General Election 2017

Mikinton

Mikinton

Well-Known Forumite
Indeed.

But there are subtle differences, a bit like when Labour implemented a "bedroom tax" back in 2008 (?).
 
Mikinton

Mikinton

Well-Known Forumite
https://capx.co/labours-manifesto-takes-the-voters-for-fools/

Which brings us, at long, long last, to how Labour’s going to raise the money. And on this, the manifesto has a lot less to say. Practically nothing, in fact.

The most obvious route is tax rises. But Labour “will guarantee to rule out rises in income tax for those earning below £80,000 a year, on personal National Insurance Contributions, and on VAT”. They insist that “only the highest 5 per cent of earners will be asked to contribute more in tax to help fund our public services that have suffered at the hands of seven years of Tory austerity”.

Fine. Great. Let’s assume that the rich – who are already contributing a gargantuan proportion of the tax take – will be entirely happy about this. That’s a few billion in the pot.

Except that the manifesto explicitly states that the resulting £6 billion a year plus will go to the NHS. Even then, it won’t be enough, so they’ll also fund it by raising taxes on private medical insurance and halving the fees paid to management consultants.

Next, there’s Labour’s plan to “ask large corporations to pay a little more”. The idea is to reverse Conservative cuts to corporation tax, thereby raising £20 billion. Except that as Daniel Mahoney of the Centre for Policy Studies calculated recently, Labour’s plan would only raise between £3.7 billion and £5 billion per year, because of the way higher taxes depress revenues.

The problem for Labour here isn’t just that lower corporation taxes have actually increased revenues, as this chart shows.
Click to expand...

Screen-Shot-2017-05-11-at-10.02.54-1-790x273.png


Note how the figure in the middle trends up while the figure at the bottom goes down.

Raising the rate of tax may make Labour supporters feel good but doesn't actually do the job.
 
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tek-monkey

tek-monkey

wanna see my snake?
Few points/questions:

Is it adjusted for inflation?
Does it reflect a rising population?
Why have offshore receipts dried up?
It would be much higher if we stopped letting people off extremely large bills (vodafone, google etc.)
 
Mikinton

Mikinton

Well-Known Forumite
tek-monkey said:
Few points/questions:

Is it adjusted for inflation? - Don't know. Compounded up, it looks like the inflation rate was about 15% for the period.
Does it reflect a rising population? - Don't know. I looks like population rose by about 5% - 3m over 62.75m
Why have offshore receipts dried up? - Don't know.
It would be much higher if we stopped letting people off extremely large bills (vodafone, google etc.) - Not sure if "much" is the right word in relative terms. Do you have any figures?
Click to expand...
Compare the above percentages to the percentage drop in tax rate (28.5% i.e. 8 percentage points) and the increase in annual tax receipts (15.5%).

If you're right in what you imply, it seems that inflation and the rising population pretty much cancel out the increase in tax receipts leaving us with the drop in tax rate having no appreciable effect.

But I'm certainly no expert so best read the article.

And there's this .... http://www.politics.co.uk/comment-a...-balanced-guide-to-the-draft-labour-manifesto
 
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