For the Brits: When will BREXIT referendum happen ?

[peejaye]

I'm sorry Stavros but a lot of that is down to Government policy? Since when as taking money out of peoples' pocket been good for the economy? Economies thrive when people are spending money. Nowhere in Western Europe is there anything like the poverty we have in the UK! It' shameful & embarrassing!

[Stavros]

It is curious is it not, Peejaye how many people believed and still believe leaving the EU will be better for the UK as a whole, that it will benefit the economy, prevent the UK from being sucked into an 'ever larger Union' which in time will have one currency, one army, one government -that leaving the EU will reduce the number of immigrants coming to live in the UK and, crucially, people who voted leave for most of the reasons cited in your post even when they were, as you say, consequences of government policy rather than the EU. I don't know if the UK has levels of poverty not seen in Spain or Portugal, France or Italy as I am not sure how to calculate or measure it.

But, when talk about taking money out of people's pockets, people who are in work but earning less than £11,500 do not pay tax and they and others on low incomes are also entitled to in-work benefits. A survey has discovered that UK workers who do pay tax are subsidizing major chains (Next, Asda, Tesco, Morrisons and Sainsbury) to the tune of at least £1 billion a year as these shops pay low wages forcing their workers to get a top up from the state or reductions in rent through housing benefit, and so on. But what this means is that the basic argument, low taxes are good for jobs, is a mirage -it encourages firms to hire people on low wages, but does not only not give the economy the stimulus you refer to, what is taken away in tax is then re-applied through benefits -somebody has to pay the difference, and it is the middle class who pay it as they pay the largest proportion of tax, which is where part or a lot of their grievance comes from.

JM Keynes argued that when an economy is in recession, when demand falls and supply with it, the state should employ one group of workers to dig a hole, and another to fill it up, both groups of workers having a wage to spend in the local economy and prevent local businesses from folding in the recession. I don't think Keynes would believe the magic realism of contemporary policy that boasts about tax cuts while increasing poverty and moreover, that by soaking the mddle class for the money they do earn drags that class into the penumbra of 'just about managing' when in the past being middle class was to be 'comfortable'.

I think we are not talking about the principles of taxation, which are sound: it is a contact which exists to provide the public with a range of services paid for by taxation; it is the management of the State's finances and the overall performance of the economy that has led us to this point. Politicians have chickened out of raising taxes and interest rates and proving they can use that money responsibly and for the benefit of all, none more so than Jeremy Corbyn who is either a coward or a liar when he says taxes will not go up under a Labour government. Look at the historical record, the UK, the US, France, Germany, Sweden all thrived when taxes were high. But it does require politicians with moral backbone as well as managerial competence, and that may be where the gap lies these days.

[peejaye]

Oh, I thought Jeremy Corbyn was going to raise taxes for the rich & super rich? Or did you miss that?
It's no surprise by your tone; You are not a fan?
For the record; I am a big advocator of rising taxes, not under a Tory Government though as none of it would go on public services.

[Stavros]

Oh, I thought Jeremy Corbyn was going to raise taxes for the rich & super rich? Or did you miss that?
It's no surprise by your tone; You are not a fan?
For the record; I am a big advocator of rising taxes, not under a Tory Government though as none of it would go on public services.

A good example of infantile politics, as there is no evidence raising taxes on the wealthy benefits the treasury more than any other social group, it is just a form of 'class revenge'. If Corbyn was not such a coward he would raise taxes for all of us, but yes, in the hope that the revenues would be better spent than they have been. He has succumbed to that PR fear that any party that says it is going to raise taxes will not win elections. The UK economy in the immediate aftermath of Brexit will impose some harsh decisions on whoever is in power.

[filghy2]

I don't know if the UK has levels of poverty not seen in Spain or Portugal, France or Italy as I am not sure how to calculate or measure it.

In the age of the internet you don't have to, Stavros, because someone else has done it already. https://data.oecd.org/inequality/pov...ndicator-chart
The UK has a higher poverty rate than most of Europe, but is certainly not the highest (Italy, Spain and Portugal are all higher). There are different ways to measure poverty, but I don't find this result surprising given those countries have much higher unemployment rates.

What is true is that the UK has higher income inequality than any other European country, which you can see on the same webpage. That is probably due to a higher proportion of super-rich people.

There is actually a good case for higher taxation of the rich on distributional grounds, given they have been getting a disproportionate share of the income gains in recent decades. Of course, you have to consider the economic impacts in incentives to work and invest, but I see no reason why these should be greater for the rich than for others. They may well be lower, as a lot of the gains to the rich may have come from economic rents; ie monopoly profits, etc that are not set in a competitive market.

Of course, this has little to do with Brexit, which will do nothing to reduce poverty or inequality.

[Stavros]

Thanks for the link filghy, I think the main problem is not so much justifying who should pay the highest rate of tax, but the trend that we have seen since globalization entered a new phase in the 1980s, whereby at the same time that corporations make staggering profits they pay less in tax, while governments use the 'low tax' mantra to win elections knowing that reducing their income base will also raise their levels of debt not least when, as in the US, governments ramp up spending on 'defence' (which in the US seems to be 'attack'). In aggregate terms, referring to both individuals in society and commercial enterprises, we are richer than we have ever been, but it is the gap between the richest and the poorest that is so stark, notably in the UK, with the additional phenomenon of the 'squeezed middle' who are no longer 'comfortable'. As Stiglitz has pointed out, if we had a more equitable approach to income and taxation that was fair and retained the bulk of revenue in the country for the benefit of its citizens, democracy might be stronger, economies more healthy and politics less open to confrontation rather than compromise.

[filghy2]

Yes, I think a key source of current problems is that the rich have increasingly refused to accept any social obligations, and have focussed on advancing their own interest without much consideration of the longer-term consequences. That was not such a problem as long as most people felt that they were also gaining, but that hasn't been happening over the past decade. As a result we are seeing a breakdown in the social compact, whereby people were willing to accept relatively free and open capitalism as long as sufficient measures were taken to ameliorate its worse aspects and ensure the gains were spread around.

Unfortunately, peoples' anger about this situation has been directed mostly at the wrong targets (foreigners and minorities). So we have the bizarre outcome where anger about the above trends helped get Trump elected, even though his policies will only make things worse. I hope that people will see through the right-wing strategy of using 'culture wars' to distract them from what is really happening, but I'm not entirely confident. There seems to be something deeply-embedded in human psychology that leads people to be more mean-spirited toward those who are different during hard times. Much will depend on whether the centre-left parties can develop a new social compact that is more appealing, but that will be challenging.

[peejaye]

A good example of infantile politics, as there is no evidence raising taxes on the wealthy benefits the treasury more than any other social group, it is just a form of 'class revenge'. If Corbyn was not such a coward he would raise taxes for all of us, but yes, in the hope that the revenues would be better spent than they have been. He has succumbed to that PR fear that any party that says it is going to raise taxes will not win elections. The UK economy in the immediate aftermath of Brexit will impose some harsh decisions on whoever is in power.

You're beginning to sound like a Liberal Democrat therefore I shan't bother taking you seriously anymore.

[peejaye]

& please stop quoting history in your posts, Politics is about what's happening right now & in the future.

[Stavros]

You're beginning to sound like a Liberal Democrat therefore I shan't bother taking you seriously anymore.

Whatever silly labels you attach to me are no substitute for the core issue: as the income of the UK declines in the first five years after leaving the EU, where will the money come from to continue funding the military, education and the NHS? Answer: taxes. You can of course put your head in the sand and say this will not happen, but direct and indirect taxes will rise, so why not say so? It is a pity more politicians choose lies to the truth, but that is how we got into this mess and I don't see much spadework from those responsible getting us out of it.