifices for the benefit of the old. At least this time round they weren't being sent off to make that sacrifice in some god-forsaken trench.
Those who are pension age now have contributed to the economy, they have been through not just wars but the aftermath.
Which wars have our pensioners been through?
Only those aged 87 or over are likely to have much memory of war time (on the basis of them being about three when war was declared).
Those in their 90s (or older) would have experienced the 1939-45 continuation of the European war of the first half of the 20th Century.
But, given that we always seem to have war mongering governments there are wars that younger pensioners would have lived through (though, very few likely to have been directly affected by): Korea, Kenya, Cyprus, Suez, various conflicts in Malaysia, Aden, and of course Northern Ireland. Some may have experienced war elsewhere that the UK managed to keep out of.
Many of those who fought in the Falklands are just approaching retirement or recently retired. First Gulf War veterans aren't far behind.
I have memories from below the age of 4 - I know it is from before then as we moved house when I was 4. And mine are of every day things, not scary things like being at war.
In relation to the autumn statement, it's striking that the tabloids celebrate an apparent give-away, but more sober papers mention fiscal drag, that tax thresholds have not gone up. Hence some people are being dragged into paying tax, and some into the 40% bracket. It's supposed to be the highest tax burden since the war. I wonder why the Mail didn't have that on their front page.
In relation to the autumn statement, it's striking that the tabloids celebrate an apparent give-away, but more sober papers mention fiscal drag, that tax thresholds have not gone up. Hence some people are being dragged into paying tax, and some into the 40% bracket. It's supposed to be the highest tax burden since the war. I wonder why the Mail didn't have that on their front page.
I averted my gaze quickly, as usual, but glancing at the *papers* in the Co-Op there were indeed a number of headlines on the *You've never had it so good* theme.
These *papers*, I presume, relate to the situation on the Planet Nibiru, or somewhere, but not in Merrie England...
OK, but the mere thought of having to put up with the greedy gobshites of the tory party for yet more years to come is not exactly enticing...
I joined some of my ex-crewmates (The Ladies Who Lunch) yesterday for one of our occasional get-togethers, and we realised that we were all vulnerable health-wise, in our 60s and 70s, and therefore a useless burden...
Some had indeed had Covid, but survived, and were almost incandescent with rage at the callous attitude of that Loathsome and Odious Oaf who played at being Prime Minister...
In relation to the autumn statement, it's striking that the tabloids celebrate an apparent give-away, but more sober papers mention fiscal drag, that tax thresholds have not gone up. Hence some people are being dragged into paying tax, and some into the 40% bracket. It's supposed to be the highest tax burden since the war. I wonder why the Mail didn't have that on their front page.
Perhaps they prefer not to raise the difficult question. Given that the government is not spending money on decent wages for nurses, teachers and other public sector workers. Nor are they spending money on recruitment to fill massive numbers of vacancies within the public sector. And, they're not investing in all the infrastructure needs of the country - from insulating homes to building railways fit for the 20th century. Also, they're not spending money to process asylum claims to move asylum seekers from unsuitable accommodation so they can work and pay their own way.
If the government is gathering a greater proportion of money in tax than ever before, what are they spending it on?.
In relation to the autumn statement, it's striking that the tabloids celebrate an apparent give-away, but more sober papers mention fiscal drag, that tax thresholds have not gone up. Hence some people are being dragged into paying tax, and some into the 40% bracket. It's supposed to be the highest tax burden since the war. I wonder why the Mail didn't have that on their front page.
<snip>
If the government is gathering a greater proportion of money in tax than ever before, what are they spending it on?.
A very pertinent question. Answers on a postcard, please.
Increased borrowing costs after Truss scared the shit out of the markets and made them realise that the tories have been getting high on their own Hayekist supply?
Increased borrowing costs after Truss scared the shit out of the markets and made them realise that the tories have been getting high on their own Hayekist supply?
Not a complete answer but it's a big part of it. The stunted growth is the other big factor as it means the proportion of GDP taken up by the public sector is increasing as the overall GDP is stagnant... Hence the need for higher tax take (as a proportion of GDP.
Basically, it's the price fundamental mismanagement.
I would suppose that a relatively large proportion of the population are on in-work benefits, and even this Tory Party isn't cutting in-work benefits by enough to make a difference to the overall bill.
Increased borrowing costs after Truss scared the shit out of the markets and made them realise that the tories have been getting high on their own Hayekist supply?
Not a complete answer but it's a big part of it. The stunted growth is the other big factor as it means the proportion of GDP taken up by the public sector is increasing as the overall GDP is stagnant
And costs have gone up - driven primarily by imports of which the most significant is energy.
Memories of WWII? Oh yes, I rremember my mother rushing to pick me up when the air raid warning sounded; the band of the Irish Guards parading past the local police station; my father (in the Home Guard) bringing his rifle and, later, his Sten gun home and terrifying my mother; the sand bags piled round government buildings in London; the planes with invasion stripes going over around D-Day; Italian prisoners working in the local fields; and that's just a few. What seems remarkable now is the freedom we had. Oh yes, and collecting rose hips for Vitamin C. Happy days, for the most part, surprisingly.
Memories of WWII? Oh yes, I rremember my mother rushing to pick me up when the air raid warning sounded; the band of the Irish Guards parading past the local police station; my father (in the Home Guard) bringing his rifle and, later, his Sten gun home and terrifying my mother; the sand bags piled round government buildings in London; the planes with invasion stripes going over around D-Day; Italian prisoners working in the local fields; and that's just a few. What seems remarkable now is the freedom we had. Oh yes, and collecting rose hips for Vitamin C. Happy days, for the most part, surprisingly.
From being that age or younger I can remember - a couple of days at nursery school, first day at school, a few events at primary school, but I wouldn't describe any of it as clear. Just images. But then, this was the early 70s, not much was happening.
My wife clearly remembers the red sky over the burning Liverpool docks, and her mother weeping over the broken glass and mess when a bomb fell behind their house. Fortunately it didn't explode. Both our stomachs still turn over at the sound of an air raid siren, These are not things you easily forget.
OK, but the mere thought of having to put up with the greedy gobshites of the tory party for yet more years to come is not exactly enticing...
I joined some of my ex-crewmates (The Ladies Who Lunch) yesterday for one of our occasional get-togethers, and we realised that we were all vulnerable health-wise, in our 60s and 70s, and therefore a useless burden...
Some had indeed had Covid, but survived, and were almost incandescent with rage at the callous attitude of that Loathsome and Odious Oaf who played at being Prime Minister...
Just spotted this little piece by poet Michael Rosen in today's Guardian - I assume it's in the public domain, as it's on their website:
Out of bedrooms and wards
long lines of the dead walk towards you
asking you,
‘Who were you to decide
that our innings was over?
Who gave you the umpire’s white coat
and upraised finger?’
Did you think we would never speak
from the graves you gave us?
In relation to the autumn statement, it's striking that the tabloids celebrate an apparent give-away, but more sober papers mention fiscal drag, that tax thresholds have not gone up. Hence some people are being dragged into paying tax, and some into the 40% bracket. It's supposed to be the highest tax burden since the war. I wonder why the Mail didn't have that on their front page.
I don't understand this fuss about fiscal drag. You will only pay more tax if you are earning more money and if you are having to pay a bit of tax at the nigher rate, you can't be doing too bad.
Memories of WWII? Oh yes, I rremember my mother rushing to pick me up when the air raid warning sounded; the band of the Irish Guards parading past the local police station; my father (in the Home Guard) bringing his rifle and, later, his Sten gun home and terrifying my mother; the sand bags piled round government buildings in London; the planes with invasion stripes going over around D-Day; Italian prisoners working in the local fields; and that's just a few. What seems remarkable now is the freedom we had. Oh yes, and collecting rose hips for Vitamin C. Happy days, for the most part, surprisingly.
I was born a few years after WW2 ended. I never learnt anything about the war at school. I guess they assumed that our family would tell us. However, the only things I learnt at home were that my dad was in the Royal Marines and my Mom worked on the buses. Perhaps they assumed we would be told all about it at school.
My Dad served in the Army during WW2, and went with the BEF to France at an early date, seeing action in and around Lille, though he never liked to talk about it. He was seriously injured in an accident on camp at Aldershot in 1940, and spent several years in and out of various military hospitals, so Mum had vivid memories of visiting him (and of the difficulties of wartime travel).
The father of Mrs BF the Second - he died before I came to know the family, so I never met him - was a prisoner of the Japanese in Burma, and, like many other survivors, never spoke at any length about his experiences.
IIRC, though, the subject of WW2 wasn't exactly avoided at school - perhaps it was just too recent to have become a settled part of the history curriculum.
The fuss about fiscal drag? In a word, inflation. And I don't mean the annual figure, which is meaningless. I mean the fact that indexing the personal allowance against the CPI was written into law by the coalition, but then taken out again by one of the more dishonestly greedy Tory chancellors since the minor inconvenience of the Lib Dems was dispensed with. This means that, as prices increase since the last increase to the personal allowance, inflation is eating away at the value of the personal allowance, and having increases in income which do no more than keep up with inflation since the last increase is dragging more and more people into paying tax. Very soon, that will apply to people with no source of taxable income other than the state pension, especially if they have a significant amount of additional state pension.
The fact that the annualised rate of inflation is dropping has no effect on what I am saying because it is more than a year since the personal allowance was increased. So don't give me that bullshit. Thank you.
<snip>
I don't understand this fuss about fiscal drag. You will only pay more tax if you are earning more money and if you are having to pay a bit of tax at the nigher rate, you can't be doing too bad.
<snip>
Here’s a simple example. I earn £120 a week. The first £20 is tax free and as it happens covers my rent. I pay 20% tax on the next £100 of my earnings. The balance of £80 pays food utilities council tax and transport. I’m OK. If I earned more than £120 per week I’d pay 40% tax on any additional amount
Then inflation hits. My rent is now £22 a week. My other expenses are now £88 a week. Luckily my pay has also increased by 10%. However tax bands haven’t changed. The first £20 is tax free, but that amount no longer covers my rent. The next £100 is taxed at 20% leaving £80, but £2 of that now goes on rent. The next £12 (my pay rise) is taxed at 40% - £4.80 leaving £7.20.
<snip>
I don't understand this fuss about fiscal drag. You will only pay more tax if you are earning more money and if you are having to pay a bit of tax at the nigher rate, you can't be doing too bad.
<snip>
Here’s a simple example. I earn £120 a week. The first £20 is tax free and as it happens covers my rent. I pay 20% tax on the next £100 of my earnings. The balance of £80 pays food utilities council tax and transport. I’m OK. If I earned more than £120 per week I’d pay 40% tax on any additional amount
Then inflation hits. My rent is now £22 a week. My other expenses are now £88 a week. Luckily my pay has also increased by 10%. However tax bands haven’t changed. The first £20 is tax free, but that amount no longer covers my rent. The next £100 is taxed at 20% leaving £80, but £2 of that now goes on rent. The next £12 (my pay rise) is taxed at 40% - £4.80 leaving £7.20.
My total earnings are £132.
My tax bill is £24.80.
My take home pay is £107.20.
My rent and other expenses are £110.
I’m in trouble, a victim of fiscal drag.
Your example is far too simple and gives false results. It would be helpful if you used real life figures. If you got a 10% rise on your £120, you would still not be paying any tax.
You would only be paying an extra 20% tax on anything over £50K a year
<snip>
I don't understand this fuss about fiscal drag. You will only pay more tax if you are earning more money and if you are having to pay a bit of tax at the nigher rate, you can't be doing too bad.
<snip>
Here’s a simple example. I earn £120 a week. The first £20 is tax free and as it happens covers my rent. I pay 20% tax on the next £100 of my earnings. The balance of £80 pays food utilities council tax and transport. I’m OK. If I earned more than £120 per week I’d pay 40% tax on any additional amount
Then inflation hits. My rent is now £22 a week. My other expenses are now £88 a week. Luckily my pay has also increased by 10%. However tax bands haven’t changed. The first £20 is tax free, but that amount no longer covers my rent. The next £100 is taxed at 20% leaving £80, but £2 of that now goes on rent. The next £12 (my pay rise) is taxed at 40% - £4.80 leaving £7.20.
My total earnings are £132.
My tax bill is £24.80.
My take home pay is £107.20.
My rent and other expenses are £110.
I’m in trouble, a victim of fiscal drag.
Thank you for explaining the nature and consequences of fiscal drag with an example that should be simple enough for anyone to understand.
I don't understand this fuss about fiscal drag. You will only pay more tax if you are earning more money and if you are having to pay a bit of tax at the nigher rate, you can't be doing too bad.
You understand that the important bit about money is not the numerical figures, but its purchasing power, right? In other words, you always want to think in inflation-adjusted terms.
When you frame your thoughts that way, an increase in pay of less than the prevailing rate of inflation is still, effectively, a pay cut. An increase in tax bands of less than the prevailing rate of inflation is, effectively, a tax increase.
The number of pounds you have is irrelevant. What matters is how much stuff those pounds buy.
I don't understand this fuss about fiscal drag. You will only pay more tax if you are earning more money and if you are having to pay a bit of tax at the nigher rate, you can't be doing too bad.
You understand that the important bit about money is not the numerical figures, but its purchasing power, right? In other words, you always want to think in inflation-adjusted terms.
When you frame your thoughts that way, an increase in pay of less than the prevailing rate of inflation is still, effectively, a pay cut. An increase in tax bands of less than the prevailing rate of inflation is, effectively, a tax increase.
The number of pounds you have is irrelevant. What matters is how much stuff those pounds buy.
Yes, I understand it all but when you have to find nearly £100 billion a year just to pay for the interest on the national debt as well as pay for everything else. we have to raise tax from somewhere. This fiscal drag effects people on average wages and below far more than those in the 40p tax band because the hugher earners can afford a bit of 'financial pain'.
I don't understand this fuss about fiscal drag. You will only pay more tax if you are earning more money and if you are having to pay a bit of tax at the nigher rate, you can't be doing too bad.
You understand that the important bit about money is not the numerical figures, but its purchasing power, right? In other words, you always want to think in inflation-adjusted terms.
When you frame your thoughts that way, an increase in pay of less than the prevailing rate of inflation is still, effectively, a pay cut. An increase in tax bands of less than the prevailing rate of inflation is, effectively, a tax increase.
The number of pounds you have is irrelevant. What matters is how much stuff those pounds buy.
Yes, I understand it all but when you have to find nearly £100 billion a year just to pay for the interest on the national debt as well as pay for everything else. we have to raise tax from somewhere. This fiscal drag effects people on average wages and below far more than those in the 40p tax band because the hugher earners can afford a bit of 'financial pain'.
We should have to raise tax by much if government spending is correct. This government has spent it very badly and millions of pounds have been wasted. Millions that could have been put back into the economy and public services. We bail out failing businesses that run public transport for instance. Rwanda is another. Not claiming back Covid money is another.
Earlier you were saying with signs of some apparent sympathy that some people in the Tory party think the government is too left wing because it's raising so much tax.
Now you're saying that the tax it is raising is not a problem.
It does rather seem that your objection is not to the criticism but to who is making it. Which is the wrong way round.
<snip>
I don't understand this fuss about fiscal drag. You will only pay more tax if you are earning more money and if you are having to pay a bit of tax at the nigher rate, you can't be doing too bad.
<snip>
Here’s a simple example. I earn £120 a week. The first £20 is tax free and as it happens covers my rent. I pay 20% tax on the next £100 of my earnings. The balance of £80 pays food utilities council tax and transport. I’m OK. If I earned more than £120 per week I’d pay 40% tax on any additional amount
Then inflation hits. My rent is now £22 a week. My other expenses are now £88 a week. Luckily my pay has also increased by 10%. However tax bands haven’t changed. The first £20 is tax free, but that amount no longer covers my rent. The next £100 is taxed at 20% leaving £80, but £2 of that now goes on rent. The next £12 (my pay rise) is taxed at 40% - £4.80 leaving £7.20.
My total earnings are £132.
My tax bill is £24.80.
My take home pay is £107.20.
My rent and other expenses are £110.
I’m in trouble, a victim of fiscal drag.
Your example is far too simple and gives false results. It would be helpful if you used real life figures. If you got a 10% rise on your £120, you would still not be paying any tax.
You would only be paying an extra 20% tax on anything over £50K a year
The point of the simple example is to show clearly how fiscal drag works. You can put what real life figures you like into the equation, but as long as there is inflation and the thresholds don’t change you’ll get that effect. It is in practice a hidden way of increasing taxes.
You’re right too to note that it hits the poorest hardest. It’s actually a double whammy for them, firstly because inflation tends to mean that cheap own brands are quietly discontinued, so on the things they have to spend money on the effective rate of inflation is higher than the general rate.
Secondly, as you note, they have less room for manoeuvre. Somebody who’s previously been saving a bit stops saving. Somebody who’s managed a week in the sun in Alicante has to get by with a week in a holiday park in Norfolk. But somebody who’s already on the breadline is in a desperate situation. They’re now having to skip meals, go to the foodbank etc.
The tax free element of someone’s income sort of represents the minimum amount they need to live on. If that’s all they’re earning the state considers it’s not right to tax them. If inflation bites, the basic living cost is higher. If the threshold doesn’t change then they are now being taxed on some of the minimum income they need.
In relation to the autumn statement, it's striking that the tabloids celebrate an apparent give-away, but more sober papers mention fiscal drag, that tax thresholds have not gone up. Hence some people are being dragged into paying tax, and some into the 40% bracket. It's supposed to be the highest tax burden since the war. I wonder why the Mail didn't have that on their front page.
I don't understand this fuss about fiscal drag. You will only pay more tax if you are earning more money and if you are having to pay a bit of tax at the nigher rate, you can't be doing too bad.
The equivalent would be if your annual pension increase (currently tied to the triple lock) was taxed, or taxed at a higher rate to the rest of your pension.
In relation to the autumn statement, it's striking that the tabloids celebrate an apparent give-away, but more sober papers mention fiscal drag, that tax thresholds have not gone up. Hence some people are being dragged into paying tax, and some into the 40% bracket. It's supposed to be the highest tax burden since the war. I wonder why the Mail didn't have that on their front page.
I don't understand this fuss about fiscal drag. You will only pay more tax if you are earning more money and if you are having to pay a bit of tax at the nigher rate, you can't be doing too bad.
The equivalent would be if your annual pension increase (currently tied to the triple lock) was taxed, or taxed at a higher rate to the rest of your pension.
Which, of course, is happening to many people, precisely because of fiscal drag. Only someone absolutely determined to see inflation as some kind of force of nature, rather than a feature of political choices (such as allowing the Band of England to pursue a sadistic interest rate policy and corporate interests to gouge obscene profits) can be blind to the avoidable suffering of fiscal drag.
Perhaps @Telford would like to remind us of all the Good Things that Brexit has achieved for this great country?
We are no longer in the EU. That's more than enough for me.
Then you're even more of an idiot than I had ever imagined. **** all the way off.
I am merely a member of the 52% club
Which is now down to about 40% and sinking, as this minor issue called reality sinks in. You were sold a crock of shit. It's now emptying all over your head and still you can't smell it. There are words.
Perhaps @Telford would like to remind us of all the Good Things that Brexit has achieved for this great country?
We are no longer in the EU. That's more than enough for me.
Then you're even more of an idiot than I had ever imagined. **** all the way off.
I am merely a member of the 52% club
Which is now down to about 40% and sinking, as this minor issue called reality sinks in. You were sold a crock of shit. It's now emptying all over your head and still you can't smell it. There are words.
Correction: it's emptying over our head. Which is the source of my anger: I smelt it when it was offered. It stank, and you threw it all over me. I find that hard to forgive. And take your ridiculously tiny majority and shove it into a ridiculously tiny space of your choice.
Perhaps @Telford would like to remind us of all the Good Things that Brexit has achieved for this great country?
We are no longer in the EU. That's more than enough for me.
Then you're even more of an idiot than I had ever imagined. **** all the way off.
I am merely a member of the 52% club
Which is now down to about 40% and sinking, as this minor issue called reality sinks in. You were sold a crock of shit. It's now emptying all over your head and still you can't smell it. There are words.
and I will give you some by Bob Dylan
Ramona
Come closer Shut softly your watery eyes
The pangs of your sadness
shall pass as your senses will rise
Perhaps @Telford would like to remind us of all the Good Things that Brexit has achieved for this great country?
We are no longer in the EU. That's more than enough for me.
Why, though? Serious question...what harm (if any) was the EU doing to you, for instance?
Dave, now David the Lord Cameron. promised a referendum and as a result he won the 2015 election. In 1975 I voted to remain in a common market, I had never had the chance to vote to remain in the EU.
And, there was no reason why "Lord" Cameron had to actually hold the referendum he did. He could have delayed to allow more time to sell the benefits of EU membership, or for the Leave side to try and unite behind one version of the incompatible fantasies they were offering. He could have simply spent 5 years doing something reasonably useful to build the UK economy and repair the damage done between 2010 and 2015 before things got too bad, and found there wasn't time to get that particular stupid idea through Parliament.
Comments
But, given that we always seem to have war mongering governments there are wars that younger pensioners would have lived through (though, very few likely to have been directly affected by): Korea, Kenya, Cyprus, Suez, various conflicts in Malaysia, Aden, and of course Northern Ireland. Some may have experienced war elsewhere that the UK managed to keep out of.
Many of those who fought in the Falklands are just approaching retirement or recently retired. First Gulf War veterans aren't far behind.
You have a remarkable memory - I can remember almost nothing from when I was 7 or younger.
I averted my gaze quickly, as usual, but glancing at the *papers* in the Co-Op there were indeed a number of headlines on the *You've never had it so good* theme.
These *papers*, I presume, relate to the situation on the Planet Nibiru, or somewhere, but not in Merrie England...
OK, but the mere thought of having to put up with the greedy gobshites of the tory party for yet more years to come is not exactly enticing...
I joined some of my ex-crewmates (The Ladies Who Lunch) yesterday for one of our occasional get-togethers, and we realised that we were all vulnerable health-wise, in our 60s and 70s, and therefore a useless burden...
Some had indeed had Covid, but survived, and were almost incandescent with rage at the callous attitude of that Loathsome and Odious Oaf who played at being Prime Minister...
If the government is gathering a greater proportion of money in tax than ever before, what are they spending it on?.
A very pertinent question. Answers on a postcard, please.
Not a complete answer but it's a big part of it. The stunted growth is the other big factor as it means the proportion of GDP taken up by the public sector is increasing as the overall GDP is stagnant... Hence the need for higher tax take (as a proportion of GDP.
Basically, it's the price fundamental mismanagement.
Other words could, and should, be added, of course.
And costs have gone up - driven primarily by imports of which the most significant is energy.
From being that age or younger I can remember - a couple of days at nursery school, first day at school, a few events at primary school, but I wouldn't describe any of it as clear. Just images. But then, this was the early 70s, not much was happening.
Just spotted this little piece by poet Michael Rosen in today's Guardian - I assume it's in the public domain, as it's on their website:
Out of bedrooms and wards
long lines of the dead walk towards you
asking you,
‘Who were you to decide
that our innings was over?
Who gave you the umpire’s white coat
and upraised finger?’
Did you think we would never speak
from the graves you gave us?
I don't understand this fuss about fiscal drag. You will only pay more tax if you are earning more money and if you are having to pay a bit of tax at the nigher rate, you can't be doing too bad.
I was born a few years after WW2 ended. I never learnt anything about the war at school. I guess they assumed that our family would tell us. However, the only things I learnt at home were that my dad was in the Royal Marines and my Mom worked on the buses. Perhaps they assumed we would be told all about it at school.
My Dad served in the Army during WW2, and went with the BEF to France at an early date, seeing action in and around Lille, though he never liked to talk about it. He was seriously injured in an accident on camp at Aldershot in 1940, and spent several years in and out of various military hospitals, so Mum had vivid memories of visiting him (and of the difficulties of wartime travel).
The father of Mrs BF the Second - he died before I came to know the family, so I never met him - was a prisoner of the Japanese in Burma, and, like many other survivors, never spoke at any length about his experiences.
IIRC, though, the subject of WW2 wasn't exactly avoided at school - perhaps it was just too recent to have become a settled part of the history curriculum.
The fact that the annualised rate of inflation is dropping has no effect on what I am saying because it is more than a year since the personal allowance was increased. So don't give me that bullshit. Thank you.
Then inflation hits. My rent is now £22 a week. My other expenses are now £88 a week. Luckily my pay has also increased by 10%. However tax bands haven’t changed. The first £20 is tax free, but that amount no longer covers my rent. The next £100 is taxed at 20% leaving £80, but £2 of that now goes on rent. The next £12 (my pay rise) is taxed at 40% - £4.80 leaving £7.20.
My total earnings are £132.
My tax bill is £24.80.
My take home pay is £107.20.
My rent and other expenses are £110.
I’m in trouble, a victim of fiscal drag.
You would only be paying an extra 20% tax on anything over £50K a year
Thank you for explaining the nature and consequences of fiscal drag with an example that should be simple enough for anyone to understand.
You understand that the important bit about money is not the numerical figures, but its purchasing power, right? In other words, you always want to think in inflation-adjusted terms.
When you frame your thoughts that way, an increase in pay of less than the prevailing rate of inflation is still, effectively, a pay cut. An increase in tax bands of less than the prevailing rate of inflation is, effectively, a tax increase.
The number of pounds you have is irrelevant. What matters is how much stuff those pounds buy.
Now you're saying that the tax it is raising is not a problem.
It does rather seem that your objection is not to the criticism but to who is making it. Which is the wrong way round.
You’re right too to note that it hits the poorest hardest. It’s actually a double whammy for them, firstly because inflation tends to mean that cheap own brands are quietly discontinued, so on the things they have to spend money on the effective rate of inflation is higher than the general rate.
Secondly, as you note, they have less room for manoeuvre. Somebody who’s previously been saving a bit stops saving. Somebody who’s managed a week in the sun in Alicante has to get by with a week in a holiday park in Norfolk. But somebody who’s already on the breadline is in a desperate situation. They’re now having to skip meals, go to the foodbank etc.
The tax free element of someone’s income sort of represents the minimum amount they need to live on. If that’s all they’re earning the state considers it’s not right to tax them. If inflation bites, the basic living cost is higher. If the threshold doesn’t change then they are now being taxed on some of the minimum income they need.
The equivalent would be if your annual pension increase (currently tied to the triple lock) was taxed, or taxed at a higher rate to the rest of your pension.
Which, of course, is happening to many people, precisely because of fiscal drag. Only someone absolutely determined to see inflation as some kind of force of nature, rather than a feature of political choices (such as allowing the Band of England to pursue a sadistic interest rate policy and corporate interests to gouge obscene profits) can be blind to the avoidable suffering of fiscal drag.
https://www.theguardian.com/politics/2023/nov/25/uks-flagship-post-brexit-trade-deal-worth-even-less-than-previously-thought-obr-says
Lunacy - but the swivel-eyed loons will never admit it...
Yes, the only views on economics that should be valued are those of bampot brexiteer ultras.
Then you're even more of an idiot than I had ever imagined. Fuck all the way off.
Hard luck.
Which is now down to about 40% and sinking, as this minor issue called reality sinks in. You were sold a crock of shit. It's now emptying all over your head and still you can't smell it. There are words.
Why, though? Serious question...what harm (if any) was the EU doing to you, for instance?
Correction: it's emptying over our head. Which is the source of my anger: I smelt it when it was offered. It stank, and you threw it all over me. I find that hard to forgive. And take your ridiculously tiny majority and shove it into a ridiculously tiny space of your choice.
It's too late now, of course, but I expect there are others who say the same.
Ramona
Come closer
Shut softly your watery eyes
The pangs of your sadness
shall pass as your senses will rise
Dave, now David the Lord Cameron. promised a referendum and as a result he won the 2015 election. In 1975 I voted to remain in a common market, I had never had the chance to vote to remain in the EU.