Election Year or Fear!

[MadAmster]

Saw one economist on the box yesterday saying that mist of the "burden" of the extra tax from the budget will fall on the top 10% of earners. Unless you're in that top 10%, you'll likely think that's where it SHOULD fall.

There will be more than enough tales online, some credible, some obviously made up, of people who, for instance, run one small care home who will be worse off.

I saw it as a not unreasonable budget but there are several things in it that are dependent on certain other things and if anything in the "chain" breaks then.... IMO, austerity could return. I hope, for the sake of the country, that the Red Tories have got it right.

For me, the only change that applies is the 4.1% increase on my part OAP from next April. That's above Dutch inflation, which is good. Now waiting to hear, sometime in the next 6 weeks, what will happen to my part Dutch AOW and private pension. A similar rise to that of my UK OAP would be great although I wouldn't refuse a higher rise...

Going after the Covid billions is a great idea. If they find sufficient to permanently damage the Blue Tories, it will prove to be even better.

[Geoff Parkstone]

2% increase will have less impact on property buyers than the beer duty has on draft drinkers, in fact this small increase combined with a relatively larger increase in disposal (CG) tax might well change the minds of those in property to dispose of their assets. I was expecting and in fact had adjusted for some sort of income tax differential for 'unearned' income

But the CGT rate on selling second homes hasn't changed has it? Was 24% already - isn't it just other capital gains - eg on stocks n shares - where the rate has gone up.

CGT rate on second homes for higher rate tax payers was reduced from 28% to 24% by last blue budget

[Andy_Faber]

But the CGT rate on selling second homes hasn't changed has it? Was 24% already - isn't it just other capital gains - eg on stocks n shares - where the rate has gone up.

CGT rate on second homes for higher rate tax payers was reduced from 28% to 24% by last blue budget

Depends how you hold your asset. As I understand it holding as an individual hasn’t changed, holding as as shareholder in a company/partnership has.

[ramAnag]

I can only offer enlightenment on this from my own observation and experience, and for Tricky-related reasons I won't include comment about immigration pressures

An observation about 'the homeless': You may recall I did charitable work that brought me into contact with 'the homeless' (I don't now by the way, halo slipped). I was surprised/shocked that a significant amount of those I spoke to PREFERRED to be homeless, for reasons too complex for me to help with, including many who were given shelter and either refused it or quickly/repeatedly gave it up. Solving that (in those cases) seemed to me to be a mental health issue not an accommodation-shortage issue

Regarding empty properties, personally as a landlord I consider gaps in occupancy of my own properties beyond a couple of days per tenant changeover to be a failure on my part and I/we work bloody hard to avoid it happening, so seeing empty properties around frustrates me. BUT there are lots of genuine reasons, beyond the obvious 2nd home/occasional airbnb anomolies - houses in probate, houses vacated by people in old folks homes, houses empty due to temporary work relocation, houses waiting for sale where the owner has had to move, houses willed to people not yet capable of occupation, there are loads more and there's a lot of such inertia, I have indirect knowledge of the volume through my own and Mrs F's employment in estate agency/management. In most of these cases, and because every case is different, its not practically possible to give these properties over to people in need, think of the time (and cost) of bringing them up to standard as a for instance

Add to that the fact that if an accidental empty property owner becomes a landlord and gets it wrong, it can be a nightmare to put it back right. Whatever the noble intentions in allowing tenants into a property, once they are in they are in and they hold almost all of the cards, regardless of behaviour, inclination to pay or adhering to other conditions. Landlordship is a profession and I would always recommend owners NOT to risk their property unless it was for the long term and with eyes absolutely wide open to the pitfalls

Just a few points, not any sort of solution

Points all accepted. It was just something I’d read and wondered if it provided a way forward at a time when affordable housing is needed and they’re not making land anymore.

[Geoff Parkstone]

In fact global warming is taking land rather than making it!

[ramAnag]

In fact global warming is taking land rather than making it!

Hmmm. Inclined to agree, GP. Unfortunately despite all the recent evidence from the U.S, Spain and countless other harder to relate to places, there are still those amongst us, including dear old Donald, who remain in denial.

[Trickytreesreds]

So the dust has settled and my knowledge sweep is this from all the opinions.
We are taxed more (highest ever), we are borrowing more than ever. yet the projections for growth are around 1- 1,5% OVER THE NEXT 4-5 YEARS?
That doesn't exactly meet his description of excitement and growth to me|?
It is a bare minimum?

Yet again he never mentions the GDP per capita, which will keep falling whilst the population keeps surging. We are all poorer, even with or without his budget.

[Trickytreesreds]

In fact global warming is taking land rather than making it!

Thats not all true. We are clearing away rain forests faster than ever, So good news there. Errrrrrrrrrrrrrrrrrrrrrrrrrm, I think?

[Geoff Parkstone]

Clearing rainforests does not make land, it repurposes existing land, unless you reference mangroves.

[Geoff Parkstone]

TTR:

We always were going to be poorer if taxes rise - apart from those at the extremes of wealth who either get a bit more or avoid the rises

GDP per capital is always likely to fall with the importation of low earning people to do the jobs that our own indigenous population chose not to. The budget won't remedy that - it's
a social/structural dilemma: and arguably irresolvable.

[ramAnag]

TTR:

We always were going to be poorer if taxes rise - apart from those at the extremes of wealth who either get a bit more or avoid the rises

GDP per capital is always likely to fall with the importation of low earning people to do the jobs that our own indigenous population chose not to. The budget won't remedy that - it's
a social/structural dilemma: and arguably irresolvable.

Point well made, GP.

Not sure it’s entirely ‘irresolvable’ though.

Isn’t the simple truth that the proverbial nettle has begun to be grasped. IF we want good schools in buildings that are fit for purpose and likewise…good hospitals, dentistry facilities, cleaner rivers and better roads etc then we have to pay for them and I can’t see how most of the required funding will come from anywhere other than taxation.

So yes, we may be superficially worse off with higher taxation…but we’ll hopefully be better off in terms of our grandchildren’s schooling, our hospital waiting lists, dentist availability, the use of AI within the NHS, and the ability to travel without encountering tyre bursting or accident causing potholes. Question then is…which route do we want to take?

That’s the theory anyway. Of course if it all comes to nothing they’ll have failed and will be voted out. If it eventually works however…then I’ll regard us as being ‘richer’.

[swaledale]

TTR:

We always were going to be poorer if taxes rise - apart from those at the extremes of wealth who either get a bit more or avoid the rises

GDP per capital is always likely to fall with the importation of low earning people to do the jobs that our own indigenous population chose not to. The budget won't remedy that - it's
a social/structural dilemma: and arguably irresolvable.

Except that is not what is happening, the bulk of the immigration since the Brexit deal was agreed has been skilled workers, with the exception of temporary agricultural workers that tend to have 6 months visas for vegetable and fruit picking etc. There are a set of salary levels, depending upon the occupation, starting around the £23K mark, but level is set at £38K, so hardly filling low paid jobs.

Your correct in that its a structural issue, basic demographics, the birth rate has been falling for decades. Other than a rise in the long term sick, which is something that can be addressed, there is no large pool of indigenous labour available to do these jobs.

[swaledale]

Point well made, GP.

Not sure it’s entirely ‘irresolvable’ though.

Isn’t the simple truth that the proverbial nettle has begun to be grasped. IF we want good schools in buildings that are fit for purpose and likewise…good hospitals, dentistry facilities, cleaner rivers and better roads etc then we have to pay for them and I can’t see how most of the required funding will come from anywhere other than taxation.

So yes, we may be superficially worse off with higher taxation…but we’ll hopefully be better off in terms of our grandchildren’s schooling, our hospital waiting lists, dentist availability, the use of AI within the NHS, and the ability to travel without encountering tyre bursting or accident causing potholes. Question then is…which route do we want to take?

That’s the theory anyway. Of course if it all comes to nothing they’ll have failed and will be voted out. If it eventually works however…then I’ll regard us as being ‘richer’.

I do think that they should have levied higher taxes on high earners, whilst until such times as we re-join the customs union and/or the single market, economic growth will continue to be low. But I guess over the next 2 or 3 years Labour will perhaps move towards this, because they surely know that this is the case.

[MadAmster]

The crux of it, IMO, is that we are prisoners of the shareholding faction. They want ever more in dividends which means they want companies to sell more and more goods and services. With birth rates falling, we actually need less goods to be made and sold, less services are needed because there's less people. The demands of the shareholders is why we keep getting high immigration levels we don't really need.

Int greed grand?

[Geoff Parkstone]

That analysis is intriguing MA - as s far as the domestic economy is concerned it's likely true: we do not need to consume more but vast marketing budgets exist to convince us that we do, in order to avoid contracting demand.

But most significant brands/quoted businesses are globalized where the consumer marketplace is still expanding although much of that demand is perhaps unable to afford the goods.

This does place Mother Capitalism in a difficult position, and one of its biggest challenges is to attain sustained growth where the richer first world demand should be tailing off and poorer third world demand continuing to rise. (Terms used loosely).

A flaw in the model? The model seems to require infinite demand - but that demand needs to be one which maintains price integrity.

Dividend demands? Well suppliers of capital are an integral stakeholder in the system and rightly deserve a return on the capital which they put at risk of loss. Of course that return should be proportionate but it cannot be denied. Don't forget here that the rapacious shareholder is significantly likely, ultimately, to be you and I via our pensions - and we all like to see those rise as you yourself noted elsethread.