How to reverse austerity? Scrap some of the tax-relief schemes worth £204bn | Tax and spending

7 comments

1. A lot of these schemes do need to be scrapped, no doubt, but at the same time there does need to be some careful analysis on which ones exactly to avoid throwing the baby out with the bathwater.

   As this article rightly points out Entrepreneurs’ relief is a bit of a joke, and should rightly be considered for scrapping if no evidence can be found of an economic impact proportional to the cost.

   But on the other hand you’ve got tax reliefs like the EOT which, not only do they enable businesses to put profits in the hands of employees through an income-tax free bonus (where profits should rightfully go) but, also unlock a whole host of benefits enabled by the transition to employee ownership, such as an 8-12% average productivity increase per employee. Reliefs like these are absolutely vital to picking up our economy and actually probably need to be strengthened – even if they might also need to be tweaked slightly to be better targeted (and protected against misuse).

   Of course, these are the kind of details which neither Party are looking at – opting instead for soundbites which amount to not much at all.

2. – What about stopping sending and wasting wads of money in the latest CIA trap formerly known as Ukraine?

   – Well no, not _that_.

3. How to scrap austerity: Instead of being austere by restricting financing of things that will cost money but produce more value than their cost, you spend money on things that will provide more value than they cost, thus making the country better.

4. I think there’s a lot that labour haven’t put into their manifesto within this line of thinking that they plan to do but don’t need to to win votes so they’re not committing to it publicly

5. And what happens when she raises CGT – which we know is going to happen – and receipts fall, as HMRC know they will? What happens then?

   Labour are incredibly financially illiterate, and as bad as it is now, it’s only going to get worse. We’ve already tried the Labour lite approach over the past few years (big state, high tax, high migration) and it clearly has failed, so now we’re going for the full fat version.

   Tax rates don’t matter except when it comes to platitudes like “make the rich pay”, despite them paying an ever increasing % of tax revenues while more and more people contribute nothing to the system. All that should matter is the tax take. We should be brave and bold enough to set tax rates at the optimum level to maximise revenues. That could mean increasing some taxes, it will likely mean lowering many more. But people are – bizarrely – ideologically opposed to this even if the public purse ends up with much more money in it.

   CGT receipts will fall when she raises the rates. It’s just a matter of by how much. The current HMRC estimate is that a 10% increase in the higher rate of CGT will result in a £3bn+ loss of revenue over the next 2 years. And she’s likely to raise it by 20%. In what world does that make any sense to do?

6. You need to decide what kind of society you want. Either austerity is a problem or it isn’t. There are no maybe or maybe not in this question. Free for the rich and wealthy or a leveled playing field. 

7. How about we physically remove people from this country that arrived here illegally? That will save us several billion pounds a year.