NI Increase

I'd give it zero chance of working. The money will be consumed by the NHS machine and deliver nothing. It's a (very expensive) sticking plaster when fundamental reform is what's required. I've got recent experience of dealing with the issue of elderly parents needing care. What i witnessed was a breathtakingly inefficient system where the left hand didn't know what the right hand was doing.

If I was confident that it wouldn’t be frittered away then I’d be broadly OK with it, but announcing more spending without any plans to significantly improve efficiency is just crap.

So as it stands, It’s another few grand of tax a year that I can’t see any benefit from.

I’ve got no doubts that this funding will vanish up its own orifice in next to no time and that no benefit will be felt by anyone for any significant time period. It will remain the case that if you want elderly relatives to see their years out in the kind of setting and environment you’d wish for them you’ll be paying for it. The money will be used to pump into the NHS and that used to issue grants and payments to private care homes at huge administrative cost diluting the financial effects to close to nil. It would be far more financially effective to send your elderly infirm reliant relatives to a country with far lower costs to live in an environment that is far more pleasant being cared for by people who are paid more at the level of national averages than the bottom of the pay scale. Harsh but true I’m afraid.

I suppose if I were to gripe about this I could simply say I’ll very likely never see any benefit from it but that’s good because like car insurance I’m willing to pay without having to use it but glad it’s there when I do. The real gripe is that not only am I never likely to see any benefit from this additional tax but I have no faith that anyone else will either.

Re the £350M a week, according to the King's Fund (which I don't think are particularly right wing), real spending on the NHS has increased by 15% since 2016/17. Depending on whether you used a pre covid planned budget on 2019/20 or 2020/21 that works out by my maths at between £217M and £415M per week in real terms. So in my view the NHS has had and gobbled up its £350M per week despite protestations to the contrary. 

www.kingsfund.org.uk/projects/nhs-in-a-nutshell/nhs-budget



Turning to the NI increase, it won't be enough - it never would be even if you made it 10% or 20% extra NI frankly. What worries me is that by setting it out as a separate line on payslips, it will be easy to say in future years "oh, we just need another 1% on that or 2% on that". Like all taxes, a % here and a % there and before you know it will be 5% additional NI and so on. 

Frankly the whole notion of tax and NI as separate taxes are outdated. If you're going to break a manifesto promise, break big. Merge tax and NI into one sensible rated income tax. That way all unearned income also pays more - so the rate could be lower than them just added together. Best way to tax people? Easy - widen the base, lower the rate. I think you'd have to maintain some kind of employer payroll tax too to keep continuity on that front. State Pension should be based on residency. And in work benefits based on whether you pay PAYE or not. And I say this as semi-retired and mostly living of our investments and pensions. 

Also of course the government could try that revolutionary concept of spending less on stupid shit. HS2? There's more than a few years NI increase straight away. I'm sure that is jut the tip of a huge iceberg of waste, but every government's attempt to manage waste always fails.  

I do need to be careful what I say about the NHS. From my own perspective at the moment they are giving me quick and great care - I can't complain. The nub of the issue is that we are an ageing population and therefore demand for old age based services - health and social care - is only going to go one way. That's the conversation that society is still not prepared to have with itself. As long as the government can keep the welfare state ponzi scheme going, they can avoid that conversation. 

And of course, apart from "taxing the rich" the Labour party have nothing to add to the debate. There just are not enough rich to pay for everyone to have free lifetime care. 

HS2 is all about employment during the build phase with benefits for various party funders, sorry - business owners. So it’s effectively social security payments with an output.

This data is two years out of date, but it shows that Capital taxes and IHT (which does not even get it's own piece of the pie chart) are minnows. Even if you doubled the rates, it would not give you enough. Although I can see the argument for equalising income tax and CGT rates, although then you'd have to reintroduce inflation lifting of historic costs in cost basis calculations). for tax receipts, the heavy lifters are income tax, NI and VAT. 

At what point is a government going to start taxing electric or 'zero' (Ha!) emissions cars?
The loss of road tax and fuel duty will leave a massive hole otherwise.

Many years ago, my father predicted a point at which social care meant reaching a certain age (IF you were lucky) and being given a little blue pill. NOT the one advertised on T'internet either. I'm not sure he is wrong either.

Ultimately, in a very few years, electric car drivers are going to have to pay the same as every other road user, probably via road pricing with the vehicle sending its movements to a central point with invoices issued and paid by direct debit.

It would be fairer, and more honest and transparent, because let's face it fewer people understand what NI is compared to IT. 

But honest and transparent would have been even more risky politically as it would make the manifesto red line breach even more obvious. Having seen off Comrade Corbyn, it wouldn't then do to look like you'd done an about face and nicked his outfit.

As regards this being a mere sticking plaster for wider problems - that certainly seems to be the view of the Institute for Fiscal Studies who have a piece in today's Times headed "Covid's the cover for this inevitable rise", suggesting Boris's manifesto was either a pack of porkies or a work of ignorant delusion.

This line caught my eye and should cause pause for thought: "The £14 billion of tax rises, on top of the £25 billion or so announced in the March budget, will mean an increase in the UK's tax burden of about 1.5% of national income. It will hit its highest sustained level in peacetime. And it is likely to stay there."

But it should be noted that the government's hands are probably tied - the article concludes by saying "The logical consequences of the irresistible demands for ever more spending on health and social care are finally with us: higher taxes and a bigger state".

The difficulty Boris and the Tories have to manage is the self-evident hypocrisy of having won not just an election, but also a referendum, on the basis of scaremongering about precisely the risk of higher taxes and a bigger state under Corbyn and the EU. But it's eminently possible they'll get away with it.

Boris will either get away with it or slink off into the sunset before the next general election so as to ensure he hasn't lost one. Bit like Tony Blair did. At the moment he has the benefit of being up against quite soft opposition. I can't imagine he could believe his luck when Kier Starmer got the Labour leadership. As much as I'm sure Starmer is a nice guy, as a lawyer he was up against people who couldn't legally lie and have to answer the questions asked of them. In Boris he comes up against a world class bullshitter who is incredibly adept at not just shirking difficult questions but batting them right back and I don't think he can cope.

It is also a fair point that this had to come at some point. The sheer costs of the pandemic such as furlough, PPE, vaccines and T&T had to be recovered somehow. Add in the financial burden of our ageing population and shrinking birth rate and it's no surprise that taxes have to rise. But NI feels like the least fair way of doing it. It is essentially making the least wealthy pay to protect protect estate of those lucky enough to own their own home.

Much as I hate any rise, that at least is universal. Fairer imho.

Absolutely not, unless it has a regional weighting akin to means-testing. Our house is worth a small fortune but it is also very small - 1100ft2 - because we couldn’t afford anything bigger despite being on two very handsome salaries. I don’t see why I should be penalised taxwise for living in London. That would be deeply unfair.

Plus our house hasn’t gone up in value in the last 18m at all so bugger-all unearned value.

Grossly unfair, you have no control over the value of your property.
Our house has gone up about 5-fold in value since we moved here, well over 20 years ago. Council tax has gone up almost 4-fold in that time too.  My income has certainly not gone up as much, proportionately, over that time, and the house value is only relevant when it comes to move.  To gain an extra bedroom is a huge financial outlay around where I live, maybe £100k or more, money I simply do not have and cannot afford.  Conversely, to trade down to something smaller (by one bedroom) and have the "benefit" of difference between selling and buying prices, would yield very little after all house moving costs are taken into account.