General Chat

The Chancelor's aim is to get the get the annual budget into balance so what we expect to see over time is a reduction in the amount of new debt each year. A reduction in overall debt comes much later.

Forget the nonsense about money going to those who don't rally need it too. Out of total yearly spending of 735 Billion, the amounts are trivial.

In reality, the nations money is being spent, by amount in descending order, on the following:-

Old age pensions (£143 Billion)
Health Care (£129 Billion)
Welfare (£112 Billion)
Education (£89 Billion)
Interest (49 Billion)
Defence (£44 Billion)
Protection (£29 Billion)
Transport (£19 Billion)

And lets not forget that the so called top wealthy pay more tax overall under this government than ever before.

The pensions were contributed to over a period of years
during which time the treasury could invest it, profitably or pay off debt
whatever The Chancellor saw to be expedient.
But the pensions are earned by the recipient. It's their nest egg.

Those paying NI now towards their pension are in reality giving the money to the government to pay pensioners now.

Disagree Inspector Green Pen, present top rate is not the highest tax ever paid.

The Beatles wrote a song Taxman due to their having to pay the top rate of tax. In the 1960s and into the 70s the top rate eventually became 19/6d in the pound so for every pound earned over a certain amount they only got 6d. That's why so many became tax exiles.

I believe it may have been even higher during WW2 but don't quote me on that :-)

Before VAT there was purchase tax so tax on what you buy is not new.

You know the old quote - there's nothing certain but death and taxes.

Before VAT which successive governments haven't got rid of wasn't it otherwise known as Purchase Tax and Selective Employment Tax?

Again David, all this info is on line!!

I've no doubt, was engaging in a forum

Whilst that is true PatinCyprus, what is being paid in NI isn't just what is paid by younger people, employers contribute to the NI fund too and even then the amounts are insufficient to cover pension payments and have to be topped up by the govt. Also, NI payments cover many benefits payable to younger people as well eg payment to widows/widowers and sickness benefit.

Some people (I'm not including you) seem to think people in work funding state pensions for older folk is a new thing, but it has always been the case and those older people receiving state pension now, also in earlier years, paid NI to help fund the pensioners of the time, so we all contribute with our NI payments while raising families, have mortgages etc. Also, what is forgotten by youngsters is how many of us pensioners are still paying income tax and covering our own pension cost with those amounts we pay!

Just to clarify, I didn't say top rate is the highest ever. What I said was that the proportion of tax paid by high earners has risen under the present government. Not the same thing at all.

In fact experience has shown that increasing the top rate of tax actually reduces the proportion of tax collected from high earners, largely because there are minded to find other ways of disposing of their income without incurring tax liability as already suggested eg tax exiles, for example.

NI is simply another form of tax - it is not a contribution to future pension. Pensions are paid out of current income, there is no pension pot, if only there were.

Yes, these higher earners are not so much tax evaders but many are
tax avoiders.... cute

I take your point IGP and NI has been mooted for many years to become another tax as it likely will in the future, although it is said that there are still difficulties with a merger. It has also been politic to keep it seperate from income tax so the income tax figure looks lower than if combined with NI.

State pensions were never guaranteed as they relied on the 'contributory principle' of paying in to get something out and not paying in enough could reduce or disqualify one from being entitled, regardless of how much tax you paid during your working life. I suppose the best way to put it is that NI IS a contribution to satisfy the rules that give entitlement to pension rather than the actual payment of the pension, so NI is contributory in that aspect.

Although we don't have individual pension pots, we do have individual NI accounts and NI receipts, apart from a contribution to NHS are ring fenced and not used for anything other than contributory benefits.

One thing that worries me about merging Tax and NI is that under the current system you don't pay NI if you work after pension age. If they merge the two will we all pay more than now if we work after pension age? No-one seems to have addressed that as yet.

In addition there was/is SERP Annx

I hasten to add before I'm, corrected this has nothing to do with National Debt.
Just saying like

Yes good old SERPs David. The earnings related addition to state pension that coincided with NI becoming a percentage of your earnings instead of being a flat rate deduction each week/month. In a tax year, the amount of NI you paid at the lower earnings limit for NI covered your basic state pension for that year and the NI paid on earnings above that counted towards your SERPS for that year.

There were earnings related additions to other benefits too, but over the years these were taken away. :-S

One of the cruellest old rules up to 1979 was the 'Married Woman's Half Test'. In addition to satisfying the normal rules to get a state pension a married woman had to have paid sufficient NI in half of the years of her marriage up to the tax year before age 60. This meant that a woman could have paid more than 40 years NI for a full state pension, but if she married a couple of years before she was pension age and gave up work then she'd get nothing!!

On the subject of the National Debt, even if we did have more manufacturing, how would we compete with countries where wages are cheaper? People are always clamouring for wage increases as it is.

Such demands for more money for the same work priced a lot of people out of job forever. The challenge of the NUM resulted in the end of the mining industry.
The only mines open to visitors are monuments'

They turned one of our closed down mines into a museum David, but even that closed last year.

NUM leader Scargill received a large tin of cash from Colonel Gadaffi I recall.

I've been watching episodes of Prime Minister's Question Time on bbc iplayer.

The economy always incites angry exchanges as they reel off billions and trillions from bits of paper. How much of it becomes s reality we never really know.

You might do better if you wish to have some understanding of economics and all those billions to have a stab at two basic texts from Paul Einzig and Lipsey & Crystal

https://en.wikipedia.org/wiki/Paul_Einzig
http://rajkumar2850.weebly.com/-general-economics/economics-lipsey-chrystal-12th-edition-ppt

far better than the Daily Wail.

Osobourne of course prefers Say's Law
https://en.wikipedia.org/wiki/Say%27s_law

and the utter nonsense of it is why, despite never ending cuts, the deficit is always going up!

The UK is heading for a very bad economic crash which will become catastrophic if it votes for brexit.

I confess that economics on such a huge scale is beyond my comprehension.

It's enough that I manage to keep my own home solvent.