Design your own economic theory

1966_and_all_that said:
How dare you insult the dismal science in that way!

Actually, the Conservative-led Governments since 2012 have been doing somersaults with low business taxes in an effort to engender business investment. In fact, business in the macro-sense has taken the surplus profits created by these reductions, out of their businesses in the form of ever higher bonuses, salaries and dividendes, or using them to purchase real estate. Investment has remained sluggish.
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Science shmience

i think it started in the UK anyway around the mid 80's under thatcher, particularly banking de-regulation, Blair didnt do anything about it, in fact most of his policies (through Brown) were specifically designed to make it worse (PPP is a case in point, create a short term asset class out of supporting mechanisms to the economy), Bank of england independence created a bunch of other issues largely to do with short termism, and the disconnection of markets from corporate performance largely driven by short term Chaos investing (my own term) completes the circle. Investment in assets is really really easy, and lending for that type of investment is also really easy. Investing in productive enterprises is incredibly hard, because the finance institutions dont want to know.

I think there are many more equitable models for the economy, even more equitable models that have a basis in consumerism, because breaking that is a real problem. but the pain for any change with the economy imbedded as it is in everything the working population does almost all if not all the pain of change will be felt by the working population.
 
Matesrates said:
Blimey it was just a suggestion and no, I don’t have any suggestions, if I did, I’d probably be chancellor. Do you have suggestions?
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Yes, I do.
1. Increase the tax-free personal allowance to £15,000
2. Reintroduce the 10% income tax rate on the first £15,000 of taxed income
3. Increase the standard rate of income tax by 1% up to 21% for those earning from £30,000.01 to £40,000
4. Increase the higher rate of income tax for those earning from £40,000.01 up to £60,000, to 43%
5. Introduce an upper income tax band of 46% for those earning from £60,000.01 to £150,000
6. Introduce a top income tax band of 60% for those earning over £150,000
7. Reduce the standard rate of VAT back to 17.5%
8. Increase corporation tax to 22%.
9. Introduce a Lack of Use tax of 1% per annum on empty properties valued at over £1m, where a property has been empty for over 6 months.
10. Increase the rates of Capital Gains tax on the sale of properties to 20% for standard rate tax payers and 30% for tax payers paying above that.

These are just a few of the changes I would make in order to improve the circumstances off the less well off. Obviously this is before considering the changes required to the benefits and state pension systems.
 
Costero Poderoso said:
Science shmience

i think it started in the UK anyway around the mid 80's under thatcher, particularly banking de-regulation, Blair didnt do anything about it, in fact most of his policies (through Brown) were specifically designed to make it worse (PPP is a case in point, create a short term asset class out of supporting mechanisms to the economy), Bank of england independence created a bunch of other issues largely to do with short termism, and the disconnection of markets from corporate performance largely driven by short term Chaos investing (my own term) completes the circle. Investment in assets is really really easy, and lending for that type of investment is also really easy. Investing in productive enterprises is incredibly hard, because the finance institutions dont want to know.

I think there are many more equitable models for the economy, even more equitable models that have a basis in consumerism, because breaking that is a real problem. but the pain for any change with the economy imbedded as it is in everything the working population does almost all if not all the pain of change will be felt by the working population.
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good points.
 
1966_and_all_that said:
I post what I believe to be the better way of doing things. That this aligns with left wing thinking is no accident but it isn't a slavish, knee-jerk response. If I and others on the left were only sounding off on our own, you might have a point. But you know very well that there are plenty right wingers on here who are always ready to shout their 'truth' to the rest if us.
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It’s all pointless whichever side it comes from
 
Put everyone who ever cashed in on nationalised industry privatisation shares in Poulton stocks on a rotation basis. And Maureen ** Lipman.
 
Costero Poderoso said:
OK, the laffer curve can be used to indicate tax cuts on any part of the curve, it is a theory based on recieved wisdom at the very best, and its root is presuppositional belief that low tax stimulates growth. Its actually a direct lift from some 14th century soothsayer, who had little or no evidence for the opinion either.

There is no direct empirical correlation between tax and growth, for every low tax economy with high growth, there is another one with low or no growth, and several high tax economies that have long term stable growth. According to Laffer himself you cannot use the curve to show when it is time to raise taxes. On every level it is a system used to justify lowering taxes for the very wealthy at every single point in an economic cycle - economy doing well - lower taxes to maintain economic benefits. economy stagnating - lower taxes to stimulate growth. economy shrinking - lower taxes to launch a recovery. Thats why it has about as much credibility as flat earth.

There is another one called the phillips curve which connects inflation and unemployment, again simple recieved wisdom and a justification for libertarian supply side economics, and maintaining an insecure low wage economy for a majority of workers.

There is a direct correlation between modern tax cuts and asset value increases and there is a correlation between asset value increases and unemployemt but i havent seen anything that empirically concludes a causation. But based on the lack of real evidence in the Laffer theory i could easily come to the conclusion that tax cuts actually cause unemployment.

The fact that the figures for growth, inflation, unemployment are so manipulable calls into question most economic theories that try and connect these aspects. I make the claim elsewhere that the majority of economics is simply justification of faith in a system. Even keynsian economics is largely faith based, in that the tools of the economic theory are the outcomes.

The fact that both systems are still in frquent use as tools is astonishing.
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I have come to the conclusion that these long replies of yours are mainly (not all) Gish Gallop 👍
 
seasideone said:
The more Tax you take out of the system the less the private sector can invest - which in turn creates jobs, growth and more tax revenues.

It is a balance but lefties just don’t get it!!
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Except the vast majority of large employers in this country are owned by overseas companies and profits are taken abroad.
 
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