Universal Credit and Family Tax Credit, the two examples you named, are paid out of general taxation; not income tax.
Your statement that those two benefits are "paid for by middle and high earners" is false, or at least incomplete.
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UK taxation policy.
Your statement that those two benefits are "paid for by middle and high earners" is false, or at least incomplete.
The thread title has been changed to be more inclusive.
I didn't create it, it was made to separate this political topic from others, Brexit/Partygate etc.
And remember folks, we are still in the era of "Be Kind".
Massively different views on here, left, right, rich and poor.
But we can all be grown up and civil.
.
And could I add, the vast majority of self employed people earn about 50% of what an employed person earns...very few self employed people pay anything other than the basic rate of tax.
The majority of the self employed work part time, in combination with family duties and care support, and pay little or no income tax at all.
I am firmly in that bracket.
I pay a good deal of tax, on fuel, home, energy, vat and vehicle excise...but I have had to pay zero on my actual income for over a decade.
That is typical self employment in the UK.
Nick🎢
TS Member
Apologies I'll be careful to name every single tax source in the future. I'll make sure I am absolutely complete. You can go about just telling people they are wrong or you can say "have you considered x, y and ".. the response you will get will be vastly different.
The pound is in freefall, the Bank of England will be forced by the markets into taking emergency action, and nobody is in the least bit surprised, because it was completely expected.
KamaKwazi turncoat fiscal policy by inexperienced leaders of a dodgy party in government.
Nick🎢
TS Member
I would like to understand the mechanism behind the fall. Is it pure confidence? I thought generally the price was driven by demand to hold the currency. You would think with less corp tax there would be higher demand to hold it for the whales to invest in more profitable business etc. It's interesting.
Alsty
TS Member
It's because inflation is already high and tax cuts increase inflation. The chancellor has now said further tax cuts are on the way, which has panicked the markets because further tax cuts would push inflation higher still. It also shows a chancellor that doesn't know what he's doing.
BoE look likely to take emergency action this week and put interest rates up again.
Benzin
TS Member
That levelling up though. /s
Lowest pound ever. It might well hit parity with the dollar at this rate.
pluk
TS Member
Well, it's bounced already, so not really.
It's very notable that the Euro also slumped this morning to a 20 year low against the dollar, with as far as I am aware no new fiscal policy of note in Europe, so this appears to be driven by the strength of speculation on the dollar more than a direct response to UK taxation changes.
That's not to say it hasn't has an impact, but it's certainly not wholly the driver of this.
Nick🎢
TS Member
Ah ok so am I right in saying it's a money supply and debasement issue then. I.e. what is "good for the economy" (their words) having more cash flowing is really going do debase and contribute to inflation. In other words, people having less cash stops it. Guess nobody would want to push that agenda though!
AstroDan
TS Team
The pound has also fallen against the Euro.
8 Euro cents in a month to €1.10.
There's a pattern here.
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IanB
TS Member
My worry is that the Bank of England increase interest rates to try and reduce inflation. If interest rates get to 5%/6% as some are suggesting, that is going to cause a significant increase in peoples mortgages, reducing their spending power or worse. If people stop spending, then business will employee less people, and its a downward spiral. I am not sure all the higher earners who get tax breaks will make up for the spending of those who can no longer afford to.
Just feels like one crisis after another at the moment, and they keep coming before the previous one has been solved.
pluk
TS Member
Nearly all of that before Friday, if we are looking at the consequences of the tax changes it doesn't look as closely linked.
Obviously if we had done something good instead we might have seen soke actual improvement in the pound, but as a cause its far less clear
Or you can just not make silly comments which imply rich people alone pay poor people's benefits, up to you.
As long as you're not spouting right-wing tropes designed to cause division and vilify the poor, I don't care tbh.
Nick🎢
TS Member
You can spin it politically however you like (though I would caution from making assumptions about people - very easy to jump to assumptions with text like this, we all do it).
One can argue that statement is right or left wing. Right wing "the well off pay for the burden of the poor" left wing "those that have the ability to support those that do not in an equitable society".
Ultimately the math is objective though. Have a look into net contributor and net beneficiary. Just a warning though the facts might be uncomfortable. In cold hard reality even people that some may consider "well off" are net beneficiaries.
Interest rates at 5-6% is actually considered normal it’s just a whole generation has only seen 1% since 2008.
I can actually remember them at close to 20% in the early 90’s and people were just handing the house keys back to the bank.
The housing market crashed and then young people could actually afford a house again, it’s all part of the economic cycle, the mistake is believing we had somehow got away from it.
I’m a great believer in saving some for a rainy day, I know I’m fortunate and in some respects got lucky but I also started with nothing, not even a decent education.
Nick🎢
TS Member
One thing we can all take from this is it is now time to start over paying your mortgage.
We shouldn't forget the risk to private renters too (social will hopefully have some protection) as rates will cascade into rents.