Donate to Remove ads

Got a credit card? use our Credit Card & Finance Calculators

Thanks to johnstevens77,Bhoddhisatva,scotia,Anonymous,Cornytiv34, for Donating to support the site

Increased tax, higher unemployment & economic difficulties

The Big Picture Place
ChrisNix
2 Lemon pips
Posts: 222
Joined: May 23rd, 2018, 11:04 am
Has thanked: 97 times
Been thanked: 48 times

Re: Increased tax, higher unemployment & economic difficulties

#361129

Postby ChrisNix » November 29th, 2020, 11:25 am

NeilW wrote:
dealtn wrote:So yet again. Tell me when that will happen?


It's happening now. That's what QE is doing - pushing down the yield curve in certain places in pursuit of the Bank's monetary policy.
Explain the mechanism (as you so often make a demand on others) where in the real world this can or will happen


That's what QE is doing. They pick certain maturities and purchase them to reduce the supply of that Gilt forcing the price up and the yield down to move the yield curve at that point where they want it. Then they lend those Gilts to the DMO who can fine tune the position in the Gilt repo market ahead of the auctions.

The net result of active cash management is that DMO can actually end up with the interest cost less than if they have just run a Ways and Means balance.

Positive net interest after cost of funds has been recorded by virtue of funding the Exchequer’s daily cash needs in the wholesale money markets at rates that have been on average below the DMA’s internal cost of funds (Bank Rate) and from investing surpluses at market rates that were on average above this.


DMO Annual Review 2020, pp p37 https://www.dmo.gov.uk/media/17019/gar1920.pdf

Can I ask you something else, since you've run a GEMM? Where does the GEMM get their cash balances from to buy the Gilts in the auction? And if they borrow from a bank what do they use as collateral?


Wasn't something similar said around time of ERM demise?

Chris

odysseus2000
Lemon Half
Posts: 6362
Joined: November 8th, 2016, 11:33 pm
Has thanked: 1530 times
Been thanked: 959 times

Re: Increased tax, higher unemployment & economic difficulties

#385856

Postby odysseus2000 » February 11th, 2021, 10:29 pm

Interesting that the Chancellor is now thinking of a revenue tax on Amazon and Facebook etc:

https://www.thesun.co.uk/news/14024420/ ... rce=pushly

This is interesting as I thought the revenue tax already existed in the UK, called VAT. As it is everyone who gets anything from either of these business gives on most items 20% to the Chancellor.

However, I have doubts that any additional revenue tax will ever be collected as it would require political collaboration and good will between nations which with certain nations having vested interest in the existing regime is imho unlikely.

If it was ever to happen I assume that Amazon would put up prices, addition even more vat to the Chancellors take.

Regards,

tjh290633
Lemon Half
Posts: 8208
Joined: November 4th, 2016, 11:20 am
Has thanked: 913 times
Been thanked: 4096 times

Re: Increased tax, higher unemployment & economic difficulties

#385935

Postby tjh290633 » February 12th, 2021, 10:32 am

odysseus2000 wrote:Interesting that the Chancellor is now thinking of a revenue tax on Amazon and Facebook etc:

https://www.thesun.co.uk/news/14024420/ ... rce=pushly

This is interesting as I thought the revenue tax already existed in the UK, called VAT.

The clue is in the name "Value Added". It is not a sales tax. Nor is it a revenue tax.

TJH

dealtn
Lemon Half
Posts: 6072
Joined: November 21st, 2016, 4:26 pm
Has thanked: 441 times
Been thanked: 2324 times

Re: Increased tax, higher unemployment & economic difficulties

#385941

Postby dealtn » February 12th, 2021, 10:40 am

odysseus2000 wrote:Interesting that the Chancellor is now thinking of a revenue tax on Amazon and Facebook etc:

https://www.thesun.co.uk/news/14024420/ ... rce=pushly

This is interesting as I thought the revenue tax already existed in the UK, called VAT. As it is everyone who gets anything from either of these business gives on most items 20% to the Chancellor.

However, I have doubts that any additional revenue tax will ever be collected as it would require political collaboration and good will between nations which with certain nations having vested interest in the existing regime is imho unlikely.

If it was ever to happen I assume that Amazon would put up prices, addition even more vat to the Chancellors take.

Regards,


O dear, yet again you use a word such as "everyone". Not only is it not a revenue tax, not everyone will give 20% to the Chancellor. Particularly with respect to Facebook, but also Amazon, many of the customers are themselves VAT registered. The Chancellors take of their revenue isn't 20%, that isn't how VAT works.

scrumpyjack
Lemon Quarter
Posts: 4811
Joined: November 4th, 2016, 10:15 am
Has thanked: 605 times
Been thanked: 2675 times

Re: Increased tax, higher unemployment & economic difficulties

#385962

Postby scrumpyjack » February 12th, 2021, 11:22 am

The newspapers seem to be floating every conceivable tax as if Rishi is seriously considering it.
One way to raise a LOT of revenue, without much admin, would be to have a deemed disposal of all quoted shares at their market value at 5 April 2021. That would trigger a lot of CGT, would not present any valuation problems and not much admin/collection costs.
Fair? No but simple and hard to avoid. Like a wealth tax but practical and demonstrably a 'one off'.

PeterGray
Lemon Slice
Posts: 847
Joined: November 4th, 2016, 11:18 am
Has thanked: 782 times
Been thanked: 343 times

Re: Increased tax, higher unemployment & economic difficulties

#385982

Postby PeterGray » February 12th, 2021, 11:53 am

That would certainly crystalise a lot of CGT. But how big would the net impact be? It would also rebase the effective purchase price and date for the future, so would bring CGT forward. But might have little net effect over several years.

odysseus2000
Lemon Half
Posts: 6362
Joined: November 8th, 2016, 11:33 pm
Has thanked: 1530 times
Been thanked: 959 times

Re: Increased tax, higher unemployment & economic difficulties

#386028

Postby odysseus2000 » February 12th, 2021, 1:03 pm

dealtn
O dear, yet again you use a word such as "everyone". Not only is it not a revenue tax, not everyone will give 20% to the Chancellor. Particularly with respect to Facebook, but also Amazon, many of the customers are themselves VAT registered. The Chancellors take of their revenue isn't 20%, that isn't how VAT works.


Yes, business don't pay VAT, but then business sell to consumers and the consumers then pay vat on the amazon price plus margin.

Recent legistlation from the Treasury also requires all over seas sellers to the UK to be registered and to collect vat on all sales and then send that collected vat to the Chancellor.

But maybe I have this wrong. How, apart from reduced rated items, can VAT be avoided by the end user.?

Regards,

odysseus2000
Lemon Half
Posts: 6362
Joined: November 8th, 2016, 11:33 pm
Has thanked: 1530 times
Been thanked: 959 times

Re: Increased tax, higher unemployment & economic difficulties

#386029

Postby odysseus2000 » February 12th, 2021, 1:05 pm

The clue is in the name "Value Added". It is not a sales tax. Nor is it a revenue tax.

TJH


Yes, I know its called value added, but I pay it when someone sells me something and at that point it is a direct tax on the sale price which without VAT would be 20% less.

Regards,

dealtn
Lemon Half
Posts: 6072
Joined: November 21st, 2016, 4:26 pm
Has thanked: 441 times
Been thanked: 2324 times

Re: Increased tax, higher unemployment & economic difficulties

#386038

Postby dealtn » February 12th, 2021, 1:22 pm

odysseus2000 wrote:
dealtn
O dear, yet again you use a word such as "everyone". Not only is it not a revenue tax, not everyone will give 20% to the Chancellor. Particularly with respect to Facebook, but also Amazon, many of the customers are themselves VAT registered. The Chancellors take of their revenue isn't 20%, that isn't how VAT works.


Yes, business don't pay VAT, but then business sell to consumers and the consumers then pay vat on the amazon price plus margin.

Recent legistlation from the Treasury also requires all over seas sellers to the UK to be registered and to collect vat on all sales and then send that collected vat to the Chancellor.

But maybe I have this wrong. How, apart from reduced rated items, can VAT be avoided by the end user.?

Regards,


Who is the end user of a Facebook Advertisement?

odysseus2000
Lemon Half
Posts: 6362
Joined: November 8th, 2016, 11:33 pm
Has thanked: 1530 times
Been thanked: 959 times

Re: Increased tax, higher unemployment & economic difficulties

#386042

Postby odysseus2000 » February 12th, 2021, 1:33 pm

dealtn
Who is the end user of a Facebook Advertisement?


Who is the end user of any advertisement, how is tax paid on it?

Regards,

dealtn
Lemon Half
Posts: 6072
Joined: November 21st, 2016, 4:26 pm
Has thanked: 441 times
Been thanked: 2324 times

Re: Increased tax, higher unemployment & economic difficulties

#386049

Postby dealtn » February 12th, 2021, 1:44 pm

odysseus2000 wrote:
dealtn
Who is the end user of a Facebook Advertisement?


Who is the end user of any advertisement, how is tax paid on it?

Regards,


Exactly.

You were the one making the claim that "everyone" pays 20% tax, and then also "consumers pay VAT ... "

You then admit that maybe you have it wrong (although I can't ever remember you conceding you do), and asking "How ... can VAT be avoided by the end user?"

So, does the end user of the advert pay 20% VAT on the advert? Or is the end user of the advert the company paying for it, in which case is the Chancellor getting 20% VAT from them for the advert?

I can't see the chancellor getting 20% in either case, perhaps you do. Or is there some other way the Chancellor is getting his 20% of the revenue from the Facebook advert?

odysseus2000
Lemon Half
Posts: 6362
Joined: November 8th, 2016, 11:33 pm
Has thanked: 1530 times
Been thanked: 959 times

Re: Increased tax, higher unemployment & economic difficulties

#386068

Postby odysseus2000 » February 12th, 2021, 2:20 pm

dealtn
I can't see the chancellor getting 20% in either case, perhaps you do. Or is there some other way the Chancellor is getting his 20% of the revenue from the Facebook advert?


The Chancellor gets 20% of all the sales generated by the advertisement.

The last Facebook conference call I listened to indicated that Facebook adverts were generating very substantial revenue for the advertisers, far far better than any other medium.

Regards,

dealtn
Lemon Half
Posts: 6072
Joined: November 21st, 2016, 4:26 pm
Has thanked: 441 times
Been thanked: 2324 times

Re: Increased tax, higher unemployment & economic difficulties

#386071

Postby dealtn » February 12th, 2021, 2:28 pm

odysseus2000 wrote:
dealtn
I can't see the chancellor getting 20% in either case, perhaps you do. Or is there some other way the Chancellor is getting his 20% of the revenue from the Facebook advert?


The Chancellor gets 20% of all the sales generated by the advertisement.

The last Facebook conference call I listened to indicated that Facebook adverts were generating very substantial revenue for the advertisers, far far better than any other medium.

Regards,


No.

At best he gets 20% of all VAT rated product sales to consumers, and not to registered VAT businesses. Depending on the company advertising that can be significantly different to "20% of all sales generated" from the advert and different again to the original claim of "everyone who gets anything from either of these businesses gives on most items 20% to the Chancellor".

Are you beginning to see that your original claim that there was already a revenue tax on Amazon and Facebook might actually be a little untrue?

At some point you might need to revisit that ...

odysseus2000 wrote:
But maybe I have this wrong.


odysseus2000
Lemon Half
Posts: 6362
Joined: November 8th, 2016, 11:33 pm
Has thanked: 1530 times
Been thanked: 959 times

Re: Increased tax, higher unemployment & economic difficulties

#386072

Postby odysseus2000 » February 12th, 2021, 2:36 pm

dealtn
At best he gets 20% of all VAT rated product sales to consumers, and not to registered VAT businesses. Depending on the company advertising that can be significantly different to "20% of all sales generated" from the advert and different again to the original claim of "everyone who gets anything from either of these businesses gives on most items 20% to the Chancellor".


Eventually all sales go to consumers. Business exist to sell stuff or services to end users. It can be a long process which is why folk like to use the term Value Added in that there may be multiple business to business transactions before the final sale to the punter, each business to business adding value and then at the end a consumer pays the vat on the final price.

Sure if a business buys something from another business and then can't sell it to consumers then the exchequer gets nothing but the business has a problem that it better fix or it goes bust.

The exchequer love VAT since it is a tax that has to be administered by business with Draconian punishments for cheating and because in the by and by the eventual consequence of all business activity is to sell something to someone who can't reclaim the vat.

Regards,

dealtn
Lemon Half
Posts: 6072
Joined: November 21st, 2016, 4:26 pm
Has thanked: 441 times
Been thanked: 2324 times

Re: Increased tax, higher unemployment & economic difficulties

#386081

Postby dealtn » February 12th, 2021, 2:51 pm

odysseus2000 wrote:
dealtn
At best he gets 20% of all VAT rated product sales to consumers, and not to registered VAT businesses. Depending on the company advertising that can be significantly different to "20% of all sales generated" from the advert and different again to the original claim of "everyone who gets anything from either of these businesses gives on most items 20% to the Chancellor".


Eventually all sales go to consumers. Business exist to sell stuff or services to end users. It can be a long process which is why folk like to use the term Value Added in that there may be multiple business to business transactions before the final sale to the punter, each business to business adding value and then at the end a consumer pays the vat on the final price.

Sure if a business buys something from another business and then can't sell it to consumers then the exchequer gets nothing but the business has a problem that it better fix or it goes bust.

The exchequer love VAT since it is a tax that has to be administered by business with Draconian punishments for cheating and because in the by and by the eventual consequence of all business activity is to sell something to someone who can't reclaim the vat.

Regards,


Yes.

However you started this thread with this statement.

odysseus2000 wrote:
Interesting that the Chancellor is now thinking of a revenue tax on Amazon and Facebook etc:

https://www.thesun.co.uk/news/14024420/ ... rce=pushly

This is interesting as I thought the revenue tax already existed in the UK, called VAT. As it is everyone who gets anything from either of these business gives on most items 20% to the Chancellor.



I have shown that your conflating this to mean that (Amazon and) Facebook already face a revenue tax isn't true.

If you wish to revise to it now say that some of the customers of (Amazon and) Facebook pay VAT, and maybe argue there is no need for those business to additionally face a revenue tax, that's fine. Just say so admitting your original post on the matter wasn't correct or clear and representative of your views.

odysseus2000
Lemon Half
Posts: 6362
Joined: November 8th, 2016, 11:33 pm
Has thanked: 1530 times
Been thanked: 959 times

Re: Increased tax, higher unemployment & economic difficulties

#386085

Postby odysseus2000 » February 12th, 2021, 3:01 pm

I have shown that your conflating this to mean that (Amazon and) Facebook already face a revenue tax isn't true.

If you wish to revise to it now say that some of the customers of (Amazon and) Facebook pay VAT, and maybe argue there is no need for those business to additionally face a revenue tax, that's fine. Just say so admitting your original post on the matter wasn't correct or clear and representative of your views.


If you interpreted my post to mean that Amazon and Facebook directly pay a revenue tax, then that was not what I intended to convey.

What I was trying to get over is that the business activity of Amazon and Facebook, leads to a large amount of tax income for the exchequer. Sure Amazon and Facebook may not directly have to pay the tax, but all the exchequer cares about is the tax that comes in and that this behaves like a sales tax that is paid by the end user and which is collected via the business that sells the product or service to the end user.

For the exchequer it is as practically perfect a tax as a tax can be, paid by all end users (with a few exceptions like children's clothes) who consume product or services as an end user and that is everyone in the country as it is impossible to live without buying stuff.

Regards,

Charlottesquare
Lemon Quarter
Posts: 1775
Joined: November 4th, 2016, 3:22 pm
Has thanked: 105 times
Been thanked: 560 times

Re: Increased tax, higher unemployment & economic difficulties

#386086

Postby Charlottesquare » February 12th, 2021, 3:05 pm

scrumpyjack wrote:The newspapers seem to be floating every conceivable tax as if Rishi is seriously considering it.
One way to raise a LOT of revenue, without much admin, would be to have a deemed disposal of all quoted shares at their market value at 5 April 2021. That would trigger a lot of CGT, would not present any valuation problems and not much admin/collection costs.
Fair? No but simple and hard to avoid. Like a wealth tax but practical and demonstrably a 'one off'.


Given a deemed disposal where do individuals get the cash to pay their tax bill?

scrumpyjack
Lemon Quarter
Posts: 4811
Joined: November 4th, 2016, 10:15 am
Has thanked: 605 times
Been thanked: 2675 times

Re: Increased tax, higher unemployment & economic difficulties

#386091

Postby scrumpyjack » February 12th, 2021, 3:18 pm

Charlottesquare wrote:
scrumpyjack wrote:The newspapers seem to be floating every conceivable tax as if Rishi is seriously considering it.
One way to raise a LOT of revenue, without much admin, would be to have a deemed disposal of all quoted shares at their market value at 5 April 2021. That would trigger a lot of CGT, would not present any valuation problems and not much admin/collection costs.
Fair? No but simple and hard to avoid. Like a wealth tax but practical and demonstrably a 'one off'.


Given a deemed disposal where do individuals get the cash to pay their tax bill?


Don't ask me, I didn't say it was a good idea, just better than the 'wealth tax'. Perhaps the same arrangements as were suggested for that, but at least it is easier to raise cash from selling quoted shares than other assets.

dealtn
Lemon Half
Posts: 6072
Joined: November 21st, 2016, 4:26 pm
Has thanked: 441 times
Been thanked: 2324 times

Re: Increased tax, higher unemployment & economic difficulties

#386099

Postby dealtn » February 12th, 2021, 3:43 pm

odysseus2000 wrote:
I have shown that your conflating this to mean that (Amazon and) Facebook already face a revenue tax isn't true.

If you wish to revise to it now say that some of the customers of (Amazon and) Facebook pay VAT, and maybe argue there is no need for those business to additionally face a revenue tax, that's fine. Just say so admitting your original post on the matter wasn't correct or clear and representative of your views.


If you interpreted my post to mean that Amazon and Facebook directly pay a revenue tax, then that was not what I intended to convey.

What I was trying to get over is that the business activity of Amazon and Facebook, leads to a large amount of tax income for the exchequer. Sure Amazon and Facebook may not directly have to pay the tax, but all the exchequer cares about is the tax that comes in and that this behaves like a sales tax that is paid by the end user and which is collected via the business that sells the product or service to the end user.

For the exchequer it is as practically perfect a tax as a tax can be, paid by all end users (with a few exceptions like children's clothes) who consume product or services as an end user and that is everyone in the country as it is impossible to live without buying stuff.

Regards,


Ok, interesting.

So presumably your solution for a Chancellor with this perfect tax, looking to raise additional revenue, he should raise the rate of VAT to >20% in that case. Are you advocating that approach, or do you have an alternative suggestion?

Adopting your view that it is "end users" that pay all the tax, presumably you also think it is economically sensible therefore to abolish business taxes too. I actually think that's a credible an interesting suggestion, but politically I don't think it will fly. The direction of travel on this has reversed in recent years and the rates of Corporation Tax in the UK are now rising, and potentially rising again. They remain amongst the lowest across the world though which I applaud.

tjh290633
Lemon Half
Posts: 8208
Joined: November 4th, 2016, 11:20 am
Has thanked: 913 times
Been thanked: 4096 times

Re: Increased tax, higher unemployment & economic difficulties

#386109

Postby tjh290633 » February 12th, 2021, 4:07 pm

odysseus2000 wrote:
The clue is in the name "Value Added". It is not a sales tax. Nor is it a revenue tax.

TJH


Yes, I know its called value added, but I pay it when someone sells me something and at that point it is a direct tax on the sale price which without VAT would be 20% less.

Regards,

Although the price which you pay has 20% added to the net price, the seller has already paid VAT to his suppliers, at 20% on their net prices, and he deducts that tax paid from the amount which the consumer pays in VAT, to arrive at the amount he remits to the Government. That is why it is called "Value Added Tax", because the seller pays the tax on the value which he has added, not on the items which he bought to resell which have already incurred VAT (the Input Tax).

TJH


Return to “Macro and Global Topics”

Who is online

Users browsing this forum: Arborbridge and 18 guests