Posts Tagged ‘government’

It’s the start of a new tax year. That means another year of people trying to sell me their self-assessment services long after I have already filed mine. What joy.

Last year was a kick in the balls for small business owners. The government introduced a new tax on dividends, which is how small business owners typically pay themselves.

This year it looked like we were going to hit with the double whammy. First, that £5,000 limit was set to be decreased to £2,000, resulting in me paying tax on an additional £3,000 of income.

Second, the flat VAT rate for my industry was set to be increased by 2%. If you are not familiar with flat VAT, it is a scheme that allows small businesses to pay a set rate of VAT and not claim anything back on purchases, meaning you can avoid doing all the complex VAT accounting. It’s terrific.

This year hasn’t been a complete disaster. The VAT increase has happened, but the reduction of the tax threshold will not take place until next year. Add to that that the corporation tax rate had been reduced by 1% and the additional tax being placed on small business owners is irritating, but not crippling.

One thing remains clear, however. This Conservative government is no friend to small businesses. For a second year running, they have increased taxes in favour of cutting those for big businesses.

Recently a new report by Shelter suggested that 80% of homes were unaffordable to most families. Government intervention on this issue has failed us. Perhaps it is time for a free market solution?

Firstly, the government’s “Help to Buy” scheme is not helpful. It allows people to take 95% mortgages by allowing the banks to make less risky mortgages and the government paying the rest. The problem with this is that it allows people to buy homes they can’t afford.

The example of the Help to Buy website shows the government adding in £20,000 to the £5,000 deposit the buyer has, thus allowing them to buy a £200,000 house. But they cannot afford a £200,000 house. Based on the deposit they are putting up they can afford a £40,000 house. However, state intervention then allows everyone to charge £200,000 and have buyers for them, thus house prices go up to way beyond what they should be.

Secondly, the banks are willing to take large risks on mortgages because they know the government will bail them out if they get into trouble. Thus they can take huge risks, get rich when times are good and make the tax payer pay when times are bad. Who wouldn’t do that?

The government should stop doing things to make this huge prices affordable and actually do the opposite – making them unaffordable! Thus the free market would then bring prices down.

This, not propping up unaffordable house prices, is where state intervention would be useful. In order for the free market to function effectively you need to ensure there is liquidity in the market. This can be achieved by making sitting on second homes unaffordable.

Leeds City Council has already taken steps to do this. They have revoked council tax discount on empty properties and after two years you even may a premium of an extra 50% (you pay 150% of the normal council bill) to encourage you to sell it. Similarly, as I wrote about in 2012, you could just ban people from buying second homes.

Ending the state-sponsored propping up of house prices and introducing further measures to add liquidity to the housing market could then allow the free market to bring house prices down to a reasonable level.

Obviously this is a topic that most people will have an opinion on, so I would love to hear why I am wrong (on which I expect there will be some good arguments).

The warm weather has got me thinking about hose pipe bans. I’m not sure whether they are instigated by the water companies themselves, or by a statutory instrument of government, but either way, it is at the hand of the water companies themselves, complaining about the lack of water. Sometimes this can be attributed to exceptionally dry weather, but often it can just be the case of the private sector cutting water reserves in an attempt to extract more profit.

Therefore, in my opinion, if a water company fails in this way, they should be fined. And fined heavily, because water is quite important.

But extending this, we could regularly fine them, and restrict the profits, for the greater good. Utility companies, and indeed many other natural monopolies that were previously nationalised and have since been sold off, often report large profits. This is just more money passing to the rich, from the poor. Which is bad.

However, we privatised them anyway, because we’re told that private companies run more efficiently.

But why do we let them make such high profits?

Consider if we bled them dry. We hardly let them make any profit because of the price caps and fines we imposed on them. Would this make them less efficient? I suspect not. I think, if anything, they would be forced to run themselves more efficiently in their desperate bid for survival. It would encourage the very efficiently we originally privatised them to bring.

The consequence however was that private investors were less likely to invest in infrastructure. But how much money actually ends up being invested in infrastructure now? Clearly a lot less than could be given the profit given out to the shareholders.

More importantly, if you have just skimmed most of the profit from a private company and taken anything they have left back in fines, you suddenly have a lot of spare money. Money that can then be used by the government to subsidise investment in infrastructure.

Being the Imperial Western states that we are, we have a habit of going into countries, taking out the dictators (mostly the ones that we originally installed and have been propping up for the past few decades) and forcing democracy on the people.

It has been suggested that this has unfortunately come back to bite us on the ass a few times. Particularly when it comes to Islamic states. After all, what happens if you give democracy to a people and they democratically decide that they want to be enslaved and live under a dictatorship? This might sound like a philosophical thought experiment, but is actually the reality we face – with huge amounts of people brainwashed by the evils of religion, mainly Islam in this case, there is a every chance people might opt for this.

Should we allow it? If we’re ever going to remove democracy from the world and appoint me as the benevolent dictator, we’re going to have to eventually. But on a more serious note, it doesn’t seem right to allow such a thing to happen. Yet, it would seem undemocratic to stop it, if that is what the electorate have chosen.

However, there are possibly some arguments to support an intervention against it.

Firstly, you might be able to argue that it doesn’t make sense logically. It’s the same basic defence to “can god make a rock so big he can’t pick it up” argument – you can’t vote to end democracy because then you wouldn’t have a democracy. Of course you could say well you had one at the time but now it’s gone, but then you could also argue that you never really lived in a democracy if it was contingent on you acting a certain way.

You could argue in a democracy everyone eligible has to be able to have their say. You can argue that if everyone voted for it, then it is the wish of everyone, so it’s fine, but of course not everyone would, but more importantly, the younger generations that were ineligible to vote but would be eligible in the future, should not have that choice taken away from them.

You could also argue that anyone who would vote such a way would be either under duress of mental incapacitation, and therefore ineligible to vote – a state religion that is enforced as strictly as it is in Islamic states would seem to fit both those boxes.

There are some badly put forward points – now I’m hoping my philosopher friends will put forward some coherent and well thought out arguments, as I would be interested to read them.

I was only four years old when Margaret Thatcher stepped down as Prime Minister. But to say that I, or any of us in my peer group where after Thatcher’s time is naive – we were born to a generation entangled with Thatcherism and grew up in a landscape that had been radically altered by her eleven years in the post.

My interest in the debate is greater provoked by the outpouring of vile and hatred that has spewed forth since Baroness Thatcher’s passing. This is of course different from the calm and rational discourse surrounding her policies and impact that should, indeed must be had.

But if you are unable to separate a discussion on ideas, from a personal attack designed only to draw offense, I am going to treat you with the same contempt that the simple minded religious bigot deserves. In fact, I’m going to argue against you, to take up arms I don’t even believe in, to provide Devil’s Advocacy against your arguments.

As Norm points out, it seems you are refused permission to have a balanced argument on Thatcher. You must hate her with every cell in your body, or prostrate your unworthy self at her feet in admiration – god help you if you were to think some of the things she did were good and some of the things she did were bad.

This black and white vision of reality, insisting she is the Devil himself in female form (by the way, we had a female head of government 34 years ago, is nobody else proud of that?) has no place intelligent conversation. A debate on the evils (or otherwise) of the 1980’s Conservative government however, is very much welcome.

David Cameron unveils his new proposal for structuring government.

Two years on from The Zuck officially announcing that the age of privacy was over, the government are once again on a beeline for another giant step in privacy invasion. The question is though, who is going to stop them?

Probably nobody. In fact, it’s already too late for that. They already track who we send emails and text messages to. They might not have the content of them yet, but they can already see what is going on. So despite the fact that we have freedom of association, and therefore I have every right to be friends with terrorists if I wanted to, chances are none of us would because our the government would then be watching everything we do and our telecommunications providers would have no option but to hand the records over.

So the downward spiral into Nineteen Eighty-Four seems to be well underway. In fact, Cameron doesn’t even need to install telescreens into our homes because as CIA director David Petraeus pointed out last month, we’re installing the gadgets for them.

But even if we did recognise that our freedoms are quickly being eroded, who is actually going to stand up against it? The answer is probably very few of us. Because ultimately, privacy is something that you can live your life without.

Of course, nobody wants to, and the visions from Nineteen Eighty-Four are horrific, but a slow, gradual erosion of our liberties isn’t going to affect our lives too much and unless we’re going to look at the bigger picture, it will be reasonably easy to swallow. I mean, the government already tracks all the messages we send and receive and watches us on CCTV on all the roads and city centres already. But we all accept that now.

Motiving yourself to get and there and do something about the bigger picture is never easy because there is little motivation to take care of it now. Not to mention that the government has got us so scared of terrorism that we openly invite many of the security measures put in place – just look at what Bush managed to push out in the Patriot Act.

Day to day, the invasion of privacy is just a purely intellectual exercise – we have nothing illegal to hide, it’s only the terrorists who need to be worried. Of course, we would prefer to have privacy, but it isn’t like we need it to go about our lawful lives.

Furthermore, what can you really do about it anyway? Chances are it will never feel like we’re now at the line that we must draw and go no further – it will continue slowly and gradually. Much like the slow ticking of the evolution clock, there is no definitive cut-off between here and Nazi Germany.

Indeed, we have many of the tools to do it now. You can route all your internet traffic via an anonymous proxy. But almost nobody does. It’s just too much effort. That’s the problem – it will simply be easier to just swallow the erosion of our civil liberties than it will to fight the fight. So where do we go from here?

This week, George Osbourne rolled out The Budget. Norm described it as a budget he found “impossible to get angry about.” But I disagree.

The increase in the personal tax allowance is great, thumbs up there, well, on the most part. I’m not too bothered by the granny tax either, as state pensions have in fact gone up quite considerably in a time when many working people’s pay have been frozen despite the ever marching climb of inflation. Not to mention is that all that is happening is that their personal allowance is being lowered to match that of working people.

However, when it comes to the top tax bracket, it is nothing moe than a traditional Tory budget. There is little justification for giving 14,000 millionaires a tax break given the financial crisis we are in.

One of the clearest messages we have received from this government is that the previous one has left them with a huge hole in the budget and that strong austerity measures would need to be put in place. So, if it so important to plug the hole in the budget and pay back some of our borrowing, how can we afford to give tax breaks to the rich?