Should the highest rate of income tax be raised to 50%

Original post by Bornblue

I did address your point about Reagan. Often right wing leaders utilise bits of left wing economics and vice versa. The fact that a perceived right wing leader introduces left wing measures, does not make those measures right wing.

Again, George Bush introduced a socialist bail out of the banks. The fact he was right wing, didn't make his policy any less left wing.

Of course you can.
The point is that simply because a large body of people believe something, it doesn't mean they necessarily have a valid point.

I agree with you , left wing leaders can use right wing policy and vica versa. Regan had very low taxes but public spending still rose. Bush had to bail out the banks as did any government. A completely free market economy doesn't work nor does a communist state.

Reply 144

Original post by fleky6910

I agree with you , left wing leaders can use right wing policy and vica versa. Regan had very low taxes but public spending still rose. Bush had to bail out the banks as did any government. A completely free market economy doesn't work nor does a communist state.

I agree.

The 1960s tory party broadly accepted the Keynsian consensus. That government had a big role to play in the economy and society.
Heck in the 1960s the Tories used to compete with Labour about who would build more council houses!

They were certainly right wing on social issues. Didn't like immigration, or gays, or abortion, or women. But economically they were not the free marketeer, neoliberal party that they were under Thatcher.

Reply 145

RedManc

OP

3

Original post by Bornblue

I agree.

The 1960s tory party broadly accepted the Keynsian consensus. That government had a big role to play in the economy and society.
Heck in the 1960s the Tories used to compete with Labour about who would build more council houses!

They were certainly right wing on social issues. Didn't like immigration, or gays, or abortion, or women. But economically they were not the free marketeer, neoliberal party that they were under Thatcher.

I prefer the tory party of the 50's and 60's

Reply 146

Original post by Bornblue

I agree.

The 1960s tory party broadly accepted the Keynsian consensus. That government had a big role to play in the economy and society.
Heck in the 1960s the Tories used to compete with Labour about who would build more council houses!

They were certainly right wing on social issues. Didn't like immigration, or gays, or abortion, or women. But economically they were not the free marketeer, neoliberal party that they were under Thatcher.

Thatcher's time required a different type of economics however. Whatever your taught of her , she was a game changer in British politics. She cut taxes a heck load! I have admiration for thatcher and think she saved us( you probably disagree but we'll leave that debate aside). Austerity and Keynesian economics can both work depending on the economic climate.
Hammond and Trump seem to be implementing a Keynesian consensus also. Should be interesting to see. What are ur taughts on this?
Reagan was for the free market and low taxes but also implemented some Keynesian policy. ( high public spending etc.)

(edited 7 years ago)

Reply 147

Posted from TSR Mobile

How many debates has that reply won you I wonder?

Typical lefty response, if you can't beat them, whinge. You consistently called out others while making little contribution to the taxation debate itself and here you are dismissing legitimate arguments others make and saying that they are a waste of your time.
Would you like a safe space?

(edited 7 years ago)

Reply 148

Original post by heri2rs

Posted from TSR Mobile

How many debates has that reply won you I wonder?

Typical lefty response, if you can't beat them, whinge. You consistently called out others while making little contribution to the taxation debate itself and here you are dismissing legitimate arguments others make and saying that they are a waste of your time.
Would you like a safe space?

Are you interested in joining the conservatives in the model house of commons?

Reply 149

Posted from TSR Mobile

There was indeed high public spending under Reagan but this was in defence, so they could cripple the USSR economically. It was Keynesian to an extent but it was never supposed to stimulate aggregate demand in an economy based on supply

Reply 150

Original post by heri2rs

Posted from TSR Mobile

How many debates has that reply won you I wonder?

Typical lefty response, if you can't beat them, whinge. You consistently called out others while making little contribution to the taxation debate itself and here you are dismissing legitimate arguments others make and saying that they are a waste of your time.
Would you like a safe space?

I assume this was meant for me, even though you failed to quote or tag me.
If someone is to argue that taxation is too high then I could have a reasonable debate with them.

But if they are seriously saying 'taxation is theft!' then I have little time for debating with such extremists.
Go live in Somalia then if you think no taxation and therefore no government, law or order is a great thing.

No, I don't want a safe space thank you.

Reply 151

Original post by fleky6910

Thatcher's time required a different type of economics however. Whatever your taught of her , she was a game changer in British politics. She cut taxes a heck load! I have admiration for thatcher and think she saved us( you probably disagree but we'll leave that debate aside). Austerity and Keynesian economics can both work depending on the economic climate.
Hammond and Trump seem to be implementing a Keynesian consensus also. Should be interesting to see. What are ur taughts on this?
Reagan was for the free market and low taxes but also implemented some Keynesian policy. ( high public spending etc.)

Of course. For good or bad Thatcher was incredibly influential and shifted the country. Only two Prime Ministers in the last hundred years have shifted the consensus that much, Thatcher (who made Labour neoliberal) and Atlee (who made the tories support the NHS and welfare state).

However, it is worth noting that Thatcher raised VAT massively. So while she cut some taxes, she increased others. Reagan also introduced a number of tax cuts.

Austerity can work to control growth for sure. As Des said. An economy which is booming too quickly can be very dangerous, as they found out in America in the 1920s.

I don't really agree that Hammond is proposing Keynisan economics. He's less brutal than his predecessor with public spending but I don't see him making big investments which we badly need such as a mass house building scheme.

Trump is a strange one. He is trying to peddle the idea of 'low tax and low spend', while at the same time promising massive spending sprees in the rust belt states and on infrastructure projects such as the wall.

Reply 152

Original post by Bornblue

Of course. For good or bad Thatcher was incredibly influential and shifted the country. Only two Prime Ministers in the last hundred years have shifted the consensus that much, Thatcher (who made Labour neoliberal) and Atlee (who made the tories support the NHS and welfare state).

However, it is worth noting that Thatcher raised VAT massively. So while she cut some taxes, she increased others. Reagan also introduced a number of tax cuts.

Austerity can work to control growth for sure. As Des said. An economy which is booming too quickly can be very dangerous, as they found out in America in the 1920s.

I don't really agree that Hammond is proposing Keynisan economics. He's less brutal than his predecessor with public spending but I don't see him making big investments which we badly need such as a mass house building scheme.

Trump is a strange one. He is trying to peddle the idea of 'low tax and low spend', while at the same time promising massive spending sprees in the rust belt states and on infrastructure projects such as the wall.

Original post by Bornblue

Austerity can work to control growth for sure. As Des said. An economy which is booming too quickly can be very dangerous, as they found out in America in the 1920s.

The only down side I see with this is that in theory it works. But in reality its not a popular move and normally is not very good electorally when a government goes 'the economy is doing well, lets raise taxes and cut spending'. Also with regards to investment we need to reduce the debt, we have embarked on austerity so we might as well as do it properly instead of half heatedly and once we begin to reduce the debt and a comfortable surplus then we can invest. Hammond is a bit softer and has promised to invest a bit in infrastructure . I agree with you and don't think it will be major however I agree with this.

Trump has promised to cut taxes but also increase spending , the economy will probably perform but the debt will soar unless he finds a way to fund them

(edited 7 years ago)

Reply 153

Original post by fleky6910

The only down side I see with this is that in theory it works. But in reality its not a popular move and normally is not very good electorally when a government goes 'the economy is doing well, lets raise taxes and cut spending'. Also with regards to investment we need to reduce the debt, we have embarked on austerity so we might as well as do it properly instead of half heatedly and once we begin to reduce the debt and a comfortable surplus then we can invest. Hammond is a bit softer and has promised to invest a bit in infrastructure . I agree with you and don't think it will be major however I agree with this.

Trump has promised to cut taxes but also increase spending , the economy will probably perform but the debt will soar unless he finds a way to fund them

Austerity in and of itself is not inherently a bad thing. The problem with the austerity of the last government was that it disproportionately affected those with the lowest amount of wealth, who were in the most vulnerable situations.

Austerity which was more evenly spread would be far more tolerable. For example, one measure of austerity should have been to impose rent caps and energy price freezes. This would have allowed us to reduce the amount of benefits we needed to give to poorer individuals to top up their rent or pay their energy bills.

Personally though I very much favour the approach of FDR. Massive short term investment creating millions of jobs and stimulating the economy that way.

Reply 154

Original post by Bornblue

Austerity which was more evenly spread would be far more tolerable. For example, one measure of austerity should have been to impose rent caps and energy price freezes. This would have allowed us to reduce the amount of benefits we needed to give to poorer individuals to top up their rent or pay their energy bills.

I personally was only disgusted with the disability benefit cuts. I back the rest of cuts, I also think Osborne should've gone through with the tax credit cuts. He could have actually met his targets by implementing harsher austerity ( then again the lib dems blocked some) and he would have looked less of a mong.
I guess rent caps may have given him a reason to cut welfare further. Although I believe he should have income taxes more, perhaps to 15% and sliced the top rate down a bit more. He did a good thing by raising the personal allowance but this should've been accompanied by a tax cut to really make work pay.

Reply 155

Rakas21

21

Original post by Bornblue

I agree.

The 1960s tory party broadly accepted the Keynsian consensus. That government had a big role to play in the economy and society.
Heck in the 1960s the Tories used to compete with Labour about who would build more council houses!

They were certainly right wing on social issues. Didn't like immigration, or gays, or abortion, or women. But economically they were not the free marketeer, neoliberal party that they were under Thatcher.

It's worth remembering that through much of the 1800's the Liberal Party advocated free trade and lower taxation much more than the Conservative Party (albeit Disraeli more or less accepted the Peel/Gladstone consensus). The party was largely unchanged in many regards from about 1840-1980 (new faces, broadly same policy).

Worth noting that it was the Conservative Party which built the first social housing and the Labour Party which restricted access to it (the Conservative idea early on was for them to be for working people).

Original post by fleky6910

Thatcher's time required a different type of economics however. Whatever your taught of her , she was a game changer in British politics. She cut taxes a heck load! I have admiration for thatcher and think she saved us( you probably disagree but we'll leave that debate aside). Austerity and Keynesian economics can both work depending on the economic climate.
Hammond and Trump seem to be implementing a Keynesian consensus also. Should be interesting to see. What are ur taughts on this?
Reagan was for the free market and low taxes but also implemented some Keynesian policy. ( high public spending etc.)

Nominal spending increases can largely be ignored since economics is not zero sum. Did US spending increase as a proportion of GDP?

Original post by Bornblue

Of course. For good or bad Thatcher was incredibly influential and shifted the country. Only two Prime Ministers in the last hundred years have shifted the consensus that much, Thatcher (who made Labour neoliberal) and Atlee (who made the tories support the NHS and welfare state).

However, it is worth noting that Thatcher raised VAT massively. So while she cut some taxes, she increased others. Reagan also introduced a number of tax cuts.

Austerity can work to control growth for sure. As Des said. An economy which is booming too quickly can be very dangerous, as they found out in America in the 1920s.

I don't really agree that Hammond is proposing Keynisan economics. He's less brutal than his predecessor with public spending but I don't see him making big investments which we badly need such as a mass house building scheme.

Trump is a strange one. He is trying to peddle the idea of 'low tax and low spend', while at the same time promising massive spending sprees in the rust belt states and on infrastructure projects such as the wall.

Worth noting the context for a few of your points.

The first is that it's important to remember that the Beveridge white paper would have been implemented by whoever won albeit differently. Also worth noting that the first welfare state was very different (the Guardian thought the poor were feckless back then and Attlee's government had no time for people like unmarried mothers). By comparison today's welfare state is luxury.

The 1920's were probably a bad example of an over-inflating economy due to intervention (the 70's would be more apt) but rather the 'roaring twenties' were basically like the 00's except instead of houses, everybody bought shares. Also worth noting that unlike the Great Recession, government let the banks and firms back then die.

Trump wants both tax cuts and capital spending which are both good but both expensive. It will be interesting in a Republican senate to see whether either is reduced in scope, whether its unfunded or whether like the 1930's UK we see both capital spending and massive cuts to current spending.

Original post by fleky6910

I personally was only disgusted with the disability benefit cuts. I back the rest of cuts, I also think Osborne should've gone through with the tax credit cuts. He could have actually met his targets by implementing harsher austerity ( then again the lib dems blocked some) and he would have looked less of a mong.
I guess rent caps may have given him a reason to cut welfare further. Although I believe he should have income taxes more, perhaps to 15% and sliced the top rate down a bit more. He did a good thing by raising the personal allowance but this should've been accompanied by a tax cut to really make work pay.

Osbourne missed his targets because in 2011-2012 the deficit actually rose and that's largely because of 4 things..

1) The VAT increase
2) Halving capital spending
3) The Euro-zone crisis killing exports
4) Very aggressive spending cuts

In the 2012-2013 budget Osbourne ramped up capital spending both on and off the books (help to buy is a debt based capital spending programme) and slowed the pace of cuts substantially.

(edited 7 years ago)

Reply 156

Original post by Rakas21

It's worth remembering that through much of the 1800's the Liberal Party advocated free trade and lower taxation much more than the Conservative Party (albeit Disraeli more or less accepted the Peel/Gladstone consensus). The party was largely unchanged in many regards from about 1840-1980 (new faces, broadly same policy).

Worth noting that it was the Conservative Party which built the first social housing and the Labour Party which restricted access to it (the Conservative idea early on was for them to be for working people).

Nominal spending increases can largely be ignored since economics is not zero sum. Did US spending increase as a proportion of GDP?

Worth noting the context for a few of your points.

The first is that it's important to remember that the Beveridge white paper would have been implemented by whoever won albeit differently. Also worth noting that the first welfare state was very different (the Guardian thought the poor were feckless back then and Attlee's government had no time for people like unmarried mothers). By comparison today's welfare state is luxury.

The 1920's were probably a bad example of an over-inflating economy due to intervention (the 70's would be more apt) but rather the 'roaring twenties' were basically like the 00's except instead of houses, everybody bought shares. Also worth noting that unlike the Great Recession, government let the banks and firms back then die.

Trump wants both tax cuts and capital spending which are both good but both expensive. It will be interesting in a Republican senate to see whether either is reduced in scope, whether its unfunded or whether like the 1930's UK we see both capital spending and massive cuts to current spending.

Osbourne missed his targets because in 2011-2012 the deficit actually rose and that's largely because of 4 things..

1) The VAT increase
2) Halving capital spending
3) The Euro-zone crisis killing exports
4) Very aggressive spending cuts

In the 2012-2013 budget Osbourne ramped up capital spending both on and off the books (help to buy is a debt based capital spending programme) and slowed the pace of cuts substantially.

What's your opinion on FDRs new deal?

Reply 157

Rakas21

21

Original post by Bornblue

What's your opinion on FDRs new deal?

An answer to a different question. The US had seen a Greek like depression coupled with a slice of the monetary supply actually falling because the banks were not bailed during the Great Depression. What this did is create a massive amount of spare capacity which meant that FDR could use massive levels of stimulus.

Although its a step in the right direction i don't believe it can be replicated in the UK or US today due to the fact that equilibrium employment is much higher than those days (due to attitudes to women, disability, part time work ect..).

One of the dangers cited by some regarding Trump's plans for a ~10% GDP stimulus is that because the unemployment and underemployment level is relatively low and this approach has not been tried in normal times for several decades that we say a hefty inflationary effect which of course demands interest rate increases and potential problems for mortgage owners.

To make it clear, I do support much higher capital spending levels and am not rubbishing FDR however i feel its important to point out the context in that we do not have the spare capacity that the US did in the 30's.

Reply 158

Original post by Bornblue

I assume this was meant for me, even though you failed to quote or tag me.
If someone is to argue that taxation is too high then I could have a reasonable debate with them.

But if they are seriously saying 'taxation is theft!' then I have little time for debating with such extremists.
Go live in Somalia then if you think no taxation and therefore no government, law or order is a great thing.

No, I don't want a safe space thank you.

Whilst I still think it is theft, I think a little taxation - through tariffs and sales tax is a necessary evil, to pay for the military and police. Other than that, the free market can always find a way to give people the things they want.

Original post by Bornblue

What's your opinion on FDRs new deal?

This wasn't directed at me but:

In the 1920's, only the top 2% percent of earners payed any income tax in America thanks to Calvin Coolidge (Greatest president ever). This was a time when the economy was booming and many people in rural areas first had access to electricity - Thanks to the free market. The 40 hour work week was introduced by Henry Ford to attract the best workers - thanks to the free market. Everybody - even the proletariat, could buy vehicles and consumer products like washing machines, radios etc.

And before you say that the economy crashed as a result of this, you'll want to learn about the plague that is central banking. The federal reserve vastly expanded its money supply in the 20's making credit cheap. This encouraged people to take out loans to invest. There's nothing wrong with this, except that the fed kept inflating the supply so that when it did pull back on credit expansion, prices tanked by 35%, stocks crashed and everybody rushed to sell. The crash of '29 was never really the cause of the Depression, but indeed the response.

A common misconception is that Herbert Hoover was a traditional republican 'do nothing' president, when in fact, he was a known economic interventionist so much so, that his predeccesor, Calvin Coolidge an actual 'do nothing' president though he was an incompetent choice - and rightly so. FDR actually ran as the 'do nothing' candidate, to the right of Herbert Hoover in 1932.

I'll leave the link to the bulletin at the end;
'The Fed made further errors that helped put the economy back into recession in 1938. Meanwhile, a flood of bank failures in the early 1930s compounded the money supply shrinkage and heightened economic fears. A key problem was that most states restricted bank branching, which prevented banks from diversifying their portfolios across jurisdictions.By contrast, Canada allowed
nationwide branching and did not suffer a single bank failure during the Depression.'

'The Depression was a uniquely severe contraction. Real gross domestic product fell for four years before finally beginning to recover.3 Real output only regained its 1929 level in 1936, but then output plunged again in 1938. The unemployment rate stayed persistently high at more than 14 percent for 10 years (1931 to 1940).4 By contrast, the economy recovered rapidly after a sharp contraction in 1921. Real output fell 9 percent in 1921 and unemployment rose to 11.7 percent.5 But the economy bounced back with output recovering all its lost ground in 1922. Unemployment fell to 6.7 percent in 1922 and 2.4 percent in 1923. The secret to the quick recovery was that the government generally stood aside and let the market recover by itself—wages and prices adjusted, resources shifted to new areas of growth, profits recovered, business optimism returned, and investment rose.'

This refers to the conveniently named 'forgotten depression' of 1919-1921. Production had contracted by 33%, compared to 27% in the Great Depression. The response however by Woodrow Wilson (the tyrant who gave us the Fed) and Warren Harding was completely different. They sat back and did nothing. The implemented huge tax cuts and the economy quickly recovered.

Herbert Hoover however engaged in a typical Keynesian response by starting huge infrastructure projects, most notably the Hoover Dam. He imposed protectionist tariffs through the Smoot-Hawley act, further stifling world trade, which had also contracted to a third of levels prior to 1929.

I could go on about the New Deal in detail but then it would become an essay

https://object.cato.org/sites/cato.org/files/pubs/pdf/tbb-0508-25.pdf

Reply 159