Tax cuts: a Swedish recession remedy

les

"we conservatives are the workers'party"

I like that!

Simon Stephenson

Can we agree on one thing, Fraser - there are some people who are currently on benefit, who if treated more harshly and severely, would join the ranks of the employed. Few dispute that this is true. But few dispute, also, that there are large numbers of unemployed people for whom harsher and more severe treatment would not lead to them becoming employed. And so, for these people, tough love has only the effect of making them even less connected to majority society than they are at the moment.

Those who are expressing reservations about the IDS proposals on welfare are not attempting to dispute that for some people a less forgiving regime would be constructive. They are, however, questioning just how human it is to put in place a policy that also makes things more difficult for the people who lack the abilities and skills to hold their heads above water in a society which, for them, is a hostile and unwelcoming place.

This is one of the problems in dealing with policy for 60 million people - no policy is going to operate 100% in the direction it should. There are bound to be people who become caught up in a policy which is not designed to include them, and of course this needs to be taken into consideration when designing just how the policy is to be put in place. But I'm afraid that it's not really very intellectual to object to a socially ameliorative policy just because a minority will abuse it. It's time to recognise that mainstream normality is something out of reach of far more people than coalition-like thinking likes to assume, and that failing to recognise this - placing the blame for our present circumstances on the unfortunate minority - is a most cowardly notion, unworthy of those who call themselves qualified to exert power over the rest of us.

TrevorsDen

What was the state of the Swedish deficit and their debt?

But yes I think we all agree we need a tax system which encourages people into work. High thresholds and low rates. I would like to see income tax abolished altogether - after all we won the Napoleonic War years ago.

But given our current deficit do we really see much progress on that for the next 2 to 3 years?

Andy Leeds

Yes well some of us why are employers know all this. And some of us who are employers are getting very pissed off at all the rules, regulations and 'rights' we have to honour, give and damn well pay for.

The Coalition needs to think a hell of a lot more about employers, particularly small employers who create the majority of jobs in this country.

Ed P

At last some economic sense!

But too late for Eire, free 1922-2010, now owned by the EU

Random Robin

The Swedish banking system is one of the strongest in the world. They learnt from their own crash in 1990's and they have created a lean, productive and fair society with a high standard of healthcare and education and a highly productive workforce. This is light years ahead of Britain. Whether we'll ever achieve their quality of life is doubtful, but at least we are travelling in the right direction after 13 years of living in Brown darkness.

TomTom

We will need to create more jobs for the Irish and Portuguese refugees who will be flooding here as their economies sink beneath the waves - they will qualify here for work or benefit

libertarian

Simon,

No one said that the Swedes where tougher on the unemployed, he REDUCED taxes for the employed. Meanwhile the unemployed either get a job and enjoy GREATER benefit or stay where they are and are no worse off.

Simple really

ToryScot

@Simon Stephenson

You're right; the poor are not to blame. What is to blame is this ridiculous notion left wingers have that throwing money at the underclass will resolve their situation, and that because one should not generalise or be seen to be discriminatory, instead of this money being targeted at a million or so long term unemployed NEETs, it is targeted at 5 million or so people - from those with "bad backs", to those with 14 children, to those living within a socially excluded council estate.

Getting past that notion is the hurdle the country faces, ditching "cradle to the grave" for "safety net" is the way to do that. Change this culture of benefit dependency, into one that is dependent on work for living, the state for emergencies.

Dimoto

Simon Stephenson - we have just emerged from thirteen years of rapidly increasing public expenditures, and were beginning to approach the point where all social benefits would be reduced, because the money would have run out.

a) we could carry on, benfitting ourselves into national collapse,
b) give the wealth generating part of the economy a break, then we might actually be able to afford some decent benefits one of these years.

Although, since Swedish benefits are much more generous than ours, not sure we can take direct lessons from there.

emil

Toryscot

amen to that, all we need now is a government that "gets it" as well.

Verity

Random Robin says that Sweden has created "a lean, productive and fair society."

It's not up to governments to be "creating" a fair society at all. It's not their remit to be creating anything. They're just supposed to be keeping the damn' law and staying out of citizens' lives.

justathought

Tax is like mothers milk to government and it is easier to tax and spend others peoples money than allow them to keep a greater share of the fruits of the labour. The past maladministration by Labour means that those on welfare we able to turn it into a lifestyle choice.

Belgium has reduced its corporation tax to 25% and the Netherlands is following suit. Members of the German coalition are calling for tax cuts. If tax cuts can be shared between corporation and income and funded by further cuts in welfare then so much the better.

daniel maris

Hang on - anyone know how much taxes the Swedes pay? Because if they are the model, then presumably we should pay the same level of taxes.

TrevorsDen

Mr Stephenson - I see nowhere in the report that the particular idea was to be tougher on those on benefits.

What we are doing here is limiting benefits to what seems a reasonable 26k, limiting housing benefit to £400pw and making sure invalidity benefit only goes to those who deserve it.

Labour claimed to have created 1 million jobs. It created 1 million immigrants and put 1 million Brits on benefits. Thats got to be turned round - well I think most Conservatives do. Labour seems to judge its success by the numbers of people it puts on benefits.

Terence Hale

Hi,
Tax cuts: a Swedish recession remedy.
This may sound strange but give every body 500 pounds on the
condition they spend it within a month. Kick start the economy.
Regards DR. Terence Hale

michael

Cutting taxes for employing people... ho hum.

2012 is the start of loading compulsory pensions @ 3% of the payroll, representing an increase in these taxes of 20%.
Tax payable will then represent 18% of the payroll...under Thatcher it was just 2% of the payroll. (A 9 fold/900% increase!)

despair

Verity
Random Robin's post does not use the word "government" at all. So, what are you ranting about?

Chris lancashire

Fraser - I had exactly the same experience at Paris CDG 2 weeks ago, so it's not only the English that can't run airports.

Ian Walker

Michael, that's an 800% increase. But the point still stands.

All of this, though, is rearranging the deckchairs. You can't tax income in the 21st Century, because the whole concept of "income" has become so nebulous.

Land-value taxation is the way to go.

Simon Stephenson

libertarian : 10.07pm

What I'm questioning is the developing zeitgeist that the bulk of the benefit-receiving class are idle wasters who are perfectly capable of blending themselves into the workforce in such a way that their consumption is offset by an overall increase in economic product.

I'm sorry, but I just believe this to be wishful thinking on the part of those who see the sole responsibility for our society's problems as being those people who don't tick the right boxes. It's a free will vs determinist argument of course, my position being that there are significant numbers of people whose ability to function effectively as part of society, as it is, has been destroyed by their experiences in early years.

With minorities, it always seems to be the case that they are the ones with the fault, they are the ones who should make all the adaptations. It's pure process-thinking, denying the improbability of being able to achieve the desired outcome, leaving the decisions to be just which particular proactive policy to put in place.

ToryScot : 10.10pm

I agree completely that welfare should be a safety-net and that gaming it should be made difficult. But gaming isn't just a problem of the unemployed and the benefit system. Virtually our entire competitive marketing culture is about gaming, not genuine substance, and it's absurd to expect one particular section of society to behave at a higher level of morality than most of the other sections.

Moreover, I think you're way wrong in your estimation that only one million out of five are genuinely in need of social welfare. Three, or four out of five, perhaps.

Dimoto : 10.31pm

I don't accept your argument that welfare is the most appropriate public expenditure to restrict, nor that the "right" way to reduce public spending is to apply even-handed cuts across the board. My guess is that there are huge areas of the public-sector where non-essential expenditure could be cut at far less imposed suffering than by attacking welfare. But then, this would upset the comfort of some of the majority, so instead it's politically more acceptable to find savings in the unfortunate minority who don't count for so much.

TrevorsDen : 7.18am

Bureaucracy gets many things wrong, and there are certainly some apparent nonsenses in the housing benefit system. Moreover, there are some people of ability who consciously direct their energies towards milking the welfare system, rather than to funding their lives from their own value-production. And yes, there are some people who are psychologically locked into a life of dependence, who with the right help could climb out of it.

But what I'd like people to consider is that there are also large numbers of people to whom none of this applies. And that it is a pretty awful society which thinks it's more important to catch out a few cheats than it is to ensure that everyone who needs help gets it.

Baron

remind me who was it who said 'the best way to help people out of poverty is to make them uncomfortable in it'?

Holly ......

Verity,it is most certainly the governments role to put into place policies that make working pay.
I fear you are slacking....no deriding comment on DC.Tut tut.

Baron

Simon Stephenson @ 11.48 is lecturing TrevorsDen: ‘And that it is a pretty awful society which thinks it's more important to catch out a few cheats than it is to ensure that everyone who needs help gets it.’

well then, the society should catch the former because the cheat’s breaking the law, he’s stealing. But helping everyone who needs help? I dunno. Would this include someone who had tattooed his body fully, now wants a job but cannot get it unless the self-inflicted skin cuts are removed? Where do you start and end in defining ‘everyone who needs help’, ha? Others see the tattooed chap getting a free removal on the NHS and think ‘right, I want a smaller nose, thicker penis, lifted bum’. And so it goes, the society keeps adding up more who need help. It could be limited by a commission of wise men, you may argue. Well, why should a bunch of well meaning overpaid apparatchiks decide who’s more deserving, a tattooed man needing a job, or a fat-arsed woman needing a shapelier bottom?

listen, it sounds barbaric, heartless and stuff, I can see you cringing at such views but we will all go bankrupt, the society will break down, there’ll be a lot of pain and suffering unless we rid ourselves of the idea that it’s the duty of the society to ‘help everyone who needs help’. We should be taxed immeasurably less, and it should be to everyone of us to make provisions through insurance, rely on family, friends, charities.

Simon Stephenson

Baron : 12.12pm

Thomas Jefferson, but while this may apply to some people, can it be said to apply to all? My point is that there are some people apart from the obviously physically or mentally handicapped who are equally incapable of becoming a working cog of existing society, however much incentive is given to them to do so, and however much discomfort they are required to live in. And that it is both in these people's interests, and society's as a whole, that we recognise this. For if we don't, we prevent ourselves from addressing an imperfection that does exist, because our egotistical prejudices lead us instead to address one that doesn't.

Just because something's right for us doesn't mean it's right for everyone, and maybe what little we lose directly from compromise, we gain from an increased co-operation from those to whom we have given ground.

TGF UKIP

It would take a conservative government, or even a conservative part of a government, to get that here. None such is on the horizon.

David Hatfield

Laffer and Reagan did the same in the US with almost identical results. "Stay the Course!"

daniel maris

Ian Walker -

I tend to agree that land value taxation is the way to go - it can't be evaded or avoided and it is reasonably progressive as richer people tend to have much bigger parcels of land in ownership. I would prefer to see a universal benefit, a flat 20% income tax and a big land value tax to the current disincentivising system.

But there is a problem I think in terms of foreign workers here - who could effectively ship their wealth overseas...one might have to retain a high income tax for non-UK citizens.