This week on the IEA Podcast, Lord Frost, Dr Kristian Niemietz and host Callum Price dig into the Bank of England’s decision to hold rates at 3.75% — and whether the Governor should still have his job after the near 10% inflation disaster of 2021-22.
Great conversation! At last you talk about tax being as a result if s transaction to differentiate between present taxation and a so called new ‘wealth tax’.
I’ve been writing for many months on this platform direct to you about this very point. And you’re not listening! But you nearly do!!
Tax, in fact all taxes are based on transactional accuracy. Kristin you are do nearly right! It is accurately defined by a transaction. And the figure set by that transaction defines how much tax is paid. You are absolutely correct.
But what you’re missing is the ‘trigger point’ for that tax so you can really understand our tax system properly. You’re missing the crucial point I’m trying desperately to make.
The trigger is SPENDING Kristian.
If you can get to that understanding then, and only then, can the penny drop. That our whole monetary tax system relies solely on SPENDING to ‘trigger’ tax take for our governments revenue.
The whole revenue stream for government is based on SPENDING. All taxation. Not just Vat and Duty taxes. But crucially also Income taxes and NIC. They are all triggered by SPENDING. Not by income.
Despite having ‘income’ in the heading and despite earners being liable for the tax it’s triggered by the ‘SPENDING’ if the employer first. It’s their SPENDING on the employer that triggers those taxes. And it’s the employers who are tasked to have to pay it! Employees don’t pay the tax. Employers pay it. From the revenue taken by that business from the customers and consumers if that business‘SPENDING’ their money. It’s nuanced but unless you see the trigger you will still think taxes are different. Some paid by workers more than non workers for example. That’s wrong! Because taxes are not as a result of working. As we are led to be but are in fact the result of SPENDING of money by the passing on of money by transaction of SPENDING Kristian.
Our whole tax system, to give a resupply of sufficient money to our governments revenue for its needs to SPEND on our behalf us all as a result of SPENDING! Or an instruction to SPEND. Like for Council tax. Or inheritance tax. Or car road tax. Or insurance tax or windfall taxes. In all cases money has to move or naturally moves as a result of or by the act of SPENDING. We either choose to SPEND as a result of receiving money or we are told to SPEND by a certain date. An enforced flow of moving money. To result the need for money going forward.
If you are willing to open your ears, eyes and mind to that then, you can easily deduce that to increase the amount of tax revenue then, we you they need to increase the amount of SPENDING money. Not just in weight but in time.
In other words money has to move faster and in more larger amounts to not just get the GROWTH your all after but as our revenue stream increases then so does the governments tax take grow as well.
Do the answer we all need is right there! In front if your eyes!!
Growth can only come from more if our collective money that’s out there must be SPENT more often in more weight and in a faster time. The more money we all SPEND the more revenue is forced through snd the more tax is then created from more SPENDING and if it’s all done in a faster pace of movement by faster SPENDING then the more tax revenue is produced.
It’s that simple. We have had snd still have a CASH FLOW problem. Our money already out there is NOT being SPENT fast enough or in sufficient weight to give us sufficient revenue or give our government sufficient tax revenue gif their needs snd ours!
Come on, start listening!!!
More SPENDING is needed. But if most of our money is NOT being SPENT then that’s why we have a stagnant economy.
It’s not because we don’t have enough money out there!? It’s because Sue not enough of it is being used! By just SPENDING it!!
We allow recipients if money rich or poor, to keep it, and there is no time limit on that. So too much of it remains UNSPENT each month. So much do that our collective tax productive economy is underfunded which in turn underfunds our government in too low a tax take. It’s not rocket science.
Too little money is being SPENT each month. So too little tax is being triggered and so collected.
…..as for a small state Kristian. I’m with you! Only if you mean a state that isn’t wasting their money. But if you mean a state that doesn’t deliver our needs? Then I firmly disagree with you,
A state must make good decisions. Not bad ones. So I get you think a smaller more cost effective state is what we need. But a smaller state that fails to deliver? No.
And my dear Lord interest rate hikes are what is strangling SPENDING. It delays free movement. It drip feeds our needs by slowing down availability of money to freely SPEND. By sidelining money and keeping it idle is a further delay to its need for movement through our hands that is the productive part of our economy, as money held into is unproductive as a revenue and tax revenue streams.
Our BoE ability to strangle our economy is at the heart of our problems. Inflation isn’t a problem. As long as wages grow at the same rate! And as I have explained before, that higher wages can only come from a faster more increased SPENDING of mire if out idle money. So stopping that flow back is causing less income to cope with that inflation. When it’s extra income stream we need to afford that inflation,
Wealth taxes don’t work because you can’t quantify wealth. You can’t fairly do it without expensive investigation.
Besides it’s not SPENDING of money. It’s holding if assets. It’s totally different.
And you conflate wealth and money.
Wealth should be the house she assets bought with SPENDING money. Not money itself. Months what we need to glow snd not say on it prevented from glueing it moving. We are destroying the flow that gives us more wages and higher tax take. It’s working against us.
There ehh we have inequality and stagnation. We are a rich country. There is apparently £19 trillion pounds out there. It’s not disappeared. Someone somewhere had it at any one time. But if it’s not in our productive economy his can it do any good?
It’s missing in action!
That’s why we can’t get our economy working. Not fit s lack of money buy s lack of money being SPENT.
Put a SPEND by date on all money digitally. Spend it or lose it yo government, they’ll get us back on our feet with more money for higher wages snd z well funded government,
Great conversation! At last you talk about tax being as a result if s transaction to differentiate between present taxation and a so called new ‘wealth tax’.
I’ve been writing for many months on this platform direct to you about this very point. And you’re not listening! But you nearly do!!
Tax, in fact all taxes are based on transactional accuracy. Kristin you are do nearly right! It is accurately defined by a transaction. And the figure set by that transaction defines how much tax is paid. You are absolutely correct.
But what you’re missing is the ‘trigger point’ for that tax so you can really understand our tax system properly. You’re missing the crucial point I’m trying desperately to make.
The trigger is SPENDING Kristian.
If you can get to that understanding then, and only then, can the penny drop. That our whole monetary tax system relies solely on SPENDING to ‘trigger’ tax take for our governments revenue.
The whole revenue stream for government is based on SPENDING. All taxation. Not just Vat and Duty taxes. But crucially also Income taxes and NIC. They are all triggered by SPENDING. Not by income.
Despite having ‘income’ in the heading and despite earners being liable for the tax it’s triggered by the ‘SPENDING’ if the employer first. It’s their SPENDING on the employer that triggers those taxes. And it’s the employers who are tasked to have to pay it! Employees don’t pay the tax. Employers pay it. From the revenue taken by that business from the customers and consumers if that business‘SPENDING’ their money. It’s nuanced but unless you see the trigger you will still think taxes are different. Some paid by workers more than non workers for example. That’s wrong! Because taxes are not as a result of working. As we are led to be but are in fact the result of SPENDING of money by the passing on of money by transaction of SPENDING Kristian.
Our whole tax system, to give a resupply of sufficient money to our governments revenue for its needs to SPEND on our behalf us all as a result of SPENDING! Or an instruction to SPEND. Like for Council tax. Or inheritance tax. Or car road tax. Or insurance tax or windfall taxes. In all cases money has to move or naturally moves as a result of or by the act of SPENDING. We either choose to SPEND as a result of receiving money or we are told to SPEND by a certain date. An enforced flow of moving money. To result the need for money going forward.
If you are willing to open your ears, eyes and mind to that then, you can easily deduce that to increase the amount of tax revenue then, we you they need to increase the amount of SPENDING money. Not just in weight but in time.
In other words money has to move faster and in more larger amounts to not just get the GROWTH your all after but as our revenue stream increases then so does the governments tax take grow as well.
Do the answer we all need is right there! In front if your eyes!!
Growth can only come from more if our collective money that’s out there must be SPENT more often in more weight and in a faster time. The more money we all SPEND the more revenue is forced through snd the more tax is then created from more SPENDING and if it’s all done in a faster pace of movement by faster SPENDING then the more tax revenue is produced.
It’s that simple. We have had snd still have a CASH FLOW problem. Our money already out there is NOT being SPENT fast enough or in sufficient weight to give us sufficient revenue or give our government sufficient tax revenue gif their needs snd ours!
Come on, start listening!!!
More SPENDING is needed. But if most of our money is NOT being SPENT then that’s why we have a stagnant economy.
It’s not because we don’t have enough money out there!? It’s because Sue not enough of it is being used! By just SPENDING it!!
We allow recipients if money rich or poor, to keep it, and there is no time limit on that. So too much of it remains UNSPENT each month. So much do that our collective tax productive economy is underfunded which in turn underfunds our government in too low a tax take. It’s not rocket science.
Too little money is being SPENT each month. So too little tax is being triggered and so collected.
…..as for a small state Kristian. I’m with you! Only if you mean a state that isn’t wasting their money. But if you mean a state that doesn’t deliver our needs? Then I firmly disagree with you,
A state must make good decisions. Not bad ones. So I get you think a smaller more cost effective state is what we need. But a smaller state that fails to deliver? No.
And my dear Lord interest rate hikes are what is strangling SPENDING. It delays free movement. It drip feeds our needs by slowing down availability of money to freely SPEND. By sidelining money and keeping it idle is a further delay to its need for movement through our hands that is the productive part of our economy, as money held into is unproductive as a revenue and tax revenue streams.
Our BoE ability to strangle our economy is at the heart of our problems. Inflation isn’t a problem. As long as wages grow at the same rate! And as I have explained before, that higher wages can only come from a faster more increased SPENDING of mire if out idle money. So stopping that flow back is causing less income to cope with that inflation. When it’s extra income stream we need to afford that inflation,
Wealth taxes don’t work because you can’t quantify wealth. You can’t fairly do it without expensive investigation.
Besides it’s not SPENDING of money. It’s holding if assets. It’s totally different.
And you conflate wealth and money.
Wealth should be the house she assets bought with SPENDING money. Not money itself. Months what we need to glow snd not say on it prevented from glueing it moving. We are destroying the flow that gives us more wages and higher tax take. It’s working against us.
There ehh we have inequality and stagnation. We are a rich country. There is apparently £19 trillion pounds out there. It’s not disappeared. Someone somewhere had it at any one time. But if it’s not in our productive economy his can it do any good?
It’s missing in action!
That’s why we can’t get our economy working. Not fit s lack of money buy s lack of money being SPENT.
Put a SPEND by date on all money digitally. Spend it or lose it yo government, they’ll get us back on our feet with more money for higher wages snd z well funded government,