Politics Thread!

[tufty]

… rich foreigners, both those cash rich but who don't pay UK income tax and those who take simple steps so the house is in the name of a non-higher rate taxpayer.

OH NOES! It'll be difficult to collect tax, so let's not bother. That's your answer to everything, isn't it?

Twat.

[pogo]

Not so much difficult to collect but given the proposed exemption for non-higher rate taxpayers it will target far fewer households than the 100,000 or so that cost more than £2m. So to collect £1.2bn Labour will either have to levy far more than £12,000 per property, or they'll have to find the money elsewhere.

They may hope to collect the money when the occupants move, but the people in these houses who are not higher rate taxpayers are those that have been their decades; they're not about to move, especially not to pay tax. And average life expectancies at age 65 are about 20 years, so most won't be paying on death any time soon.

It's always been mostly a political gesture anyway. Like the 50% rate (which Labour plan to reintroduce), it doesn't matter if it's ineffectual or even damaging. It's targeting the rich so must be worth doing. Hence the name "mansion tax" even though it has nothing to do with mansions.

[pogo]

Thinking about it there's another consequence of the tax that doesn't seem to have been mentioned.

We all remember the recent stamp duty changes. These were almost universally welcomed for doing away with the 'slab' approach to taxation. That's where you pay nothing up to a threshold then all of a sudden start paying tax on all everything once you hit the threshold. So your house costs £125k you pay nothing. £125,001 you're hit with a bill for $1250.01 (1% of the sale price).

The problem with this is it distorts the market as prices cluster just below the threshold. Sellers accept less and/or adjust what they're selling to hit the lower price. You can see the thresholds clearly on this chart of sale prices



We don't adopt a slab system for income taxes as it would work even less well. Wages are highly variable and it's much easier to arrange your affairs to come below a threshold: get paid in shares, have it paid into your pension instead, set yourself up as a company and only draw a basic rate income from it.

Except having a "mansion tax" that's only paid by higher rate taxpayers, even if it's a flat rate on properties, is in effect a slab of tax you get hit with at the higher rate threshold. A large slab equivalent to an income tax hike of 20% or more for some. Those affected would be strongly motivated to avoid paying it; even a pay cut might make sense if it dropped them out of the higher tax bracket.

Yes, they in theory pay it eventually but if they've no plans to move then it's after they die, so no concern. Plus they may reasonably think that the tax might be wound up long before then, as ineffectual, no longer needed, or after a change in government.

[pogo]

From here: http://www.yakyak.org/viewtopic.php?p=1619402#p1619402

That is bit shocking.

BBC report

Yes. Something terrible obviously happened in 2005-6 as the demand for food banks has been growing uninterrupted ever since ! Look at a graph of unemployment or the deficit and you can easily spot the recession and recovery but it doesn't appear in this data, which suggests it's little related.

According to WP the Trussel Trust started only around 2004, so growth could be entirely down to their growth as a charity. Data including other providers would be much more useful, but perhaps less dramatic and shocking.

[Portland]

Pound shop Enoch Powell

[gravy]

The problem with this is it distorts the market as prices cluster just below the threshold. Sellers accept less and/or adjust what they're selling to hit the lower price. You can see the thresholds clearly on this chart of sale prices

Are you saying that downward pressure on property prices is a bad thing?

[Dio]

Look at a graph of unemployment or the deficit and you can easily spot the recession and recovery but it doesn't appear in this data, which suggests it's little related.

... or, as has been mooted, there really isn't a recovery affecting the people that might need food banks at least after the savage cuts are taken into account?

[pogo]

Are you saying that downward pressure on property prices is a bad thing?

A distorted market it rarely a good thing. In this case I think the overall effect was minimal, but it would lead to certain prices not being worth asking; there's no point asking just more than the threshold if tax jumps so much you collect less than if your price is just below it. So prices would jump over those unwanted prices leading to more rapid rises and more volatility.

... or, as has been mooted, there really isn't a recovery affecting the people that might need food banks at least after the savage cuts are taken into account?

But that's all anecdotal. There's no data, or at least the only data seems to be that graph which looks unrelated to any economic or benefit changes. It looks like there's been a rapid uptake starting long before the recession took hold, as groups running food banks spread their operations around the country and became more and more connected to charities, the CAB and the DWP who can now all refer people to the food banks. But all this didn't exist a few years ago; a food bank collection point now appears regularly outside two local supermarkets but I think it's only been doing so for a couple of years.

So it's impossible to unpick how much is due to natural growth and expansion and how much is due to e.g. benefit changes. Once it stops growing so rapidly, doubling almost every year, then it might be possible to judge if it's rising or falling due to the wider economy. As food poverty could easily be falling:

* Unemployment is falling rapidly, so the number receiving JSA and subject to sanctions is falling
* Unlike wages benefits have kept up with inflation
* Large increases in personal allowances have particularly benefitted the low paid, i.e. the working poor
* Perhaps because of this poverty has been falling, to the lowest levels since the 1980s
* While inflation's been low it's been driven by food and fuel prices which have been falling; anyone who spends most of their money on food and fuel should have a negative personal inflation rate

[pogo]

My real reason for posting here (just felt I could not leave the above points unanswered) is more immigration madness.

Labour pledges 'stronger' criminal checks on migrants

Labour trying to out-tough the Tories and UKIP on immigration. Bound to fail. It's particularly pointless what they're trying to do. We already don't let criminals in, or at least we try not to as we ask them on the form. Of course criminals will just lie. So what are the tougher checks ?:-

"I think we need much stronger checks in place, that must include a requirement on people applying for British citizenship to provide the equivalent of the Criminal Records Bureau checks from their own country."

Checks would be made on those without such a document to see if they have a criminal record in their own country.

How exactly? You going to send police out to check on such applicants, doing private investigations in their home country? Or hire local PIs to do it for you? It would be hideously expensive, but mostly it won't work. The countries that people come from are distant, have often poor relations with the UK, and won't take kindly to the UK government snooping around.

Many countries won't have a Criminal Records Bureau, or have one willing to cooperate with citizens trying to leave. So you fall back to asking them on the form, the same as now, and hoping they don't omit anything.

[Dio]

I hope that they're trying to put up a tough image in order that they can campaign on a pro-Euro platform which would leave us in the wonderful position of the CBI backing Labour over the Tories. But I wish I was more sure.

[pogo]

http://www.bbc.co.uk/news/uk-30474521

Speaking in Great Yarmouth, the Labour leader set out plans to stop cheap foreign workers replacing British staff, saying a future Labour government would pass a law to criminalise such behaviour.

This is potentially a big deal. All those people stuck at Calais trying to cross the channel, why don't they stay in France? As they can't get jobs; France is much better at stopping them working. Here it's a £10,000 fine which sounds like a lot but is just a cost of business for many firms that they only pay if inspected which happens rarely.

You can imagine the consequences. Hard to put a number on it but all of a sudden lots of restaurants, shops, cafés, businesses would lose these staff (or risk jail), in particular in London. And who would replace them? London's unemployment rate is already very low and its broken property market makes it too expensive for people to come in and work, at least not at entry level jobs. So restaurants, shops, other businesses will close, or reduce hours/do less work. Some will charge more to keep or recruit staff, but there are limits to how much they can ask for a coffee or curry, and in many cases native workers aren't available at any price.

So another policy that sounds tough but which will probably not be implemented as the costs especially in London are high.

[Dio]

Businesses in London need to accept they must pay more for their casual staff. If the head of Dominos is saying he can't get staff without importing from Eastern Europe, the reason is because he ain't paying enough.

[Orava]

Pound shop Enoch Powell

I went to the Pound Shop today, it was absolutely heaving and had a lot more food in there than I remember from my last visit. Are these places becoming peoples' main places of shopping? Got some parcel tape, for a pound, it was rubbish and kept breaking down though.

[merman]

Millipede has missed the point. Companies NEED immigrants to keep down costs. How else are Starbucks going to make huge profits and dodge paying tax on them without employing surly Eastern European baristas with sketchy English?

[pogo]

Businesses in London need to accept they must pay more for their casual staff. If the head of Dominos is saying he can't get staff without importing from Eastern Europe, the reason is because he ain't paying enough.

Milliband's not suggesting stopping people from Eastern Europe, or at least I don't think so. But it doesn't work like that; immigrants are going into jobs mostly which there aren't locals for. Foreigners cost more in training and if not EU citizens carry much more risk, so are only taken on if there's no alternative.

Or to put it another way there probably is a wage you could pay that would attract people from outside London to work there but how high is it? London rents are several times higher than the rest of the country, hundreds of pounds a week for a room, rather than the hundred that will get you a house around here.

Firms would have to raise prices significantly; those not able to would go out of business. Still others would not be able to find anyone at any price as they need people with very particular skills – Indian and other restaurants for example.