They should have done this 11 years ago, why the hell has is taken them so long?

Damn good idea.

Provided, of course, that the higher rate threshold is adjusted to match.

If this is done – permanently and with the threshold rising every year – then I would certainly support it.

And I would support a higher top rate to pay for it.

As long as the lunatic tax credit system is also properly reformed and cost savings found there.

It has always been a disgrace that those on min wage have to pay tax and then claim it back.

Good news, though as noughtpointzero says, it should have been done ages ago. I wonder how close to the £10k mark we’d be if we were following a more realistic inflationary figure for the last decade?

Excellent idea. Death to income taxes!

Lee – even lower, actually. If we apply RPI to the April 1997 personal allowance (which was £4,045), it should be c. £5.3k, not the £6,035 it currently is. Lots of tax allowances haven’t been indexed for many many years now (principally in the benefits in kind legislation – did you know that £8.5k pa makes you a higher paid employee?)

The move would also help middle-income families, who would only starting paying the basic rate of tax on earning above £10,000.

First, I’ll believe it when I see it; second, I’m assuming it means a universal personal allowance of £10K, so even those people who aren’t ‘hard-working families’ on ‘middle incomes’ will get a tax cut as well. Perhaps if Brown had thought of this (and the proposed 45% top rate) ten years ago, New Labour would be viewed rather differently.

Vince Cable and LDs have been suggesting this for a year. Brown has kept the higher rate of tax low as well. Therefore many moderate earners ( Police Inspector , chartered engineers) have been inluded. A more sensible higher rate of tax would start at £50K. The danger is that many skilled engineers could move abroad. A chartered engineer/scientist from a top UK university is attractive to many countries.

Yes, this would seem to be an admission that everything he has done for the last eleven years has been a mistake. Must look up what people were saying at the time about why tax credits were a better solution than raising the tax threshold.

Must look up what people were saying at the time about why tax credits were a better solution than raising the tax threshold.

Amen.

(Well, they employed a lot of people. And LBH, Gordon likes nothing more than an overcomplicated, bureaucratic and expensive way to do the fucking obvious.)

While this would undoubtedly be a good thing to do, and personally I’d up the threshold to £15,000 or £16,000, I just cannot see this being brought about in the comprehensive, simple manner it would require?
Why?
Because it’d mean at least partly, if not wholly, dismantling Gordon Brown’s baby, tax credits which have been a ludicrously convoluted and ineffective way of attempting to assist the low-paid. It’s one of the things he’s allegedly proudest of, which tells you a lot: a daft technocratic ’solution’ which is massively overcomplicated and arse-around-tit, even if well-intentioned (sceptics say it’s deliberately confusing and off-putting to deter take-up of tax credits…). Instead of taking the money away from the poorly paid and then asking ‘em to apply to get some back, just don’t take it from ‘em in the first place…

“Lee – even lower, actually. If we apply RPI to the April 1997 personal allowance (which was £4,045), it should be c. £5.3k, not the £6,035 it currently is.”

I said realistic inflationary figure (for this type of thing at least), of which RPI is not in the slightest.

When someone comes up with a “only the shit we really need to buy” price index, then I’ll listen

Don’t get your hopes up. There’s nothing there to suggest it’s actually going to happen.

If it did I would completely welcome it. Cameron wouldn’t reverse it, so it looks permanent like.

If you raise the tax threshold and scrap tax credits (as some of you seem to want to do), then what will happen is that poor families lose money and middle and higher income earners gain money. Transferring wealth from the poor to the better off, and from those with children to those without, is not a good idea.

Much better would be to raise the threshold, keep tax credits (with some modifications) and make up the money by increasing taxes on higher earners, and cutting spending on things like ID cards.

Sorry, Chairman Ben S. Bernanke, But Quantitative Easing Won’t Work.

In a Liquidity Trap although Saving (S) is abnormally high investment (I) is next to 0.

Hence, the Keynesian paradigm I = S is not verified.

The purpose of Quantitative Easing being to lower the yield on long-term savings and increase liquidity it doesn’t create $1 of investment.

In a Liquidity Trap the last thing the Market needs is liquidity.

Quantitative Easing does diminish the yield on long-term US Treasury debt but lowers marginally, if at all, the asked yield on long-term savings.

Those purchases maintain the demand for long-term asset in an unstable equilibrium.

When this desequilibrium resolves the Market turns chaotic.

This and other issues are explored in my tract:

A Specific Application of Employment, Interest and Money
Plea for a New World Economic Order

Abstract:

This tract makes a critical analysis of credit based, free market economy, Capitalism, and proves that its dysfunctions are the result of the existence of credit.

It shows that no fiscal or monetary policy, including the barbaric Quantitative Easing will get us out of depression.

A Credit Free, Free Market Economy will correct all of those dysfunctions.

The alternative would be, on the long run, to wait for the physical destruction (through war or rust) of most of our productive assets. It will be at a cost none of us can afford to pay.

In This Age of Turbulence People Want an Exit Strategy Out of Credit,
An Adventure in a New World Economic Order.

A Specific Application of Employment, Interest and Money
http://edsk.org/interest.html

Press release of my open letter to Chairman Ben S. Bernanke:

Sorry, Chairman Ben S. Bernanke, But Quantitative Easing Won’t Work.
http://www.prlog.org/10162465.html

Yours Sincerely,

Shalom P. Hamou AKA ‘MC Shalom’
Chief Economist – Master Conductor
1776 – Annuit Cœptis.

It’s been a source of bemusement for years. Pay someone say £4 an hour, less than minimum wage, and you’re an evil, exploitative criminal. Yet the government is quite happy to tax people on poverty wages and apparently that’s OK.

£4 ph on a 40 hr week would be £8320 pa – at which point our government turns up and demands 20% of the last (approx) 2.5K – getting on for £500 !

“I agree with Laban” shock!

This has been UKIP policy for several years and the ASI has been shouting about it for many more.

One thing about indexation of allowances though. You shouldn’t uprate them by RPI (and certainly not CPI). They should go up with wage inflation. Yes, I know it ain’t going to be true this year but over the decades real wages (ie, after that RPI adjustment) go up by 1-2% a year, year on year. So if you don’t upgrade by wage inflation (and this holds true for the upper band as well) then you’re going to get ever more people sucked into the income tax net (and, indeed, the upper band).

Brown has never raised the allowances by more than RPI and in at least one year he froze it altogether. Of course, it’s not just him that has done this over the decades, but this is thre reason why 50 years ago you hardly paid income tax on average wages and now someone part time on minimum wage does.