I've been thinking a lot about this minimum pricing lark and I've reached a conclusion; I like it. I fact I like it so much I can think of a number of other area we could apply it to:
- Receding hairline matt varnish. - Vaseline intensive care eye-lid moisturiser. - Cocaine and related products. - Samuri swords.
For as you know a minimum price will have the following effects:
- it dissuades frivolous uses of those products it's applied to, leading to a much snazzier kind of user. - it leads to better quality product as providers of poorer versions quickly go under.
Examples:
Receding hairline matt varnish
Ye gods the light! It burns!
VIC eye-lid moisturiser
Moisture. SO MUCH MOISTURE!
And clearly the last 2 examples never saw anything crop up as a consequence of raising the minimum price to, say, ooh 5 years in jail minimum.
Oh.
Well never mind that I have a rather elegant proposal we could apply minimum pricing too which would kill 2 (fat) birds with one stone.
We legalise prostitution and apply a minimum price for services rendered by sex workers; I can see it now (or hypothesise on the impact as my wife doesn't let me out after dark; it's scary out there) - beautiful, scantily clad maidens fair wandering the darker reaches of Leeds' Red Light District scanning for work, Roxanne will put on her red light tonight.
But wait Tom it just won't be that way you say? Why not - surely higher quality poontang will be in the offing if we raise the minimum price Bertha charges versus some lithe eastern European competition; it'll be safer too - the bottom-dwelling echelons of the market for sex will no longer have the cash to partake, prostitutes will be cleaner and safer as their violent cheapo-stinko punters disappear.
What do you mean that will put Bertha on the dole? She was on there already - why does it matter if she can't afford that Sky TV anymore? She was already finding it difficult to attract punters as it was, particularly since you banned smoking in her work place.
And wait your telling me those violent, dirty disease riddled punters just found other ways of getting rowdy, assaulting folks, drinking alcohol hand gel and sniffing glue? What - they managed to shack up with one another?
Then,
For what reason do you think pricing the violent, unwashed masses out of the drinking market will have an impact on their behaviour?
And even if it did why would you allow the purveyors of alcohol to keep the artificially raised profit from this activity?
There is no economic justification for creating a minimum price; there is no legitimate moral argument ultimately - your just spreading the misery on the lowest earners from the top.
But, by forcing the revenue onto the industry, which will see some companies who went for premium product not affected by minimum pricing, whilst killing other groups who sold alcohol to the lowest paid (and I believe we would be lucky to see this be neutral in aggregate on the alcohol industry) you create the least good, most destructive justification of them all: a political one.
Raising taxes is always unpopular, artificially raising prices further along the supply chain (whether it be money, booze, fags...) mitigates the effects of that unpopularity, moving it onto other groups (read big alcohol/tobacco/finance etc.)
But Lib Dem leader and Deputy Prime Minister Mr Clegg said on Tuesday he was a "strong supporter" of the cap, as were the "vast majority" of people, because it was "fair to say you can't receive more in benefits than if you were to earn £35,000 before tax".
Still when all is said and done the question I will be asking to my mp Rachel Reeves and what I urge you to ask your own mp and assorted lefties will be this:
If £26,000 is not enough in take-home benefits to support those on welfare then why is it more than ample for a taxpaying worker?
Divvy up that figure into 2 people working and you get a minimum £13k income untaxed that Labour and associated peers say is desperately not enough to support a household; current standard tax free allowance is ~£6.5k for most folk.
So why is it ok to tax twice as much income from a hardworking taxpayer as it is to cap double that in benefits to someone who isn't working?
Blogging light for the foreseeable future; work heavy. Will try to get more in but money and patience in short supply. Stay safe and eyes open!
It seems everybody is doing it these days; my wife did it yesterday; it seems highly likely my work colleagues will be doing it next Friday and it is not entirely out of the question that my wife may be called to do it again in the very near future without resolution: I am of course talking about having some sort of naughty intercourse with a loved one despite the thrill being long gone.
Or striking due to pensions; I cant remember which as I have had very little sleep in the past few days.
In both cases my view on the subject has changed little (my feelings on the content of the arguement on both sides are a different matter): the government has been keen to kick this particular ball into the long grass well into the future for decades and a considerable ratcheting up of the public sector liabilities in terms of wages, pensions and perks is now being challenged by a massive financial crisis in major part caused by the kind of intervention perpetrated by those self-same civil servants. However, those civil servants did sign a contract in good faith with their paymasters with a view to getting a particular benefit in return for the sweat of their brow; if there paymasters wanted to change the terms of their pay for new employees then that would be fine but that is not what is being offered: as this BBC Q&A on the pension strikes shows what we actually have is an attempt to change the goal-posts midway through.
Irrespective of what libertarians think of the public sector pay, scope and conditions (here is an excellent example) I cant help but think we should see this from a contractual point of view - they offered a service for which the expected returns are now being renegotiated; however you feel about the supposed fore-knowledge of those self-same unions and workers about the likelihood of their fields continued expansion and the ability to meet the ever increasing wage and pension bill, the coercive autocracy that Labour became (ever was?) that perpetrated this massive expansion knowing full well that history would regard them as heroes and the incoming conservatives as monsters stealing milk and pensions and stuff and would forget about the actual detail such as the former government having no credible plan to pay for any of it or the actions of a few rogue bankers intent on derailing the whole socialist utopian exercise by employing cutting-edge financial instruments that mainly focused on the financial powerhouses of black men in string vests' - for the record I think it's a combination of all 3 of the above (the bankers in question being central bankers, not, as is obviously assumed, entirely at the doorway to commercial banks, though undoubtedly not helped); you need just look at the asinine suggestions of union leaders over the last few years - government has Ponzi'd all our pension contributions away on Cherie Blair's human rights law firm and Gordon Brown vanity projects? Pension fund has been scuttled by poor pension investment vehicles? I know! Soak the rich! shut down global trade! charge people for sending/receiving spam! To me that sounds like a good reason to linch your paymasters, not rob the productive and successful.
Anyway, coming back off tangent, how do we solve the problem? I have a 3-point plan on how to deal with the problem that is both elegant, simple, non-fattening and would prove almost universally popular by all but the most left-wing, swivel-eyed sociopathic, diversity mung-bean, poy-dance coordinator (so am guessing about half of them): it would enable:
The public sector by and large to get a pay increase.
Enable them to also afford the new pension contributions being asked for.
Reduce the overall headcount of some of the British public's least favourite aspects of the public sector with little or no fuss from the remainder.
My idea?
The public sector pay average as of January this year out-stripped the private sector at £23,660 compared to £21,528 (and I am certain this figure doesn't take into account the other perks such as the final salary pension schemes etc. so the difference has some ancillary factors pushing this even higher); this means that net an average public sector employee takes home approximately £17,470 according to my shiny Listen to Taxman app on my iPhone; just short of £1500 a month spare. To give them a "happy" pay rise lets assume we match inflation - call it a 5% pay rise + 3% for the additional requested pension contributions for simplicity: that would mean the take home pay increase should be ~£1575 a month or an extra £1400 extra a year.
So again Tom get to your point - what's your idea?
Simple: immeadiately reduce public sector pay by 6-8% and make the remaining income-tax free (NICs, student loans and pension contributions etc. remain).
The difference in the cut wage bill and the increased take home pay + pension contributions would be more than enough to keep the workers happy; you could then renegotiate new and recent starters' pension schemes with less fuss kicked up by those lucky enough to have a final salary pension, perhaps by ending national pay scales and paying new recruits weighted against their predecessor.
This also carries the advantage of making the public sector the most vocal group on the reserve to argue against increasing income taxation and high NICs - it would not be tolerated for long were the public sector wage bill to rise again and the issue of "fairness" would be thoroughly abandoned by those self-same groups with their massive advantage over taxation.
This also just makes sense; why on earth do we think it's a good idea to pay our employees only to take a portion of the cash back in order to pay other employees? Why not just pay them less, code them differently in the tax system and remove them altogether?
But what about the higher paid local council millionaires Tomrat I hear (myself?) scream? Fair enough - charge them a high rate of national insurance and/or remove any upper maximum take; failing that stop voting for spineless politicians and ask for real, bloody reform of the system that allows the mass looting of public finances. Similar rant but this time about QuANGOs? They aren't public sector bodies or the tax code doesn't apply - as such they are subject to whatever rules for taxation the rest of us put up with but would find themselves with all the problems of a rapidly reducing pension pot; the pressure will be on the government to fold them back in and reform/remove their role.
The only people who should be out of work at the end of this exercise should be a couple of thousand HMRC admin staff who are surplus to requirements as a large number of tax returns, PAYE forms and ancillary documentation will simply cease to be processed.
As far as I can see this government has missed a vital opportunity to argue for reform of the public sector by instead focusing on reduction of the bill they will always lose the latter arguement because without addressing the former civil servants will reduce at the coalface, not the back offices and executive suites; the managers are not going to vote for less management. All that is left to this current government if they want to make an impact is elegant, unarguable changes to the system that are both exercises in reform and compromises on the subject of money; a subject the state seems constantly fixated on.
Ministers are locked in battle over a Liberal Democrat plan to splash out £5billion to boost the economy.
As the International Monetary Fund slashed economic forecasts, Vince Cable stunned colleagues by claiming there is ‘flexibility’ within austerity plans for public spending on road schemes, business parks and faster broadband links.
He was responding to an IMF report which said growth will be ‘anaemic’ and warned the world was in a ‘dangerous new phase’, with Britain facing a one-in-six chance of slipping back into recession. ... However, the proposals for substantial public spending on infrastructure deals – referred to as ‘Plan A-plus’ – are clearly being talked about and the Business Secretary insisted that the Lib Dems were not backing away from the Coalition’s commitment to cutting the budget deficit.
The story is similar across several papers, and whilst the amounts talked about in the grand scheme of things are paltry*, it is indicative of the fatal conceit our ministers have that any problem they have is solvable if you only coat it in paper money and hope it sticks.
Which is why I think we need to remind Osbo the Clown of a few basic economic realities and logic; it is growing increasingly obvious he was more stuck on the PP side of his PPE course when he attend toffee-nose college at Oxbridge-on-sea or wherever and thus is up to us his masters to beef up the E.
Let's send him this, Henry Hazlitt's finest work (the link goes to a free copy for your own benefit). The tome explains in big shiny, easy to understand words the futility of what we have come to know as "Keynesian Economics"** - something we used to originally call "Village Idiot Speak" - it explains eruditely the contrary folly of many types of public spending and regulation in a way even Ed Ballsup could understand***.
Let's do this on some key date in the near future: how about Henry Hazlitt's birthday? November 28th sounds like as good as any date. You could send them a print out of the tome from the link above but it might be more striking if you bought a copy: Amazon are selling it pretty cheap at the moment.
As someone who took part in LPUK's (RIP) 1984 campaign - giving every MP in the last parliament a copy of George Orwell's 1984 with a word of advice not to treat it as an instruction manual - I know that these kind of campaigns work; I'm sure after the first couple of hundred copies Georgie will start handing them out/leaving them in Whitehall loos/propelling them into tue Thames - in any case likely every mp will see one before the years out.
Go on you know it makes sense.
* = incidentally what have they been spending money on if they haven't been improving infrastructure over the last 15 years? WTF are we paying out half our GDP for if they are having trouble keeping the sodding lights on?
** = yes I'm aware that Keynesian economics isn't nearly as simple as that but only in so much as I am also aware that the left-leaning intelligentsia and elites in government essentially treat it as code for hacking the valve off the spending facet.
*** = in fact if you can get hold of 2/3 copies pretty sure Balls and Cable could both benefit from owning a copy.
The real message of the conservative pro-life position is that we're in favor of living. We consider people--with a few obvious exceptions--to be assets. Liberals consider people to be nuisances. People are always needing more government resources to feed, house, and clothe them and to pick up the trash around their FEMA trailers and to make sure their self-esteem is high enough to join community organizers lobbying for more government resources.
The above quote not only illustrates part of my own beliefs in the pro-life debate but also links in to the next bit below.
I had a tweet exchange with Mr. Murphy on the subject of the minimum wage that went something a little like this (*cues piano*):
Today's announced increase in the minimum wage of 2.5% to 608p is considerably less than current rate of inflation. bit.ly/f1a0H7 (Retweeted by Mssr Murphy)
ME: @RichardJMurphy @Peston yes - where are employer[s] supposed to find the extra money to pay their employees?
@tjerubbaal @Peston if u r paying min wage your staff costs r already state subsidised massively - how much state sub do u need?
This comment came as odd, alien even; on top of enforcing higher rates of pay from employers was the government also subsidising this? How?
To this day I still await an answer from Mr. Murphy, accountant extraordinaire; but, using the magic of twitter, stream of consciousness that it is, I delved into the vast knowledge and "wisdom" of my "zealous" following to invite an answer from further afield.
It appears that being on minimum wage attracts additional "subsidies" in the form of housing benefit and tax credits to make up the shortfall; like Gordon Brown's splurge of tax credits for the middle classes down this seems to me like robbing Peter to pay Peter and Paul a moderate sum back the difference going to paying Humphrey's wage and giving him paper to shuffle, the effect here being to raise the amount of income to an "acceptable" level for those on minimum wage; below is the breakdown of what is available to the average singleton on the new £6.08 minimum wage:
So on a 37.5 hour week at minimum wage of £11856, £483.30 is added as the bare minimum, making their wage up to £12339.30.
So on an after tax income of £10,424.44 they add £483.30, making the amount those hard-pressed minimum wage earners working under the jack-boot of a top-hat wearing capitalist is £10907.74.
This gets to you by first taking off £876.20 from your wage annually only for you to get a fraction back from the state.
A few things.
Lets accept that we can (not should) guarantee a minimum wage - lets ignore the fact that the labour theory of value has almost certainly been proved a nonsense since it was first mooted (a one word answer as to why it is a nonsense: eBay) - are we really going about it the right way when we tax the pay of those we consider to require subsidy?
Further if we are admitting that the minimum wage doesn't cover the basics, something I'm naive to think if we are going to have should be a pre-requisite, then why bother with it in the first place? Why would you tax any of it? I means that like admitting it should be lower isn't it?
In fact if we are going to buy in full time to the charade that is the state subsidy of workers wages then why not abolish all benefits and fold them into one benefit system?
In a negative income tax system, people earning a certain income level would owe no taxes; those earning more than that would pay a proportion of their income above that level; and those below that level would receive a payment of a proportion of their shortfall, which is the amount their income falls below that level.
Now it could be said that eliminating minimum wage legislation and initiating a Negative Income Tax benefit system doesn't eliminate the possibility that employers will attempt to milk the subsidy for all its worth in order to reduce pay below what they would offer for that role, and you would be right; if employers can reduce wages at another's expense then they will (look at how health and safety legislation and regulations favours the incumbent, larger established businesses, dissuading new entrants to the market); likewise what is to stop someone from doing no work at all and just collecting their pay whilst staying at home? This is of course a dilemma that we face today but with the myriad benefits system, albeit currently the system dissuades people from entering work altogether
One model was proposed by Milton Friedman, as part of his flat tax proposals. In this version, a specified proportion of unused deductions or allowances would be refunded to the taxpayer. If, for a family of four the amount of allowances came out to $10,000, and the subsidy rate was 50% (the rate recommended by Friedman), and the family earned $6,000, the family would receive $2,000, because it left $4,000 of allowances unused, and therefore qualifies for $2,000, half that amount. Friedman feared that subsidy rates as high as those would lessen the incentive to obtain employment. He also warned that the negative income tax, as an addition to the "ragbag" of welfare and assistance programs, would only worsen the problem of bureaucracy and waste. Instead, he argued, the negative income tax should immediately replace all other welfare and assistance programs on the way to a completely laissez-faire society where all welfare is privately administered. The negative income tax has come up in one form or another in Congress, but Friedman opposed it because it came packaged with other undesirable elements antithetical to the efficacy of the negative income tax. Friedman preferred to have no income tax at all, but said he did not think it was politically feasible at that time to eliminate it, so he suggested this as a less harmful income tax scheme.
I would perhaps make it less restrictive on how you retain the advantage offered by your tax-free income, as I laid out here.
And can anyone really claim this would be more expensive to implement? Switching from 50+ benefit systems to one would save money in the long run.
That is of course unless you are a civil servant intent on a little empire building, less interested in what actually works rather than what gets you more unbridled power over the people you deign to serve.
Remember back when the coalition still hadn't markedly pissed off anyone? You know it was sometime in October/November; Osbo had just told us all calmly that DROSSTRAP would be the order of the day - the brakes going on for getting more indebted, with a view to a second term setting a plan to handle all those IOUs under the carpet - Zippy as business secretary was chatting up journalists and briefing against businesses his lefty constituents didn't particularly like; Cameron courageously and heroically arguing down the amount of our government money handed over to an increasing EU budget in this new age of austerity.
If £0.45Bn = 2.9% increase that equates to £0.225Bn per 1%; therefore £13.45Bn/£0.225Bn = a 59.77% increase in our net EU contributions.
Looked at another way the average cost of the Lockheed Martin F-35 Lightning "Joint Strike fighter" - those jets we have had to cut the majority of our order of to make up budget cuts - come in based on the Wikipedia pages' figure at about £85 Million a piece.
So we've just given up a potential 158 brand spanking new and shiny fighter jets bailing out the unaccountble Eurozone colleagues an their ambitions for a single currency.
You still glad we got "cast-iron Dave" at the helm? More like pig iron; will crumble at the slightest hint of pressure onto a bed of taxpayers money.
David Cameron vowed to hand hundreds of millions of pounds of taxpayers’ money plus vital military secrets to Pakistan yesterday to make amends for offending the Muslim nation last year.
The Prime Minister pledged to invest £650million in Pakistani schools at a time when the education budget at home is being cut.
Britain is also to give highly sensitive military technology to combat roadside bombs to the Pakistani security services, which are widely blamed for funding and arming the Taliban.
Notwithstanding the humongous amount of money simply mulched up by our own local authorities on beano's to far away lands*, I think giving aid money bungs to hostile, submarine and nuclear-weapon-totting savages is an appalling use of our money by our increasingly vainglorious Euroslime Dave.
If it is worth giving aid to Pakistan (and I'm sure it is), there should be no need to compel taxpayers to do it; it'll come naturally by the charitable sector, and as we see from the revealed preferences of all those calling for more government spending (H/T to Tim Worstall) they are unwilling to back up spending plans which involve giving money to other nation's governments.
After all isn't that really the ultimate test for the left's desired spending habits: not their desire to give to Oxfam or UNICEF, but cutting checks to give directly to those governments responsible for the people concerned? If you are unwilling to give to corrupt third world politicos in places like Libya, Pakistan or Umbongo, why should the government be able to?
In a tale which sounds like it could have come straight from a Yes, Minister script, Digby Jones, the former head of the CBI, reveals this weekend that he was so frustrated that he wasn't allowed to drive a British-built car he even offered to use his own Jaguar. ... The book, serialised in The Telegraph, also reveals that inward investment opportunities were often squandered because civil servants were slow at responding to requests from businesses that wanted advice.
In one example the Canadian aerospace and engineering company, Bombardier, almost abandoned plans to invest £500m to build business jets in Northern Ireland because it had "heard nothing" from the Government's business department.
But a question remains; why do we need a BIS? Implementing health & safety legislation could be handled by the Dept. if Sickness, tax liabilities by Her Mag's State Sanctioned Theft & Violence and environmental concerns by the Department of Energetic Zealots for Climate Change or the Department of Environmental Fabians & Rural Turnip Mulchers.
So why not wrap up what appears to be a vehicle for state-gerrymandering in private business, an especially repugnant concept considering that it mandates a third party's involvement in what should be a private agreement between the individuals involved.
The indications are that you will be £110.82 better off. Breakdown of Difference £ Alcohol £-24.71 Fuel £-32.09 Income tax £+400.00 National insurance £-82.58 Tax credits £-144.80 Vehicle excise duty £-5.00
So, as long as I behave as a mindless automaton, consuming a precise amount of victory gin each weekend and driving nowhere but work and to pick up ever more costly food I can be a whole £100+ up?
Tax legislation, measured by the respected Tolley’s ‘Yellow’ handbook on direct taxes, has mushroomed from two to five volumes since Labour took power in 1997, and from 1,800 to a voluminous 18,000 pages.
I have a solution that would concentrate minds bit:
- all legislation which directly remove monies from people needs to be collected in one place (a government codex, like Tolley's, on taxation if you will), including substance of laws, statutory instruments and regulation.
- Legislation put in place stating the tax law and codex should be written in plain English. Tax calculations should be incorporated in tables on the codex; any calculations should be proofed so they can be done by anyone possessing a GCSE in maths (low bar I know).
- The text format should be one font and one standard size, say 10/12pt for main body text and 8/10pt for notes or indices in arial.
- now the important bit- the codex cannot be any thicker than 1 inch when printed on standard printer paper; if the printed codex fails this stress test it has to be rewritten; no caveats, no separate indexes or additional explanatory notes - just one 1-inch document.
Doesn't matter the content; the government has to justify that at the ballot box, but a more useful exercise long term would be to get successive governments to think how they raise their money and justify why special interest groups deserve tax breaks (in both sense of the word "break").
I wont hold my breath; might be cool to petition government to do this - would at least raise some interesting questions about tax in general.
Protesters warned of a fuel price ‘crisis’ last night after the cost of unleaded petrol hit £1.40 a litre – £6.37 a gallon. Campaign group Fair Fuel UK said that the price charged at a BP garage in Kent was the highest so far in Britain. The forecourt on the M2 near Rainham, Gillingham, was also selling a litre of diesel at £1.44 – about £6.55 a gallon.
This is a product of monetary inflation and the events in the Middle East.
Oh, as will no doubt be pointed out by the various useful leftist idiots, by Osbourne's Declining Rate Of State Sanctioned Theft Re-Appropriation Programme (DROSSTRAP as I'll now refer to it as in the future; in a nutshell taking more from us at a slower rate of increase).
