Bolitics The New Condem Government

[blandy]

but I still don't thing they're taking from the poor and giving to the rich.

They are giving to the rich in the sense that tax money is being spent on paying off the debt to our creditors (rich people) rather than poured into HB, disability allowances and other benefits which I suppose could be defined as taking from the poor (or equally witholding free money from poorer people, depending on your POV)....

True. I don't think myself, though, that paying somebody what you owe them is "giving", also, given that the money the poor do get in terms of benefits actually comes from taxes paid by people in work and by businesses [the Rich] then the distribution is still from rich to poor, just less so than previously, perhaps.

None of which takes away from the fac..er...view that both the last lot, and the current lot are largely a bunch of utter twunts.

[ender4]

Of course there are other things which further contribute to the widening gap between rich and poor. For example in education, we see the scrapping of a plan to extend free school meals to all children below the poverty line, but money for "free schools".

In housing, we will be seeing what Boris called ethnic cleansing, shipping the poor out so their housing can be taken over by wealthier people, just like Dame Shirley did in Westminster all those years ago.

There's the wider point made by Jon that the impact of financial intervention is felt by the poor while the benefits are received by the rich, both in bankers' pay and in shareholders receiving profits via dividends while any losses are socialised.

This is against a backdrop of top boardroom pay having increased by 55% (according to Income Data Services) or "only" 23% (Hays Group). These pay increases are not directly caused by government, but are the context in which regressive changes to taxes and benefits must be seen, ie a pretty fiercely regressive environment to begin with.

The 'poverty line' in this country is a sham. sure some people live in poverty & get free school meals, but there are lots of people who are nowhere near poverty who are classed as in poverty by the daft measure used. It becomes the case, that the richer the country you are, the more people you have in poverty.

ethnic cleansing - well, this just ain't gonna happen. Landlords will have a choice of having no tenant, or accepting lower rent, guess what they will choose. its just scare stories from left-wing newspapers.

i accept your other 2 points, but thats not really related to the government. Bankers pay, shareholders dividends & boardroom pay might be excessive, but doesn't have anything to do with the cuts.

[TrentVilla]

i agree with pretty much all of this, the rich are being hit the hardest, then the poor, then the rest. but generally, everyone is being hit.

How exactly do you conclude the rich are being hit the hardest?

There can be little doubt that changes like the increase in VAT will hit those on low incomes far harder than those on higher incomes.

[ender4]

How exactly do you conclude the rich are being hit the hardest?

David Cameron told me 8)

"We've gone about these spending cuts in a way that is fair and in a way that promotes economic growth and new jobs," he said.

"Fair because if you look at the figures you'll see the highest earners aren't just paying more in cash, they are paying more as a percentage of their income. As we promised, those with broader shoulders are bearing a greater burden.

[TrentVilla]

Must be true then

I don't quite follow this statement though, I may be missing something but what have the Tories introduced that means the highest earners are paying a higher % of their income? Have they changed the level of income tax and I've missed it? (Genuine question)

To me it seems clear that the cuts will impact those on lower income more than those on higher income what ever Dave says.

[ender4]

Even the housing benefit cuts financially impacts the well-off much more than the middle class.

Housing benefit goes into the pockets of rich landlords, many who make millions from it.

Cutting housing benefit will make their income lower, which i think is a good thing.

It might impact the poor for a short period of time, but in fact they don't see the money from housing benefit, they just receive it & pass it on.

Where it might impact is those single people living in properties which are too big for them.

:? :|

edit - forgot to put a smiley, as i'm not sure if i'm being serious or silly here, but it just occured to me.

[blandy]

Here, Trent

The IFS think tank has also cast doubt on the chancellor's analysis of who would feel most of the pain from the cuts.

Excluding the wealthiest 2% of the population, who it assesses will be the hardest hit, it said the plans would be regressive in their impact, since those in the bottom half of the income scale would be affected more than those in the top half as a result of cuts to benefits and public services.

The Treasury has rejected this but BBC economics editor Stephanie Flanders said its analysis had excluded a third of the benefit changes being proposed and did not factor in the impact of all the changes right up to 2014-15.

The IFS calculations suggested the bottom 10% will, on average, lose about 5.5% of their net income compared to roughly 4.5% for the top 10%, she added.

[peterms]

The 'poverty line' in this country is a sham. sure some people live in poverty & get free school meals, but there are lots of people who are nowhere near poverty who are classed as in poverty by the daft measure used. It becomes the case, that the richer the country you are, the more people you have in poverty.

ethnic cleansing - well, this just ain't gonna happen. Landlords will have a choice of having no tenant, or accepting lower rent, guess what they will choose. its just scare stories from left-wing newspapers.

i accept your other 2 points, but thats not really related to the government. Bankers pay, shareholders dividends & boardroom pay might be excessive, but doesn't have anything to do with the cuts.

Poverty is a relative concept; it's about disparties, not about absolute measures of wealth. It is simply not the case that the richer the country, the more people in poverty. What is the case, though, is that the greater the level of inequality, the more people will fall within that particular country's definition of poverty.

Landlords will make a rational economic decision based on alternative options open to them. The option you don't seem to recognise is that of selling the property. In a market where property prices were continually rising and rent levels were high, it made sense to own a property and let it out. If the capital value isn't appreciating and rental yields are falling, it might make more sense to sell and invest the money somewhere else. It's simple economics, not scare stories from those naughty lefty papers.

And of course the cuts are related to bankers' pay and shareholders dividends. What has happened - can you really have missed it? - is that the losses the banks made have been socialised, ie covered by us, and are now being paid for by cuts in public spending; meanwhile, shareholders who in orthodox economic theory should have lost the value of their investment instead have seen it protected, and the people who caused the problems continue to get pay and bonuses at a level which most people find shocking.

[ender4]

Must be true then

I don't quite follow this statement though, I may be missing something but what have the Tories introduced that means the highest earners are paying a higher % of their income? Have they changed the level of income tax and I've missed it? (Genuine question)

i'm not exactly sure which is why i used that quote from Cameron instead.

i'm sure i did read from a few sources at the time that it would impact the well-off more, but i can't figure out exactly how.

Child benefit cut & offshore banking tightening up are the only 2 main ones i can think off.

[TrentVilla]

Here, Trent

The IFS think tank has also cast doubt on the chancellor's analysis of who would feel most of the pain from the cuts.

Excluding the wealthiest 2% of the population, who it assesses will be the hardest hit, it said the plans would be regressive in their impact, since those in the bottom half of the income scale would be affected more than those in the top half as a result of cuts to benefits and public services.

The Treasury has rejected this but BBC economics editor Stephanie Flanders said its analysis had excluded a third of the benefit changes being proposed and did not factor in the impact of all the changes right up to 2014-15.

The IFS calculations suggested the bottom 10% will, on average, lose about 5.5% of their net income compared to roughly 4.5% for the top 10%, she added.

So the cuts will hit the poor the hardest as I thought despite what the government say.

The top 2% may be losing more in cash terms but that isn't the same as saying they are hardest hit.

[snowychap]

The 'poverty line' in this country is a sham. sure some people live in poverty & get free school meals, but there are lots of people who are nowhere near poverty who are classed as in poverty by the daft measure used.

Your expertise in this area comes from what?

[ender4]

Landlords will make a rational economic decision based on alternative options open to them. The option you don't seem to recognise is that of selling the property. In a market where property prices were continually rising and rent levels were high, it made sense to own a property and let it out. If the capital value isn't appreciating and rental yields are falling, it might make more sense to sell and invest the money somewhere else.

good point, i never thought of the point that if the new buyer just lives in the house rather than renting it out, then the stock of rentable properties goes down.

i partially retract what i said, only partially as i would think most landlords will just put up with the lower rent rather than sell in a depressed market. they will say that we had the good times, now i don't make as much (shrug shoulders), and they'll wait till house prices increase again before selling up in a few years time.

[ender4]

The 'poverty line' in this country is a sham. sure some people live in poverty & get free school meals, but there are lots of people who are nowhere near poverty who are classed as in poverty by the daft measure used.

Your expertise in this area comes from what?

no expertise, i just find it weird when they talk about the poverty line being 'only' an household income of £20k or whatever it is.

[Jon]

Here, Trent

The IFS think tank has also cast doubt on the chancellor's analysis of who would feel most of the pain from the cuts.

Excluding the wealthiest 2% of the population, who it assesses will be the hardest hit, it said the plans would be regressive in their impact, since those in the bottom half of the income scale would be affected more than those in the top half as a result of cuts to benefits and public services.

The Treasury has rejected this but BBC economics editor Stephanie Flanders said its analysis had excluded a third of the benefit changes being proposed and did not factor in the impact of all the changes right up to 2014-15.

The IFS calculations suggested the bottom 10% will, on average, lose about 5.5% of their net income compared to roughly 4.5% for the top 10%, she added.

That is a damning and shocking indictment of this savage new government. The Lib Dems, as I've said before, should hang their heads in shame.

[blandy]

Here, Trent

The IFS think tank the wealthiest 2% of the population...will be the hardest hit...

The top 2% may be losing more in cash terms but that isn't the same as saying they are hardest hit.

They are saying the top 2% are hardest hit, which is the same as saying they are hardest hit. !??!!!

[snowychap]

i would think most landlords will just put up with the lower rent

You might be interested to read this study which I linked earlier in the thread and, in particular, pages 25 to 30 (inclusive) which discuss both the supply side aspect of market adjustments and the accessibility (and possible future accessibility) of private rentals to LHA claimants.

[Jon]

The 'poverty line' in this country is a sham. sure some people live in poverty & get free school meals, but there are lots of people who are nowhere near poverty who are classed as in poverty by the daft measure used.

Your expertise in this area comes from what?

no expertise, i just find it weird when they talk about the poverty line being 'only' an household income of £20k or whatever it is.

I can see where you're coming from, as someone classed as "in poverty" in this country can live relatively well, when compared to say the starving in Africa.

But then when you compare those "in poverty" in this country to the wealthy in this country, the discrepancies are huge, and they are impoverished when compared to the relatively well off, and the uber rich.

That gap should be narrrowed, and the last labour govt shamefully did not do that, they just made everyone a bit richer, but the wealthy disproportionately more so.

Shame on them.

However, this savage govt will stretch that gap even more. Shame on them too.

[ender4]

The IFS calculations suggested the bottom 10% will, on average, lose about 5.5% of their net income compared to roughly 4.5% for the top 10%, she added.

That is a damning and shocking indictment of this savage new government. The Lib Dems, as I've said before, should hang their heads in shame.

That is not good.

I would hope the Lib Dems have enough influence to tweak the cuts that so everyone gets the same percentage (say 5%) which would be fair.

though saying that, its the benefits costl which is where the explosion in govt spending has been over the past decade, so i guess you'd have to expect the cuts to fall hardest there.

[peterms]

Must be true then

I don't quite follow this statement though, I may be missing something but what have the Tories introduced that means the highest earners are paying a higher % of their income? Have they changed the level of income tax and I've missed it? (Genuine question)

To me it seems clear that the cuts will impact those on lower income more than those on higher income what ever Dave says.

Here, Trent

The IFS think tank has also cast doubt on the chancellor's analysis of who would feel most of the pain from the cuts.

Excluding the wealthiest 2% of the population, who it assesses will be the hardest hit, it said the plans would be regressive in their impact, since those in the bottom half of the income scale would be affected more than those in the top half as a result of cuts to benefits and public services.

The Treasury has rejected this but BBC economics editor Stephanie Flanders said its analysis had excluded a third of the benefit changes being proposed and did not factor in the impact of all the changes right up to 2014-15.

The IFS calculations suggested the bottom 10% will, on average, lose about 5.5% of their net income compared to roughly 4.5% for the top 10%, she added.

Looking at the IFS assessment of how much of the impact on the richest is down to plans previously announced by the last government, I would dispute that the impact on the richest is because of what the Tories have introduced. The wealthiest 2% will be hardest hit, but this is because of what the last government did, not what the current lot are doing.

[ender4]

i would think most landlords will just put up with the lower rent

You might be interested to read this study which I linked earlier in the thread and, in particular, pages 25 to 30 (inclusive) which discuss both the supply side aspect of market adjustments and the accessibility (and possible future accessibility) of private rentals to LHA claimants.

just read those pages, and fair enough.

I guess London (& some other areas) are different to Bham & Leicester which is where i was getting my thoughts from. I know 2 Landlords in Bham & 1 in Leicester who have multiple properties rented to housing benefit claimants, and they plan to 'ride out the tough times'. they all believe things will get better in the long-term again, either with house price increases or a change of govt in the future.

But i take the point of the report on board.