Randomly Selected Article or Link

The Independent today reports criticism of Lib Dems' ideas for switching some of the burden of taxation off incomes, especially lower incomes and onto wealth accumulation, predominantly by the already well off and well paid, in the form of capping the tax relief on pensions contributions to the basic rate. I seem to recall the story will probably disappear from view for non-subscribers but you can still read it at the moment.

Of course regular readers will know that I'd prefer to tax only real property - the occupancy and ownership of scarce natural resources that we all depend on such as land, and not capital, but the criticism is unwarranted. You see, they complain that:

they would cut incentives for people to save for their retirement at a time when it was important to boost saving to help avert a long-term pensions crisis

and New Labour's John McFall, chairman of the Commons Treasury Select Committee, said:

"This comes at a very odd time. When the Government is trying to give every encouragement for people to save for pensions in later life, this cuts across those proposals. It goes against recommendations by Lord Turner and others to encourage savings. Instead, this will do the reverse. It is well-intentioned but naive."

Well-intentioned but naive is better suited to McFall's criticism though. There is no greater disincentive to saving for pensions than not having enough money left to put anything aside in the first place. And people in that situation are going to benefit from the transfer of part of the tax burden off of lower incomes and onto the ability to salt away ones excess income.

Already New Labour, friend of the working classes, has removed the cap imposed by the Tories in their heyday in 1989 on the proportion of one's salary one can put away in a pension fund. The effect? People with high incomes can choose to keep as income only what they need to survive and salt all the rest away in an ever wider range of pensionable assets, such as homes that other people might aspire to own instead of rent from the rentier pension fund, safe from the tax man.

As I blogged before, fully 50% of the population share just 7% of the accumulated marketable wealth of the UK. With a median household income - 50% of people live in households whose total income is below it and 50% above it - of just over £23,000 you have to be in the top 14% of households to fall into the Lib Dems' proposed higher rate (40%) income tax band of incomes above £50,000 and therefore be affected by this change - presumably even fewer individuals since this study is about household incomes (source: Institute for Fiscal Studies, Poverty and Inequality in Britain 2005 - this year's study shows no doubt similar figures, though I haven't looked at them yet).

Everyone else will have more (albeit slightly) left in their pockets and so increased capacity to save for a pension or anything else. Just who do New Labour, friend of the poor, want to help these days?

Me - I don't particularly like the tax proposal, and nor do I believe that it is feasible in the long term to rely for our pensions on being able to put away now some of what is already inadequate often to fund a decent lifestyle in the present, and hope that it will miraculously keep us in relative comfort in our dying days. But this criticism is, as they say, well-intentioned, perhaps, but naive, definitely.

Technorati Tags: lib dems, pensions, wealth distribution, tax

It's not that I am usually a luddite. Nor do I necessarily mourn the fact that workers have priced themselves out of a job. But there is something very sad about the Telegraph's story that the Symington port family is to phase out crushing grapes by gangs of human feet:

Centuries of port heritage ended by family firm

The world's oldest and largest port producer is finally trampling on 2,000 years of agricultural history.

The Symington family, which has been making port since 1652, has announced that it will no longer crush its grapes under foot.

The saddest part is surely that:

While the robots are an expensive investment, they can do the job at any time of the day or night - and don't need the encouragement of an accompanying musician.

Will port wine ever be the same without the local folk tunes of Portugal being instilled into it at birth I wonder?

Anyone who's read any of my blog will know of the work I do on affordable housing through Oxfordshire Community Land Trust in my spare time. After five years of work, persuasion, lobbying, all for nothing, we have the opportunity, thanks to a very generous elderly lady who has settled all she wants to on her children is willing to swap us her house and its plot in return for about half its value and a smaller home carved out of half her existing cottage so we can at last get a site on which to develop a few affordable houses and prove the concept to the communities of Oxfordshire who would like to be able to do similar.

The trouble is that to be viable we have had to buy about half each of the two neighbouring gardens and are likely to try and get another adjacent one. And so, with the efforts of a very energetic fellow board member's contacts in the Society of Friends we have raised a decent chunk of this. Nevertheless we still have to fund the borrowing on about £170,000 worth of loans starting from the end of May when we are due to complete on the first two slices of adjoining land.

Anyway, it works out that in the worst case we probably need to fund interest payments of around £1000 per month until we either get planning consent and can realistically borrow against the land to develop or till we can raise the remainder as gifts and pay off the loan that way, whichever is the sooner.

So we have a variety of ideas about how to scrape together this sum, one of which is a commitment by me that, if in May I were to find myself in receipt of a small additional income, say from a councillor's allowance, the 90% of that I am not already committed to giving to the party to help me pay for Focus leaflets and campaigning in the ward will go to the charitable associate of OCLT, the Stonesfield Community Trust that is fronting our land purchase, to help pay that interest bill.

So, not only do I now have to win for Headington Hill and Northway, its residents, this and next year's new students, freedom and the Liberal Democrats, but also for OCLT and affordable housing in Oxfordshire!

Mad eh? We'll, we've got to pay for it somehow to prove the whole idea to skeptical councillors, the media and bureaucrats? What better a way if it works out right? I am standing in this election at least partly to promote my ideas for innovative financing of things like affordable housing. I'm sure there's not a household in the ward doesn't feel or understand the effects of the gross deficiency we have in Oxford and Oxfordshire of that.