Govt money

Govt money

I was considering the EU’s NextGenerationEU and the idea that this was the tipping point into a fiscal union. I am not sure because the EU’s tax raising powers are as pre 16th Amendment United States; it cannot tax people or companies. This led me to consider the proportion of Govt. income rasied through income tax and other sources. This is a blog in two part, the first on the EU & the 16th amendment, the second on UK income tax and income equality. I comment on direct taxes and and the 16th by writing the following,

While looking at EU common tax policy, I thought about the need of the US to pass a constitutional amendment to allow federal direct taxation since previously the US required direct taxes to be apportioned to the States. The amendment is the 16th, and was designed to permit Income Tax an overcome a Supreme Court ruling which prohibited it; which came in two years later and has never been repealed. The Constitution Center has a review of the amendment arguing that the 16th only authorises income tax and the court has for instance constrained capital gains taxes. The Atlantic, also comments although the latter is more a history.

Dave Levy

The obvious development of income tax within the US led me to have a look at just how much of the UK Govt’s income is raised through income tax, the most progressive tax we have. The House of Commons Library has described the 2020/21 tax revenue sources, it seems that they’re no longer posting it out to everyone.

from the HoC Library Report : Open Parliament Licence v3.0.

The report landing page also has a chart showing the proportion by source over time, and its remarkably consistent. I also note that Income Tax is separated from NI and while some NI is paid by the employer most is paid by the employee. The Govt gets 43% of its income from these two sources and on top of this charges 20% of what one spends. There is also a compulsory private sector pensions levy on workers too, which does not appear in this chart. No wonder the low paid are struggling.

made by Dave Levy, from the HoC Library Report : Open Parliament Licence v3.0.

The separation of NI from Income Tax also permits them to claim that “The 10% of income taxpayers with the largest incomes contribute over 60% of income tax receipts”.

If you want to look at income inequality, Statista have the Gini Coefficient over time.

Statista UK Gini Coefficient over time , used under Statista Terms of Use

We need more income tax, less NI & VAT


This article contains Parliamentary information licensed under the Open Parliament Licence v3.0. The featured image is from Images of Money, on flickr, via wikimedia.org and used under the Creative Commons Attribution 2.0 Generic licence.  …

The end of fortress Europa?

The end of fortress Europa?

This is a commentary on the CoFoE proposals on ‘Migration’. CoFoE is the European Union's hybrid citizen's panel on the future policies and structure of the Union. Migration is often the issue where racism within the state and population expresses itself most strongly. Debate has become very polarised. If you’re interested, in the issue, you’ll remember the stories and pictures of the Greek refugee camps, and deaths in the Med and in the Channel together with the EU’s payments to Turkey, and the prosecution [ also here ] of rescue ship captains by Italy. Let’s hope this is the opportunity to bury “Fortress Europa”. .... for more, "Read More" ...

Let’s have an enquiry into Russian Money in British Politics

I received this email yesterday; The Government has responded to the petition you signed – “Hold a public inquiry into Russian interference in UK politics”.

Government responded:

The UK has a robust process to protect against foreign interference, led by the intelligence and security agencies. There are no plans to alter this approach or initiate a public inquiry.

It is, and always shall be, an absolute priority for the Government to protect the UK’s democratic processes against foreign interference. The Intelligence and Security Agencies produce and contribute to regular assessments of state threats, including potential malign interference. We keep those assessments under constant review and, where necessary, update them in response to new intelligence. As new information emerges, the Government will always consider the most appropriate use of any intelligence received, including whether it might be appropriate to make that intelligence public. Given this long standing approach, there are no plans to initiate a public inquiry into Russian interference.

Interference in democratic processes is an international issue, affecting not only the UK. That is why the UK Government will continue to call out and respond to malign activity, including any attempts to interfere in our democratic processes, alongside our international partners including the Five Eyes countries and NATO.

Protecting and promoting a flourishing democracy is a cross-cutting challenge and requires coordinated action. That is why the Government is bringing forward a package of legislation that delivers ambitious reform. Our National Security legislative proposals will give the intelligence agencies and law enforcement the tools they need to tackle the diversifying and evolving threats we face. Our Online Safety Bill proposes a range of measures that will help protect democratic discourse, such as forcing companies to tackle illegal misinformation and disinformation, and by tackling online abuse. Our Elections Bill contains a range of reforms, including strengthening rules on ineligible foreign campaign spending. All of this legislative work is supported by the cross-government Defending Democracy programme, which brings together expertise and capabilities from across Government departments, the Security and Intelligence Agencies and civil society to ensure UK democracy remains open, vibrant and secure.

Cabinet Office


😲 😨 😡

Words fail me; although I could have saved them a lot of words by just saying “No!”. …

The economics hurdle for rejoining!

This was published on the London 4 Europe web site, arguing that the Euro and “Banking Union” are potential political obstacles to rejoining. I just observe that the author has not caught up with the change in macro-economic management, the Stability and Growth Pact has serious credibility problems given the numerous breaches. We can hope that with a new coloured government in Germany the deficit fetishism of the EU will be weakened. Secondly, banking regulation is global and emanates from the G7 and BIS in Basel. The EU has little room for manoeuvre, although of course, should it be in a position to join BIS that would change things. This is an article designed to show how clever the author is and fails in that goal.

The ECB, Frankfurt CC DFL 2011 BY-SA

I note the article focuses on Sweden, which has agreed to adopt the Euro and not Denmark which has an opt-out. When we get to negotiating re-entry, the size of the UK economy and the sterling zone will be issues which may lead to us being given an opt-out or a Swedish deal, although I was interested to note that Nordea, Sweden’s largest bank has moved to Finland to locate in the Eurozone.

A serious analysis will come later, when both parties need an answer dealing with transaction volume, prudential regulation and fundamentally macro-economic policy. Let’s note that we had an opt-out of the compliance clauses of the SGP, we doubt we’ll be getting that back.

Macro-economics will be a problem if we have a left led Labour Govt., that wanted to pursue a policy of full employment but more importantly will be the need to meet the democracy criterion of the Copenhagen Criteria, where parliamentary sovereignty, the House of Lords and first past the post together may be seen as obstacles. Starmer’s Labour lacks the will to confront the issue of rejoining the EU but would probably welcome the shackles of today’s Stability and Growth pact. Actually, the Stability & Growth Pact is a serious barrier to rejoining for the Left; perhaps the sterling zone will save us from that too.  …

Are Transparency International wearing rose coloured specs?

Are Transparency International wearing rose coloured specs?

I find it hard to believe that Transparency International, the world's premier anti-corruption campaigning organisation have marked the UK as having improved on 2020 in their most recent Corruption Perception Index and have the UK as within the top 15 countries. So I ask why might this be? This article looks at the issue of lags, TI's focus on the public sector, press bias via ownership, and some private sector scandals. I finish by asking, if they mark the UK so well despite the evidence, how much worse are the others?, ...

The buck stops … over there

The buck stops … over there

Not all is happy in the Labour Party in Westminster & Southside. It seems that people are not happy with David Evans performance as GS. Personally, I agree, but in this tweet, and the politico article it quotes, “Labour Sources” identify his speed on implementing change, inability to raise private funds and the mishandling of staff cuts. It interests me that the response and culpability for the data breach is not on the charge sheet nor the complete administrative balls up at Conference 21.

I have two things to say. On fundraising, it is not David Evans who has driven people or Unions away and the idea that the Labour Party can run on large donations alone is a fiction that has never been possible.

When Blair’s people tried it, despite adopting a pro-business position on Trade Union reform and selling other policy positions such as the attempted exclusion of Formula 1 from tobacco advertising ban, they ended up illegally hiding donations as loans, and selling peerages. They finished up by borrowing tens of millions of pounds from banks to fight elections, a debt that was only finally paid off after the Corbyn surge. Such largesse from the banking sector is unlikely to be forthcoming for an opposition party, except possibly from abroad which is equally illegal. …

Sophie’s choice

I had the pleasure of meeting Rachel Reeves (MP Leeds West) last weekend; she was guest speaker at a Lewisham Labour fund raiser and I was fortunate enough to be able to ask her a question as she was leaving with her sister, Ellie (MP Lewisham West & Penge). I asked where she got her mandate to say we are not going to rejoin the EU in 50 years. She said that it came from Keir and when I said that I’d ask him the same question, she said that we have to win back the Red Wall seats and that even hers remained in jeopardy unless we had a firm position. I did say that “not in 50 years” will lose votes in London, wish I’d made it clear that the “policy” may be posing a choice between the two sisters’ seats.

There’s an interesting asymmetry in the estimated Brexit votes between the two seats, Leeds West 53% leave, Lewisham West and Penge 35% leave. …

Democracy and the rule of law first!

Democracy and the rule of law first!

Friends are considering if we/they should support Ukraine’s request for fast-track membership of the EU. I believe that Putin’s target is the EU and that its response must be robust but the criteria for membership includes a robust democracy, a market economy and an administration committed to the rule of law. Ukraine does not meet these three criteria.

From my work in CTOE on the COFOE, I have come to the conclusion that one of the weaknesses of the EU’s treaties is that while the principles of proportionality and subsidiarity are essential parts of the treaties, they only express a relationship between the EU and the member states. This needs to change such that the member states need to guarantee subsidiarity within themselves and to their citizens. The current treaties do not do this.

This is needed to ensure that the promise of subsidiarity is met, that decisions are taken as close to the citizen as possible. It annoyed me greatly, that Cameron was bleating on about subsidiarity while acting as the elected dictator of one of the most centralised states in Europe. This deficit and lack of mandate on the institutions of the EU cause problems for independence or ethnic minority movements within the member states, such as in Spain and Hungary. Ukraine also has an significant ethnic minority population and its democracy needs to offer them the same security and human rights as the majority.

Ukraine is deemed by Transparency International as the second most corrupt state in Europe, it is third worst in front of the ECtHR and is deemed to be a Hybrid State by the Economist Intelligence Unit’s democracy index. The only way in which Ukraine could join via a fast track is if the EU were to relax its standards on human rights and the rule of law. It is unlikely to do that as it is in the same argument with Poland and Hungary and is busy changing its rules to allow it to financially sanction them.

Democrats need to defend and improve the democracy of the EU, and its member states. Our solidarity with the people of the Ukraine needs to be expressed through other means.


Image Credit: CC European Parliament 2010 BY-NC-ND MEPs Voting …