Where has all the money gone &what to do about it.

unlacedgecko · May 28, 2019

Goweresque said:
Which is my point exactly. Everything gets more complex and requires more grey matter to be able to do it successfully. And more and more of society doesn't have the grey matter necessary, and start to fall between the cracks.

You then have an addition process at work, assortative mating. Which basically means clever people are more likely to have kids with clever people (and produce higher than average intelligence children) and vice versa. If 90% of jobs require X level of intelligence and those below that end up largely on benefits, partners are going to be selected from your immediate social circles, which will be sorted by intelligence beforehand, by jobs and education (or lack thereof). So even the random nature of DNA transfer will be dulled by the pre-sorting of people into groups by intelligence before they select who to have kids with.

So increasingly you will end up with two groups - those capable of getting on in modern society, and having kids who can get on as well, and those who aren't capable of managing the modern world, and neither will their kids be, largely. Plus of course there will be a lot of nurture as well - a dim child from intelligent parents will be pushed at school and got through university and probably make a go of life, a similar kid from a not so bright background won't have the same support to force them onwards. So you have both nature and nurture working in conjunction to create separate groups within society.

I agree entirely. Then the added issue of the less able generally having more offspring per capita than the more able.

Divergence of the human species?

Cropper · May 28, 2019

ollie989898 said:
I have to laugh at Clive not wanting any more taxation. That is fine. I would then introduce means testing for anyone wanting to use NHS services, including social care, dentists and schools.

But this already happens through taxation doesn’t it? The more one earns the more tax one has to pay, 40% of £100k is a lot more than 20% of £40k isn’t it? And some higher earners will choose to use some of their wealth to pay for private health, private dentists and private schools which benefits the state twice by reducing the burden on the NHS and state schools.

Werzle said:
Very true but it grates when we see it being wasted on crazy schemes and incompentence

The first thing the new Lib-Dem local council did after being elected was to vote through a pay rise for themselves!

lazy farmer said:
I love the fact many seem to be defending what isn’t working.
for what is quite frankly very little risk paid and effective tax rate of 6%

I’m finding it hard to imagine how you are doing this legally unless your calculations are out? Are you saying you are paying 6% tax on your business profit or on what you pay yourself out of the business?

For example, £720 tax on £12000 salary seems believable but £6k tax on £100k profit seems less so but possible with capital allowances which means the money has gone somewhere else anyway.

Highland Mule · May 28, 2019

Cropper said:
But this already happens through taxation doesn’t it? The more one earns the more tax one has to pay, 40% of £100k is a lot more than 20% of £40k isn’t it? And some higher earners will choose to use some of their wealth to pay for private health, private dentists and private schools which benefits the state twice by reducing the burden on the NHS and state schools.

The first thing the new Lib-Dem local council did after being elected was to vote through a pay rise for themselves!

I’m finding it hard to imagine how you are doing this legally unless your calculations are out? Are you saying you are paying 6% tax on your business profit or on what you pay yourself out of the business?

For example, £720 tax on £12000 salary seems believable but £6k tax on £100k profit seems less so but possible with capital allowances which means the money has gone somewhere else anyway.

I suppose if LF was very close to retirement, he could be loading most of his profit into a pension fund, with the expectation of getting it back out as a lump sum in a year or two? If not, and he's found a magic loophole then I want to know - I run a limited company and pay way more tax than that.

ollie989898 · May 28, 2019

So, we have concluded that the poor are either too thick or too lackadaisical to be of benefit to society, so much for social mobility then.

I can't help but notice that other countries in Europe have more provision for young people, including proper recruitment programs rather than an endless system dumping money into tertiary education.

Goweresque · May 28, 2019

ollie989898 said:
So, we have concluded that the poor are either too thick or too lackadaisical to be of benefit to society, so much for social mobility then.

I can't help but notice that other countries in Europe have more provision for young people, including proper recruitment programs rather than an endless system dumping money into tertiary education.

Given the UK is close to the bottom of the youth unemployment stats (ie one of the lowest rates, which is good) across Europe, I think we can't be doing that badly. Particularly when compared to countries like France, Spain and Italy who are double the UK. Even Sweden, your poster child for Nordic economics,has far higher youth unemployment than the UK, 17% to 11%.

https://www.statista.com/statistics/266228/youth-unemployment-rate-in-eu-countries/

NLF · May 28, 2019

lazy farmer said:
Ignoring the fact that the austerity push since the coalition government has pushed childhood poverty to over 3 million adult care is on the brink of total collapse whilst the likes of me for what is quite frankly very little risk paid and effective tax rate of 6%.

Please explain how you get to a 6% tax rate (legally)?

Corporation tax is 19%, income tax ranges from 20% to 60% with NI on top. The only way you can legally pay 6% tax on your income is if you don't make much profit or have a lot of phoney partners.

The corporate partner loophole (a so called "controlled partner") has been closed for the April 2019 tax year so anyone using that to shift profit will get a nasty surprise this year. HMRC has said that you either have to be taxed like a partnership or a company, but not a hybrid where the partners control the corporate partner.

Goweresque · May 28, 2019

It needs not to be forgotten that the tax rates we all talk about are marginal ones. The actual overall tax rate a person pays will depend on their actual income level. For example if your income is below the tax allowance, your income tax rate is zero. If its a thousand pounds over you only pay 20% on the thousand, which works out at an effective rate of 1.5%, and so on and so forth.

Take a person on the minimum wage (£8.21) who works a 40 hour week they will earn £328/wk, or £17077/yr. They will pay £911 of income tax and £1013 of NI, a total of £1924. Thats just over 11% of their income.

Now compare to someone on £100k. They will pay £27492 in income tax and £5964 in NI, a total of £33468, thats a tad over one third of their income.

So they have earned just under 6 times as much income, but paid over 17 times as much tax. When people say 'the rich aren't paying their fair share' it is in fact true, its just that they are paying far MORE that their 'fair share', by a massive margin.

lazy farmer · May 28, 2019

NLF said:
Please explain how you get to a 6% tax rate (legally)?

Corporation tax is 19%, income tax ranges from 20% to 60% with NI on top. The only way you can legally pay 6% tax on your income is if you don't make much profit or have a lot of phoney partners.

The corporate partner loophole (a so called "controlled partner") has been closed for the April 2019 tax year so anyone using that to shift profit will get a nasty surprise this year. HMRC has said that you either have to be taxed like a partnership or a company, but not a hybrid where the partners control the corporate partner.

The limited company is part of a partnership. So profits can be placed to best advantage tax wise. Which may include loses which may mean repayments are made. And the game goes on.

Cropper · May 28, 2019

lazy farmer said:
The limited company is part of a partnership. So profits can be placed to best advantage tax wise. Which may include loses which may mean repayments are made. And the game goes on.

So you think you should be paying tax if you’re making losses?

lazy farmer · May 28, 2019

Cropper said:
So you think you should be paying tax if you’re making losses?

the limited company made a very large profit the other partners made losses.

brigadoon · May 28, 2019

lazy farmer said:
the limited company made a very large profit the other partners made losses.

Still a long way short of explaining a claim of a 6% tax rate, nothing wrong with offsetting losses across the partnership but that is reducing the taxable amount not the rate.

ollie989898 · May 28, 2019

Goweresque said:
It needs not to be forgotten that the tax rates we all talk about are marginal ones. The actual overall tax rate a person pays will depend on their actual income level. For example if your income is below the tax allowance, your income tax rate is zero. If its a thousand pounds over you only pay 20% on the thousand, which works out at an effective rate of 1.5%, and so on and so forth.

Take a person on the minimum wage (£8.21) who works a 40 hour week they will earn £328/wk, or £17077/yr. They will pay £911 of income tax and £1013 of NI, a total of £1924. Thats just over 11% of their income.

Now compare to someone on £100k. They will pay £27492 in income tax and £5964 in NI, a total of £33468, thats a tad over one third of their income.

So they have earned just under 6 times as much income, but paid over 17 times as much tax. When people say 'the rich aren't paying their fair share' it is in fact true, its just that they are paying far MORE that their 'fair share', by a massive margin.

A few percent more is no reason to complain either. And back to companies: 30%, lets not beat around the bush.

ollie989898 · May 28, 2019

Goweresque said:
Given the UK is close to the bottom of the youth unemployment stats (ie one of the lowest rates, which is good) across Europe, I think we can't be doing that badly. Particularly when compared to countries like France, Spain and Italy who are double the UK. Even Sweden, your poster child for Nordic economics,has far higher youth unemployment than the UK, 17% to 11%.

https://www.statista.com/statistics/266228/youth-unemployment-rate-in-eu-countries/

That's great but I don't believe UK unemployment rates and neither do you.

Goweresque · May 29, 2019

ollie989898 said:
That's great but I don't believe UK unemployment rates and neither do you.

Well I can't speak for other parts of the UK, but round these parts anyone who actually wants work can find it in next to no time, its finding workers thats the hard part. Everyone I know who employs people is tearing their hair out at the impossibility of finding decent staff. Plenty who are happy to turn up, do b*gger all and collect their pay, and then disappear every few days 'on the sick' and for 'family emergencies', but actual grafters are thin on the ground.........anyone who is one can name their price. And usually has gone self employed, and is booked up for here to next Christmas.

ollie989898 · May 29, 2019

Goweresque said:
Well I can't speak for other parts of the UK, but round these parts anyone who actually wants work can find it in next to no time, its finding workers thats the hard part. Everyone I know who employs people is tearing their hair out at the impossibility of finding decent staff. Plenty who are happy to turn up, do b*gger all and collect their pay, and then disappear every few days 'on the sick' and for 'family emergencies', but actual grafters are thin on the ground.........anyone who is one can name their price. And usually has gone self employed, and is booked up for here to next Christmas.

Thats a nice story but in no way has any bearing on unemployment statistics.

brigadoon · May 29, 2019

ollie989898 said:
A few percent more is no reason to complain either. And back to companies: 30%, lets not beat around the bush.

No lets not - your proposal is unlikely to see an increase in tax take in the UK which is kind of the whole point

Since, with the exception of Capital and Other taxes, almost all taxes come out of companies in one shape or form what on earth do you hope to achieve by putting a brake on economic activity?

lazy farmer · May 29, 2019

brigadoon said:
Still a long way short of explaining a claim of a 6% tax rate, nothing wrong with offsetting losses across the partnership but that is reducing the taxable amount not the rate.

There we will have to disagree

gatepost · May 29, 2019

Goweresque said:
Well I can't speak for other parts of the UK, but round these parts anyone who actually wants work can find it in next to no time, its finding workers thats the hard part. Everyone I know who employs people is tearing their hair out at the impossibility of finding decent staff. Plenty who are happy to turn up, do b*gger all and collect their pay, and then disappear every few days 'on the sick' and for 'family emergencies', but actual grafters are thin on the ground.........anyone who is one can name their price. And usually has gone self employed, and is booked up for here to next Christmas.

Oh so true , daughter has a pub and butchers , turning up to work appears to be a vague general idea but in no way an absolute requirement.

Kiwi Pete · May 29, 2019

Goweresque said:
Well I can't speak for other parts of the UK, but round these parts anyone who actually wants work can find it in next to no time, its finding workers thats the hard part. Everyone I know who employs people is tearing their hair out at the impossibility of finding decent staff. Plenty who are happy to turn up, do b*gger all and collect their pay, and then disappear every few days 'on the sick' and for 'family emergencies', but actual grafters are thin on the ground.........anyone who is one can name their price. And usually has gone self employed, and is booked up for here to next Christmas.

You can speak for other parts of the world with that statement!
Staff are easy to find, but great staff are like finding an ounce of gold dust in your washbasin..

Goweresque · May 29, 2019

ollie989898 said:
Thats a nice story but in no way has any bearing on unemployment statistics.

But you were saying the statistics were bunk! The actual unemployment stats are the lowest they've been for decades, 44 years to be precise:

https://www.theguardian.com/business/2019/mar/19/uk-unemployment-falls-brexit-jobless-rate

So if there's a hidden army of people not on the unemployment lists who are desperate for jobs, how come employers can't find them?

Where has all the money gone &what to do about it.

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Up to 25%

25-50%

50-75%

75-100%

100% I’ve had enough of farming!

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