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This is going to be similar to the Kansas Experiment but a scaled up version. Can Britain really afford to cut taxes ? It has already cut services to the bone,

This is going to be similar to the Kansas Experiment but a scaled up version. Can Britain really afford to cut taxes ? It has already cut services to the bone, while running a large twin deficit. Ireland can afford lower tax rates because its such a small country - Dublin is nothing like London and can survive on low investment, and Ireland does not have complex public health service like the NHS. Also lower rates really doesn't mean anything if you are unable to access customers. What Brexit represents is a demand shock to British business, a kind of deflation that has caused the collapse of society in the past. A market of 55 million people is too small for doing any serious 21st Century type globalized business.

nagrom 10y ago
> Can Britain really afford to cut taxes ? It has already cut services to the bone, while running a large twin deficit. Britain has absolutely not cut services to the bone - that claim in incredibly hyperbolic. More could be done, but in general no-one goes hungry, people are not homeless, garbage is collected, clean water is provided, the rule of law is enforced, the court system is healthy, public transport is good, schools and universities are doing fine, pensions are paid and health care continues to be rather good and excellent value for money. Cash budgets have increased every year in the past twenty. It's not perfect but don't let the resentful wailey-wailey nature of those who want more public spending from 'moral' conviction convince you that the UK is anything other than a well-functioning first world country with good public services and a well-educated population. Public services are about the best that they have ever been. That will continue to be true even if the rate of corporate tax is reduced. > Ireland can afford lower tax rates because its such a small country - Dublin is nothing like London and can survive on low investment, and Ireland does not have complex public health service like the NHS. Other people have already told you that Ireland spends more and achieves less on health care. There are many large countries with lower taxes than Britain that are doing more or less just fine. There is much, much more to investment than tax-and-spend governmental intervention. > Also lower rates really doesn't mean anything if you are unable to access customers. What Brexit represents is a demand shock to British business, a kind of deflation that has caused the collapse of society in the past. I'd love to have an example of British societal collapse in the recent past as a consequence of demand shock, but you won't be able to give me one because it doesn't exist. At worst, we have the union-backed strikes in the seventies causing a collapse of public services, but there was no revolution, no breakdown in law and order and no termination of any major political entity. The current global system is undergoing something of deflation with almost all major currencies undergoing 'quantitative easing' to attempt to address it. This is not a Brexit phenomenon and affects the Euro area and the EU worse than it affects sterling. That will likely continue to be true. > A market of 55 million people is too small for doing any serious 21st Century type globalized business. In accordance with the rest of your claims, this is both subtly incorrect in fact and hyperbolic in claim. Your population figure is low by 15%, but the main point is that Brexit doesn't mean building a Trump-style wall around the island or pulling it into the mid-Atlantic. Cross-border trade will function just fine outside of the EU and Britain will continue to be a tier-2 globally trading nation behind the US, China and perhaps Japan, but on a par with or ahead of everyone else. Brexit does not mean a severing of all ties with the rest of the world and the breathless discussion of what it means really pisses me off. Some (not all) of the UK's interaction with European countries will change in some subtle ways. New accommodations will be reached. Predicting 'societal collapse' is chicken-little-style doom-mongering and hysteria - if you took the same approach to your regular life, you'd never go outside for fear of being hit by a meteor, catching SARS, being hit by lightning or some other flouncey, drama-queen, childish panic. In short: Brexit - some stuff will change, but most of it won't be as bad as you think, and perhaps some of it might be good! :-)
- DanBC 10y ago
  > Britain has absolutely not cut services to the bone - that claim in incredibly hyperbolic. More could be done, but in general no-one goes hungry, Use of foodbanks is at record levels. Families in poverty are at the highest they've been for years; often those families are in work. > people are not homeless, If by homeless you mean "rough sleeping" then rates of homelessness are at the highest they've been for years. (numbers for 2015 are double the number for 2015) If you mean statutory homelessness then they're at the highest they've been for years. (But counting rough sleepers, statutory homeless, and vulnerably housed people in the UK is tricky). > garbage is collected, Amount of fly-tipping appears to have increased, although that might just be better reporting and recording. Most councils have moved from weekly collections to fortnightly collection, and some are thinking of moving to once every three weeks. > clean water is provided, This is a commercial service provided by tax avoiding private companies. > the rule of law is enforced, the court system is healthy, Legal aid has been cut from many many people, leaving a lot of people without access to justice. This is especially the case in family law. There's a risk that children's human rights to a family life are being interfered with. > public transport is good, Mostly private companies. Public transport is good in large cities; somewhat good in large towns; pretty lousy outside large towns. > schools and universities are doing fine, Cost of loans has increased, amount of debt that students leave university with is highest it's ever been > pensions are paid Tell that to the 50something women who've been fucked over by governments increasing retiring age several times, leaving those women thousands of pounds out of pocket. Or tell that to C&A workers. > and health care continues to be rather good A&E 4 hour targets aren't being met; consultant-led waiting times aren't being met; UK has pretty terrible outcomes for cancer; MH is not good. Children with mental illness find it very hard to get a bed, and those beds may be hundreds of miles away from their home. Community care for children with mental illness has always been rough, but with the Young People's Transformation Plan we were supposed to see things get better. Some CCGs took that money for young people and spent it elsewhere. Last month there were zero in-patient beds for adults with mental illness. This means that very sick people (because rightly nowadays you have to be very ill to get an in-patient place) are at increased risk of death and severe harm. Out of county in-patient treatment for adults with mental illness is at record levels. Politicians lie if they say the NHS has had increase in spending. NHS deficits are at record levels; NHS budgets have been cut in anyway you define budget and cut. It isn't possible to look at current NHS budgets and say they've been increased. Cutting wages (and removing bursaries) means there are many posts that are unfilled, and some of those are substantive posts. > and excellent value for money. We do a lot for not much money. But there are a lot of things that have excellent "spend to save" numbers that we don't do because they're too expensive, so we save today but spend tomorrow. Austerity has had massive impact on public services, especially the NHS.
bbrazil 10y ago
> Ireland does not have complex public health service like the NHS. Ireland has a complex public health system whose cost is comparable to the NHS, it is however not of the same quality.
- talideon 10y ago
  10% of GDP, IIRC, which is more than the NHS and for worse outcomes. If anything, the Irish system is more complex because of the legacy of being formerly Church-dominated and decades of half-hearted reforms. There's a reason why the Irish health system has long been nicknamed 'Angola'.
mrmffh 10y ago
Lower rates can equal a larger absolute cut.
peteretep 10y ago
> Can Britain really afford to cut taxes Can it afford tax revenue lost via business fleeing? The answer is probably no to both, but one offers increased employment as a side-effect. It's a plan for making lemonade.
UK-AL 10y ago
If it gets more companies here and more people employed, it can actually increase the amount of tax.
- tehabe 10y ago
  A scheme which rarely (if at all) works. Usually cutting taxes means cutting revenue.
- Noseshine 10y ago
  "Lower the taxes of businesses so that they can invest" - That's been the theory behind decades of such experiments in many countries. Worked out great, we all can see how the money keep s"trickling down". That theory is actually very un-capitalistic: It assumes that only a few people know what is best for the majority. Because it's built into the system (and with a certain perverse logic, not at all irrational of course) that those who've had success are more likely to know how to have more of it. So the system is actually incredibly anti-risk with money - in an age when "money" surely is not a limiting factor. Not overall - it is because a few have so much they don't find good investment opportunities (when you have billions, only hundreds of millions of opportunity at once make sense to even look at), but for the vast rest of us it is. So it becomes a tautology: The system is set up to make it far more likely that the successful succeed more, and that is then used as justification for itself, "see, it's too risky to give resources to the inexperienced, data prove it". So we get ever more concentration of control ("money", "power" are indirect terms, "control" is what it comes down to. Th eproblem of the 0.01% isn't their jets, their yachts, their mansions, it is their control of too much of economic life at the expense of most everyone else.): https://www.youtube.com/watch?v=QPKKQnijnsM https://www.youtube.com/watch?v=QPKKQnijnsM
  - nagrom 10y ago
    > That's been the theory behind decades of such experiments in many countries. Worked out great, we all can see how the money keep s"trickling down". Do you have an example? I don't know of any serious economist that backs trickle-down theory except as a strawman, but many point to lower and flatter taxes that can be used to support market-based economics as enabling high productivity. The obvious country that backs this - the US - has done pretty well from it, as have a multitude of smaller nations (Hong Kong, Switzerland, Singapore, the UK, Canada, Australia). Some countries with higher taxes but also based around a free market economy have done well - Germany is the prominent example and Sweden and Finland. Some have succumbed to corruption and are failing, or on the brink of failure (Italy, Spain, Greece). The opposite - high taxes, lack of a market and extreme governmental intervention - has certainly been tried in many, many countries. Most (all?) have failed badly in a way that has destroyed generations of productivity (North Korea, Cuba, The Soviet Union, Venezuela, etc.) and really fucked-up their societies that way - usually accompanied by secret police squads, the crushing of liberties and very low quality-of-life. > That theory is actually very un-capitalistic: It assumes that only a few people know what is best for the majority. That's actually very 'capitalistic' - the man with the capital makes the ultimate decisions as to where it gets invested. Perhaps you meant democratic? I'm not convinced by the rest of your argument either. The capital owner usually employs many people to invest portions of the capital into smaller investment opportunities - it's not like Bill Gates has to invest all of his fortune into just one opportunity is it? If anything, this site is based around the idea of giving capital to the unexperienced to start businesses with promising ideas - that's pretty much the exact theoretical definition of angel investors, incubators and VCs. One might argue that these institutions suffer from cronyism and don't do their job as well as they should, but their job is after all to re-allocate accrued capital to value-producers in a risk-balanced way across a broad portfolio which, I think, is what you seem to want to advocate.
_Understated_ 10y ago
I think it's a great move and I would love to see it go further. I take your point on asking whether Britain can afford to cut taxes but I reckon it will be funded by removing pension tax relief: It costs around £34 billion per year [1]. By this, I mean that the treasury loses out on £34 billion a year. The solution will be to tax income as normal, no pension tax relief but to allow zero tax on the pension drawdown at the other end. From the current chancellors point of view it's a win-win: He gets an additional £34 billion a year and the problem of zero tax at retirement age becomes someone elses issue. [1] - https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/503200/PEN6__2001-02_to_2014-15___for_publication.pdf https://www.gov.uk/government/uploads/system/uploads/attachm...
- d4rti 10y ago
  What's the upside for investing a pension versus an ISA then?
  - _Understated_ 10y ago
    You can take your ISA money any time but pensions are drawn when you reach a certain age.
talideon 10y ago
> Ireland does not have complex public health service like the NHS. Where exactly did you get that idea? As bbrazil wrote, that's certainly not the case. We also spend more on healthcare per head here in Ireland than is spent in the UK. We have one of the highest spends in the OECD and a complex legacy of the pre-independence healthcare system plastered over almost a century of half-hearted reforms to deal with. People in Ireland envy the NHS for three reasons: compared to the Irish 'system', it's cheap and relatively simple, and the outcomes are better than our more expensive hodge-podge.

nagrom 10y ago

> Can Britain really afford to cut taxes ? It has already cut services to the bone, while running a large twin deficit. Britain has absolutely not cut services to the bone - that claim in incredibly hyperbolic. More could be done, but in general no-one goes hungry, people are not homeless, garbage is collected, clean water is provided, the rule of law is enforced, the court system is healthy, public transport is good, schools and universities are doing fine, pensions are paid and health care continues to be rather good and excellent value for money. Cash budgets have increased every year in the past twenty. It's not perfect but don't let the resentful wailey-wailey nature of those who want more public spending from 'moral' conviction convince you that the UK is anything other than a well-functioning first world country with good public services and a well-educated population. Public services are about the best that they have ever been. That will continue to be true even if the rate of corporate tax is reduced. > Ireland can afford lower tax rates because its such a small country - Dublin is nothing like London and can survive on low investment, and Ireland does not have complex public health service like the NHS. Other people have already told you that Ireland spends more and achieves less on health care. There are many large countries with lower taxes than Britain that are doing more or less just fine. There is much, much more to investment than tax-and-spend governmental intervention. > Also lower rates really doesn't mean anything if you are unable to access customers. What Brexit represents is a demand shock to British business, a kind of deflation that has caused the collapse of society in the past. I'd love to have an example of British societal collapse in the recent past as a consequence of demand shock, but you won't be able to give me one because it doesn't exist. At worst, we have the union-backed strikes in the seventies causing a collapse of public services, but there was no revolution, no breakdown in law and order and no termination of any major political entity. The current global system is undergoing something of deflation with almost all major currencies undergoing 'quantitative easing' to attempt to address it. This is not a Brexit phenomenon and affects the Euro area and the EU worse than it affects sterling. That will likely continue to be true. > A market of 55 million people is too small for doing any serious 21st Century type globalized business. In accordance with the rest of your claims, this is both subtly incorrect in fact and hyperbolic in claim. Your population figure is low by 15%, but the main point is that Brexit doesn't mean building a Trump-style wall around the island or pulling it into the mid-Atlantic. Cross-border trade will function just fine outside of the EU and Britain will continue to be a tier-2 globally trading nation behind the US, China and perhaps Japan, but on a par with or ahead of everyone else. Brexit does not mean a severing of all ties with the rest of the world and the breathless discussion of what it means really pisses me off. Some (not all) of the UK's interaction with European countries will change in some subtle ways. New accommodations will be reached. Predicting 'societal collapse' is chicken-little-style doom-mongering and hysteria - if you took the same approach to your regular life, you'd never go outside for fear of being hit by a meteor, catching SARS, being hit by lightning or some other flouncey, drama-queen, childish panic. In short: Brexit - some stuff will change, but most of it won't be as bad as you think, and perhaps some of it might be good! :-)

DanBC 10y ago
> Britain has absolutely not cut services to the bone - that claim in incredibly hyperbolic. More could be done, but in general no-one goes hungry, Use of foodbanks is at record levels. Families in poverty are at the highest they've been for years; often those families are in work. > people are not homeless, If by homeless you mean "rough sleeping" then rates of homelessness are at the highest they've been for years. (numbers for 2015 are double the number for 2015) If you mean statutory homelessness then they're at the highest they've been for years. (But counting rough sleepers, statutory homeless, and vulnerably housed people in the UK is tricky). > garbage is collected, Amount of fly-tipping appears to have increased, although that might just be better reporting and recording. Most councils have moved from weekly collections to fortnightly collection, and some are thinking of moving to once every three weeks. > clean water is provided, This is a commercial service provided by tax avoiding private companies. > the rule of law is enforced, the court system is healthy, Legal aid has been cut from many many people, leaving a lot of people without access to justice. This is especially the case in family law. There's a risk that children's human rights to a family life are being interfered with. > public transport is good, Mostly private companies. Public transport is good in large cities; somewhat good in large towns; pretty lousy outside large towns. > schools and universities are doing fine, Cost of loans has increased, amount of debt that students leave university with is highest it's ever been > pensions are paid Tell that to the 50something women who've been fucked over by governments increasing retiring age several times, leaving those women thousands of pounds out of pocket. Or tell that to C&A workers. > and health care continues to be rather good A&E 4 hour targets aren't being met; consultant-led waiting times aren't being met; UK has pretty terrible outcomes for cancer; MH is not good. Children with mental illness find it very hard to get a bed, and those beds may be hundreds of miles away from their home. Community care for children with mental illness has always been rough, but with the Young People's Transformation Plan we were supposed to see things get better. Some CCGs took that money for young people and spent it elsewhere. Last month there were zero in-patient beds for adults with mental illness. This means that very sick people (because rightly nowadays you have to be very ill to get an in-patient place) are at increased risk of death and severe harm. Out of county in-patient treatment for adults with mental illness is at record levels. Politicians lie if they say the NHS has had increase in spending. NHS deficits are at record levels; NHS budgets have been cut in anyway you define budget and cut. It isn't possible to look at current NHS budgets and say they've been increased. Cutting wages (and removing bursaries) means there are many posts that are unfilled, and some of those are substantive posts. > and excellent value for money. We do a lot for not much money. But there are a lot of things that have excellent "spend to save" numbers that we don't do because they're too expensive, so we save today but spend tomorrow. Austerity has had massive impact on public services, especially the NHS.

bbrazil 10y ago

> Ireland does not have complex public health service like the NHS. Ireland has a complex public health system whose cost is comparable to the NHS, it is however not of the same quality.

talideon 10y ago
10% of GDP, IIRC, which is more than the NHS and for worse outcomes. If anything, the Irish system is more complex because of the legacy of being formerly Church-dominated and decades of half-hearted reforms. There's a reason why the Irish health system has long been nicknamed 'Angola'.

mrmffh 10y ago

Lower rates can equal a larger absolute cut.

peteretep 10y ago

> Can Britain really afford to cut taxes Can it afford tax revenue lost via business fleeing? The answer is probably no to both, but one offers increased employment as a side-effect. It's a plan for making lemonade.

UK-AL 10y ago

If it gets more companies here and more people employed, it can actually increase the amount of tax.

tehabe 10y ago
A scheme which rarely (if at all) works. Usually cutting taxes means cutting revenue.
Noseshine 10y ago
"Lower the taxes of businesses so that they can invest" - That's been the theory behind decades of such experiments in many countries. Worked out great, we all can see how the money keep s"trickling down". That theory is actually very un-capitalistic: It assumes that only a few people know what is best for the majority. Because it's built into the system (and with a certain perverse logic, not at all irrational of course) that those who've had success are more likely to know how to have more of it. So the system is actually incredibly anti-risk with money - in an age when "money" surely is not a limiting factor. Not overall - it is because a few have so much they don't find good investment opportunities (when you have billions, only hundreds of millions of opportunity at once make sense to even look at), but for the vast rest of us it is. So it becomes a tautology: The system is set up to make it far more likely that the successful succeed more, and that is then used as justification for itself, "see, it's too risky to give resources to the inexperienced, data prove it". So we get ever more concentration of control ("money", "power" are indirect terms, "control" is what it comes down to. Th eproblem of the 0.01% isn't their jets, their yachts, their mansions, it is their control of too much of economic life at the expense of most everyone else.): https://www.youtube.com/watch?v=QPKKQnijnsM https://www.youtube.com/watch?v=QPKKQnijnsM
- nagrom 10y ago
  > That's been the theory behind decades of such experiments in many countries. Worked out great, we all can see how the money keep s"trickling down". Do you have an example? I don't know of any serious economist that backs trickle-down theory except as a strawman, but many point to lower and flatter taxes that can be used to support market-based economics as enabling high productivity. The obvious country that backs this - the US - has done pretty well from it, as have a multitude of smaller nations (Hong Kong, Switzerland, Singapore, the UK, Canada, Australia). Some countries with higher taxes but also based around a free market economy have done well - Germany is the prominent example and Sweden and Finland. Some have succumbed to corruption and are failing, or on the brink of failure (Italy, Spain, Greece). The opposite - high taxes, lack of a market and extreme governmental intervention - has certainly been tried in many, many countries. Most (all?) have failed badly in a way that has destroyed generations of productivity (North Korea, Cuba, The Soviet Union, Venezuela, etc.) and really fucked-up their societies that way - usually accompanied by secret police squads, the crushing of liberties and very low quality-of-life. > That theory is actually very un-capitalistic: It assumes that only a few people know what is best for the majority. That's actually very 'capitalistic' - the man with the capital makes the ultimate decisions as to where it gets invested. Perhaps you meant democratic? I'm not convinced by the rest of your argument either. The capital owner usually employs many people to invest portions of the capital into smaller investment opportunities - it's not like Bill Gates has to invest all of his fortune into just one opportunity is it? If anything, this site is based around the idea of giving capital to the unexperienced to start businesses with promising ideas - that's pretty much the exact theoretical definition of angel investors, incubators and VCs. One might argue that these institutions suffer from cronyism and don't do their job as well as they should, but their job is after all to re-allocate accrued capital to value-producers in a risk-balanced way across a broad portfolio which, I think, is what you seem to want to advocate.

_Understated_ 10y ago

I think it's a great move and I would love to see it go further. I take your point on asking whether Britain can afford to cut taxes but I reckon it will be funded by removing pension tax relief: It costs around £34 billion per year [1]. By this, I mean that the treasury loses out on £34 billion a year. The solution will be to tax income as normal, no pension tax relief but to allow zero tax on the pension drawdown at the other end. From the current chancellors point of view it's a win-win: He gets an additional £34 billion a year and the problem of zero tax at retirement age becomes someone elses issue. [1] - https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/503200/PEN6__2001-02_to_2014-15___for_publication.pdf https://www.gov.uk/government/uploads/system/uploads/attachm...

d4rti 10y ago
What's the upside for investing a pension versus an ISA then?
- _Understated_ 10y ago
  You can take your ISA money any time but pensions are drawn when you reach a certain age.

talideon 10y ago

> Ireland does not have complex public health service like the NHS. Where exactly did you get that idea? As bbrazil wrote, that's certainly not the case. We also spend more on healthcare per head here in Ireland than is spent in the UK. We have one of the highest spends in the OECD and a complex legacy of the pre-independence healthcare system plastered over almost a century of half-hearted reforms to deal with. People in Ireland envy the NHS for three reasons: compared to the Irish 'system', it's cheap and relatively simple, and the outcomes are better than our more expensive hodge-podge.