IFS report states whoever wins the election will have to reduce the state, increase state debt or raise taxes.

[caringcarer]

IFS say those are the stark 3 options available to the new government. Services are already scant and cut to the bone, debt is already so high after the COVID borrowing. Are tax rises really the only option left for any new government? Can anyone think of a realistic alternative?

Go after the PPE scammers, close tax avoidance loop holes starting with ones for large companies like Amazon and Starbucks and raise corporation taxes for starters.

Personally even though I am on not much over the minimum wage I would be happy to pay more tax. If we take Denmark as an example, they pay higher taxes then us but have WAY higher disposable incomes as the taxes cover so much more. If we invested in genuinely affordable housing we could practically double taxes on the lowest earner and they'd still be better off!

The report is a statement of the obvious

We have massive state debt from Covid. Yes whoever takes over has to do one of those three.

My thoughts exactly!

Well yes….the question is what combination of levers are labour going to pull.

I am not entirely clear where all our taxes are going when they are the highest they've been for decades. If I was the new government, I would start with this.

I would tackle the 'drop in an ocean' waste too. For example, Research Grants. They are awarded to one body who then awards money to another body who passes it on to another body. Each time people are employed just to pass the money on. I know, I worked in one of them and my job was basically moving tax payers money around. It was so so wasteful. Central government could have awarded it directly to the body at the bottom doing the research. It would be much cheaper than filtering it through UKRI, Research Agencies, Universities etc. Sometimes we gave someone money for them to give it back to us to give to someone else...

Aren't they always the only options though.

Or do they mean there are no further efficiencies in the state only reductions.

Ie when austerity started school could make some efficiencies without impacting education, but now there are none left.

Our taxes went to pay for what was needed to tackle the Covid pandemic.

Furlough cost billions.

Extra nhs money, nightingale hospitals.

Vaccines - the government paid for them and for some of the development costs

I'm just worried about what might be cut if that is the chosen option. The thought of borrowing more is very worrying and not many people want even more taxes when we're already paying the highest tax burden for 70 years.

I think they'll do all three - and hope it goes under radar or they can blame the current lot.

There's very little room to do much at all - a poisoned chalice really. I do think taxes will be tinkering and raining thresholds as they've rules out the big ones so far.

Yes, all of the above would help.

The greens in Scotland have the best idea and in the USA a wealth tax on the super-rich is popular across the board.

Here is the Green’s policy in Scotland:

“The Greens want a wealth tax on the “super rich” to raise tens of billions of pounds a year for public services.
The party which is standing a record 4 candidates in Scotland including one in each of the six Glasgow seats, said it would impose the tax on the richest 1% in the UK.
It would affect those with assets of £4.4 million and above.
The tax rate would rise incrementally stating at 1% and rising to 5% for those worth £5.7m, then 10% for people with £18.2m.”

Whoever wins will need to make cuts and raise taxes in reality. It’s a bit of a poisoned chalice.

That exactly.

The Tories have salted the fields for an incoming government.

That's a good idea in theory but probably a short term solution. The thing about the super rich is that they can go live practically anywhere without much difficulty. Not saying it shouldn't be done but within a few years a lot of the super rich would leave the UK.

The only real hope is to borrow in the short term while you implement policies that finally get our productivity growth back to normal levels. The UK has a massive productivity problem. Liz Truss, for all her manifest flaws, wasn't wrong about that.

And you need to invest in tax officials in order to crack down on tax avoidance. Again, short term costs for longer term gain.

There are a few things you could do to improve productivity that wouldn't cost money. Planning reform, and reducing friction with European trade would help, but both will face political resistance. Changes in tedious tax rebates on capital investment were implemented very recently, so that should help in theory.

I think it's really unfair the extent furlough gets blamed on here. If the state had not paid it, they'd be a bigger bill for benefits, social services, NHS and mental health as furlough literally saved lives especially for those on low incomes when they were told not to work for greater good of society.

Is there an opportunity to invest money in some areas to eventually save money further down the line?

For example, combating obesity/sorting mental health issues etc. through public health initiatives, active transport policy etc. can save the NHS money. Reopening Sure Start centres and removing the 2 child benefit cap can remove kids from poverty and help save money too, in the long term. Reducing crime and anti-social behaviour helps reduce the prison population.

A spend money to make money sort of thing?

Maybe if they stopped pissing tax payers money away that would help instead.

How much is wasted in the NHS alone? Using 'preferred suppliers' at treble the price the same item/service could be bought elsewhere.

On foreign aid to countries on the rise economically while our country is going under?

On the managers of the managers of the manager of the bloke who redesigns the logo.

Or on the ridiculous companies brought in and paid for crackpot schemes and incorrect legal advice (like Stonewall) instead of consulting an in house lawyer...

I think you'll find most people will be quite disgruntled at the government asking for more of our water, while we watch it piss out of the millions of holes in their bucket.