Cleaning Up This Taxing Mess

The dust has settled (or rather been obscured by an announcement about a rise in the price of alcohol) and now it’s time to go behind the headlines, and see what Georgie boy has done. Reading The Sun yesterday it seems the paper that backed the conservatives in the election has turned on them after the latest budget. It claimed that Osborne was putting Britain in “the wrong trousers” citing a lack of action on fuel duty, the hidden ‘tax’ on pensioners within the budget and the rise in duty on cigarettes as the punishment levied upon its readers. Unsurprisingly it also slated the cut in top rate tax, a subject that will undoubtedly define debates in the commons over the next few weeks, but is it right in doing so?

The labour party will be demonising the same old self-interested Tories, looking after their friends in the millionaires club, and many left wing activists and supporters will join them in spreading this. I refuse to believe that different political ideologies are based upon self-interest or that one side is simply evil. This blog concentrates on the drop in top rate tax.

What’s the rationale behind a drop in top rate tax?

Do you fancy coming round and doing my washing up? All my flatmates have gone away and the dishes are stacking up. Will you come and wash them? Given the fact no one is knocking down my door I’ll assume no one wants to. Some of you may even have reacted with an offhand “Yeah, if you pay me.” This is the basic reasoning behind the policy. If you pay someone more (by taking less in tax) they work more, and this is good for the country and possibly even tax revenue.

George Osborne has actually been very clever here. As we observed with the 50p tax rate introduction in 2010/11 high earners have no problem in forestalling their income. In this case when the 50p tax rate was announced many executives had income diverted from the 2010/11 tax year in which they would have been taxed at 50% to the year 2009/10 at 40%. Osborne claims that this forestalling was to the tune of £16 billion and that cost the exchequer around £1.6 billion pounds. This is plainly a fallacy, the forestalling cost nothing. If the tax rate had not been introduced the £16 billion would have been taxed at 40% in the second year just the same. No revenue was lost as a result of the policy and the chancellor has done well to portray it in such a light.

Furthermore, the tax drop also makes sense in an economic sphere. Having observed this tendency George can exploit it for the good of the exchequer. The announcement that this change will only take effect in the tax year 2013/14 has created potential economic benefits. By delaying the implementation we can expect high earners to react in a similar manner as they did for the rise. By delaying income into the year with the lower tax rate individuals can save 5p in the pound of tax paid. A decision that many will rationalise is worth the wait, especially because this can add up to over £40,000 for earners of £1million. However the difference between this and the forestalling observed in 2009/10 is that this will leave many firms not paying as high bills in salary this year, leading to a higher profit. Profit is taxable by Corporation tax, which this budget cut to 24%, and firms will either chose to face this tax or to re-invest the profit into their businesses leading to abnormal expansion. Assuming some firms choose each option this will lead to the double effect of increasing corporation tax receipts this year and creating jobs and fostering growth. Firms will then pay out the wages next year at the lower rate of 45%. On the whole the public coffer will lose the 5% on these bonuses, but gain the 24% on the profit. Overall on a £1 million bonus delayed for a year the government gains £82,000, an increase of almost a fifth over the 50p rate.

This effect will also help the Tories to justify their decisions in the budget. Firms being forced to pay tax on profits this year will increase corporation tax revenue, creating the illusion of a justification for cutting corporation tax, rather than the clumsy reasoning that cutting the rate will encourage businesses to locate in the UK they will have figures to show the benefits to lowering the rate. The fact high earners delay income till next year will also create a loss of revenue under the 50p rate this year and an increase in revenue next year, again ‘Proving’ that the 50p rate was too high and that a decrease in tax was the right policy option for the economy. Osborne will be keen to stress these facts when the figures come out just in time for the next election.

If it’s good for the economy what’s the problem?

Returning now to the scenario we had earlier, there’s a madman in my house and he’s chopped of my hands and says unless my washing up gets done he’s going to kill me. In this case you might be more tempted to come round and do my dishes, because you can probably afford the cost of coming and I’m unable to do them myself. This is the left wings argument for keeping the top rate. Those that are more able to help should help more.

It wont do itself

These arguments of equity and fairness however are difficult to justify as they do not come with easily linked qualitative data, in the first example I used above it is impossible to deny that paying is an effective way to get people to do my dishes. Comparatively the evidence that those who are the most efficient at doing them, and hence get paid the most to do so, should compensate those who are less able to is weak.

Yet the tax rate does not face this problem, for keeping it also has justification in an economic sphere. Retuning to our million pound bonus in the previous section, looking at it across the period above it is clear that it is more efficient to drop the tax rate. However if we assume the bonus is paid continually over 10 years the story is different. Under the 50p rate the bonus gives £5million in tax, on the other hand if there is a drop in the tax rate after the first year (and corporation and forestalling are taken into account) it is just £4.6 million. Unfortunately this benefit is all hypothetical the structure of tax change that the conservatives have implemented means that it will never be measured as at both ends of the spectrum high earners have shifted their income across time periods into the lower bracket, leading to insignificant tax receipts of the 50p rate and hence no compelling evidence to maintain or reinstate it. 

Of course we cannot tell if this would have caused revenue to be higher or not, because the higher tax rate may mean that less people in the UK earn that kind of money as they take their expertise elsewhere. Personally I would argue that these higher earners have a low tendency to leave as the UK is highly specialised in jobs with this kind of salary and hence moving between nations may be low. But there is no conclusive analysis that can take place to prove this here. Another factor to take into account is that the economy is currently short of liquidity, implying that money now is preferable to money in 10 years’ time. So the value of Tory policy may be more appropriate in the current climate. The earnings in the first year can be used to pay off debt, reducing interest rate payments across future years and leading to a stronger economy.

The conclusion here is rather unclear, while in the future the numbers will in all likelihood indicate that the Chancellor was right in his budget tax decisions the figures will only represent a temporary, rather than sustained, increase in revenue. Convincing arguments can be seen on both sides but the unpredictable nature of individual’s reaction to different tax rates make it impossible to assess direct effect of policy. The success or failure of George Osborne’s budget will likely fall solely upon the macro level performance of the British economy of the next few years, if sustained growth can be reached again debates of top rate tax will probably take a back seat in political discussions.  

Here's a song called clean:

Someone please come and do the washing up...

An Aggravated Response

Just read a Blog by my good friend Richard And his usually impeccably perceptive sporting analysis was this week horribly flawed. here is my paragraph by paragraph response to his article

No apologise necessary mate. 

While Dubbing the Superbowl the greatest show on earth is perhaps a little melodramatic, however it does frequently have the highest viewing figures of any American show every year. This shows that to the average American it is the greatest show on earth. Speaking of the sport in a worldwide context it is also important to remember that the superbowl will probably be the 4^th most watched sporting event in the world this year, displaced only by the Olympic opening ceremony (which only occurs every 4 years), the Champions League final and the final stage of the tour de France. Next year it will be the 3^rd most watched, giving it a claim certainly to being one of the most watched shows on earth.

World Champions is a true fact. The rugby world cup exists despite the fact only about 8 nations have a chance to win the tournament. Why is NFL any different? Only one country enters but that does not mean the sport is only open to one country, it is called the world championship because it is the highest honour in the sport and they are the best team in the world.

Now you turn to the problems with the sport being dull which is something that you hear a lot from British people who don’t really watch the sport. First in American culture sport is a day’s entertainment, fans turn up to matches with friends for what is called a tailgate sharing drinks with other fans, having a BBQ and snacking etc, this also happens in American homes, inviting people over to watch the game is a social event. You watch a play, have a swig of beer, and chat to the mates, rather than sitting down with the sole intention of watching the sport. The criticism of the sports stop start nature is often presented by people who don’t watch on a regular basis. When a play is run 90% of the time there is time for one reply before the next play starts. In that time coaches are working out tactics to be used in the next play based upon a dynamic game plan and things they notice on the field. A huge wealth of factors go into designing each play, which are not immediately obvious to the casual observer or someone who clearly has no grasp of the sport (such as the blogger in question). The only time when there are significant breaks in the play are at the end of a ¼, at a time out or at a change of possession. This time is used for teams to switch ends, switch game plans and switch personnel respectively. A necessity for the game to proceed.

Plays may only last a few seconds but that gives way to a completely different type of fitness to that used by rugby or football players. Aerobic respiration takes place during a rugby match where players are not full throttle the whole time they are on the field. American football is the opposite, giving everything you have in the tank over a short period anaerobically and then recharging in between. Having played the sport (something the blogger has clearly not) I can explain that every second you are on the pitch from when the ball is snapped to when the play is whistled dead you are sprinting. Questioning the fitness of these athletes is frankly a joke; the hundred metre final is over in less than 10 seconds, yet you would never question their fitness. Failing to acknowledge the difference between aerobic and anaerobic exercise is frankly embarrassing and shows a distinct lack of understanding.

Quarter back is skill position; you’ve over simplified a very complicated game. For starters on average a quarterback has 3 seconds in the pocket before he is tackled by an opposition player, in that time he has to assess the type of defence being played, is it zone or man coverage and if there is a blitz. Once this is done he has to go through a series of ‘reads’ to analyse which receiver is open and where he will be by the time the ball has arrived. Finally he has to throw the ball into an area in which only the receiver can catch it, sometimes from distances as far as 60 yards away. Please try to stand that far away from a wheelie bin and throw an American football at it. If you can hit that every time, you might have what it takes to be an NFL QB, once you’ve mastered everything else of course…

The NFL imposes 15 yard penalties for unsportsmanlike conduct and excessive celebration over celebration is a problem in the NFL, but it is in my opinion no greater problem then diving in football.

I’d challenge you to tell a William Perry or Ndamukong Suh (Slowest man in the 2010 NFL draft) that he is fat. At the NFL combine who ran the 40 yard dash in 5.03 seconds, he also bench pressed 225 pounds (which is around 102kg and more than I do) 32 times in a row. Can jump over 35 inches from standing (the height of his jump - his height standing with his arm in the air) and  jump 8 feet horizontally (also from standing). I would challenge the blogger to match any of these stats yourself.

Your last point is despicable. In rugby, players make tackles in open play with very little padding, this is true. However certain rules exist for the protection of individuals. Players cannot be lifted off their feet, players must “hit and wrap” and may not be touched in the air. In the NFL none of these rules hold. Other rules also exist such as the fact players are allowed to launch themselves into a collision with another player, who does not even see them coming. While in rugby a player with the ball will be able to see where a hit is coming from and brace. An NFL receiver attempting to catch the ball can be hit from behind by a player who simply launches himself, making no attempt to wrap his arms around but driving through with his shoulder. Simply put rugby is a contact sport, whereas NFL is a collision sport. Hence padding is necessary to protect players. 

Cheers

Simon's View on Society: Part 1: As it stands

This blog will hopefully be a 3 or 4 part-er about the global situation as I see it, More likely this will be a one off that no one will read because it’s what can loosely be described as a rather dull mix of economics and geography. So without further ado let’s bring on the boredom!

Part 1: As it stands: Post Fordism

So we live in a post-Fordist society, simply put we are currently live in an era after that of mass production (courtesy of Henry Ford) and no one has come up with a catchy enough name to describe the new era in which we live, but one thing is for certain it’s an era of change:  From manual factory labour, to service industrial jobs in developed economies, a widening employment polarisation both within and between regions, Characterised in the crudest terms by widening wage inequality. Yet perhaps more tragic then this is the individualisation (arguably even isolation) of labour. Gone are the class structures of Fordism, unions no longer appear at the forefront of workers minds, and other benefits from employments, such as pensions and sick pay appear to dwindle, as rising unemployment in western economies, driven not only by population growth but a long overdue reduction in the gendering of labour, savages the benefits to employment as the free market runs rampant. No longer embedded within society or even governance the economy drives all social benefit from employment into the dust in its wake.

This is getting pretty heavy, have some kittens

Instead Fordist benefits are replaced by precariousness in employment, employer flexible hours and lower wages. Yet there is also an arguably more intense vilifications and alienation of those who sit on the outsides, Immigrants, the unable to work and the unemployed (although perhaps the social stigma associated with unemployment has done more to keep a low welfare bill then many government savings attempts) become scape goats for macro level economic problems of which they have no control. Society is nevertheless incapable of appreciating the irony of shaming the unemployed in a system in which employment is no longer secured.

  All of which continue to further the equity gap. As Danny Quah theorised the knowledge economy does not lead to expansible and weightless transactions or infinite geographical reach because any potential benefit is eradicated due to uneven access and opportunity (often via infrastructure). Non-rivalrous knowledge goods are simply commodified as previously had been the case for formalising Land, Labour and liquidity. (Polanyi) Knowledge joins these as a fictitious commodity, that was forcibly created, yet claimed to be fundamental to the free market functioning. This combined with the “Superstar effect” (you pay a huge amount for the very best, you believe only the greatest will do and pay them accordingly, while those below, irrespective of rank, are paid comparatively little, despite being only marginally less useful) all lead to what Quah calls the “twin peaks of global development” in which there is no middle class, simply rich and a disassociated (even from each other) poor. (Worth noting that in this increasingly polarised society Quah owns a Lamborghini Gallardo and I don’t)

All will be equal when I've got one Danny

So that’s all gravy, lots of stuff about inequality and how bad the free market is, but what does it all mean? Well standing says a sevenfold structure of social divisions. Split into 7 catagories.

Elite: the top 1%

Salariat: Stable employment with employment benefits gvmnt/large corporation

Proficians: Portfolio workers

Old working class: Manual labours

Precariat: Precarious employment. Characterised by the 7 forms of insecurity

Unemployed: those actively seeking to work

Detached: rarely employed, alienated by society through no fault of their own. Often generations of Worklessness

And it is the Precariat category that I will investigate further in my next blog (TUNE IN NEXT WEEK)

Here's a song about what the UK might be like about this time next week

Give Clubs a Chance!

It's essay time, which means I'm blogging.

Clubs seem to be the topic dou joure so i may as well throw my unwanted trilby into the ring. (could i pull off hats?) So lets get started with my run down!

NUMBER 1!!!

Thanks Deion

First up it's all about the people you go with. You want to have a good time in a club? Take some people you actually like! Assemble a team and go out hard, no one ever got anywhere by being a whiny little bitch,

Sorry Duffy

if you go out thinking you're going to have a shit night then chances are that's what will happen. Having a unit around you that you enjoy spending time with can prevent this from happening!

NUMBER 2!!!

I've been reading A lot of literature lately about how clubs are places where women and men come together to be arbitrarily combined based on completely selfish values, that's not always the case, i know a lot of guys and gals that go clubbing because they like a dance, doesn't mean that you have to all pair up! I accept however that clubbing for women seems to be an endless stream of rejecting men who make advances. I personally I have no problem with a guy trying to make a play on a girl, that's fine, but lets watch our conduct gents! I have literally no idea how it became acceptable conduct to essentially go up to a girl you find attractive, rub your cock against her leg, and see if they respond in a positive manner. But as a collective we can work on that by not doing it and calling out those that do. hence making clubbing a more enjoyable environment for all.

NUMBER 3!!!


You don't like the music, I get it, I don't like some of it either, but there are clubs for all different types of music! Don't rule out clubbing altogether just because you don't like one variety, that's like saying you don't like meat because you tried cows foot a few times and you didn't fancy it. Striking something down based on one (admitting mainstream) segment is nothing short of absurd.


Foam parties can fuck off though

Here's NFL Hall of Fame cornerback Deion Sanders, personal hero of mine to the tune of "Opposite of Adults" by Chiddy Bang. which you might here in a club, but i doubt it

"Through unity, we can touch thousands"

Grounds for Divorce

Quick update on my life

Bus stops and a woman with a pram and a kid gets on, she's struggling with her stuff and she drops something, which I pick up for her.
"Thank you." She says
"No Problem" I reply
"Where's daddy when you need him?" she responds
"Story of my life!" I say in a jokey manner, and chuckle, Impressed as I am with my witty retort. After a few seconds it becomes clear I've made a horrible misjudgment about my audience.

Turns out a 5pm commuter bus is not the appropriate setting for dead pan verging on black comedy. The bus is silent. I feel the stares of those sitting in my vicinity. I have no choice, but to replace my headphone, and press the stop button, quietly leave at the next stop and continue my journey on foot.


Here's a song to see us out

Did you hear the one about the pregnant woman with no husband?

So for those not keeping a close eye on my life (if not why not, you cunts) I went away recently to Europe and along my physical Journey towards Romania I also started a Metaphorical Journey along the long and arduous path of feminism. After the degrading experience of reading a book titled “How to be a Woman” by Caitlin Moran and other books on the subject with similarly dire names I had intended to write a (well researched) blog on the economic reasoning behind a gender pay gap, why it shouldn’t be 30% and finally my all-encompassing solution for such a problem.

Yet instead while doing the research for this blog I found that the UKs system for maternity pay can charitably be described as nonsensical and uncharitably described as backwards on a similar level to that of Tom Cruise’s Ideology. First of all I’d like to make it clear that most women are probably not affected by the issues this blog raises. Nevertheless I think it’s important to take a good long look at government policy on maternity pay.

74% of companies provide more than the government level of benefit known as Statutory Maternity Pay (SMP) which in 2010 was £112.75 a week. For those that don’t know you can take 39 weeks of for a pregnancy legally (although the EU has voted on a bill to change this and the amount.) however progress is slow in this field because, quite frankly, they have more important things to worry about.

Think all that information has sunk in? I doubt it; let me lay some truth on you. £112.75 works out to £5863 a year. My room in a 4 bedroom flat in London is costing me more than that. Only one of the EU 27 has lower government pregnancy support pay (Luxembourg).  What this means is if you work for a UK company, there is a 1 in 4 chance that you cannot afford to get pregnant without financial support from another person. That’s fine for women who are happily married and decide to have a child, but what about unplanned pregnancy? What about women whose husbands leave them? What about rape victims? Are we seriously giving up on these women and their unborn children?

Furthermore (look at me using words) this 26% of firms are often at the bottom end of the pay structure for low paid and government designated “unskilled” work, Women in this line of work are often undereducated in comparison with the national average, there is also much research linking unplanned pregnancy to low income.

See I don't just make this shit up

This means that the women who have the highest rates of unplanned pregnancy, have the lowest financial capacity to support themselves get an unacceptably low amount of welfare support from our government. The most vulnerable, gain the least support.

And this is shortfall is reflected in the government shortfall, if you crunch the numbers (which I have) you’ll see the government spending on SMP is £2765 per woman, which means (with more crunching) that the average woman at 26% of UK firms takes just 24.5 weeks off work when having a child. That’s 171 days off to grow a human.

Like I said above, help is on the way, the EU is riding in on its debt ridden pony to save the day, hurrah! Maybe I can buy Greece for a tenner and then turn it into a massive olive farm and use the profits to save pregnant women in the UK. Maybe not, I’ll probably just stay at home.

If you were affected by any of the issues raised by this blog there isn’t a government hotline you can call, because apparently they don’t give a shit

                                                                  on an unrelated note

P.S to finish the answer to the joke in the title is neither have I, because she's dead.

NFL loses the keys

So as promised I've been writing a second blog on another farce, but i'd like to take a brief, but sickening moment to look back on the farce I mentioned last time. I've noticed that my advice to a certain Daniel Meier has obviously not been taken as he's written another 2 blogs. You can read his regurgitated opinion here, you can even listen to a song by a band that describe themselves as "3rd wave ska punk reggae dub" if you want, i must have missed those first two waves...

Having recovered from the onset of nausea let's move on to the real meat of this weeks blog. As Mr Cameron seems all too keen to remind us times are tough, and even big businesses are having to tighten there metaphorical belts in preparation for the metaphorical prostate exam that governments across the world are soon to embark upon. That is of course you live in the world of professional sport. Now before you stop reading and cast aside another dull instalment do stick with me! For I promise* not only does this blog inform, but it entertains, unlike some blogs of people who are 'studenting' (more on this next time possibly).

The National Football League (NFL) is a company which runs the league of American football teams that is most widely followed in the states, it’s there equivalent of the Premier league. Unlike Football in England however this structure has not always been stable taking on many forms throughout the years. Even now there is a rival league to the NFL in the form of the UFL (United Football league) with a smattering of teams with similarly ridiculous names. The NFL lasts from season to season based upon a Collective Bargaining Agreement (CBA) which sets out the rules of the sport, off field activities and most importantly pay. Every so often a CBA reaches near the end of its contracted period and teams, players and owners have to renegotiate the terms of the agreement.   

In 2008 it was decided that a new CBA was to be agreed. A date was set for a new CBA to be created by March 3^rd 2011, and put simply this hasn’t happened. As a result the Owners of all the NFL teams have hidden the keys to their stadiums and training facilities, and players now have to look for them so that they can begin preparing for the new season. (Hence the term “lockout”) Unfortunately the search for these keys has been about as successful as the navy seals attempt to find Osama Bin Laden the McCanns search for the daughter they killed. Which could ultimately mean that there is no football next year

One of the problems is that some owners would rather not have a salary cap at all. They’d rather use the 'small' fortunes that they have accumulated to be able to pay as much as they like. Hiring the best players to simply buy trophies in what has become known as the “Manchester city” school of thought. For example Dallas cowboys’ owner Jerry Jones would rather win championships then worry about creating a league which is equal and entertaining (possibly because this will make his investment more valuable). Either way he doesn’t care, because if there are no games next year he can use the 60 yard TV in Cowboys stadium to watch babestation.

Great Quality TV Jerry! What is that 32 DD?

NFL owners have said they will tell the players where the keys are hidden if they are given money. First it is vital to explain in this particular sport all the revenue raised from ticket sales, advertising, broadcasting and whatever is given to the NFL Corporation in the form of a healthy $9 billion pie.   Under the old CBA the owners were entitled to a healthy if rather filling slice of $1 billion! The players are then left to fight to the death over 60% of the pie in what is known as the salary cap. The victorious player is the given a “super bowl” in which to eat there lukewarm desert.

John Madden Won his Super Bowl in 1976 with the Oakland Raiders

However in the last 5 years since the 2006 CBA the owners claim that the cost of running an NFL team has risen and that $2.4 billion should cover the hardship. Ignoring the (un) likelihood that these billionaires do have an inflation rate of 19% pa. They propose that the players should hence take a pay cut of 18% to ease the financial burden. Don’t worry though this money won’t be coming from household NFL names like Tiger Woods and Bruce Springsteen. Rather from the rookies and practice squad players who don’t own Ferraris but still have families to feed.

Still at least we've still got basketball...

Speaking of basketball and barak obama

* this is a liberal democrate promise