Monday, April 17, 2006

Time to Go

Tighten your belts; just about all the big newspapers are reporting today that the final bill to British taxpayers for President Blair's cave-in on the EU budget is about £20 billion more than was announced at the time. This is a truly stupefying sum. The additional amount conceded by Mr. Blair last December is £7 billion, is equivalent to the total police budget for England and Wales. The United Kingdom's annual gross contribution to Brussels, £12 billion, is equivalent to the combined revenue raised by inheritance tax, capital gains tax and stamp duty. We are, in short, paying in an awesome amount of money and add this to the news today that two million people owe more than £10,000 on their credit cards and you have a financial elephant in the living room which can’t be ignored.

I’m off to the Isle of Wight and Southampton today for the second attempt to fly a banner over the St Mary’s Stadium, this time for the Saints game against Millwall at 3pm. We have to be over the top at exactly 15:05 with a message asking Southampton chairman, Rupert Lowe to resign. There’s a huge amount of pressure from the fans to make it happen today; the last attempt was aborted because of high winds and I’ll take some video shots of the stadium from above to share with you if all goes well.

16 comments:

Anonymous said...

Perhaps we should give that to Africa? As for credit card debt here is my story. Over 10 years I have acquired £23K of debt (excluding overdrafts). The reason? My wife gave up work in 1995 when our 1st child was born. We had no family to help us. Child care would have swallowed all but £100 of her monthly income (then £800 pcm)and as it was our first child had special needs requirements. Clothing and car repairs and increasing costs got defaulted to credit. Not one penny of help came from the state and we had to cut right back. We haven't had a holiday in years. I used to work an early, late and night shifts and between shifts did everything from parking cars for a hotel to sorting mail to running an internet business and delivering flyers. We now have accumulated the equivelent of a year's salary over a decade. Council tax has been the worst offender. In 1995 we paid I think £250 p.a. Now it's £1000. What for?

Anonymous said...

When I sit in Council Tax budget setting meetings ( I have done 3 this year!) I always try and remember stories like these, to set in context recommendations such as "only 4.6% rise this year".

Chris Wells

Anonymous said...

Good for you Chris but why wont you and the Tory party support a local income tax collected with normal tax through Paye and directly related to our ability to pay?
The tax burden created by Brown has sat heaviest as a proportion of income, on the poorest in our society.If a Conservative New Labour has done nothing about this gross inequality then shouldn't our new labour Conservative Party under David do something?

Anonymous said...

You hear the chancellor state he'll need to charge extra for this or that, utility companies state they have to charge extra because of water shortages, oil shortages, increased transport costs and then they're all patting themselves on the back for making great profits, cutting public expenditure etc. The same executives or politicians then slate public servants for wanting to retire at 60 who have tolerated poor pay for years whilst they pocket their platinum extra early retirment pensions and golden handshakes. They set people against people. The newspapers side with them too! The same people are responsible for cutting budgets back because they want to make savings. Then we the consumer pick up the tab but pay doesn't go up does it? My pay is the same as 10 years a go, it's just juggled around to make it look more. Where are we supposed to find the money? Yeah we'll make cut backs too, we'll go without heating in winter, walk around in the dark to avoid using electricity, miss eating lunch and go hungry because the bank manager sent your case to the collections centre who then made you spend £500 on a credit card to pay all their £35 charges in arrears or face some men visiting your house for a chat. Hell I only got this computer as I needed it for work and it's made out of bits and I use a Skype telephone. No one in power, whether utility companies or politicians thinks about where the money will come from. Seeing as I no longer need credit I'm going really annoy my bank manager now and ask the credit card company to stop charging interest and then pay them a minimum token sum per month and I've secretly moved my bank account to a basic cash only account so the bank will be left with no income and my huge overdraft which I'll pay off in modest installments whether they l;ike it or not. So long as you pay something the law protects you. The people who run this country don't care, only the party, policies and political agenda matters and the banks, insurance companies and utility companies are legalized extortinists.

Anonymous said...

The taxation system will always impinge unfairly on some group in society. There has been a move in recent years to multiply the number of taxes, so each one seems less individually than the whole. We now pay water rates, police and fire service separate precepts, as well as county and district and town council individual demands. They total much more than the single old rates, which was similarly compiled. In addition personal taxation is moving away from income to expenditure (indirect taxes, petrol for example?), or hidden away as National Insurance, these days just another tax. Pension fund taxation, airport taxes, fuel surcharges, all designed to hide the real total tax burden, which is huge.

Some element of tax has always related to property ownership as well, and council tax still retains this flavour. The bigger your property band, the greater the % of tax you must pay. The average is set at Band D. Generally this is reflective of ability to pay, if you can buy and run a larger property, usually you can afford the tax. There are exceptions, usually little old ladies on fixed incomes still living in the larger family home (that is not meant to be rude, just an obvious example). There is council tax benefit to be claimed if income is low.

Your case is based on a mythical assumption, that a local income tax would bear less heavily. It would still need to raise roughly equivalent sums; there would be winners and losers, and it would undoubtedly create a new anomaly of some hard pressed group. Plus, I have no idea about comparitive cost of collection. Countries where the local cash is raised this way, Canada for example, are not necessarily havens of happy taxpayers believing their system is best! Generally they feel they pay too much tax - sound familiar?

The best way is to reduce public expenditure so we do not need such a heavy tax burden in the first place. Right now we have a penurious tax system, surrounded by expensive means tested (and often wrongly calculated) means of ameliorating through a variety of tax credits. Getting the tax take down does away with the means testing bureaucracy and saves money all round.

You may nbe thinking this puts me at odds with current conservative thinking on public expenditure. Perhaps. Perhaps they are getting it wrong by aping the Blair/Brown model, which sounds grand in Islington, but hurts like hell out here!

Chris Wells

Anonymous said...

Chris,I accept that no group likes being taxed but fiscal studies all report that the poorest members of our society pay the greatest proportion of their meagre income in direct taxes and indirect taxes. This issue can easily be addressed by raising tax thresholds and surely local tax bands should be based on the old tithe system. Those above a certain threshold pay 10% of income and everyone pays a fair share of their income; it worked for the Church for many centuries!

Anonymous said...

Bit concerned we have heard little from Dr Moores about this afternoons flypast at Southampton.
Did it go well and have you returned safely?

James Maskell said...

With earnings rising above inflation, more people are being hit harder. The problem comes with reforming the tax system. Going to a simple flat tax as we all know disproportionately hits the poor and elderly. Too much complication with number of tax bands as well as tax credits and theres too much bureaucracy which drains money away.

I strongly believe in cutting personal and business taxes. Taxes are far too high and thats strangling the economy and peoples pockets.

Anonymous said...

May I venture to suggest that if the current tax system meant we all paid at 10% you probably would not be complaining!

Chris Wells

James Maskell said...

Having a single rate of 10% for all taxpayers would benefit the rich as they would pay a much reduced rate. Its disproportionate. Those earning lots of money can afford to pay 10% tax on their income, but 10% tax to someone earning just above the threshold is hit hard as the value of the money is greater to them than the person earning lots. Having more than one band allows the balance to be more equal. Flat taxes are regressive. Lower and fairer taxation I gladly advocate but flat taxes is just as bad as the system now.

Mathsman said...

Where's the maths here? 10% of a £10,000 salary is £1,000 and of £50,000 is £5,000. Whose paying more but proportionally the same? If the rate doesn't kick in until past £8,000, the poor bloke only pays £200 tax whilst the richer bloke pays £4,200. The difference betwwen the two has gone from ratio of 1:5 in amounts of tax paid to 1:21. i.e the richer bloke pays 21 times more tax than the poor guy and yet they both have the same zero rate allowance and still only pay 10%. Think about it?

Anonymous said...

The maths has to also include the number of rich blokes and the number of poorer blokes in relation to the total yield. plus what each may potentially do if they feel they are paying too much. Poor bloke moans, rich bloke moves overseas, or lends some money to a politician in return for a peerage?

Chris Wells

Anonymous said...

I accept your point about greedy rich bloke moving overseas but they wouldn't at a flat rate. Wot I can't understand is why we have a tax system that hits the poor bloke before he has even paid for food, fuel, shelter and clothes for him and his family. Even the Normans found that unsustainable; the peasants starved.

Anonymous said...

But those who didn't starve went on to form the Peasants Revolt which was stirred up mainly by a bunch of stroppy sods from Thanet!!

James Maskell said...

The Thanet stroppy sods are the best!

To give some more accurate numbers that we are looking at, the Adam Smith Institute proposes a flat tax of 22% with a threshold of 12,000 pounds. How will we fill in the 50 billion pounds hole in the public finances without hurting the frontline services?

The highest rate of income tax as everyone knows is 40%. Having a flat tax means those in the highest band get essentially a tax cut. It moves the tax burden downwards to those on middle incomes.

Anonymous said...

James when you mention 40% as being the highest rate don't forget about a tax by another name, the NI charge which is around 12% but is capped so it doesn't affect very big earners so much as middle income earners.
All I know is that if I earn £100 gross I pay £52 tax on it, then I buy petrol with that £48 left over and pay about another £32 tax, so I am left with £16 out of the £100 I sweated to earn.
Seems like a lot to pay, although if I bought a pair of shoes and not petrol I would just be paying 17 and a half percent VAT plus of course some EU imposed tariff which I don't even know how much it is.
At least we don't pay tax on basic foods YET, although many EU countries do.