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Government financial "black hole" - non-political thoughts

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MrBlueSky

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Hi,

I have been thinking about the upcoming budget and the governments options on filling the ongoing black hole in the finainces. This is not meant to be a comment on the current government or any other, just the situation

The current thinking is that the government will have to raise income tax to balance the books, which will hit just about everyone.

I was considering VAT, even thoguh it is much higher now than ever before (I remember it being 15%!), raising it by 2% could raise £15bn to £20bn a year. VAT is not payable on food, childrens clothes or books etc. So is arguably a fairer tax than income tax.....


Discuss?
 
The problem is the lack of growth; poor productivity, in large part due to low investment; non-tarrif trade bariers and the impact of a diminished City.

You can make decisions to get into this problem, and plenty were made in the last decade that did that, but you can not tax your way out of it.
 
MrBlueSky said:
Hi,

I have been thinking about the upcoming budget and the governments options on filling the ongoing black hole in the finainces. This is not meant to be a comment on the current government or any other, just the situation

The current thinking is that the government will have to raise income tax to balance the books, which will hit just about everyone.

I was considering VAT, even thoguh it is much higher now than ever before (I remember it being 15%!), raising it by 2% could raise £15bn to £20bn a year. VAT is not payable on food, childrens clothes or books etc. So is arguably a fairer tax than income tax.....


Discuss?
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if Value added tax goes up the cost of things go up so the knock on effect would be we'd need more money to pay for things, then we want more money/wages which if we do get any increase will mean we pay more income tax its a knock on effect and win win for the government
 
Budgets and governments are, regrettably, political. . . But leaving aside any politics, if amateurs - who lack the "mechanical" vision to see what the future consequences of their actions will do - are put in charge of running any financial institution, it is never going to end well.
 
They should stop messing with black holes, they suck you in and turn you into spaghetti.

It's the price of energy, apparently we are the second highest in the world.
 
Bill.Mu1.jpg
 
It was only after 2008 I heard that Churchill quote 'a nation trying to tax itself into prosperity is like a man standing in a bucket and trying to lift himself up by pulling on the handle'. It's always rung true to me.

As above, it's energy costs that are largely strangling our economy. I'm not a climate change denier but looking at it realistically, they're tanking our economy to achieve lofty 'net zero' goals while global competitors prosper. There's something wrong in the way it was put together surely - green electricity being pinned to the market cost of gas etc. Surely all that 'overpayment' we're suffering should be going into making wind farms and hydro plants and the like, so we eventually get cheap abundant energy? Nope - it's given to the corporate energy giants who are laughing all the way to the bank!

At the risk of pessimism, I see no solution. In Westminster and Whitehall I see only ineptitude and corruption. I strongly advise my kids to emigrate with any decent opportunity and just hope I can live out my days before there's a catastrophic collapse.
 
There are underlying pushes that come from outside our country, like net zero.
No serious country would cripple their own industry, and population, by applying burdens that are not being equally caried by larger countries, with far greater bearing on the alleged problem.

Regardless of party, the winning hand is not in the few cards we are allowed to select from the pack, they are in the hidden hands, and deals done beyond Whitehall.
We can argue parties, and local politics if we want, in fact they would prefer we did argue, vehemently and not look beyond the veil.

The reason politics is banned is because it breaks down to simplistic fighting, with no ultimate gain.
The fighting is the reason for politics, we cannot find solutions in such slippery, life long distraction, and obfuscation, puppets, if not pathological liars.
 
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The economy is a self-fulfilling prophecy.

Tell folk there is a (bogus - they refused give specific details) £22bn blackhole in the finances to justify whacking the economy with a (“one off, never to be repeated”) £38bn tax grab, and hey presto you immediately kick off a ‘tax-squander’ doom loop which then creates a genuine blackhole in the economy.

…which a year later needs another “one off, never to be repeated” tax grab.

This doesn’t end well.
 
Economic activity does not create wealth if it comes from neighbours, each paying the other, to do their own washing.
Much of our "Service Industry"is a version of the above.
When leaving university with a MBA brings higher reward than a MSc., a HR manager earns more than a Nurse and Construction companies are controlled by Accountants,( Carillion).
The bean counters multiply whilst the number of beans to be counted rapidly declines.
 
Accept we are no longer a world power and concentrate on our own people rather than help/interfere in other countries, stop the impossible to achieve rush to zero emissions which is causing the high energy prices
Make all councils, politicians answerable for decisions they make
If you can’t manage spending there will be a permanent black hole
 
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