Fun Online Polls: Fergie, Prince Andrew & Ralph Miliband

The responses to last week's Fun Online Poll were as follows:

Fergie and Prince Andrew might get married again...

Not bothered either way - 56%
Ah bless, good luck to them - 21%
Clearly nobody else would have them - 16%
Which Fergie? Sir Alex Ferguson? - 4%
They are making a laughing stock of the Royal Family - 3%
Other, please specify - 0%

Fair do's. I was in the "Ah bless" camp myself.
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The Daily Mailiband saga continues. As a brighter mind than mine once said, it's the only newspaper which trolls its own readership.

Today they published this photo:
So, notwothstanding there is no such place as "Britain", that's the topic of this week's Fun Online Poll: are we capable of distinguishing between the people of a country as a whole and in the round, and a narrow self-appointed élite?

Of course, we swiftly go round the clock and realise that most professors at the LSE, whose kids went to Oxford when it was still "free" and end up as Foreign Secretary or Leader Of The Opposition without ever having had a proper job are part of the self-same, general-populace-loathing, self-appointed élite, but hey...

Vote here or use the widget in the sidebar.

Which is the real version and which is the spoof?

From The Evening Standard:

Version A

Boris Johnson today called on the Government to give "telecommuters" a tax break on the cost of working from home.

The Mayor said employees should be able to deduct a share of the cost of telecommunication and council tax bills from their pre-tax income, saving them hundreds of pounds every year and helping to reduce overcrowding on London Transport.

David Cameron is set to announce help for "telecommuters" on Wednesday as part of his drive to encourage a flexible working hours culture. However, he is not expected to back Mr Johnson's proposal as the Treasury would lose out.

Version B

Boris Johnson today called on the Government to give "hard-working" commuters a tax break on the cost of their season ticket.

The Mayor said employees should be able to deduct the cost of their annual travel from their pre-tax income, saving them hundreds of pounds every year.

David Cameron is set to announce help for rail commuters on Wednesday as part of his drive to tackle the cost-of-living crisis. However, he is not expected to back Mr Johnson's proposal as the Treasury would lose out.

Retraction Of The Day

Robert Peston on top form:

UPDATE 1045

OK. First of all I made a fat finger mistake: 0.9% of £130bn is just under £1.2bn NOT just under £12bn.

Why I didn't spot my howling error before my blog went live is utterly beyond me. But I didn't, so v sorry.

Second, I am told that the 0.9% on a 95% mortgage is a one-off up front fee, not a recurring annual fee. And on a 90% mortgage the fee will be around half that.

So actually the recurring revenues to be earned by the Treasury may be hundreds of millions of pounds, not billions. More importantly, perhaps, the recurring cost to the banks of the insurance will be rather less than I thought.

Which means that if, as they say, they are going to charge circa [sic] 5% interest for the help-to-buy mortgages they may be vulnerable to the allegation that they charging more than is necessary or fair.

Yup.

Going by his figures (assuming £100,000 purchase):

Interest charged on 90% mortgage with Help To Sell subsidy 5%.

Interest charged on 75% mortgage without Help To Sell subsidy 3.5%.

£90,000 x 5% = £4,500 per annum.

£75,000 x 3.5% = £2,625 per annum.

The marginal £15,000 earns the bank £1,875 per annum (for several years) for a one-off cost/fee/premium of £90,000 x 0.45% = £405 (aka "higher lending charge").

Reader's Letter Of The Day

From the FT:

Sir, I was glad to see Merryn Somerset Webb’s article “The perfect tax” (House & Home, September 28), but I would like to respond to one point.

Ms Webb refers to an out-of-control property bubble in the US from which, as far as she can see, Pennsylvania was never immune. It should be noted that only 20 or so towns in Pennsylvania have (partial) location value taxation, so a property bubble that included, at least, other parts of Pennsylvania does not refute the idea that an LVT can suppress the boom and bust cycle in real estate.

Also, the boom and bust cycle was notably severe in California and Florida, which have low property taxes, and mild in Texas, which has no income tax and relies to a larger extent on the property tax.

Nicholas D Rosen, Arlington, VA, US.

Just to back that up with some boring statistics:

The IRS isn't the only one who wants a piece of your paycheck - 41 states have a broad-based individual income tax. Only seven states lack an income tax altogether. They are:

Alaska
Florida
Nevada
South Dakota
Texas
Washington
Wyoming

Two states have a limited income tax on individuals. These states tax only dividend and interest income:

Tennessee
New Hampshire

Will I Pay Less Taxes Overall in These States?

Not necessarily. States need revenue to function, and these states will have to make up for the lack of income tax somehow. New Hampshire and Texas, for example, make up for it in property taxes. Both states have some of the highest property taxes in the nation. The cost of higher property taxes, sales taxes, fuel taxes, and other taxes could amount to higher overall taxes in some of these states.

That being said, most (but not all) of these states did make the Tax Foundation's top ten list of states with the lowest overall tax burdens.

And quoting from The Tax Foundation:

To rank the state’s tax burdens, the Tax Foundation compared the total taxes that state residents pay as a percentage of per capita income. Included in the total taxes are local taxes such as property taxes and local sales taxes. The states whose residents pay the least in taxes are:

Alaska at 6.4% of income
Nevada at 6.6% of income
Wyoming at 7% of income
Florida at 7.4% of income
New Hampshire at 7.6% of income

It’s interesting to note that none of these states have an individual income tax.

"About A Time Traveller's Wife At Midnight In Paris"

It would appear that Rachel McAdams' recent films are based on her actual real life ability to travel back in time and re-appear in the same film over and over again.

You can't actually mash these three plots together because they are identical to start with, it would be like condensing steam, diluting it with water and then adding melted ice cubes:

From Wiki, Wiki and Wiki:

2009: In the early 1970s, Henry DeTamble (Eric Bana) is in a car accident with his mother that results in her death. Henry survives by inadvertently time traveling back two weeks.

In 1991, Henry meets Clare (Rachel Mc Adams), who is overjoyed to see him although he is actually meeting her for the first time. Clare explains that she has known Henry for most of her life and that he is her best friend.

They begin a relationship, which is challenged by Henry's disorder. Falling in love, Henry and Clare eventually marry, though he actually time travels away before the ceremony and an older version of him arrives in time to step in.

2011: Gil Pender (Owen Wilson), a successful but creatively unfulfilled Hollywood screenwriter, and his fiancée, Inez (Rachel McAdams), are in Paris, vacationing with Inez's wealthy, conservative parents.

Gil is struggling to finish his first novel, centered around a man who works in a nostalgia shop, but Inez dismisses his ambition as a romantic daydream and encourages him to stick with the more lucrative screenwriting.

One night, Gil gets drunk and becomes lost in the back streets of Paris. At midnight, a 1920s Peugeot Type 176 car draws up beside him, and the passengers—dressed in 1920s clothing—urge him to join them. They go to a party for Jean Cocteau where Gil comes to realize that he has been transported back to the 1920s, an era he idolizes.

2013: At the age of 21, Tim Lake (Domhnall Gleeson) discovers he can travel in time.

After some months living in London, he meets Mary (Rachel McAdams). They seem to be attracted to each other, and outside when Tim gets to see her he falls in love. Later, Tim attempts to call Mary only to find her number is not in his phone. He realizes that by going to see his friend’s play instead of the blind date means he never met Mary.

Remembering something from the date, Tim eventually locates Mary and learns that she has a boyfriend. Tim decides to go back to the point where she met her boyfriend and ensures she never meets him and instead goes out on a date with him.

NIMBYs Of The Week

Via QG at HPC, from the Oxford Mail:

NEARLY 400 homes have been approved by ministers in a move described by Banbury MP Sir Tony Baldry as the “most disappointing” affecting the constituency in his 30 years in the post....

“I could have a better understanding of the decision if Cherwell was in any way being resistant to new housing and encouraging new housing development, but exactly the opposite is the case.”

Because if this madness continues for another couple of years, there will be no Hallowed Green Belt left, will there?

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Landlords attack coalition rent-control plan...

Landlords have criticised proposed new price controls on the monthly rents they can charge tenants.  

Eric Pickles on Thursday said that landlords yearly rent rise between 2014-18 should not be more than the retail price index (RPI).

But the Association of Residential Landlords said this could restrict investment and have major consequences for tenants and construction workers.

Landlords charge tenants for use of local facilities, including the labour market, emergency services and the use of schools and hospitals.

ARLA had submitted a plan, rejected by the coalition, seeking to guarantee 15% of buy-to-let mortgages and raise housing benefit payments by 4.6% above RPI inflation.

Pickles, Minister for Local Government and Communities, said in a statement "The proposals will put an end to over a decade of rents rising faster than inflation or wages.

"Tackling the upward drift in rent is essential to safeguard the UK's globally competitive position. The challenge for communities is to maintain high levels of local service while reducing rent. We are confident this is possible and that our proposals create a positive climate for further capital investment, in the residents interest."

But a spokesman for ARLA said: "This proposal is the toughest our members have ever faced. The coalitions settlement could have serious and far-reaching consequences.

"We want to continue to improve things for tenants. Instead, these proposals risk not only our member's balance sheets but the attractiveness of the UK as a centre for international property speculation. We will now carefully consider our political donation and lobbying plans before responding fully to Mr Pickles."

"Mortgage lenders face tougher rules"

From the BBC:

The UK's mortgage lenders have been warned that tougher regulation is on its way, to protect consumers.

The Financial Conduct Authority (FCA) has proposed that all borrowers should have an "affordability" check before being given a mortgage. Among other new rules, the FCA wants to put risk warnings on adverts and marketing material.

The Council of Mortgage Lenders gave the plans a guarded welcome, saying irresponsible lenders would struggle to comply.

Martin Wheatley, the FCA's chief executive, said: "Today I'm putting banks and building societies on notice: tougher regulation is coming and I expect them all to make changes so that consumers get a fair outcome. The clock is ticking."

The proposals mean that anyone taking out a home loan would need to prove that they could afford to repay it. In a separate government survey, one in five customers said they were not even asked about their finances when they applied for a mortgage.

Something else that Bob E pointed out to me...

... is that so-called think tank DEMOS will recommend anything you like if you are prepared to "fund their research".

The Guardian merrily rehashes the press release:

Last week the Campaign for Housing in Later Life was launched at a housing summit in Westminster to urge government to improve the housing choices for older people.

Esther Rantzen, the campaign's spokeswoman, addressed MPs and representatives from the housing industry and presented a report from the Demos think tank highlighting the chronic undersupply of appropriate retirement housing in Britain, which it calls, the "next big housing crisis".

Hmm, without looking, who do you think might have a vested interest in building loads of retirement homes, or at least getting planning permission for them?

Shall we have a sneaky peek at the acknowledgements in the DEMOS report..?

This report has benefited from the support, hard work and expertise of a huge number of people.

First, I would like to thank the members of the Home Builders Federation, whose generous funding made this research possible...

The TwatPayers' Alliance...

... expose their rank ignorance yet again in today's City AM

The government has done some good work to encourage new growing businesses. One measure that stands out is the abolition of stamp taxes on Aim-listed shares. This will make it easier for firms to raise equity finance.(1)

...If you build a business, you will pay a series of different taxes on your earnings: corporation tax when you first make a profit; income tax when those profits are paid out as dividends;(2) and capital gains tax on any attempt to realise the value of future profits.(3)

The same income is effectively taxed three times.(4) Taxing the same income repeatedly is always an unfair and inefficient way to raise revenue, but it is insane when we are talking about the engine of economic growth, the process that creates jobs.

... The 2020 Tax Commission – organised by the TaxPayers' Alliance and the Institute of Directors and released in 2011 – recommended going further and establishing a single tax on income when it is distributed, however it is distributed.(5)

Remove the extra taxes like capital gains tax, and you can make Britain a more competitive location for international investment (6) and create the right environment for more of the high growth businesses that create opportunities for everyone.

... There are many who will never want the worries and risks of starting their own business. Not everyone wants the bigger mortgages that government guarantees under the Help to Buy scheme make possible. They want the opportunity for a job that is better paid and more fulfilling. A job that will allow them to save up the money they need for a mortgage they can afford on their own terms.(7)

1) Stamp Duty on purchases of shares is of course a stupid tax, and Stamp Duty Reserve Tax is not just stupid but unfathomable, but there simply is no Stamp Duty when shares are issued. There is no tax on fund raising, end of.

Stamp Duty is only paid when an existing shareholder sells his shares to somebody else, so the amount that today's investor receives in future will be reduced slightly, but that money goes into the shareholder's bank account and not the company's.

2) Companies pay corporation tax at the basic rate, so if a basic rate taxpayer receives a dividend there is no further liability. It is only when a higher rate taxpayer receives a dividend that income tax is payable, which is broadly speaking the difference between higher rate and basic rate tax.

For a given total tax take, surely it is better for the actual business (the company) to pay a lower basic rate and the higher rate to be applied only on cash dividends paid out? You could abolish the higher rate and have a flat tax for individuals and companies, but of necessity that flat rate would be higher than the current basic rate.

3) Capital Gains Tax is another stupid tax, but companies/businesses are sold on the basis of their future profits, so those profits have not been earned yet and it is the next purchaser who will pay corporation tax on them.

So CGT is to a large extent a voluntary tax on unearned income (or a monopoly position) and if you don't sell your company/business, you never have to pay it, hence and why the revenue maximising rate (top of the Laffer curve) is a very low rate like 10% or something.

4) Why oh why do these Faux Lib's never mention VAT or National Insurance (the worst taxes of all), which between them raise/cost several times as much as higher rate income tax, corporation tax or capital gains tax? Or to put it in his terms, "the same income is effectively taxed five times".

The cumulative effect of all these taxes is difficult to calculate, but it comes to around half a business' total income/gross profits (taking employer and employees together), meaning that even so-called basic rate taxpayers have an effective marginal tax rate of about 50%, which is "too high" by any reasonable person's standards.

5) One of these ideas which sounds great in principle but if you think about it for a few minutes, you will realise it is totally unworkable/unenforceable.

Further, companies do not pay corporation tax on reinvested profits (subject to timing differences), they only pay it on profits not required to expand the business (i.e. cash piled up in the bank or paid out as dividends). This is not a peculiarity of the UK corporation tax system, it is a general observation. So corporation tax is, by and large, a tax on the profits which are (or could or should be) paid out as dividends.

6) He's talking complete shit now. Foreigners who invest in the UK pay no UK tax on capital gains from selling a UK company - never have done, never will - because they are not UK tax resident. If foreign companies invest here, they will probably pay no tax in their home country either. And corporates don't pay "capital gains tax" anyway, they pay corporation tax on the capital gains they make.

7) That last bit is actually very sensible, I'd go along with that sentiment entirely.