Interesting option for UK debt
Discussion
Had a dinner party last night and over some scotch the discussion turned to the UK and how to deal with the debt.
One option we came up with is the following.
Expected UK debt by 2018/19 is £1.5trillion
Current UK population is c63m
Current UK working population is c27m
Current UK debt is c£1trillion.
The debt in the future would equate to about £22k for every man woman and child
The debt in the future for the working population would be c£55k
Now lets say of the 27m 15m are "middle class" debt would be £100k.
So if thee 15m could be convinced to take out c£100k loan over say 25 years (or do it pro rata based on income or another option) that they would then firstly have a totally different tax code for this helping out of the govt forever more (until they are dead) and the reason behind this is they are paying their income taxes or self assessment taxes in advance as such a discount is required for such an offer.
Ot wouldn't be compulsory but an opportunity to help out the state but also a shrewd move for an individual with the means to benefit.
This would require the govt to stick to the defecit reduction plan and once the defecit is cleared in 2918/19 for it never to happen again if it did spend would have to be cut or revenue raised in that year no questions. Or a referendum would be required for this to happen.
So views?
Personally provided there is a benefit for me as an individual I would be interested in such a situation and would participate. The benefits would be the govt would not lose AAA rating due to low debt and interest rates would fall further thus win win.
One option we came up with is the following.
Expected UK debt by 2018/19 is £1.5trillion
Current UK population is c63m
Current UK working population is c27m
Current UK debt is c£1trillion.
The debt in the future would equate to about £22k for every man woman and child
The debt in the future for the working population would be c£55k
Now lets say of the 27m 15m are "middle class" debt would be £100k.
So if thee 15m could be convinced to take out c£100k loan over say 25 years (or do it pro rata based on income or another option) that they would then firstly have a totally different tax code for this helping out of the govt forever more (until they are dead) and the reason behind this is they are paying their income taxes or self assessment taxes in advance as such a discount is required for such an offer.
Ot wouldn't be compulsory but an opportunity to help out the state but also a shrewd move for an individual with the means to benefit.
This would require the govt to stick to the defecit reduction plan and once the defecit is cleared in 2918/19 for it never to happen again if it did spend would have to be cut or revenue raised in that year no questions. Or a referendum would be required for this to happen.
So views?
Personally provided there is a benefit for me as an individual I would be interested in such a situation and would participate. The benefits would be the govt would not lose AAA rating due to low debt and interest rates would fall further thus win win.
chrisispringles said:
It wouldn't deal with the structural deficit, so we'd have to keep borrowing, and I bet the markets would not be too happy about lending to a country so fked that its citizens had to bail it out.
But I stated that the assumption is that by 2018/19 the debt will be £1.5trillion at which point the defecit is eliminated. Govt wouldn't have to borrow anything as if it happened they would receive £1.5trillion yet only have a debt as at today of £1trillion so over the next 5 years the remaining 500billion would be spent on the defecit for those years - also they will be earning interest on £500billon reducing balance which is an upside.
It is an interesting idea, and one I have mulled over occasionally.
It's interesting to think that certain members of the population would be able to not pay any tax, of any kind (which is the only way it could work.) No more VAT, not more fuel duty, no more airport tax, no more alcohol tax. The world would look like a much cheaper place, for sure ...
Oli.
It's interesting to think that certain members of the population would be able to not pay any tax, of any kind (which is the only way it could work.) No more VAT, not more fuel duty, no more airport tax, no more alcohol tax. The world would look like a much cheaper place, for sure ...
Oli.
Welshbeef said:
over some scotch....
HmmmmmWelshbeef said:
So if the 15m could be convinced to take out c£100k loan over say 25 years they would then firstly have a totally different tax code
???????????Welshbeef said:
Personally provided there is a benefit for me as an individual I would be interested in such a situation and would participate.
HmmmmmI can see issues,
- You don't get tax relief for tax you pay. What makes you think you will get tax relief on that loan? It'll blow a big hole in the Treasury.
- The bankers would charge a ridiculous interest rate.
- The bankers would want secured lending.
- The bankers would probably refuse credit.
Bandit said:
The next labour government would just rack up the debt all over again.
I'd say the solution is once we have the situation (with the assumptions above) that in 2019 the budget is held outside of the hands of govt ie they cannot change any goal posts to make you think they are achieving the targets. Instead it would be fully run by a third party. As such very long term decisions would had to be made this getting rid of te stupid 5 year horizon. So pensions tax simplification etc would all be done outside of govt.
All govt would be doing is deciding how x% of the budget is spent which really should be pretty easy.
It's interesting when you look at say a £70k salary you pay £23-24 k a year in income tax and NI so 4 years you have paid £100k to the govt.
By taking out a £100k ad then having a special low tax rate forever more that's a great incentive and frankly to you as an individual a 4 year payback.
I doubt the govt would opt for that zero tax forever but a low rate I'd say would be on the cards
By taking out a £100k ad then having a special low tax rate forever more that's a great incentive and frankly to you as an individual a 4 year payback.
I doubt the govt would opt for that zero tax forever but a low rate I'd say would be on the cards
Welshbeef said:
Had a dinner party last night and over some scotch the discussion turned to the UK and how to deal with the debt.
Was chatting to a guy the other night, owns a few rental properties (25 in all), and he was cashing out 401ks (US pension accounts). His simple theory was that either this Democrat administration, or the next one would eventually raid the 401ks, and give a 4% return when you do finally retire on the amount they The Black Flash said:
Isn't this what the govt basically did at the end of the War? Issued bonds to the public, because the state was broke.
Yes, I think you're right. War bonds, and a subsequent UK Government then did something to reduce their value and screwed everyone. Not sure of exactly what happened, but have/had some very upset grandparents who lost money.Welshbeef said:
... a special low tax rate ....
Tax credits, and wrongful payments thereof...A Tax Code (and minor changes due to such as an allowance for cleaning clothes used at work, or for a company car, for example) can be understood by the general public; changes to that Tax Code on the back of benefits (so-called "tax credits") rapidly becomes beyond the ken of mere mortals, and is open to abuse in terms of attempts to claw it back at unexpected times and without notice. Benefits should be paid as electronic payments into a bank account or as a giro, not 'hidden' in wage packets as changes to tax codes .
Not that I'm bitter - owing £3.5k of overpaid "tax credits" due to a lack of response to weekly phone calls to HMRC in 2003 (they also messed up my tax code for 4 years from 2003 - my claim for tax credits wasn't properly stopped when they finally acted on my phone calls)... This has timed out now, and can't be chased via court. But as soon as I claim tax credits in the future it can be clawed back without any legal redress.
Of course, HMRC get it right every time ... (No.)
Reference the original post, why should we bail out the muppets in charge??? Reducing benefits to the bare minimum, stopping marginal taxation and stopping "tax credits" seems fair (and will starve the bottom feeders into the desert, never to be heard from again once the death rattles have subsided). People need to pull their weight in blighted UKplc2012, non?
In the meantime, ensure HMRC are "fit for purpose" before we entrust them to make further deductions from our income ... That won't be in 2013 or 2014 then?
fbrs said:
Alex said:
What you're proposing is no different to taxation really.
exactly. utterly retarded idea. move alongEdited by fbrs on Monday 17th December 02:43
Tell me whats in it for me in this scenario?
I'll give you a better option. Stop spending more money than you take in. We've had periods of tax surplus before, so its not fantasy.
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