Comments on: Age concern – the Liberal Democrats and generational equity http://www.theliberati.net/quaequamblog/2007/10/30/age-concern-%e2%80%93-the-liberal-democrats-and-generational-equity/ crass, boorish and more a bruiser than blogger Fri, 04 Jul 2008 21:05:43 +0000 http://wordpress.org/?v=2.3.1 By: Matthew http://www.theliberati.net/quaequamblog/2007/10/30/age-concern-%e2%80%93-the-liberal-democrats-and-generational-equity/#comment-98068 Matthew Tue, 30 Oct 2007 21:18:52 +0000 http://www.theliberati.net/quaequamblog/2007/10/30/age-concern-%e2%80%93-the-liberal-democrats-and-generational-equity/#comment-98068 Whoops, missed out 3) young people do get old, there is excellent 'upwards mobility' in that sense. Whoops, missed out

3) young people do get old, there is excellent ‘upwards mobility’ in that sense.

]]> By: Matthew http://www.theliberati.net/quaequamblog/2007/10/30/age-concern-%e2%80%93-the-liberal-democrats-and-generational-equity/#comment-98053 Matthew Tue, 30 Oct 2007 18:35:22 +0000 http://www.theliberati.net/quaequamblog/2007/10/30/age-concern-%e2%80%93-the-liberal-democrats-and-generational-equity/#comment-98053 Very interesting piece. A few rather unconnected points. 1) It mustn't be forgotten that young people live in a much richer country than their parents did at their age. GDP per capita growth in the UK is around 2% per annum, thus a generation (say 25 years) is 64% richer than the previous generation at the same age, if the income distribution across ages has remained the same. That's a big 'if', but surely it hasn't negated the bulk of that income increase? It's also possible - perhaps probable - that there are greater extremes of wealth amongst the young than the population as a whole though. Nevertheless there are obvious signs that young people today are richer then their parents - e.g. foreign holidays, consumer goods, designer clothes. 2) I'm not sure I share your belief that wealth funds are a good idea. It really depends on whether you believe the rate of return on foreign equities/bonds is better than the internal rate of return in your country. When we did follow such a policy, before 1914, the impact on the domestic economy was thought to be pretty bad (but on the other hand it did help to finance one and a bit wars). Very interesting piece.

A few rather unconnected points.

1) It mustn’t be forgotten that young people live in a much richer country than their parents did at their age. GDP per capita growth in the UK is around 2% per annum, thus a generation (say 25 years) is 64% richer than the previous generation at the same age, if the income distribution across ages has remained the same. That’s a big ‘if’, but surely it hasn’t negated the bulk of that income increase? It’s also possible - perhaps probable - that there are greater extremes of wealth amongst the young than the population as a whole though. Nevertheless there are obvious signs that young people today are richer then their parents - e.g. foreign holidays, consumer goods, designer clothes.
2) I’m not sure I share your belief that wealth funds are a good idea. It really depends on whether you believe the rate of return on foreign equities/bonds is better than the internal rate of return in your country. When we did follow such a policy, before 1914, the impact on the domestic economy was thought to be pretty bad (but on the other hand it did help to finance one and a bit wars).

]]> By: James Graham http://www.theliberati.net/quaequamblog/2007/10/30/age-concern-%e2%80%93-the-liberal-democrats-and-generational-equity/#comment-98039 James Graham Tue, 30 Oct 2007 16:50:55 +0000 http://www.theliberati.net/quaequamblog/2007/10/30/age-concern-%e2%80%93-the-liberal-democrats-and-generational-equity/#comment-98039 Re IHT, my position is this. The problem with IHT is that it is relatively easy to evade. I certainly agree with the Lib Dem policy position of moving to an acquisitions tax (i.e. a tax on the donee rather than the donor) as at least an interim measure - at the very least this would encourage people to spread their wealth as widely as possible. Bottom line though, I would ultimately prefer a system whereby IHT, Stamp Duty, council tax and a substantial proportion of income tax with a Land Value Tax. This wouldn't merely tax wealth at the end of someone's life, but throughout their life. Re IHT, my position is this. The problem with IHT is that it is relatively easy to evade. I certainly agree with the Lib Dem policy position of moving to an acquisitions tax (i.e. a tax on the donee rather than the donor) as at least an interim measure - at the very least this would encourage people to spread their wealth as widely as possible.

Bottom line though, I would ultimately prefer a system whereby IHT, Stamp Duty, council tax and a substantial proportion of income tax with a Land Value Tax. This wouldn’t merely tax wealth at the end of someone’s life, but throughout their life.

]]> By: Lennon http://www.theliberati.net/quaequamblog/2007/10/30/age-concern-%e2%80%93-the-liberal-democrats-and-generational-equity/#comment-98037 Lennon Tue, 30 Oct 2007 16:38:27 +0000 http://www.theliberati.net/quaequamblog/2007/10/30/age-concern-%e2%80%93-the-liberal-democrats-and-generational-equity/#comment-98037 Thanks for repeating this essay here James - an eloquant and well worded argument for generational equity, and how it fits with a true Liberal agenda, as well as some good pointers in how to start to bring this about. If I could offer a couple of additional points - firstly, I don't see how a property crash would mean that "young people would predomanantly suffer" - if they are not yet on the property ladder (and chances are they are not looking at the data) then it's great for them. If they already are on the ladder, then their next move is likely to be up rather than down, so again a crash is helpful. (I still think that this is a very important point however, as I believe that we have a systemic problem with a lack of housing stock in this country). Secondly - there is one thing that you have not addressed the Liberal view on - and that is Inheritance Tax. Surely if you are truely trying to reduce the effect of a class of people that simply keep assets amongst themselves then you should attempt at least to have something along the lines of a 100% Inheritance Tax. I realise that this appears very extreme, and clearly it wouldn't and shouldn't be suggested as a genuine policy idea, but I put it forward as a starting point for further discussion... ;-) Thanks for repeating this essay here James - an eloquant and well worded argument for generational equity, and how it fits with a true Liberal agenda, as well as some good pointers in how to start to bring this about. If I could offer a couple of additional points - firstly, I don’t see how a property crash would mean that “young people would predomanantly suffer” - if they are not yet on the property ladder (and chances are they are not looking at the data) then it’s great for them. If they already are on the ladder, then their next move is likely to be up rather than down, so again a crash is helpful. (I still think that this is a very important point however, as I believe that we have a systemic problem with a lack of housing stock in this country).
Secondly - there is one thing that you have not addressed the Liberal view on - and that is Inheritance Tax. Surely if you are truely trying to reduce the effect of a class of people that simply keep assets amongst themselves then you should attempt at least to have something along the lines of a 100% Inheritance Tax. I realise that this appears very extreme, and clearly it wouldn’t and shouldn’t be suggested as a genuine policy idea, but I put it forward as a starting point for further discussion… ;-)

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