Lordship 516

Lickin'

There is a principle of taxation involved here - horizontal equity. Horizontal equity means that taxpayers [whether a company or a real person] with equal amounts of income (or property) should pay the same amount of tax. There may be a case for an action to be taken under competition rules viz-a-viz the Treaty of Rome & UK laws. However these actions cost a lot of money & the Whitehall mandarins in association with their political masters have more firepower that individual BTL owners. It is basically a stand-and-deliver highway robbery by Osborne to favour large companies & Housing Associations in a crude attempt to push smaller BTL landlords out of the market & force them to buy other pension products.

Blair

Quarry

Lord

Brexit

Parade

May took on the job & has done precious little since taking office. More years of incompetence to come. Prospect for 10 years Debt - UP Deficit - UP Prices - UP GDP - DOWN Incomes - DOWN Profits Tax - DOWN Unemployment - DOUBTFUL Brexit - UNCERTAIN NHS - NOTHING Care - NOTHING Disabled - NOTHING Housing Funding ?1.4 billion 40,000 dwellings = ?37,500 per unit Housing Infrastructure Fund ?2.3 billion 100,000 dwellings = ?23,000 per unit Much too little, barely scratching the surface London will be faced with a 559,000 deficit of homes by 2021 [LSE] London needs 80,000 dwellings per year to catch up with unmet need & growth Less than 20,000 are currently being built.

MAY, HAMMOND, DAVIS, FOX, JOHNSON

"We send the EU ?350m a week. Let's fund our NHS instead. Vote Leave." The figure was wrong & the real figure was close to ?250million. Now a grinning Hammond is reporting that Brexit will cost about ?60billion over the next four years - this is ?288million a week, so the aggregate cost for the next four years will be in the order of ?538million per week - ?28billion per year. That would house a lot of needy families, pay for a lot of social care & shorten a lot of NHS waiting lists. No clue or hint of what the costs beyond 2020 might be, no hint of where the economy might land - more bad news to come, for sure. But this is not a problem for May & Hammond - the JAMS will pay for it, the working poor will pay for it, those needing social care will pay for it & the long queues at the NHS will pay for it all. Thank you Gove, Johnson & Farage, thanks a bunch for the wonderful prospect of Brexit

Whisky

Eight

Bit

Gentlemen

Real

jaywalker Wrote: ------------------------------------------------------- > I am not at all sure why ?120bn or so (or even x5 > that) is of any interest in the current situation. > We are rushing fast towards the cliff edge (oh > dear, did May really say that?) and so borrowing > an additional one tenth of our annual income to > put the breaks on would seem to be quite a modest > proposal (especially at negative real interest > rates). I would agree with you with the reservation that any borrowing must be utilized for productive capital projects & the current budget separated out from the capital budget. In the current state of the economy this would enable a better management process of the fiscal budget even in the long term. At the moment this does not happen and it is like co-mingling client funds and leads to confusion and much of the time disables discrete analysis.

Looking at it in context - VAT takes in roughly ?110billion, the NHS costs roughly 120billion and the NHS needs funding urgently. To indulge themselves in a gesture of VAT reduction of 2-3% would be really a gimmick whilst at the same time denying the NHS the badly needed funding. This is regardless of the theoretical effects of a VAT reduction. It failed in the past & didn't even out over the two periods - temporary reduction period & period following return to normal VAT rate. There is also an anticipatory effect. For every 1% reduction consumption falls about 0.33% in the quarter immediately before the introduction of the reduction & increases by about 0.33% in the first quarter of the reduced VAT, & increases about 0.15% duing all the other quarters of the reduction. However it then falls considerably on the re-introduction of the higher VaT rate - about -0.5% in the first quarter & levels off at about -0.25% thereafter. This happened, not only in the Uk but also in France, Germany & Spain. You would expect an evening out effect but in fact there was an overall negative effect on consumption. This is why I say it would be a gimmick - unless, of course they drop all VAT to 0% as @jaywalker suggests :)) [& close down the NHS :(( ]

jaywalker Wrote: ------------------------------------------------------- > I agree it would be a bit of a gimmick, although > the effect is presumably more on aggregate supply > (if the policy is time consistent it cannot have a > significant effect on AD as you say)- the idea in > the original post was to smooth the inflation > path. The possible reduction is not likely to be sufficient to offset the effects of currency induced price inflation which is heading in the direction of 10 to 15% depending on sector so a VAT reduction will mainly result in a theoretical increase in disposable income. The other issues is that not all suppliers will pass the reduction to their buyers - as has happened in the past. The BoE reckoned that only 50% of suppliers passed the reduction to their buyers.

The effects of a VAT reduction have been studied & tracked over time. The reduction in VAT from 20% to 17% is likely to result in consumption increasing by less than 1 per cent by the fourth quarter following reduction. GDP is likely to be raised raised by less than half a per cent relative to what would have happened without the VAT reduction. After the temporary reduction is over both consumption and GDP are depressed as a result of the policy. This would be a political gimmick and not likely to help in any meaningful manner. There are also Arbitrage effects & Substitution effects that disadvantage the consumer and the result of a cut in taxes now will have to be financed by an increase in taxes in the future.

@DaveR "mainstream economists have largely now accepted that they were wrong about the immediate effects of Brexit," Not so - acceptance that there are lagging factors, including some business decisions on the part of suppliers not to pass on increasing costs for various reasons. Also, the bouyant spending has been accompanied with a significant reduction in trading margins [Next, John Lewis] - traders sacrificing profit for survival in the short term. "...but equally warning sensibly that positive figures now just represent relief that the world didn't end," The positive figures are lagging figures that will progressively change over the coming months/quarters and not likely for the better. "... recognition that the UK economy has some fundamental strengths," Of course the UK has some fundamental strengths but these strengths need to be conserved & supported by sensible economic & political decisions - currently uncertain & unknown with May offering no reasonable advice or direction. The economy is treading water. The only small advantage [short term] advantage is the ?/$ rate that is sustaining exports - for now. This advantage will erode soon as new raw materials purchases will cost up to 20% more. As demand for raw materials will increase, this will impact even more so it a huge challenge for many businesses to keep going let alone make profit. Disadvantaging business by making access to the EU markets difficult/uncertain doesn't make sense by any measure. "... and a cautious sense that there may be a minimal damage Brexit process that is achievable." Minimal is wishful thinking. More likely that the impacts aill be significant & long term with the UK having to slog our way back to relative economic health over a long period. Every day that passes without decision/definition is further disadvantaging the UK's position and enables competitors to take advantage & consolidate their respective positions. "Huge uncertainty remains." This is for sure and the most/only important part of your post.

Quids What you say is true - for now. Employment indicators are lagging indicators & we are also in a time of decision lag & uncertainty. The worst has yet to come and it will not be pretty. If it won't affect you & you are well sheltered then great but most of the population will suffer. All that the economists are saying is that in the near future to expect a worsening of unemployment, significant increases in price inflation, a downward trend in the value of the ?, raw materials prices up over 12% already with more rises to come. All of this is on the horizon plus a lot of instability induced because of all the uncertainty due to the many months & years of wrangling within the government and with outside governments. These factors will cause everyone in the UK a plethora of problems - economic, social & personal. No point in being an ostrich or a lemming..... need to be realistic and plan accordingly. There is little to be optimistic about.

???? Wrote: ------------------------------------------------------- > This week: > UBS - keeping head office in London 'no plans on > moving' > Google - confirm new European HQ in Kings Cross > > Yesterday - inflation below expectation > > Today - retail sales at their highest growth in 14 > years, way above expectation Google confirmed that their EMEA head office is in Dublin with over 500.000 Ft Sq committed, London office currently confirmed as UK headquarters mainly tasked to support US operations & is about 160,000 Ft Sq with a further 300,000 Sq Ft on hold subject to government being able to guarantee free movement throughout Europe.... A ?25billion deficit for 2017 & ?80+billion deficit up to 2020 with record public debt..... 12+% price rises on imports...... Future is looking really positive..?

entangled

beat

Gracefully