The FT is running a most amusing feature today:
It's amusing because of the hysteria that lies just below the surface within it.
It's amusing because underneath the hysteria the truth is told. Take this, for example:
Capitalism is not working for the under-40s, so they're voting for socialism.
And this not of reality:
Many will have little option but to pay more [tax]. “In the long term, there is little that can be done to reduce this burden, unless people consciously work less hard, move down the jobs ladder or emigrate”
It's also amusing because it clearly thinks it is addressing a real possibility.
And it's amusing for what it predicts.
Let me look at those things.
Labour will increase corporation tax rates
They will. And rightly so. Even big business is bemused at the absurdly low rates it is being offered whilst it is sitting on enormous cash piles that they have no idea what to do with, barring lending it to the government. Of course they should pay more.
Labour will increase capital gains tax rates
I sincerely hope so: it is absurd that the highest capital gains tax rate is 28% and that is less than most people pay when NIC is included on their pay. The income tax and national insurance rates should be aligned.
Labour will abolish CGT entrepreneur's relief
I hope so: I explain why, here.
Labour will increase income tax rates
At the the top end that is appropriate: we have a regressive tax system. It's time that was corrected.
Labour will crack down on tax avoidance
That's a problem?
Labour would introduce a financial transactions tax
Stamp duty on shares has not stopped London being the epicentre of global financial markets, at cost to the country as a whole. Deal with it.
And then there is some nonsense:
Labour would push down the price of UK gilts
Hang on: that would mean interest rates rose. Isn't that what markets want?
But, haven't you noticed that UK national debt has increased massively since 2008 and this has not happened?
And hasn't the FT noticed QE?
Let alone People's Quantitative Easing?
The article is really very confused when it comes to these issues.
As it is on:
Labour nationalising
Yes, the railways, the NHS and PFI.
The first favours FT readers: they commute.
And they are all very popular. Just as is Labour's housebuilding pledge. And why? Because they represent efficient use of government money in meeting need.
I think we can conclude that FT readers are only interested in this when it suits their own portfolio's needs, whatever else they might say.
But the best but if all is the simple underlying message - the FT is taking Labour very seriously indeed.
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Indeed – the FT is clearly representing a small constituency here of ‘wealth shufflers’ ( a term used by Bill Mitchell), that is those people who move wealth around in wealth management funds ( largely for ‘high net worth’ and ‘ultra high net worth’ individuals).
The economic illiteracy is staggering, of course. But then have a look at a recent speech given at UCL by Richard Sharp of the B of E FPC -it’s a tick box of economic myths (www.bankofengland.co.uk/speech/2017/richard-sharp-ucl-economics-and-finance-society).
“Stamp duty on shares has not stopped London being the epicentre of global financial markets”. As somebody that holds quite a few shares – stamp duty costs are a twitch when considering “round trip costs” – (sell – buy or buy – sell). Brokerage fees are – amazing – so are the brokers offices.
In relation to Mike’s comment, it’s worth adding:
‘Margaret Thatcher created headlines and excitement with her speech wishing for a society ‘where owning shares is as common as having a car’ at the Tory party conference exactly 30 years ago.
Her dream, voiced in the 1980s heyday of big privatisations, has not come to fruition. After an initial rise later in that decade, individual share ownership has nearly halved to just 11 per cent of the total value of UK traded shares now, a new report says.
Read more: http://www.thisismoney.co.uk/money/investing/article-3265284/What-happened-Margaret-Thatcher-s-share-ownership-dream.html#ixzz53JPmEAMO
It was all a pack of lies
The FT admits it: Corbyn is coming
I think you missed the ‘…back from holiday’ from you title !!
Yes Mike Parr – a much different issue but brokerage/ fund management fees are ridiculously high and those businesses have so much inefficiency. Salute Gina Miller (well actually in truth her husband Alan) for trying to derail the gravy train.
On the subject of stamp duty I have no idea what equity stamp tax receipts are but an increasing amount of trading, certainly in the case of hedge funds, is done through CFDs or prime broking facilities where no stamp is paid. Also the retail investor can own ETFs which don’t incur stamp duty.
If London imposes a transaction tax on CFDs, ETFs, swaps, futures etc then this trade will be easily picked up in another jurisdiction. No tax is lost as none is paid at the moment. There will certainly be some business relocation but no view as to the scale.
Accepted
Just to put some numbers on it, in 2016-17, stamp duty and SDRT on shares raised about £3.7 billion (which is about a third of the £12 billion raised by SDLT on real estate transactions). Small beer in comparison to the big three (income tax, NICs and VAT) but comparable with customs duties or air passenger duty, each of which also brings in around £3 billion, and not too far behind insurance premium tax or inheritance tax.
I’m very wary of articles like this.
It’s a form of reverse triumphalism made to make Corbyn and Co (and other progressives) relax and feel that they have made it already.
Because they haven’t.
And there is still a lot that Labour seem unclear about.
Fair point
I think Tory party dwindling membership speaks for itself? They have turned off so many voter groups that one is left wondering who actually will vote for them? Feminists – nope (Pay, Toby Young, Boris Johnson.. et al), Nurses – nope (NHS crisis), Teachers (ha!), Transport Workers ….hmm, those who want to stay in the EU…? Students, and university lecturers?? Don’t make me laugh! Retailers? (What, with those high street rents!)
They’re on the way out.
Labour are just waiting for them to implode.
You might think that
I know teachers who do vote for them, even when they know it is bizarre to do so
The think they are middle class and so cannot vote Labour
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