[cloutchaser]

This is such a simplified viewpoint. The UK has never been able to collect more than 39%-40% of GDP in taxes. And that's what the level is at now. Already everyone is paying as much tax as in history. (and the "rich" pay a lot of that, remember you pay £0 tax under £15,000 income per year).

You can try and tax more, but it's highly unlikely to work based on past experience. And in these cases, like with corporation tax, usually the government actually collects more tax revenue at 20% than at 30%. So again, I'd prefer factual taxation, not virtue signalling.

What's the solution here to get more in taxes?

[Veliladon]

If only there was some form of large market close by that the UK could be a member of so that the UK could trade with them in a frictionless manner and expand the economies of both areas through trade. That would increase the GDP and hence the amount of money the government could have available to it through taxation.

But I don't think there is anything like that around. I mean, if there was, why the hell wouldn't they be lining up to become a member of it? There's only upside there.

[sgt101]

If only. Of course, you mean the EU.

But the UK has run a trade deficit of $60bn with the EU for the last 10 years or so. Leaving hasn't helped that, but staying wouldn't have either.

Something has to change in the relationship - something deep and real. The fundamental is the competitive advantage that the Euro confers on the German economy. Brexit is a way it can change overtime, there won't be an advantage for the UK, just an emergent state that is sustainable. The UK will be poorer in the present - but may avoid a Greece style implosion.

Truss showed that may is important here.

[adrian_b]

I fail to see which advantage is conferred by the Euro to the German economy, at least in the relationship with UK.

Unlike Germany, UK has always been free to establish any exchange rate they desired, between GBP and EUR. So only UK could have any advantages from the manipulation of the currencies.

Within the countries that use EUR, it can be claimed that Germany has the advantage that the other countries cannot cheat and compensate other economic problems by playing with the exchange rate. In my opinion that is a good thing, because stealing money from the people by devaluating their assets through artificial exchange rates is not the right solution for solving international commerce imbalances.

[sgt101]

If the Euro was a currency backed by the economies of Germany, Holland and Denmark it would be valued much more highly than it is now. Because of this these economies have a relative competitive advantage compared to other similar economies.

If the Euro was part of a federal system with federal transfers - like the US$ then this advantage would be mitigated because the budget positions of the rich parts of the EU would be relatively weaker (due to transfers) and the periphery of the EU would have stronger fiscal positions.

>In my opinion that is a good thing, because stealing money from the people by devaluating their assets through artificial exchange rates is not the right solution for solving international commerce imbalances.

Fair opinion - but what is the solution? Do you agree that federalisation with fiscal transfer would be correct?

[cloutchaser]

The only reason Germany become such an export powerhouse is because their currency was lower than what it would have been naturally as a country. Because countries like Greece and Italy pulled the euro down.

This was very convenient for Germany as they could build exports cheaply.

If you don’t understand this, which is a very basic part of how the eu ended up as what it is, I would just question the rest of your commenting.

[sgt101]

I don't blame Germans and Germany for taking advantage, but the political maturity to use this to create security and prosperity for everyone in Europe is completely lacking. I suppose unification and the problems afterwards are somewhat to blame.

[cloutchaser]

Very nice, but the EU is probably going to decline in GDP more than the UK, and the euro could potentially collapse due to the Italy situation in the next few years.

Thinking the UKs issues are because of brexit are about as simplistic as saying “tax the rich will solve all the worlds issues”

[jimnotgym]

>the EU is probably going to decline in GDP more than the UK

Even if that does happen, it doesn't necessarily follow that the UK couldn't also have a higher GDP by trading with the EU

>Thinking the UKs issues are because of brexit

... could make you the governor of the Bank of England

https://www.theguardian.com/business/2022/nov/16/brexit-and-...

[sgt101]

It doesn't follow, but history post 2016 wasn't written in gold if the UK had stayed in. The north of England, the central belt of Scotland and the south of Wales were in a terrible state. Brexit has failed to help, but remaining almost certainly wouldn't have either. The biggest issue the UK has experienced since leaving is Covid-19. Remaining wouldn't have helped us in that contingency.

The UK has blamed Europe for it's ills for 40 years. Remainers/rejoiners are still centered on this - we have to start to look to ourselves. Being in or out of Europe is not at issue; working to build a sustainable national economy and polity is.

[jimnotgym]

>south of Wales were in a terrible state.

South of Wales benefitted greatly from EU funds. From renovating coal tips to employment schemes. I don't understand your point here, it was the EUs fault that the UK had run down regions... even though the EU gave them money????

>The UK has blamed Europe for it's ills for 40 years. Remainers/rejoiners are still centered on this

This makes no sense at all

>we have to start to look to ourselves.

Are you suggesting that we shouldn't have international trade?

[sgt101]

>South of Wales benefitted greatly from EU funds. From renovating coal tips to employment schemes. I don't understand your point here, it was the EUs fault that the UK had run down regions... even though the EU gave them money????

yes - in the same way that it's the EU's fault that Italy and Greece and Spain have run down regions. The Euro is sucking capital from the periphery of the EU to the core... and because the EU has monetary union but not federal union there are only very small fiscal transfers in the opposite direction. This is in contrast to the monetary union in the USA where there are considerable federal transfers.

>This makes no sense at all

I will try and better explain. I think that the UK must stop blaming it's ills on its position relative to the EU; instead it must take the arrangements of other European states as a fact and make its own policy and direction. The obsession with the EU will change nothing - only internal reform of the EU to a fully federal state will change the current dynamic. The only real path for the UK in the EU is to fully join a fully federal state - I wouldn't mind too much about that if the commission was abolished, a proper civil service developed and the EU parliament had the final say over the civil service and the president (I would like a president who could propose legislation and dissolve the parliament for elections if legislation could not be passed).

However, I see precisely 0 chance of this happening in the next 50 years. After that I will be dead...

> Are you suggesting that we shouldn't have international trade?

No, of course not. I am suggesting that we see reforms and changes to our economy that enable us to have balanced trade with the rest of the world. The arrangement where we import vastly more than we export is not sustainable (in so many ways). The Brexit devaluation should have been helpful, but has been rendered moot by the very bad post Brexit trading setup. The end of the current pathway (and the pre-Brexit path) is a comprehensive economic meltdown a-la Greece in 2011; there is still sometime to avoid this - but Trussonomics showed that there is not as much as our establishment would like to think. This is the UK's fault and the UK needs to fix it.

In a way the Truss debacle has been a good wake up call - but there's still time for it to be swept under the carpet...

[hnhg]

You should say high income earners rather than "the rich" here, to be perfectly accurate. The two are not always the same.

[Moissanite]

Very important for people to understand this. For high earners (100-200k), marginal tax rates can already pass 60%. That is an income which is locally considered very high but compared to our Atlantic cousins is somewhat more normal.

I will be thousands of pounds worse off per year under the new tax plans, but I'm OK with that because I understand that it is necessary. However, we are rapidly approaching most people's tolerance limit in this regard; unless the next government does a very good job of tackling economic injustice it feels like people will just give up - at which point the only way is down.

Now, what "give up" really looks like is key - I feel like widespread civil unrest is far closer than most people realize, but before that there will be a further decline in social cohesion. Right now it feels like this story is being masked by the Ukraine situation.

[midasuni]

Becaus of the “high income child tax” and student loan repayments marginal tax rates at just 50k hit 70%. They drop again at 60k, but it’s tricky to justify working extra hard for a £5k pay rise when you only keep £2k of it.

Doesn’t help that you can’t file jointly in the U.K. either.

[jwmcq]

>What's the solution here to get more in taxes?

Easy - increase corporation tax. The main rate has been literally halved over the last 30 years.

[JonChesterfield]

The thing with that is corporations can defer profits until the rate falls again, while in the mean time you encourage people to open new premises elsewhere. So the take is not remotely linear in the percentage.

[jimnotgym]

Tax Capital Gains at the same rate as income?

[midasuni]

Not to mention income from retirees. A pensioner on £35k income pays far less in tax than a worker on £35k income.

[woodruffw]

> This is such a simplified viewpoint. The UK has never been able to collect more than 39%-40% of GDP in taxes. And that's what the level is at now. Already everyone is paying as much tax as in history.

This has a double meaning: (1) “everybody” meaning the whole body, and (2) “everybody” meaning each tax-paying individual.

The two are not the same: it can be true that the whole body of taxpayers is paying the same amount (proportionately) into the GDP as always, while more of that proportion comes from the lower and middle classes than it historically has.

[yason]

What's the solution here to get more in taxes?

The same as usually: increase the taxable base, not the tax percentage. Tax a larger base moderately than trying to out-tax the last dribbles of a dwindling, current economy.

To do this, work politically to make it easy and lucrative to do business and increase overall wealth, and make it productive and worthwhile for individuals to get more by working more.

[Glawen]

Remember that everyone is paying VAT, so yes little income are also taxed

[Moissanite]

I feel like we need a progressive VAT, which differentiates necessities from luxuries. Probably too complex to implement though.

[stu432]

We do already, there's several VAT values, necessities are supposed to be VAT free for instance. Has some quirks in it, so you end up with the Jaffa Cake Vs Biscuit debacle - https://www.astonshaw.co.uk/news/jaffa-cake-tax/#:~:text=The....

[Moissanite]

I was aware of the biscuit thing, but think it should just be rolled out more widely. We sort of have that with luxury cars, but an across the board increase of VAT to 30% on high-end goods is really what going for - defining luxury goods is left as an exercise for the reader.

[stu432]

Pretty comprehensive list here, https://www.gov.uk/guidance/rates-of-vat-on-different-goods-...

[ChuckNorris89]

Many countries have progressive VAT. In my country food is half the VAT of consumer goods while medicine and books have zero VAT.

It's definitely not that difficult to do.

[midasuni]

I pay hardly anything in vat other than a few luxuries.

Food Rent Public transport

No vat on those

Electricity is only 5%

A few quid a year on vat on toothpaste hardly makes a difference.

[jimnotgym]

One solution is to tax wealth rather than income.

That should be popular...

[akmarinov]

Nationalise some royal lands

[ChuckNorris89]

What's stopping the UK government to seize UK land owned by the royal family?

Or at least taxing them the same rates as the peasants instead of letting them freeload.

[stu432]

Because they effectively pay 85% tax on the income already. Look up the Crown Estate. The UK government taking it over would result in it being sold off at bargain basement prices to fund a voter winning 5 min fix and there'd be nothing to show for it in 50 years.

[jimnotgym]

I presume these are two unrelated points?

Nothing stops the UK seizing crown lands. In fact it sort of does. This is where the sovereign grant comes from.

Land however is not generally taxed in the UK so in that sense they do pay the same.

[JonChesterfield]

Also known as "theft"

[olddustytrail]

No, also known as "tax". Original taxes were always on wealth rather than income. We should go back to that.

[Fatnino]

There was a tax measure on the ballot here in California and the argument against was "taxes are theft from people who probably have better use for that money"

The measure passed easily.

[thebruce87m]

What country in the UK has £15k? I just looked at Scotland and England and they both have £12,570 as the basic threshold.

[phphphphp]

If that’s true, why isn’t that the party line? Every tax-reductionist I’ve heard from talks to the moral crime of high taxation, and the necessity to cut reliance on the government. I have not heard (as a regular person outside of academic circles) any politician argue that reducing taxes will increase revenue. Given how trivial this concept is to validate (cut taxes and see revenue go up) why hasn’t it been implemented?

https://www.conservatives.com/our-plan/economy

[zpeti]

Honestly, because since Blair the conservatives have been playing politics in labour's court, and labour's language and labour's politics. There hasn't been a clear and good communicator in the conservative party since... I want to say Thatcher?

The facts of this are true. When corp tax decreased from 28% to 20% tax take actually increased. But the conservatives seem unable to communicate this properly. It's sad to be honest. The "science" is there. But blaming the "Tories who want to reduce taxes on the rich and screw you" seems to be the talking point, not facts.