As I have explained many a time, the two worst taxes are VAT and Employer's National Insurance, because they damage the economy more than any other taxes, and subsidies for any specific industry or activity are bad for two reasons; they introduce yet more distortions (aka "picking losers") and they inevitably increase the tax burden on the non-subsidised sectors of the economy.
EU countries can't reduce their standard rate of VAT to lower than 15%, so the Germans and French have dressed up a VAT cut on domestically produced cars as a contribution towards the cost of scrapping the old car and replacing it with a new, slightly more energy efficient one, so it's all very green and lovely, despite being completely illegal under EU law (not that this ever stopped France before).
Employer's National Insurance on the other hand is entirely self-inflicted, there is nothing to stop the UK government increasing it or reducing it as much as it likes - and my magic fag packet says that the dynamic revenue fall of scrapping it entirely would be negligible. Seeing as it is cheaper to preserve a job than it is to create a new one, the emphasis right now should be on preserving what jobs there are, not trying to create new ones, so a cut in Employer's NI would be a quick win.
This point seems to be completely lost on the likes of the TUC and the Federation of Small Businesses - who have now called for a wage subsidy, i.e. they want to fund a subsidy for employment out of a tax thereon.
H/t Tim W.
What have we wrought in the UK?
7 hours ago
9 comments:
Mark, you are forgetting all those public sector jobs that are supported thanks to National Insurance such as all those DWP jobs, all those payroll staff, all those highly paid consultants working on NI databases and all those employees in the paper / envelope businesses!
Oh, the humanity!
I heard that FSB clown on R4 this morning. I am a small business and what I want is less tax, all tax, incluidng things like my FSA fees. Fees? Hah! Trading tax more like. The fees were more than £5000 last year.
Why don't they listen? Just cut all payroll - NI/PAYE - related taxes. I would be able to employ another person who would then not claim benefits. It just nets itself out.
I can state this categorically. Today I have received an employment request from an excellent former employee who is now on benefits. Can I find her a job? Yes. Can I pay for her and all her taxes? No. If my own taxes were cut as well I could even afford another employee. That's two real jobs I can 'create' i.e. not manufacture, today. Now. Real value adding wealth creating jobs. Not dossers telling me to eat five pieces of fruit or to buy and wash real nappies or whatever. But real jobs. Jobs in private business.
O Gawd.
...'scuse, just to add to my previous post, of course I could borrow money to finance these jobs. But why should I? What I am really doing if I do that is to finance the non wealth creating jobs that my taxes are paying for. My wealth has been officially stolen from me by the state and in order to find the cash to develop my business I now have to borrow money. In other words the national debt has increased by my borrowing which I would not need to do if I had not suffered confiscatory taxation.
And on that subject why did the bloody gummint just give £40K of my money to the bloody banks? Why not just give it to me? I'd pay off debt and take on another person or two. One of them would have likely as not been an ex bank employee laid off as the bank went bust.
Oh, bloody Hell, I am getting very pissed off again.
L, exactly, thanks for real life examples. Sorry for upsetting you, but this has to be repeated until maybe it sinks it.
OK Mark, but who reads this? How many real life politicos actually read this ir give a shit? Unless some revolution happens at the BBC/ITV/C4 these truths are just not going to get out there. the ignorance is breathtaking. For example the first question on last weeks QT was on the lines of 'why should we taxpayers for Fred's pension?'. Not only did the questioner have no clue neither did any of the panel! It fair makes you weep.
L, in answer to your first three questions, not many, none and none.
I've given up on QT, it's not the politicians that bother me so much as the sheeple in the audience with their entirely predictable and largely irrelevant questions.
The sheeple are most definitely picked by AlBBC for their BBC aligned views.
Re QT: As I understand it, attendees at QT are asked to write down what questions they wish to ask and then the BBC staff (and Dimbleby?) select the questioner (ie the qustion). If this is so, then the BBC is enabled to filter out the awkward question/questioner. Furthermore, since it is not a live transmission - or, at best, it's transmitted with a delay - somebody not asking his "approved" question will, I assume, be blanked out and another questioner selected. In any event Dimbleby can always be relied on to sit on anyone causing trouble (in the audience or on the panel).
Lola
"Why not just give it to me?"
In that case there'd be no intermediary public sector employees (aka Labour voters) to oversee the transfer and take out their commission for doing so. We can't have that surely!
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