- Capitalism and Alternatives -


Posted by: Red Deathy ( Socialist Party, UK ) on August 20, 1999 at 15:37:13:

In Reply to: whippet out posted by Gee on August 20, 1999 at 13:04:07:

: I did first time, the set up presumes govt is here to stay. Strip it away and the formula cant cope. Its a 'minor adjustment' model. So by gradually stripping out taxes, increasing allowance etc it works great.

yeah, I tried abolishing all taxes, and it just flipped out and did nothing- by the way, if you look carefully at the figures as they are, you can see the economy gradually gliding towards the Dogs, or you can have an Uber-boom, and reach the Dog's quicker, basically everything seems to osscilate around inevitable decline.

: I did that in my first model. one family was still worse off (you can be too unemployed it seems) but single parents were ok. being 'generous' allround was a distaster though. You can get 'radical' on taxes too, by just having a 35% rate cut in at say 15k and nothing below that. Cut vat and special taxes, cut out housing benefit (though the model doesnt acount for the corresponding reductions in pvte rents from the consequent opening of that mkt) and other benefits excepyt child stuff. Fun!

I tried that at 20%- or you can have nearly no taxes at the lower end, then go up to 25% for up to 40K, then slp 60% on 40K plus, and you find that such people are suprisingly unaffected- it was hard to actually get the top earners to lose money. I usually abolish familly credit and VAT as well- and Index most other benefits- don't think abolishing housing benefit would free up teh housing market, it'd create slum housing and homelessness- if you did that You'd have to increase Unemplyment benefit somewhat to cover the possible differnce.

just to note- the way housing benefit works here is that you go find a landlord, who tells you what the rent is, on the open market, and the Government pay a proprtion of your rent, demepending on income- teh market is already very open- plus, don't forget, the way rent works is that rent is determined by the exscess demand over supply, if more rent seekers come on the market, rents go up, not down.

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