Sunday, 5 July 2015

We own land, give us money!

From the BBC:

But Mr Osborne also announced:

* The benefits cap - the total amount a family can claim a year - will be cut to £23,000 in London (the BBC understands the cap will be £20,000 per household outside of London)

Very few households get anywhere near £20,000 or £23,000 in non-housing related benefits, so by an large, this is a cap on Housing Benefit (a good thing, in and of itself). But as most MPs own buy-to-lets and a disproportionate number of those are buy-to-lets in London and many of their tenants receive Housing Benefit, they decided to cut back Housing Benefit a little bit less in London.
This bit either shows he is either stupid, lying or not prepared to say what he means:

Mr Osborne confirmed he would be seeking to make cuts to tax credits for people on low incomes, which had become a "very expensive" system, costing £30bn.

Very little of that £30 bn is actually Working Tax Credits, which would indeed be unnecessary if they increased the National Insurance threshold and the personal allowance for income tax.

The bulk of the £30 bn is Child Tax Credits, the bulk of which go to non- and very low earners. If he wants to cut Child Tax Credits, why doesn't he just say so? That might or might not be a good idea, but this is the bookend to him removing Child Benefit from households where one parent earns over £50,000. So basically he is now clobbering parents all the way up the income scale.
Their policies on social housing are all over the place:

Under the planned changes to housing subsidies, local authority and housing association tenants in England who earn more than £30,000 - or £40,000 in London - will have to pay up to the market rent, Mr Osborne will say.

Those are hardly ridiculously high salaries, so what he is saying is "Get a job and we will not just punish you with income tax and NIC, we'll punish you with higher rents as well" thus creating a whole new set of break-even calculations.

And wasn't their recent bright idea to sell off as much social housing as possible? Will the Right to Buy be restricted to people who earn less than £30,000 a year?

If 'no', then middle and higher earners' best strategy is to simply exercise their Right to Buy (which might be the thinking behind this) and makes a mockery of the whole thing - if these people don't deserve a discount to the market rent, why do they deserve a much bigger discount if they buy?

If 'yes', then their best strategy is to work part-time for a year, then exercise Right to Buy and then go back to work full-time.
But at least it is all for a good cause:

Extra money from those living in local authority properties will go straight to the Exchequer.

The Budget will also confirm the end of inheritance tax on family homes worth up to £1m.

Oooooo, the irony..

Building on my earlier post, there is also this gem from the same article:

"...One CDU member who used to work with Mrs Merkel agrees. "[The announcement of the referendum] was the moment that things changed. Up until then we'd all agreed to work with the Greeks, support the Greeks, pay for the Greeks. All that was OK if they were willing to reform. Many Germans go to Greece to enjoy the culture, the food, the history.

"But they also go there and see what the [Greek] government has wasted its money on.

[I'm sorry, just run that past me again? Whose money has it wasted exactly?]

You see these huge air-conditioned Daimler buses which go to nowhere with just one passenger. We've all seen them."...

This is those German made 'Daimler Buses' that Germany loaned money to Greece to buy, that he actually admits that they 'wasted their money on', when it was perfectly obvious that Greece didn't/would never have the wealth to pay for them in the first place.

As I asked, who are the mugs?

You couldn't make it up.

Saturday, 4 July 2015

I hate to get involved in this, but...

"...I am 52 years old, and get a Pension of €1,400 per month, and dont know if i will get the next payment. I would vote NO, i have been retired since the age of 50 and get the money sent from Greece, and can use the council Gyms in London for free, free meals on wheels from Hackney Council, it is a good life...."

I would not be at all surprised if he also got housing benefits and council tax relief.

From here

Who are the mugs?

Personally, I am beginning to think that the whole thing - the EU - is some giant gerrymandering exercise based on creating the universal client state.

Friday, 3 July 2015

Mutually Assured Destruction

Spotted by View From The Solent in The Telegraph:

Land banking? Nah, not us mate.

From City AM:

York-based Persimmon added 11,500 plots to its consented landbank of 92,400 plots...

Legal completions increased by seven per cent to 6,855 new homes, while total revenue surged by 12 per cent to £1.34bn in the six months to 30 June.

Don't just take my word for it, here's what their Chief Executive has to say:

We concentrate on the fundamentals of our business: maintaining a high quality landbank, maximising our strategic land capabilities, building sustainable homes, continuing to improve margins and providing good customer care.

So their number one and number two priorities are..?

Thursday, 2 July 2015

True cost of Labour's pension tax raid: the square root of fuck all.

The Telegraph is still pumping out the line that Gordon Brown's Pension Raid has cost the "taxpayer" a cumulative £100 billion since 1997.


Rounded to the nearest £ billion or per cent...

Back in 1996-97

The mainstream corporation tax rate was 33% and the ACT credit which pension funds could reclaim was 1/4 of the cash dividend received.

* Total UK plc profits (say) £80 bn, corp tax payable £26 bn = post-tax profits £54 bn.
* Half of the £54 bn post-corp tax profits paid out as dividends.
* Half of retained profits and half of dividends belong to/paid to pension funds.
* Pension funds suffered £13 bn corp tax indirectly (half of £26 bn) and reclaimed £3 bn ACT (1/4 of the £13 bn cash dividends they received) = net direct and indirect tax bill £10 bn.
* Average tax rate 25% (£10 bn divided by half of £80 bn).


Mainstream corporation tax rate 31%.

* Total UK plc profits (say) £80 billion, corp tax payable £25 billion.
* Pension funds suffer half of that corporation tax = net indirect tax bill £12 bn.
* Average tax rate 30% (£12 bn divided by half of £80 bn)

So yes, initially this was a modest increase in their overall tax rate and a modest increase in their overall direct and indirect corporation tax bill of £2 or £3 bn.


The mainstream corporation tax rate is 20%, half paid out as dividends and half belongs to pension funds.

* Total UK plc profits (say) £160 bn, corp tax payable £32 bn.
* Pension funds suffer half that corporation tax = net indirect tax bill £16 bn.
* Average tax rate 20% (£16 billion divided by half of £160 bn).

This is now lower than the overall average rate they were suffering pre-raid.

In summary

You can reasonably argue that pension funds 'lost' £2 or £3 bn in 1997-98 compared to 1996-97 but in the meantime, they are 'winning' about £4 bn a year i.e. instead of paying overall rate 25% on their half of £160 bn, they are only paying 20% overall rate.

I'm not sure when the break-even year was, but all things considered, the losses and gains net off to a very small figure, nowhere near an overall loss of £100 bn and quite possibly a small overall gain. If you want the Excel formula, it is "=FA^0.5".

And of course, pension funds are not "the taxpayer". Everybody else is clearly miles ahead of the game as his overall indirect corporation tax bill is now 13% lower than eighteen years ago.

Bit Oversensitive, I'd Say

From the Guardian

The chairman of an organisation set up to honour the memories of the victims of the 7/7 terrorist strike on London has labelled a new trailer for the Hollywood disaster movie London Has Fallen “extremely insensitive”.

Babak Najafi’s film, a big budget sequel to 2013 action thriller Olympus Has Fallen, stars Gerard Butler, Aaron Eckhart and Morgan Freeman in the story of an attack on the capital. Chair of the Tavistock Square Memorial Trust, Philip Nelson, said the timing of the trailer’s release was wrong just a few days before the 10th anniversary of Britain’s worst terrorist strike of recent times.

So, how many days before should everyone not carry on with life? Does this also apply to things afterwards?

“This is not the first time that Hollywood has been insensitive,” he told the Mirror. “If the story is about terrorism then this is extremely insensitive. People have also recently died of a terrorist attack in Tunisia.

So, we shouldn't make any films involving terrorist plots, because someone will be offended?

“I have seen an image of Big Ben with the clock face blown out, that’s also insensitive. “[Our Trust] has had lots of help from America so I just think that these are the wrong images to portray. Is the summer the best time to be promoting this film anyway?”

Insensitive to who? Finn McMissile from Cars 2? Richard Hannay from the 39 Steps? Tim Burton for doing it first in Mars Attacks?

And, yes, the summer is the best time to be starting the promotion for this film. It's a teaser trailer. It's released months before to get people starting to talk about it.

Wednesday, 1 July 2015

Seems Appropriate

Daily Mail on top form

Spotted by MBK in The Daily Mail:

A failing businessman suspected of killing his wife and teenage daughter before fleeing to France and cutting his throat told relatives he had taken them on a surprise holiday.

Jonathan Anthony, 50, took his own life after suddenly turning up on the doorstep of a family friend in the south of France.

Within 24 hours police found the bodies of his wife Lisa, 47, and daughter Ava, 14, at the £1.8million detached five-bedroom home they shared.

Tuesday, 30 June 2015

And there's yer problem Wim, right there

From here...

"...the first currency that has not only severed its link to gold but also its link to the nation-state”...."

Sigh. Pure arrogance and hubris. Prat.

(Mind you, it might better be phrased as 'severing its link EITHER to gold OR the Nation State').

I will now await the MMT onslaught...