Jane Hutt's new tax group
will the decisions that this group make be the best decisions for the majority of businesses and people of Wales? it has a wide range of expertise from all aspects of business and wider society.
NB well done to a certain individual on their appointment, perhaps you can convince them that the Laffer curve may hold true around the edges, but the notion that we will see an influx of high net worth individuals to Wales by lowering the higher rate* is laughable.
*it is highly unlikely that a socialist party like Welsh Labour would ever actually reduce taxes preferring to squeeze us until the pips squeak
Am I right in stating that one of the tax experts appointed is a regular contributor of this esteemed forum?
I hear he is a very fine fellow indeed, and hopes to have a significant input into the work of the group, but worries some of his suggestions might be seen as a bit too 'radical' a departure from the current set up.
Worth noting that the planned reforms will give Wales control over basically all the key property taxes:
Stamp Duty Land Tax
Now that we have a fifth columnist on the inside when do we launch our coup d'etat?
I've always fancied myself as a benevolent(ish) dictator. I think the first thing I'll do after I've seized the reigns of power is organise a show trial for the architect behind Ty Pont Haearn.
Seriously, congratulations to RC. I'm sure you will bring a fresh and distinctive voice to the group. These type of advisory groups in Wales can sometimes be like Australian soap operas ie. you get the same faces on all of them so it's nice to see someone outside of the usual roster taking part.
Good on you David, I hope some of your views are listened to.
Karl, seeing as Roger Lewis might be a little too busy sorting out the mess that is Welsh rugby how about you head up the city region group in his place ?
I know we have a regular forum member in Mark on it but the more the merrier !
Of course, the opposite of nationalism is not international harmony and brotherhood, it is imperialism.
Do you want to run your own country, or do you let someone else rule it? It's not a huge moral dilemma as far as I'm concerned.
I never realised some of you mob know each other in real life.
Sadly I won't get a say regarding tax policy in Wales, but I hope the welsh government gets tax powers because then they will have to accept real responsibility and face up to their rank incompetence. Let’s hope it happens and then maybe the Welsh voter/tax payer will be able to watch WAG crash and burn!! After all there's not a one of them that has the intelligence to balance a set of scales let alone the economy of 5% of the uk population.
Bring it on baby!!!!
Tax powers are a real possibility following the silk commission, the scots push towards devo max as well as holyrood now getting gilt issuing powers
I have pondered this for an eternity; back and forth bounces the conundrum in my razor-sharp mind. Obviously as a Libertardian I don't approve of taxes but needs do as needs must. The subsidy from our English masters is not enough to keep our woeful populace in scratchcards, pot noodles and Strongbow. A radical taxation solution is needed.
Eureka! Last night it came to me in a dream. Wales should tax........
This would encourage the Welsh freeloaders to move to places that reward sloth, like communist France, or the Gypsy heartlands of western Romania.
Wales would be freed up for the English to enjoy. Let's face facts, most Welsh people don't have the aesthetic or intellectual capacity to appreciate the beautiful mountains and coasts of Wales. Tax 'em to the hilt, those that can't pay? Ship 'em out and let the worthy English be the new custodians of our bountiful but broken land.
I've just come across your article regarding us 'strolling across the summit of the Laffer curve'. It seems your article points towards us not really raising any further revenue from raising tax rates (based on HMRC's 2012 analysis), but that given the uncertainties it would be worth revisiting.
Would you say that is a fair synopsis?
The reason I ask is that in my experience changes to tax rates don't really affect the majority of income tax payers - the majority of behavioural changes come from those who hold investments and can choose when to convert gains to income. This group is a smaller than the higher rate group as a total and I was wondering how this feeds in to your analysis?
Jantra - first, that is a fair summary. The main argument for revisiting is that we now have a couple years more data, and HMRC did do a bit of a rushed job. We are also producing our own estimates later this year.
Those with dividends income (from their own firm, so they can chose the timing of dividend payments) are certainly the most responsive when it comes to tax-planning, and reallocating income over time (e.g. the forestalling, whereby they brought income forward into 2009 to avoid the 50p rate in later years). In the longer term, it could be the case that those with investments are also more responsive because they have greater ability to turn their income into capital gains, and thereby pay CGT rather than income tax. Interestingly those with large investments in uncontrolled companies can't respond quite so much (no ability to time dividends to pay when they're under the top rate threshold) - but they may be sophisticated so use other ways to avoid the tax - an accountant would know more about that. People with largely earned income can also respond though, by pension contributions for instance (although these are now capped at 40k a year, or 1.25m over a lifetime).
HMRC have looked at the responsiveness of all these sources of income taken as a whole, which is correct when trying to look at the effects of applying a 50p rate to all sources of income. Which is broadly what we should be doing (otherwise you give incentives to tax avoid by switching remuneration form - as is the case with capital gains, or self-employed getting lower NICs etc).
Jantard - you really don't warrant a reply. You're the equivalent of the playground bully shouting "spoff" or "swat" or whatever derogatory term used to criticise those showing a bit of interest in something "uncool". Just as such bullies are responsible for a lot of kids not reaching their academic potential, people like you are responsible for the crappy quality of public debate and understanding of key issues in politics, economics etc.
Thank you for a most interesting post. My understanding of economics is sketchy at the least but now some simple research has taught me something. Please continue with these posts! It makes one realise the tightrope a Chancellor must walk in order to collect taxes and still increase productivity.
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