Discussion in 'Miscellaneous' started by MacLeod, Apr 18, 2017.
It was years...
Worked for Trump. Corbyn doesn't use social media wel
Child benefit being stopped for >£50k earners was brought in by the coalition government, not Labour. With free school meals, I doubt it would apply to private schools, and free school meals, at least in primary schools, for all makes perfect sense - schools shouldn't have to deal with collecting money from parents, and what happens when the parents don't pay -- kids starve? Get put on the poor-persons table? Take it out of child benefit to fund it.
The child benefit docking is a shambles for experienced professionals like train drivers. Take a family with 2 kids that earns £50k, with one parent staying at home looking after the kids, and one parent as a train driver. Total net wage £3,065.01 per month.
If the train driver does some overtime, the train company spends £1,138. £138 is taken in employer NI, £20 employee NI, £400 in income tax, and £178.88 off child benefit. That leaves the train driver with £401.12, or an effective marginal tax rate of 65%. Even setting aside the employer NI, the marginal tax rate for people between £50k and £60k with two children is 60%.
Now take someone who earns £80k a year from investments, and manages to earn an extra £1138 one year through some lucky bets / wise investments. They'll pay 40% income tax or £455, leaving them with £682.80. What a crazy situation.
The Child Benefit limit of £50k has not increased since it was introduced 5 years ago. It's currently 11% higher than the 40% tax rate band, when it was introduced it was 20% higher. In a few years time it will be below the higher rate band. They don't get any child benefit at this level, so no marginal deduction.
Now take another family, where both parents are at work and earn £45k each. They get a total net wage of £5,646.92 per month, with no deductions from child benefit - despite earning almost twice as much per month at the train driver above!
Well the first polls since the announcement are in and the Tories have increased there lead in at least one poll.
There is one sector of the population that is seemingly overlooked by politians. The single person with no kids.
The SINKIES will be taken care of by the taxpayers of the future, the little ones that the others produce. Its why the UK needs more migrants cos the indigenous are not producing enough children. We will end up like Germany with negative population growth, more humans dying than are being born.
What's a SINKIE?
Single Income No Kids
And the IE?
True, but putting politics aside, you can't keep growing the population. In turn those vibrant and active workers grow old - it's a pyramid scheme !
The whole developed world is looking at top heavy populations for a long time to come. It will be the major economic pressure my generation and those that follow have to deal with. Initially we thought it was just a matter of sweating it out until the big post war generation dies off and the birth rate would then stabilise. But in actual fact, the grandchildren of that generation are having even fewer kids than their parents, so the problem hasn't gone away (and the birth rate continues to fall, so there's no sign of stabilisation yet). There simply is less societal focus on having families than there once was and people become economically established later in life so have less opportunity to reproduce lots of times. In terms of the environment and resources, that's a great thing. The human population managing itself downwards is a positive overall. But it's going to cause us some real headaches in the meantime. The old economic model of the young and economically active paying a small amount to cover those who had retired and lived maybe ten, fifteen years after retirement, while churning out kids to pay for their retirement has collapsed. There are far more old people and they live to an older age, and fewer young people to cover the bill. My grandfather has almost been retired longer than he worked.
Which is part of the reason retirement age has increased and been equalised. I mean lokforward into the future I can see the retirement age rising to 70 and possible further.
Our current system of economics involves not just constant, but exponential growth.
With a stable population, the amount of human work needed reduces over time as automation makes things more efficent. In the 15th century 90% of the work done in the UK was in producing food. Now it's 1%. That means rather than spending 46 weeks a year growing food, we spend 3 days, leaving us 45.5 weeks a year to do other things (like looking after the elderly, or entertaining, or posting on BBSes, or making things more efficient).
We don't have a stable population - as the population ages, more work is needed to be done in supporting people, healthcare, social care, etc. As the population changes to more single-person households, more work is needed as we need more households. This offsets the automation to some extent.
As populations get richer, they tend to reduce their offspring - people starting having kids later for example, people are less willing to give up the quality of life they have in the 20s by having 6 kids so they just have 1 or 2. This reduces the proportion of the population that are able to work (age 20-60 say), but automation helps with that. The problem comes in the equitable divying up of the wealth of a country, of wealth begatting wealth (once you have £1m in assets you can earn minimum wage by sticking it in a bank - ROI of many assets is twice that. Once you have £2m you can earn at least £40k and don't need to work. As your wealth continues to increase it snowballs, as your expenses don't increase). inheritence means that wealth is passed down through dynastys, and over time we work our way back to a feudal system, where the people doing the work are the poorest.
We have a system in the UK (and the world in general) that taxes income, not wealth, i.e. it penalises work done. If you want a smaller proportion of the country to work harder to support a larger proportion -- which is what happens when population stops growing, you need to switch this round so the tax burden falls on the wealthy, not the hard working, otherwise that hard working will simply stop working, and I dont care how many millions you have, when nobody is willing to wipe your arse when you're 70 years old and bedridden, you're stuck.
The problem with an increasing retirement age is that many people can't work even upto 65 -- if you've been a builder or a firefighter or a farmer since the age of 16, and you're now 56, you'll be struggling now, let alone the prospect of working for another 10, or even 15 years. Those of us in cushy desk jobs can work longer, but even then all it takes is a stroke and suddenly you're stuck.
Sinkie as in Yuppie, its from the 1980's
Its about sustaining a positive growth factor with enough active working people. We need to turn that pyramid into a diamond.
I don't disagree with the principle, but you run into a lot of practical problems with the idea of taxing existing wealth because it can be (and under this system bloody quickly would be) locked up in property, cars, boats, woodlands, all sorts of things that aren't cash or easily translatable into cash. This leads to the issue of 'how do you calculate wealth' as well as the practical issue of how do you pay taxes on wealth that isn't cash? You can't take 10% of a house, or a boat. Council Tax demonstrates the problem in smaller scale - you are taxed based on the size of your house, which has no correlation to your available cash to pay that tax. Inheritance tax has a similar problem, resulting in people having to sell parts of estates to pay the tax. Fair enough perhaps when the owner has died, but how do you make the person pay tax on that wealth while they're still alive? Constantly remortgage their house?
The present system has to collapse sooner or later, the Western ultra- capitalist model does not reflect population and technological changes.
That can only work if people's health remain good, maybe its time to slow down the aging process so that a 70 year old looks more and has the strength of a 40 year old. Sounds like the Star Trek universe already. But if older people are working longer, what happens to youth employment?
I believe that government debt for retired people (ones claiming a state pension) should be able to be added as a charge to their assets - don't try to find £1500 a year for council tax, just add it onto the house as a charge (upto a certain value based on the council tax band and the local authority). Same goes for affording care. This eliminates the cashflow problems that people have and governments don't, but it ensures the bills are paid, an the pensioner does not lose out.
You could even allow the charge to move with the house if they wanted to sell and buy somewhere else of the same value.
When the house is sold post death, be it 5 years or 50 years, the money is collected then (and any appropiate inflation can be added - same rates as tuition fee loans). Usual protections around transferring to spouse, protections for under 18s to be able to stay living there until after leaving school, etc. The senior therefore get to live their lives in the home they've always lived in, and not worry about council tax or care costs.
There are many 70 year olds that have the health of a typical 50 year old. However there's also many that suddenly find that health vanish, a heart attack, a stroke, cancer, etc.
Perhaps they'll become more desirable, as a source of cheap labour, if the minimum wage keeps rising for older people.
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