Kwarteng says highest rate of income tax being abolished, and basic rate being cut to 19% from next April

[HiVis]

Look, I think the way the budget was presented was wrong, and I think the 45% top rate scrapping is wrong..

But..

It's only a few short months since the UK took the tax burden to "1940's levels"
https://inews.co.uk/news/spring-stat...eaways-1535611
https://www.thetimes.co.uk/article/b...ears-qsrx0wxxw

and opposition MP's were criticising tax rises
https://www.bbc.co.uk/news/uk-politics-60189393

Maybe these reforms will work?

The UK collects around 36% (or thereabouts) of GDP in taxation and this has hovered around 32-33% for many years. We are nowhere near the borrowing of WW2 (which hit 270% of GDP) and its disingenuous to suggest we are. It took many years after the war for borrowing / gdp to return to the peacetime levels we see today.

It is correct to say this government is collecting more in tax revenue than it ever has, but that's due to inflation and the time value of money. Our borrowing as a GDP% is only slightly above pre-pandemic levels.

[life on mars]

Let's be fair and honest about this ,this budget has many connotations,:

Reacting to Labour's accusations under Boris they were of the Party higher taxing government not Labour ?

Truss had to be opposite to Sunaks left leaning budget tact.

It created a big Truss headline and puts her in folks minds negating the Boris effect (which is huge ) any news is good news for Truss ..

Not sure why everyone is getting all pissy for those who wanted a change Boris gone and were awaiting,

Optimising revenues, drives fiscal policy .. drives public services, not complicated.

Osbourne cut top rate from 50 to 45 and it raised more revenues from that group as it attracted investment.. Brown hyked it( as he left )

IR35 Is gone another Brown decesion ,which penalised poorer self employed workers , no one is talking about that .

Whilst we're on bad budgets decesion anyone remember the chaos of his 10p tax fiasco which hurt pensioners ..

I see this action the same as Gordon Brown's when he raised taxes before leaving ,knowing his party was buggered after in fighting with Blair..

Groundhog day now with electable Boris is done like Blair less capable Truss in .. she cuts taxes though less capable Brown raised them.

https://www.theguardian.com/politics...my.gordonbrown

[jon1959]

I couldn't find the 'fair' and 'honest' bits.

[Dorcus]

I couldn't find the 'fair' and 'honest' bits.

I remember he said once "I used to vote Labour" 😂😂,😂

I think he has vivid dreams, bless.

[the other bob wilson]

Thanks for being condescending. I'm pretty sure I know the markets better than you bob, how they work and how short and long positions often conflict.

The markets have returned to as they were pre mini budget. The funds who were taken by surprise with the tax cuts offloaded their assets whereas those who had taken time to digest have now acquired cheaper assets. The losers are the funds that were caught hopping and the winners are the funds that saw an opportunity.

It happens every day in the markets - this time the underlying cause were political however tomorrow it could be a drought in Kenya.

It’s a bit rich accusing me of being condescending when you’re telling me you know more about the markets than me. That said, I’m not going to deny you’re right about the markets as I find financial matters boring. However, what is clear from this exchange is that your political judgement is badly lacking. It’s not the markets you place such faith in which are responsible for the wretched reception the mini budget has received - it’s the people who do the voting. There’s another poll this morning recording a highest ever Labour lead in which seventy one per cent of Tory voters from 2019 say the Government has lost control of the economy.

https://www.theguardian.com/politics...was-forced-out

Do you think they’re blithely saying it’s just the markets and it’ll all be forgotten about in two years time in Conservative party HQ? I bet you they’re not because they realise they have a leader that is an electoral liability. She’s comes over poorly on the media, she’s a poor public speaking and I believe she is not liked by the electorate. I never understood why, but Johnson had a level of personal support he could rely on no matter how bad things got. Truss has none of that and she’ll have to be a good Prime Minister for that situation to change - she’s not made the best of starts there has she.

[the other bob wilson]

I couldn't find the 'fair' and 'honest' bits.

looks like he’s given up on adding “balance” these days.

[Eric Cartman]

Let's be fair and honest about this ,this budget has many connotations,:

Reacting to Labour's accusations under Boris they were of the Party higher taxing government not Labour ?

This is nonsense, not a good start. Labour were critical of the Tories in this regard because they near constantly promoted themselves as the party of low taxation, their 'accusations' were about continual lying. Let's not also forget, high tax and worse public services year on year shouldn't be acceptable.

Truss had to be opposite to Sunaks left leaning budget tact.

I don't even know where to start.

It created a big Truss headline and puts her in folks minds negating the Boris effect (which is huge ) any news is good news for Truss ..

The polls aren't backing that up right now.

Not sure why everyone is getting all pissy for those who wanted a change Boris gone and were awaiting,

People wanted Boris gone because of a lack of credibility, nothing has changed in that regard. Even if Truss goes, it won't change because we have a system where a small out of touch minority pick the next PM unless we reach the end of an election cycle. There has to be a better way than this.

Optimising revenues, drives fiscal policy .. drives public services, not complicated.

I think the issue here is actually that it is bloody complicated.

Osbourne cut top rate from 50 to 45 and it raised more revenues from that group as it attracted investment..

Wrong, behaviour changed (because people were forewarned about the change) and people delayed payments that would have otherwise been recorded in the previous tax year. HMRC said as much at the time, you chose to ignore that and believe the politician. Regardless of that, we are in a very different part of the cycle.

IR35 Is gone another Brown decesion ,which penalised poorer self employed workers , no one is talking about that .

Wrong, they are repealing amendments made to IR35 in 2017 and 2021. The original legislation stays in place.

Whilst we're on bad budgets decesion anyone remember the chaos of his 10p tax fiasco which hurt pensioners ..

'The last Labour government...' Yawn.

[the other bob wilson]

“Would you believe it: a revolution sold to the public as the very essence of anti elitism turns out to be the most elitist project modern British politics has ever seen.”

https://www.theguardian.com/commenti...asses-betrayal

[HiVis]

It’s a bit rich accusing me of being condescending when you’re telling me you know more about the markets than me. That said, I’m not going to deny you’re right about the markets as I find financial matters boring. However, what is clear from this exchange is that your political judgement is badly lacking. It’s not the markets you place such faith in which are responsible for the wretched reception the mini budget has received - it’s the people who do the voting. There’s another poll this morning recording a highest ever Labour lead in which seventy one per cent of Tory voters from 2019 say the Government has lost control of the economy.

https://www.theguardian.com/politics...was-forced-out

Do you think they’re blithely saying it’s just the markets and it’ll all be forgotten about in two years time in Conservative party HQ? I bet you they’re not because they realise they have a leader that is an electoral liability. She’s comes over poorly on the media, she’s a poor public speaking and I believe she is not liked by the electorate. I never understood why, but Johnson had a level of personal support he could rely on no matter how bad things got. Truss has none of that and she’ll have to be a good Prime Minister for that situation to change - she’s not made the best of starts there has she.

With all due respect Bob I've not made any comment on the politics, I've made comment on what drives the markets.

Saying that i'm not denying that the current polls paint a very grim picture, but no elections are ever won via mid term polls. However I don't pay much attention to opinion polls, because even on election night, they can be hopelessly wrong.

[A Quiet Monkfish]

Jimbo, how many times do you have to be told TRICKLE DOWN DOES NOT WORK.

(Still waiting for the apology.)

It does, and that's not a political answer. Where do you think money, wages, come from ? It comes from trade, buying, selling, making a profit, employing people. It's exactly how economies throughout the world work.

[Doucas]

Fact .The highest earning 1% in the UK pay an estimated 28% of all income tax – not the total “tax burden”. This is close to a record level.

I think the budget move is to motivate those big earners to stay as they are usually business people who provide growth and jobs.


I think the missing bit of the tax stimulus was those in the middle incomes I'd brought thier tax down from 40 % to 38% . and gave lower earners a 2% cut or raised threshold to 15000 before tax kicks in .

Don't forget lower paid workers up to the 39k were already taken out of the NI rise.

Of course they pay the most as all wealth has been hoovered up to the top over the past half century. Poorer people would pay more taxes had wages actually followed inflation during the same period. This is how tories actually think ffs.

[Doucas]

It does, and that's not a political answer. Where do you think money, wages, come from ? It comes from trade, buying, selling, making a profit, employing people. It's exactly how economies throughout the world work.

Then why have wages stagnated to such a level since this moronic theory was brought in during the 80s?

[Eric Cartman]

It does, and that's not a political answer. Where do you think money, wages, come from ? It comes from trade, buying, selling, making a profit, employing people. It's exactly how economies throughout the world work.

Where does money come from? That's a can of worms right there.

The issue in the UK right now is that the average wage is rising at a far lower rate than the wages of those at the top which isn't a great advert for any kind of policies that could be considered trickle down. The concept of pay restraint doesn't apply to CEOs creaming 40% more a year every year.

I keep hearing 'now isnt the time for wage rises' but if not now then when? Take the current rate (say last 20 years) of the decrease in the purchasing power of the median wage in the uk extend it 50 more years, an absolute disaster is looming. If we can never make a case for above inflation pay rises (and my profession certainly hasn't seen them for a long time) then the scenario we are looking at is most working people being unable to afford to meet their basic needs.

The uniqueness of the situation we face in the UK revolves around middle/lower earners. Because the UK gov has made it a very high priority to protect house prices, lower and middle earners could find a better quality of life in loads of other countries

I think there was a twitter meme the other day when the pound was approaching parity with the dollar about the UK average wage being roughly similar to the starting wage in an entry level US fast food job.

[Doucas]

Where does money come from? That's a can of worms right there.

The issue in the UK right now is that the average wage is rising at a far lower rate than the wages of those at the top which isn't a great advert for any kind of policies that could be considered trickle down. The concept of pay restraint doesn't apply to CEOs creaming 40% more a year every year.

I keep hearing 'now isnt the time for wage rises' but if not now then when? Take the current rate (say last 20 years) of the decrease in the purchasing power of the median wage in the uk extend it 50 more years, an absolute disaster is looming. If we can never make a case for above inflation pay rises (and my profession certainly hasn't seen them for a long time) then the scenario we are looking at is most working people being unable to afford to meet their basic needs.

The uniqueness of the situation we face in the UK revolves around middle/lower earners. Because the UK gov has made it a very high priority to protect house prices, lower and middle earners could find a better quality of life in loads of other countries

I think there was a twitter meme the other day when the pound was approaching parity with the dollar about the UK average wage being roughly similar to the starting wage in an entry level US fast food job.

Great post. My wealth/income last year was in the six figure range. But only a third was from wages. The rest was from investments or house price increases.

Tories love the line 'wealthy work hard for their money'. Well i worked hard in my job but I just tapped a button with investments and I sat on my arse for house price increases. Wages need to rise.

[Dorcus]

Great post. My wealth/income last year was in the six figure range. But only a third was from wages. The rest was from investments or house price increases.

Tories love the line 'wealthy work hard for their money'. Well i worked hard in my job but I just tapped a button with investments and I sat on my arse for house price increases. Wages need to rise.

Correct one of the biggest myths is that those who work hardest earn most. The unpalatable truth is that those who successfully gamble most earn the most. Few people have ever worked as long and hard as miners of yore, yet how many of those ended up as millionaires?

[Canton Kev]

Correct one of the biggest myths is that those who work hardest earn most. The unpalatable truth is that those who successfully gamble most earn the most. Few people have ever worked as long and hard as miners of yore, yet how many of those ended up as millionaires?

Had to do a double take and check the usernames. Thought you were agreeing with yourself

[az city]

It does, and that's not a political answer. Where do you think money, wages, come from ? It comes from trade, buying, selling, making a profit, employing people. It's exactly how economies throughout the world work.

I'm afraid YOU also do not understand the theory of trickle down economics. It's all about tax cuts for the wealthy...

https://www.investopedia.com/terms/t...20corporations.

I'll take a Pepsi challenge with you on Economics any time.

[Dorcus]

Had to do a double take and check the usernames. Thought you were agreeing with yourself

He's a lovely guy; were in lockstep!

[jon1959]

Take from the poor to give to the rich, U turn then U turn some more, frack Lancashire (but not Somerset), pound down, mortgages up, pensions down, 'Up the bankers and the Hedge Funds', poll plunge, Tory civil war breaking out?

Where next? Is Honda the answer?

[Taunton Blue Genie]

Take from the poor to give to the rich, U turn then U turn some more, frack Lancashire (but not Somerset), pound down, mortgages up, pensions down, 'Up the bankers and the Hedge Funds', poll plunge, Tory civil war breaking out?

Where next? Is Honda the answer?

I am all for fracking but not down 'ere.

[jon1959]

I am all for fracking but not down 'ere.

That is also the Rees-Mogg motto.

He seems to be pissing off some of his colleagues more than normal with his secretive and NIMBY fracking enthusiasm.

[az city]

Its a theory Adz, just like all of economics. You can read too many books.

At least, it’s not a completely invented discipline like, say, accounting.

[HiVis]

At least, it’s not a completely invented discipline like, say, accounting.

You'll find man has always accounted for things, its perfectly natural to do so, as it helps you understand how much resources you need to feed and clothe your population.

Economics - well we survived without it until Adam Smith came along, and there are so many competing theories in economics (Austrian, Keynesian, Chicago), its hard to take it seriously, given they can't all be right. Its a pseudo-science, a bit like reflexology. But if it keeps happy those who like maths, but were not good enough to study maths or physics at university, then its a good thing.

[Dorcus]

You'll find man has always accounted for things, its perfectly natural to do so, as it helps you understand how much resources you need to feed and clothe your population.

Economics - well we survived without it until Adam Smith came along, and there are so many competing theories in economics (Austrian, Keynesian, Chicago), its hard to take it seriously, given they can't all be right. Its a pseudo-science, a bit like reflexology. But if it keeps happy those who like maths, but were not good enough to study maths or physics at university, then its a good thing.

You're right, Maths in Physics is mindbending; and as soon as you think you've got a semblance of understanding whoops a new set of theories emerge.

[HiVis]

You're right, Maths in Physics is mindbending; and as soon as you think you've got a semblance of understanding whoops a new set of theories emerge.

Absolutely.

Books that made you cry...

Div, grad, curl and all that
Quantum Physics of Atoms, Molecules, Solids, Nuclei, and Particles

😁