How did we get to this?

[Fraidycat]

so many of the "poorer" sector have multiple jobs just trying to make ends meet, they still pay NI on at least on of those jobs and if they are really unlucky they are taxed as if they have more than one income.

No, i dont think it works like that.

Employee NI threshold applies to each job. So a nice little loop hole for the low paid.

From next year someone in theory will be able to earn £726 per week, across 3 part time jobs (£242 each) and pay £0 employee NICs for each job.

[Fraidycat]

Is it just me, or does it feel like it could be worse than post-2008?

UK is in deep tulipe.

National debt in 2007 was around 500 billion.
Currently it is about 2500 billion.

Debt interest payments will soon be £100 billion per year.

In 2021, the government revenue in the United Kingdom amounted to around 855 billion pounds, while government spending came to around 1,040 billion pounds

So it seems there is currently a £200 billion deficit which gets added to the national debt each year.

Looking at the history, the deficit was coming back under control before covid, but then exploded in 2020 and 2021.

[AtW]

Shove the tax bands up a bit as well to make sure that the lowest paid are out of income tax.
Scrap NI and put it into the 25p and 40p bands (dunno what that would make it but 30p and 50p would seem reasonable).

But don't increase VAT as that will directly push inflation up.... The gov could get inflation down to any figure to wanted to with a VAT cut but why would they do that????

No - everybody should pay tax, including pensioners

It was a mistake to increase tax free thresholds to the point that very large quantity of people don’t pay income tax

Frankly no tax should equal to no vote and ideally votes should be directly proportional to the amount of direct taxes paid

[vetran]

No - everybody should pay tax, including pensioners

It was a mistake to increase tax free thresholds to the point that very large quantity of people don’t pay income tax

Frankly no tax should equal to no vote and ideally votes should be directly proportional to the amount of direct taxes paid

The cost of collecting the tax exceeds the tax take at the bottom end, also if they raise the min wage at the same time in work benefits should disappear.

[d000hg]

No - everybody should pay tax, including pensioners

It was a mistake to increase tax free thresholds to the point that very large quantity of people don’t pay income tax

Frankly no tax should equal to no vote and ideally votes should be directly proportional to the amount of direct taxes paid

If we wanted Russian input on how we should run our country we'd get it the proper way, by allowing them to influence our elections.

[_V_]

UK is in deep tulipe.

National debt in 2007 was around 500 billion.
Currently it is about 2500 billion.

Debt interest payments will soon be £100 billion per year.

In 2021, the government revenue in the United Kingdom amounted to around 855 billion pounds, while government spending came to around 1,040 billion pounds

So it seems there is currently a £200 billion deficit which gets added to the national debt each year.

Looking at the history, the deficit was coming back under control before covid, but then exploded in 2020 and 2021.

It's going to have to end in one of two ways, massive QE again to pay the deficit each year, resulting in a £ worth about 10¢ and hyper-inflation.

Or UK does an Icelandic style default and says "sorry we are broke and aren't paying any of our debt obligations"

[willendure]

Another thing to consider is our aging population. Demographics of the UK are not quite so bad as say China or Germany (or Russia), but overall developed countries are aging and the younger population is shrinking.

We have now reached a situation where more than half of the boomers are retired. At retirement they instantly go from high earning mature workers putting away capital for retirement, to zero earnings and drawing down that capital. This means that sources of capital are drying up, so interest rates will go up no matter what any government does.

We also do not have a large young population that could drive consumer led growth (as does say Mexico or India). The Truss/Kwarteng idea of cutting tax to restimulate the country into a new growth phase was nothing but pure fantasy - it might have been a viable strategy in around 2008.

The country that led the way in aging and shows us what its effects will look like is Japan (top of the table), as its baby boom started before WW2, so it experience the drop-off first.

https://www.worlddata.info/average-age.php

So I think its inevitable that we are headed for a long period of stagflation. I think the best any government can realistically do is to continue to fight the small battles against that, there is no easy solution. Ever since Bretton Woods our currency has been on a long slow path of decline and cutting interest rates to nearly 0% in 2008 was the last free ride it could ever give us.

I am honestly excited about Labour plans to invest in the green energy revolution in this country, since we have a lot of potential with both wind and micro-nuclear. Carbon neutral by 2030 they say. Except its Labour and it will probably be a badly managed mess. But even if its 2040, 2050, it seems like one of the few areas where we could invest and make progress.

So that is how we got here. We couldn't accept it was game-over in 2008 and kept looking for another free ride fantasy instead of facing up to reality. Brexit was a big fantasy. Covid is not to blame it merely accelerated the innevitable.

The country I think will be most badly affected in Europe is Germany. Reliant on Russia for energy, entirely export driven economy exposing them to supply chain risk that is going throught the roof, and fastest aging population in Europe. Still seems to be better managed than the UK though!

[CheeseSlice]

I can remember the pundits on TV saying that after Covid the world would go through a period of prosperity similar to the Roaring 20s..

[malvolio]

No - everybody should pay tax, including pensioners

Stop there. If you get a state pension, that amount is taken off your personal allowance, so it is fully taxed at source. If you ave a provate income, that is also taxable at source.

It was a mistake to increase tax free thresholds to the point that very large quantity of people don’t pay income tax

No it wasn't. It saves a lot of money and bureaucracy.

Frankly no tax should equal to no vote and ideally votes should be directly proportional to the amount of direct taxes paid

Now I know you're only having a laugh. That's just so ridiculous

[DealorNoDeal]

I can remember the pundits on TV saying that after Covid the world would go through a period of prosperity similar to the Roaring 20s..

Could still happen I suppose, although at the moment it feels like we've skipped the Roaring bit and headed straight for Depression.