The IFS has published its analysis of the election manifestos. The distributional impact is, perhaps, the most telling part of what they had to say. This is the summary:
Credit where it is due: the LibDems come out best across the whole range of incomes.
Labour is clearly biasing the middle classes: plans on student debt help that.
But look at the top end. Under existing plans the Tories currently plan that the best off should be better off at cost to everyone else, and most especially those on lowest incomes. And that remains the case in their manifesto.
Labour markedly and appropriately challenge this. In practice the IFS doubt they can deliver but I in turn doubt some of the IFS assumptions: if they think there is a Laffer curve effect in the tax rate range that Labour is proposing then they're wrong.
Most importantly, however, there is just one party dedicated to increasing inequality in the UK at this election, and that, of course, is the Tories.
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Cheers Richard. Thanks for giving me the economic information that I can use alongside my socialist values to argue and inform people how things do not have to be this way.
It also illustrates clearly a point you made in another blog, Richard, that when you strip out the social care plans (dementia tax) – now dead of course (or subject to a green paper if/when May wins the election) – there’s very little else that wasn’t already in the pipeline or announced. But anyway, as with the Republicans in the US, the Tories are clearly and unambiguosly THE party of inequality, and again as with the Republicans, any claim to the contrary can be shown to be fake news. Not that that will stop the Mail and so on reporting otherwise.
Apologies Ivan but… is that “dead” in the way that “no election” was dead until April of this year? Do you seriously think that as soon as May is back in No 10 the Demnetia Tax will not be revived – the Green paper will lead to Dementia tax II – with a cosmetic make-over. As other news outlets have shown, a certain Mr P May & his company will benefit directly from a “dementia tax”
Agree, Mike, temporarily dead is more accurate (I too saw the staroy about Mr May).
Richard, following the theme of you blog and my earlier comment here’s seven minutes of must watch news TV from Joe Scarborough on MSNBC in the US: ‘Conservatism in the Age of Donald Trump’. If only we had a news anchor who would call out lying for what it is.
https://www.youtube.com/watch?v=wwX6o_7GYbM
Very good
‘They have embraced the coarsening of culture’
Absolutely spot on and May has done it again today by claiming Corbyn had implied that the suicide bombing ‘is our fault.’ May plays on the ambiguity of ‘our’ and deliberately distorts the meaning. Disgraceful anti-intellectual refusal to engage with real arguments.
I have to say Ivan this is a superb clip. Just looking at the faces of the others in the studio is priceless. Thank you.
Despite all my issues with American democracy and foreign policy I am reminded why I am still drawn to the sometimes irresistible idea of America and Americans themselves.
My interpretation of what I am seeing here is that the Republicans know that contemporary capitalism is effectively dead.
They just cannot face that fact and hence the lies to their supporters. It seems to me (reading between the lines) that republicanism/conservatism is on the edge of some sort of precipice.
Effectively the only way out for them now is to acknowledge the failure of neo-liberalism on their political culture and march back towards the centre left where many of the real answers to the world’s current woes lie.
It could happen. Imagine that? If it did?
As for Trump – he is just now being used by the republicans as someone to hide behind as they continue to wrestle with their neo-lib demons.
Not being able to admit to oneself that you have a problem always ends in messily and that is where the republicans are now. Our Tory party is also on this particular journey.
What assumptions have the IFS made regarding the Torres 2017 budget that was largely shelved?
Specifically the reduction in dividend allowance from 5000gbp to 2000.
(I can’t see any mention of it in the Tory manifesto. )
And Richard what do you feel about reducing the allowance and the current individual tax on dividends?
The dividend tax makes no sense
An investment income surcharge on all savings and rents would
A couple of things worth bearing in mind when thinking about the graph:
1) Distributional impacts make sense when comparing the impact of for instance a government’s budget from one year to the next. But tax and benefit measures aren’t the only things that will be impacting on the income of poorer groups. For example, Labour’s policy of increasing public sector pay will directly increase the pay of many poorer groups. Likewise policies around zero hours jobs etc. Also in the long term, increased access to higher education will increase wages, while presumably if the Tories education plans end up depriving many of a good education, we will see many ending up in low skill/low pay jobs when they otherwise would be able to achieve more.
2) The graph looks at current plans, but when the new government is formed, the plans will change, and then they will change again as the parliament progresses. We can safely assume that the Tories will be happy to exacerbate the distributional impacts, whereas Labour will be presumably seeking to mitigate the impacts on poorer income groups.
I hope I suggested the former
Morning Richard
I do so enjoy reading your blog. I haven’t read anything about your teaching exploits for a while. It must be quite an experience for your students!
Cheers.
I only teach one term a year because I am heavily research funded
Only the students can say if is it an experience!