Are Higher Taxes Inevitable for the UK? Economic Analysis from IFS Director | Pod Save the UK

Director of the Institute for Fiscal Studies Paul Johnson explains how we'll need European-style tax increases if we're to have European levels of spending.

Guest: Paul Johnson, Director of The IFS

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[Hunty]

As shown by history, raising taxes incentivises people to not earn more. The government needs to do is what citizens have to do when there isn't enough money ... SPEND LESS!
The biggest problem in the UK is the pension system. If there are not young people earning money, then there are no taxes to pay everyone's pensions. I like the system Australia has where a certain percentage of your pre-tax wage is put into a retirement investment account (superannuation), then when you retire, you draw down on that. No more suckling on the teat of government. Then you can lower taxes. USA has a similar system (401k, Roth IRSA) except you have to nominate to do it.

A country's spending should be like a household budget. And 10% of it should be put into a sovereign wealth fund, like Norway, where the proceeds can be used for state of emergencies.

And to lower inflation caused by banks printing money and devaluing it, how about changing how home loan interest is done. Current home loan interest rate is around 7%. Bank of England base is 5% plus 2% for the lenders interest rate. But ALL of the interest rate money goes to the lender as profit. How about changing it so the BoE base interest goes to repaying the loan principal. The money goes to the borrowers debt instead of bank profits and will remove money from the economy to lower inflation while paying off the home sooner. Just remove any redraw facilities.

[moeezS]

Very well said, but labour and conservatives are so scared of raising taxes that it's become a boogeyman. I wish UK was more like Scandinavian and other European countries in many aspects of public services, especially in cases of housing, transport, infrastructure, and living standards. US and UK are some of the poorest in reality despite in the numbers being some of the most developed in terms of GDP.

[douglasfox-roberts]

Buttloads of fabulously wealthy folk out there who can easily afford higher taxes. When I was a kid my dad was on a ferociously high tax rate 'cause he was briinging in loads of cash. Time to bring that idea back, especially for those Tory donors who managed to make off with an absolute fortune in return for the dodgiest PPE.