Top 5 financial things to do before labour get in?

[ooid]

Cheib said:

CGT on Primary Residence will mean people don’t move. When markets are illiquid prices become more volatile i.e. they go up and down faster.

Absolutely ludicrous idea.

It is ludicrous but I do not think the result would be more 'volatile'. It has always been more reactive (up and down) because UK has the most transparent real estate market which makes it liquid as you say. CGT would probably depress the market, it is pointless. People sell their houses and buy a new house (upgrade mostly), it has a proven multiplier effect on the economy overall (surveyors, solicitors, decorators, builders etc...)

[PushedDover]

Where labour have said no raises etc to ‘working people’ - is there a definition of ‘working people’.

Or to cut to the chase, a paye / take home number.

[Richard-D]

They have also stated an intention to 'crack down on tax avoidance'. I can't decide if that a misunderstanding of the difference between evasion and avoidance or a contrived attempt to leave the way open to effectively increase taxes whilst claiming they haven't.

[Condi]

ooid said:

Do not also forget the long term fixed rates of USA mortgages (30 years), so keep people being in the same house for a very long time.

Although not fixed rates, I believe the length of FTB mortgages in the UK is 30 years now, and the "housing ladder" as it used to be is equally broken due to the cost of moving and people buying their first house later

[isleofthorns]

Condi said:

But the increase in house value doesn't come from nowhere, it comes directly from the next generation, or the future house buyers.

Over the last twenty years, prices adjusted for inflation are actually broadly similar. Yes, compared to the mid-90's, current prices are higher, but it's worth remembering that was also the low point of the last 35 years, and came off the back of the early 90's recession and peak interest rates post leaving the ERM. Prices in 2007/8 before the crisis were actually higher when adjusted for inflation.

Population since 1995 has also increased markedly - by some 10m. New homes constructed haven't kept pace with this increase. That seems the more likely smoking gun - coupled with the adoption of modern monetary policies / low-interest rates - the end result of which we've experienced with asset and goods inflation.

It could be argued that the losers over the past decade or two have been the savers, and those on fixed incomes, as low interest rates and high price inflation have unfairly rewarded those who bought assets with debt.

Either way, I'm pretty sure that if we were to engage in a building spree and tackle the demand side of the equation, and adopt more normal monetary practices, you'll soon see prices fall.

So... isn't the answer a political and practical one -- to get building!! rather than just looking to increase taxes?

[Jon39]

PushedDover said:

Where labour have said no raises etc to ‘working people’ - is there a definition of ‘working people’.

Oh yes.
You would think that Sir James Ratcliffe was a working person.
Brought up in a council house, he started a business which now operates in 29 countries, employing 26,000 people.
That required a mighty amount of work to become so successful.

In the Labour Party he does not count as a working person, in fact he is placed in the, 'has far too much money' category.
Those 26,000 people who rely on their boss for a livelihood, probably have a different view.
Working people must be union members, employed in traditional manual occupations. Blue collar.
Income is irrelevant, eg. train drivers £60,000 pa, with a few over £100,000 including overtime.
What about union leaders, £150,000 with the highest paid £288,000.

Anyone who works in an office or the professions, is not regarded as doing proper work.
Pensioners are of course not working people, so they had better watch out for being taxed more.

[911hope]

NorthernUproar said:

This thread is totally incoherent. The current Uk tax burden is the highest it has been in 70 years. Despite this, public services are broken and the Thatcherite dream of privatisation has been proven to fatally flawed. So much so even the conservatives are talking of privatisation.

Yet despite this you believe that things will get worse for you under labour who btw also reduced effective tax rates overall from John Majors government. So your argument that labour = bad is wrong.

In a simple guy, I grew up in a council house and through free tuition fees went to university, built a business and retired at the age of 37. I’ve paid more in tax already than most folk will do in a life time. I’m not a non-dom, I love this country and want it to be good so so much, far more than those folk with flushed red faces who shout about loving our country loudly and regularly. though I could have been a non-dom, I don’t begrudge a penny in the taxes I paid.

To me it’s a simple choice, are you decent or are you a bit of a sh@t. Even if you’re a bit of a sh@t you surely want things to be better than they are. Because they’re largely crap here now. I can’t blame immigrants, half a dozen daft lads in a boat from Calais, Ukraine or Covid. It’s the chronic underfunding followed by latter crude and poor decision making in crisis funding for our education system, social services, health service, justice and infrastructure that we can blame. They’ve broken them all.

The “no money left” by the way is a treasury tradition that civil servants leave at the end of every government for the incoming portfolio holders. HMRC are already onto the private school fees ruse btw and I’m not aware of a single credible public school that are offering it. See Dan Niedle on the topic.

Correct.

There is nothing in the last 14 years of that has gone anything other than badly.

[lizardbrain]

Just goes to show that advertising works.

[macron]

Richard-D said:

They have also stated an intention to 'crack down on tax avoidance'. I can't decide if that a misunderstanding of the difference between evasion and avoidance or a contrived attempt to leave the way open to effectively increase taxes whilst claiming they haven't.

That's how the cons plan to fund £1bn of the 2.5bn unfunded cost of national service. Which, if it was that easy would make you wonder why we haven't had £1bn more to find public services for the past 14 years.

[NRS]

ooid said:

Depends on the state, and there is 'threshold' for CGT. Besides, USA housing market is more elastic (unlike UK) which means there is no strict planning restrictions or low supply of residential land over there, in most states. Do not also forget the long term fixed rates of USA mortgages (30 years), so keep people being in the same house for a very long time.

If you introduce CGT in U.K., there are many possible outcomes (negative), one of them you would lose loads of investors and higher rate tax-payers that actually buy those houses, and U.K. will end up poorer.

End up poorer? Is that really a thing/a problem in this case? Pushing house prices up isn’t a good thing, it just gets you the same thing but locks up more money from being used in the economy. Instead of having spare money to make a company that grows you have to put the money into your house for far longer. Foreign/higher tax rate payer’s money buying up houses and pushing the prices up basically is negative for society apart from the few who got a better price for their house.

isleofthorns said:

It could be argued that the losers over the past decade or two have been the savers, and those on fixed incomes, as low interest rates and high price inflation have unfairly rewarded those who bought assets with debt.

Depends how you mean savers - I’d hazard a guess most savers have put their money into shares/buying houses and so on. Which have done far better than salaries. Savers have not been the ones losing out recently, unless the person was silly enough to ‘save’ in a current bank account with no interest.

[ooid]

NRS said:

End up poorer? Is that really a thing/a problem in this case? Pushing house prices up isn’t a good thing, it just gets you the same thing but locks up more money from being used in the economy. Instead of having spare money to make a company that grows you have to put the money into your house for far longer. Foreign/higher tax rate payer’s money buying up houses and pushing the prices up basically is negative for society apart from the few who got a better price for their house.

lack of CGT do not push up prices. House prices have been increasing all over western economies, because there is demand and mostly low supply. U.K. definitely is not alone on this, many European countries have the same situation today. Foreign buyers not taking up local's supply in U.K. or definitely in London, they are more after prime residences which is more like a 'trophy asset' and they are all over the world not only in London. People should be proud that international investors chose to invest in their areas and invest in these assets.

It is funny usually in England, people chose to claim by taxing existing asset owners to achieve lower prices for houses, but never ever assume the much needed 'economic growth' to supply enough well-paid, innovative jobs so that many can actually afford aspirational homes.

[Michael_B]

isleofthorns said:

Population since 1995 has also increased markedly - by some 10m. New homes constructed haven't kept pace with this increase.

Either way, I'm pretty sure that if we were to engage in a building spree and tackle the demand side of the equation, and adopt more normal monetary practices, you'll soon see prices fall.

So... isn't the answer a political and practical one -- to get building!! rather than just looking to increase taxes?

Given that the UK's public services have been for years breaking under the strain of that ever-increasing population, and much of recent construction has been on less than ideal plots (flood-plains?), surely just building more is just treating the symptom, and putting more strain on public services, rather than trying to treat the source of the problem?

The British economy has for decades been addicted to a constant stream of new arrivals (many of them skilled) to keep wages from rising too quickly for investors' and entrepreneurs' liking. This is also because the latter cannot find suitable candidates who can actually read/write/have practical skills from the indigenous pool of recruits that the appalling UK education system vomits onto the job market each year[1].

Additionally, many low-paid low-skilled jobs (e.g. in the agricultural and care professions) are just too much like hard work for the sectors of the British population who could do them (as in not qualified for anything else), so yet more immigrant labour is required to pick fruit and wipe Grandma's derrière[2].

The best investment the UK (public and private sector) could make now, and of course should have made decades ago, is in decent education and training. But with a proviso that for certain professions/trades during 5-10 years after qualification, candidates must work/remain in the country and for a UK employer (public or private) rather than buggering off overseas where the grass seems/is greener.

Oh and CGT on primary residences is an excellent idea, perhaps tapered over a reasonable period[3]. It would lead to much less speculation in property and might make the UK population realise that houses are for living in and not making (fake inflationary) money from.

Bon dimanche à toutes et à tous


[1] Well, those that actually want to work and not just be SM influencers, etc.
[2] Though preferably not at the same time.
[3] I bought my house in Geneva in 2002, only in 2027 will I be able to sell it without paying CGT on the increase in value. It was 50% during the initial period and then tapered down to 10% by 2017, where it has remained until no longer being payable once the 25 year ownership period is up.

[Fermit]

sugerbear said:

They may have left a note but it clearly wasnt true. Uncomfortable truth is that Gordon Brown saved the UK economy.

This is true. And using the note for political gain was a disgusting move. For decades the leaving of letters, short and amusing has been a custom between old and new Chancellors. Reginald Maudling, the outgoing Tory chancellor in 1964, bumped into his Labour successor, Jim Callaghan, a personal friend, as he cleared his desk. "Sorry old cock, to leave it in this shape," he said. The custom then began.

[PushedDover]

Jon39 said:

PushedDover said:

Where labour have said no raises etc to ‘working people’ - is there a definition of ‘working people’.

Oh yes.
You would think that Sir James Ratcliffe was a working person.
Brought up in a council house, he started a business which now operates in 29 countries, employing 26,000 people.
That required a mighty amount of work to become so successful.

In the Labour Party he does not count as a working person, in fact he is placed in the, 'has far too much money' category.
Those 26,000 people who rely on their boss for a livelihood, probably have a different view.
Working people must be union members, employed in traditional manual occupations. Blue collar.
Income is irrelevant, eg. train drivers £60,000 pa, with a few over £100,000 including overtime.
What about union leaders, £150,000 with the highest paid £288,000.

Anyone who works in an office or the professions, is not regarded as doing proper work.
Pensioners are of course not working people, so they had better watch out for being taxed more.

dont disagree with - and It is largely assumed PH Directors will get bummed by Labour, yet they always say they are not going to raise tazxes for working people.
Where is the crossover?

[Car bon]

You're missing some critical words - it's ordinary hard working people who will be OK.

[The Leaper]

Car bon said:

You're missing some critical words - it's ordinary hard working people who will be OK.

Whereas, ex ordinary hardworking people ie pensioners, with significant savings and other assets to target, will not likely be OK.

R.

[Michael_B]

Jon39 said:

Oh yes.
You would think that Sir James Ratcliffe was a working person.
Brought up in a council house, he started a business which now operates in 29 countries, employing 26,000 people.
That required a mighty amount of work to become so successful.

In the Labour Party he does not count as a working person, in fact he is placed in the, 'has far too much money' category.
Those 26,000 people who rely on their boss for a livelihood, probably have a different view.

Given that he (fiscally) upped sticks and fked off to tax-free Monaco four years ago, it doesn't really matter whether the current Labour or Conservative Party consider him to be a working person in the UK or not.

One person's successful businessman is another person's dodgy asset-stripping Brexity tax-exile tt.

YMMV

[PushedDover]

Car bon said:

You're missing some critical words - it's ordinary hard working people who will be OK.

But at what income number do you transition from :

A) ordinary hard working people who will be OK
to
B) ordinary hard working people who not be OK

[xx99xx]

However they choose to do it, a new government needs to raise more in taxes/income.

Public services, which appears to be the focal point of many complaints, will not improve without more money. And where is that money supposed to come from?

Be more efficient you say? Well, all great until you realise public sector can't recruit or retain due to low salaries. Ah, sub contract out to private sector.....I e. Higher total costs, so less money to pay for permanent staff = recruitment and retention problem.

Centralised contracts are also not the money saver they're made out to be. E.g. I once needed a new keyboard. I could've got one from a high street shop for £10 (immediately) but no, I had to order from the approved contract for £20 (and wait a week for it to turn up). The price includes maintenance, they said. What maintenance does a keyboard require?!

Also train travel and hotels. We have a centralised contract. I can get better rates from a public website but I'm not allowed to go off contract.

[Car bon]

PushedDover said:

Car bon said:

You're missing some critical words - it's ordinary hard working people who will be OK.

But at what income number do you transition from :

A) ordinary hard working people who will be OK
to
B) ordinary hard working people who not be OK

Whenever I hear it, I mentally translate
hard working = uses their hands rather than their brain
ordinary = basic rate tax payer, higher rate at a push & definitely not additional rate