Emergency Budget

What about a flat-rate tax? I'm not particularly bothered about the fraction of my wage I pay to those pillocks in Westminster, as long as I earn enough to live on. Since I work hard that's fair enough!

[yorkie_chris]

Originally Posted by Rog

I think you have me wrong the poorest incomes would be very little increase teh higher earners would pay more, giving an average of £500.

I would point out that the rich are not a bottomless pit of money either. I would rather get £5000 from some one rich who considers it fair than hammer them, they hire someone to find a loop hole and then they pay nothing.

Difference is rich people will move abroad, meaning if you use them like endless cash cow then they end up going to greater lengths to avoid tax.

Imagine if we made it really easy for rich people here and got all industrialists and entrepeneurs from all around... they would pay same tax as poor people but would in sum of it bring in more money.

[Luckypants]

Originally Posted by Rog

To answer Lucky Pants, yes I know that our defecit is similar in percetnage terms to Greeces but our economy is still completely different to that of Greeces and we are therefore far more likely to be able to pay that debt back and hence why we still have a AAA rating. I cannot deny its worrying but we do ahve the financial clout to get ourselves out of this.

Our economy may well have a different make up to that of Greece, but what on earth make you think that the UK running a deficit of 11% of GDP is more sustainable than Greece running a deficit of 11%???? It's like saying joe bloggs down the road is earning £20000 but spending £24400 is wrong but it's OK if I do it. The rules are the same for both, eventually our creditors will come calling and we will be declared bankrupt. The same will happen with the UK as a whole, as happened in 1976 when we needed the IMF to rescue the UK. Saying things are different now is burying your head in the sand, you simply cannot spend money you don't have forever. Remember that while we have a budget deficit our debts continue to increase. I see your point about the 'soft landing' for UK companies dependant on Government contracts, but the writing has been on the wall for past 18 months that cuts are coming, if they have not made plans to get in replacement work then they are daft. If the work is not there, well unfortunately that is the reality of the situation.

I also think that cutting £6Bn this financial year is in fact a gradual withdrawal of government funding. £6bn is a relatively small amount seeing as the total deficit this year is likely to be £165Bn!! You can be sure that the cuts will be larger next year and the year after, because they need to be. The emergency budget will no doubt raise the overall tax burden (already too high IMO, but that's another debate) in order to reduce the deficit in future years. So IMO the reason why the UK still has a AAA credit rating is because steps are being taken to address the deficit, loss of our credit rating would be catastrophic for the public finances. We also have to remember that we need to pay all this debt back, so at some stage we need to get back to government surpluses so we can do that - at least in part, I realise that all governments in all countries have debts and this is normal.

FWIW I think the most likely tax raising changes in the coming budget will be CGT harmonised with Income Tax rates and VAT to 20%. As long as the CGT is done in line with how Nigel Lawson harmonised them in the 80s it should not be too damaging. In fact he was on Radio 4 on Saturday morning and had a lot of useful things to say on the effects of different taxation strategies.