Covid-19 Virus

Discussion in 'Taylor's Tittle-Tattle - General Banter' started by Hornet4ever, Jan 30, 2020.

  1. The undeniable truth

    The undeniable truth First Team Captain

    Not a drop in the ocean if you raise the 100-150k band from 40-50%. Depends on which govt is setting the budget. No one will morally want to really hit the sub £30k earnings. £30-75k voters could go either way so don't want to be the party to hit them. VAT and NI will be under pressure.
     
  2. a19tgg

    a19tgg First Team

    Anything above 20% surely becomes counterproductive?
     
  3. The undeniable truth

    The undeniable truth First Team Captain

    In what way? To an extent any tax rise is counterproductive ?
     
  4. a19tgg

    a19tgg First Team

    It’s slows spending down, more so on luxury goods which is where the biggest take is? Or companies desperate to remain competitive cut prices and pay less corporation tax because their profits are hit.

    If you make things more expensive you put them out of more people’s reach surely?
     
  5. wfc4ever

    wfc4ever Administrator Staff Member

    I think the lockdown will be eased at some point but restrictions will be in place until the top 4 groups have had their first jab at least.

    Boris hoped to have that done by Easter...
     
  6. Moose

    Moose First Team Captain

    The Mirror demands that teachers are vaccinated as a priority now.

    E98B6BDB-16CD-4A15-B5F0-FB2E92D5F6C2.jpeg
     
  7. AndrewH63

    AndrewH63 Reservist

    But the Second World War we borrowed the money from the USA, and it took fifty years to pay back. In Covid we borrowed it from the Bank of England, which fortunately Clement Attlee nationalised in 1946, and we only have to look like we are paying it back!

    Of course all top 20 western economies have had a similar hit. So the markets will have less opportunity to play one off against the other. But borrowing at this level will inevitably lead to less spending and the need to raise more revenue.

    I doubt there will be immediate income tax rises, the Treasury will want to see a controlled bit of inflation through consumption. So initially at least the focus will be on cutting expenditure. Three year freeze on pensions and benefit payments? Reducing tax allowances. Negative interest rates to get a lot of that extra private savings that have built up spent. Infrastructure projects, etc
    All with the aim to boost employment levels which reduces benefit costs and raises NI and income tax.

    Consumption taxes could be increased. For example moving VAT rate 0% items to a starter 5%. You might even reduce some 20% rate items to 17.5%. For example those that would encourage spending. Whack up stamp duty and capital gains tax. Remove tax breaks on say inheritance tax and pension contributions. But it’s a fine balance if you want to boost consumption without it becoming a roar away boom and bust and inflation getting out of control.

    All this will get harder if the economy is still operating in semi lockdown in late spring. But not sure what the alternative is. So let’s hope Covid hospitalisations fall dramatically in the spring. If not to influenza levels, maybe to those in Germany or better still South Korea
     
    Last edited: Jan 22, 2021
  8. wfc4ever

    wfc4ever Administrator Staff Member

  9. The undeniable truth

    The undeniable truth First Team Captain

    Yes we borrowed from the Bank of England. But they have effectively borrowed to be able to lend it. There is only so much “free money” they can print without consequences on currency valuation, inflation etc. Otherwise I think we agree, increased tax take and tighter control on govt spending will be required for a long long time.
     
    AndrewH63 likes this.
  10. Jumbolina

    Jumbolina First Team

    VAT hits the poorest hard. The finances will be a mess after this and politicians need a grown up approach and everyone above the personal allowance will need to contribute otherwise it is just fiddling around the edges. NI is no different to raising income tax.
     
    hornmeister likes this.
  11. hornmeister

    hornmeister Tired

    Absolutely this.
    A complete rationalisation of the tax and benefits system would provide efficiencies and reduce avoidance. Removing the tax breaks on schemes like EIS/SEIS would be a good start, although that has an inherent hit on new businsses. I'd argue that killing off stamp duty would raise more tax by getting the housing market moving.
     
  12. The undeniable truth

    The undeniable truth First Team Captain

    Correct. So tories less worried about raising VAT, labour would be more focussed on increasing top end tax rates and inheritance tax is the point I'm making.
    NI is similar to raising tax rates, as you say, but perhaps less unpopular given the accepted need to strengthen the NHS and the perception that NI tax goes to fund that....
     
  13. Keighley

    Keighley First Team

    No, that’s not right, the first four groups are to be done by mid-February. We’re already into category 4. It’s all of the vulnerable groups, ie up to the 50+s who are supposed to be done by Easter (well, April).
     
    Last edited: Jan 22, 2021
  14. Keighley

    Keighley First Team

  15. Bwood_Horn

    Bwood_Horn Squad Player

    Keighley likes this.
  16. The undeniable truth

    The undeniable truth First Team Captain

    Worth trying to catch it if you're young and could do with £500 ?
     
    Keighley likes this.
  17. Lloyd likes this.
  18. Moose

    Moose First Team Captain

    Almost certainly. Unintended consequences likely.
     
  19. UEA_Hornet

    UEA_Hornet First Team Captain

    Do we have to pay it back? Serious question...

    I'd like to think I'm pretty switched on with current affairs and legal things, but economics on that scale isn't something I know too much about. It's not like a debt you or I hold though is it? Plus if all the major economies take broadly the same approach, do we really lose out?
     
    wimbornet likes this.
  20. wfc4ever

    wfc4ever Administrator Staff Member

    Yes that is it.

    He said most of the vulnerable to be done by Easter.

    We’ll see - seems they are having to stop in some areas so they can catch up in others .
     
  21. The undeniable truth

    The undeniable truth First Team Captain

    If not, and it's not real debt, then lets just borrow another £gazillion and build as many hospitals as we like. In fact lets cancel all taxes....
    I don't pretend to full understand the macroeconomics here but borrowing tends to be in the form of the issue of govt bonds which ultimately need to be repaid to the lenders (**** knows who's able to lend to govts right now...Tescos :) ?). You can "print new money" to an extent but not too much without implications on your currency value and possible inflation but at that point I'll hand over to someone who knows what they're talking about....
     
  22. Keighley

    Keighley First Team

    The government has indicated it will review the restrictions after the first 4 groups are done but the noises yesterday suggest little will change then. Easter/April is a different story though as some of the Tory backbenchers are getting twitchy.
     
    wfc4ever likes this.
  23. wfc4ever

    wfc4ever Administrator Staff Member

    For our benefit or theirs?!
     
  24. Bwood_Horn

    Bwood_Horn Squad Player

    Fool! It's part of the Brexit bonanza.

    As an aside whom do I write to in order claim for my patellar tendonitis. I certain my constant moaning and groaning about it is contagious and not beneficial to the public good.
     
  25. Keighley

    Keighley First Team

    wfc4ever likes this.
  26. zztop

    zztop Eurovision Winner 2015

    It's a complicated business, and new ground. I doubt if there are many experts in a world that is looking as if it will be run on negative interest rates for some time. I read that some £500m of UK index-linked gilts maturing in 2056 were purchased by "investors" at an interest rate of minus 2%. meaning that the investors are only expecting a little over just half of their investment back.

    Personally, I also find it all bewildering.
     
  27. Bwood_Horn

    Bwood_Horn Squad Player

    They're increasingly not alone.
     
  28. Diamond

    Diamond First Team

    Seems like a similar pattern in my household now.
    Just as an update, my son had to be tested yesterday for various reasons but it returned a positive result. So my wife and son are positive, my daughters and me are negative. No symptoms from any of us.
    We are wondering if some of us have had it previously with no symptoms so have short term immunity?
     
  29. Jumbolina

    Jumbolina First Team

    I think the problem with NI from a political point of view is it hits the workers and not well off pensioners. And the perception, rightly or wrongly, is that the workers prospects have been hammered by lockdown to protect the elderly.
     
    UEA_Hornet likes this.
  30. wfc4ever

    wfc4ever Administrator Staff Member

    Well he only really got in due to Brexit I guess and he would have upset some getting a deal with the EU and all this won’t help either .
     
  31. Jumbolina

    Jumbolina First Team

    The current situation is strange now because 40%+ of government issuance is now owned by the Bank of England. AKA Quantitative Easing. In answer to the question above about who is in a position to lend to Governments right now, it's the central banks. You can argue the money printing has already happened.
     
  32. lm_wfc

    lm_wfc First Team

    This isn't the politics section but when does the decision abouthte pension raise get made?

    They go up 2.5% again due to the triple lock when wages have fallen due to furlogh etc - but when wages shoot up by say 10% next year ( to still less than before clearly it's not equal to society to put pensions up 10%?
     
    Jumbolina likes this.
  33. Moose

    Moose First Team Captain

    I don’t get that at all. Why wouldn’t you buy property or even shares in steady unexciting companies instead? How bad are people expecting things to be?
     
  34. Jumbolina

    Jumbolina First Team

    Good point - hadn't thought about that before. It's like they've got an option so gain from triple lock if wages peak and trough.
     
  35. Jumbolina

    Jumbolina First Team

    One reason is it's hugely liquid and you don't have to hold to maturity. So a new German Govt Bond issuance might begin at 102 (redeeming at 100) with a minimal interest rate and thus negative yield (which on face value is an illogical investment), yet 6 months later it might be trading at 104. At which point you can sell and make a profit. There is so much cash in the system due to QE. There are also other reasons - some funds are obligated to hold a certain amount of government debt for diversification, some banks/hedge funds are doing curve trades and speculating on the relative value between bonds of different maturities)

    These bonds don't have negative interest rates, they have negative yield. (eg buy 3 year bond for 102, get 100 back at maturity but interest rate is only 0.5%).

    Pretty weird concept negative yield bonds I agree.
     

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