In short
Podcast Episode Summary: ARCHIVE: Where Do Your Taxes Actually Go?
Introduction In this episode of Making Money, hosts Damien Jordan and Timeyin Akerele revisit a conversation with Paul Johnson, Director of the Institute for Fiscal Studies (IFS). The episode explores the complexities of taxation in the UK, public spending, and the future of tax implications for citizens. Johnson's book, *Follow the Money*, provides a foundational understanding of where taxpayer money goes and the challenges that lie ahead.
Key Themes and Discussions
- Taxation Reality Check
- Tax Increase Context: Johnson notes that income tax in the UK is currently at its highest level in history, with a projected £50 billion tax rise.
- Public Perception vs. Reality: Many citizens feel overwhelmed by their tax burden, yet Johnson argues that this sentiment may not align with fiscal realities.
- Historical Perspective: Taxes in the UK have systematically increased due to factors like aging populations, climate change, and increased spending on public services.
- Spending Dynamics
- Public Services: Despite high tax levels, many public services, like the NHS, suffer from inefficiencies and long waiting lists.
- Comparison to Other Countries: The UK’s tax levels are still lower than many Western European nations, leading to a debate about whether high taxes correlate with better public services.
- Challenges Ahead
- Demographic Shifts: An aging population, with a projected tripling of those over 80, will stress health and pension systems.
- Climate Change: Transitioning to net-zero carbon emissions will require significant financial investment and may necessitate increased taxes.
- Public Sector Cuts: Many public services have faced cuts, particularly in social care and local government funding, worsening the quality of public services.
- Economic Growth and Taxation
- Need for Growth: Johnson emphasizes the importance of economic growth to improve public finances and living standards.
- Potential Solutions: Suggestions for fostering growth include reforming planning systems, investing in education, and enhancing infrastructure.
- Political Will: Johnson highlights the political challenges in implementing long-term solutions that may not yield immediate benefits.
- Tax Fairness and Reforms
- Calls for Fairness: The discussion highlights a desire for a fairer tax system that addresses loopholes and taxes the wealthy appropriately.
- Wealth vs. Income Taxation: Johnson notes the disparity in how wealth is taxed compared to income, pointing to issues like inheritance tax and council tax that disproportionately affect lower-income individuals.
Key Takeaways
- Taxation Is Inevitable: With pressing issues like aging populations and climate change, increased taxes may be necessary to fund essential services.
- Public Services and Taxation: Although taxes are high, the effectiveness of spending needs to improve to ensure citizens see the benefits.
- Reforms Needed: To address growing inequalities and inefficiencies, there is a need for comprehensive tax reform that is fair and considers individual circumstances.
- Long-Term Perspective: Political decisions often prioritize short-term gains over long-term investments, complicating the path to sustainable economic growth.
Conclusion This enlightening discussion reveals the multifaceted view of taxation in the UK, encouraging listeners to rethink their perceptions about taxes and public spending. As economic pressures mount, understanding where taxes go and how they can be better utilized is crucial for all citizens.
Additional Resources
- Book: *Follow the Money* by Paul Johnson
- Contact for Financial Advice: makingmoney@getmost.co.uk
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This podcast episode serves as a thought-provoking exploration of taxation, public spending, and the essential reforms needed to ensure a fairer future for all.
Written by AI. May contain mistakes. Listen to the episode to check what was said.
Transcript
Automatic transcript. May contain errors.0:01You know what I love, Damo? Things that save me time. You don't have YouTube Premium, mate, so I just don't believe that. Granted, I'll give you that one. However, I've got one for you. A great time saver in personal finance is Money Week magazine. They spend a lot of time distilling the biggest stories in personal finance down into consumable chunks, so you don't have to scroll and scroll. They give practical tips on savings, investments, pensions, the UK economy, the global economy. It's like your five a day, but for finance. If you want to give Money Week a try, you can get six issues in print and the app absolutely free by visiting moneyweek.com forward slash money.
0:34After your trial, you'll save an extra£5 a quarter on the subscription, which is exclusive to Making Money listeners. And that's moneyweek.com forward slash money. But there's a link in the description if you just want to click that. We're taking a break this week, so here's a favourite from the archive. An interview with the brilliant Paul Johnson from the Institute of Fiscal Studies about his book, Follow the Money. We talk about tax, spending, and where your money really goes. He gets a bit animated, by the way, so you might hear a bit of banging on the table. But anyway, let's get into it.
1:04Income tax at the moment is going up by the most it has ever gone up. And that's probably a£50 billion tax rise. Now, that's one of the biggest tax rises in history. Paul Johnson is the director of the Institute for Fiscal Studies, the IFS. They're an independent research body who, among other things, look at how the government gets its money, like tax, and how they spend it. He's written a book called Follow the Money, How Much Does Britain Cost? It lays out exactly what the government does with our hard-earned cash, and why it's going to need a lot more of it in the future. If you're like me, you'd have heard that and gone, I pay enough tax.
1:37Well, Paul's book really gave me a different perspective, and I wanted to give you guys a chance to hear his arguments too. The population is getting older. Second thing, of course, is climate change. There's a dirty little secret in Whitehall, which is that they know how to do it and don't. We need to get the economy growing, and there are things that we can do to do that, But actually, that's going to take not just politicians to be brave, that's also going to take us to be brave.
2:04I found the book a hard read, honestly, in a sense of it challenged my internal narratives around taxation. What I mean by that is the book is about taxation, how we spend money or how the government spends money in the UK. And really this underlying message of we're probably all going to need to pay more tax in the future. and I think that goes against my everyone thinks they pay enough or they think they pay too much. That's what we want to explore today, the reasoning in there, because you convinced me wholeheartedly. Can we just start by getting an explanation of you of what you do at the IFS and kind of what the IFS do, please?
2:40Yeah, so I'm glad that challenged you, but we're a research organisation. We do work on what we think of as the economics of public policy. So that means looking at tax, welfare, pensions, health spending, education spending, local government finance, all those kinds of rather boring sounding things. But actually, the things absolutely determine how we live, how government gets its money, how it spends its money. And we do all of that by doing lots of research on huge data sets. I mean, my colleagues spent all of their time analyzing vast data sets to try and get an objective sense of how things are changing, what the difference government policy makes to people and so on.
3:23We're an educational charity and we try to be as completely objective and independent as we can. How do you interact with the government then when you say independent? What does that mean? Well, it means we sort of talk to government and opposition. It means we say when we think things aren't working or that policies are not going to achieve the sorts of things that they want them to achieve. When the numbers look to us a bit dodgy, we'll say so. But a lot of it, as I say, is doing our research and then putting that out into the world. We get quite unusual and we get lots of stuff in really high level academic publications, journals and so on.
4:02But we also talk through people like you, the BBC, ITV and the newspapers to try and put the information out into the world. So what we're trying to do is kind of bring those two together, bring the real academic rigor to the big public policy issues and get that into the public domain so people can make their own judgment about these things. We hear things from politicians and without any sense or context, it riles you up. When I heard you talk in the book or through the audio book and your words, it made sense. And it's a shame that we don't get that sort of communication. I was showing my partner the book as well.
4:41And she said it reminded her of around COVID when the doctors were speaking. And, you know, when they were talking around the policies around COVID and we brought out experts who stood there and said, we need to do this because of this. She said she felt reassured by hearing the experts speak, and often she doesn't feel reassured by hearing politicians speak, if that makes sense. That completely makes sense. I mean, of course, you know, experts can disagree and experts can have their own sort of view of the world. But we know that politicians are coming at it from a particular point of view. And they'll very often use, as you say, not put things in context.
5:13I mean, this is not a political point. But the most recent thing I can recall is at the Labour Party conference, for example, Rachel Reeves stood up and said, we're going to use a billion pounds from our non-DOM tax to increase the number of appointments in the NHS. Now, a billion pounds in an NHS budget of 180 billion is almost neither here nor there. And the number of appointments she was talking about out of the hundreds of millions that happen across the NHS is also sort of neither here nor there. But it sounds good, a billion pounds and a million appointments. Yeah, it sounds like a big number.
5:44But actually, one of the things I want to try and get across in that book is numbers that sound big aren't always big. Actually, if you're looking at the NHS, a billion pounds is a tiny number. I know a billion here, a billion there, and it's always serious money. But, you know,
6:03when we spend$180 billion, a billion is obviously useful, but it's not game changing. A billion for something like the justice system is a lot of money because that's a much smaller budget to start with. What did you think of the book too? I was about to say like the book kind of puts things into perspective. The beginning was talking about where tax started. And initially we didn't have tax. And then because of the wars. Taxes started in war. It started in war. And everyone promised to get rid of it. And then it was like, oh, wait a minute. At the beginning you said it was only for people earning over£200 who got tax.
6:35And then after like the French war, tax was abolished. Income tax was abolished. and then it came back again, and then just slowly been creeping up over time. So is it just a cycle now? Do you think that it's just going to continually increase? Well, it has ratcheted up in sort of lumps over time. So as you say, I mean, we had the Napoleonic Wars quite a long time ago, and that's when income taxes first introduced. And then taxes went up a lot again after the First World War, and then after the Second World War. And the thing that's really surprising, and I sort of knew, but really doing the book kind of lodged it in my head, is it hasn't really changed much since the end of the Second World War.
7:09Until the last few years. What do you mean by that, sorry? So we sort of, if you look at tax as a fraction of national income, so you take all the national income and how much of that goes in tax, that's been pretty steady for a long time at about a third of national income. And that's quite surprising, given that we're spending lots more on health and pensions and all those sorts of things than we were 50 years ago. And the main part of the reason we managed to get that trick out is that we basically massively cut defence spending. So we just spend less. We spent much, much less on defence and used that money to spend more on health and pensions and welfare and all those sorts of things, which, broadly speaking, until very recently has kept taxes as a fraction of national income pretty stable.
7:48But actually, they've jumped in the last four or five years by 3 % or 4 % national income, by about£100 billion. Now, that is quite a big number. That's quite a big number.
8:01And there's a reason for that, which is that we're spending lots more on health. There are more people over pension age and we're spending more on pensions. We had a decade through the 2010s of really cutting spending hard on lots of other things. And it's not obvious that you can do that much more. Economic growth has been rubbish. And we're spending a vast amount of money on debt interest payments because we've got very big debt. So put all of those things together. And the government, and it doesn't want to. I mean, Conservative governments don't want to raise tax, but it has basically been forced into really big tax rises over this parliament.
8:33How do we compare to our peers then? Because you focus on that in the book, the OECD and stuff. How do we stack up there? So if you compare us with most of Western Europe, even though we've got our highest tax level ever, it's still below most of Western Europe. I think a long way below places like France and Scandinavia, but below Germany, the Netherlands, all those sorts of countries. They tend to have much more generous pension systems, especially, but also quite often more generous welfare systems generally. So they tax quite a lot more than we do. But as with many things, we're a bit in the middle.
9:08So we tax a bit more than or rather more than a lot of the English-speaking countries, Australia, America, Canada, and quite a lot more than sort of emerging or not really emerging, but some of the Far Eastern countries like Singapore or China or what have you. So internationally, we're somewhere in the middle, but in Western European terms, actually, we've still got relatively low taxes. One of the quotes that you use in the book is that we can't have an American tax system is in low taxes and European public services. It feels to me, before reading the book, I would have said we have high taxes and poor public services.
9:45That's how it felt. Well, I think that's one of the problems at the moment is taxes are high by our historic standards, but public services do feel poor. I mean, we've got massive waiting lists in the NHS, much more than we've had for 25 years, really, in terms of NHS waiting lists. Government's been cutting spending through the 2010. So it does feel like we've got higher taxes. We do have higher taxes than we've had. And public services are struggling, which is not a happy place to be in. And part of that is, as I say, because we have really poor economic growth. We're spending so much on debt interest, and we don't see any benefit from paying for debt interest.
10:20But if you compare our public services with those in the US, actually, ours aren't too bad. No. A lot better than the ones in the US, definitely. I always say that people always say the NHS is like, it's not very good. That's a long waiting list, but at least we have an NHS and we have, it works just very slowly. So yeah. But when you need it. So I, I, I recently needed the NHS and I was, I was in a point where it was like A &E needed a brain scan and I waited 17 hours and it's like, I could have an internal bleed on the brain here while I'm sat here. And I think they've cut the areas of society that you don't know they've been cut until you need them.
10:56and then it becomes very obvious. And my whole view of NHS funding and sorting it out shifted in one night because I basically came out of there going, you know, they're very good at fixing people that are clearly dying. If you might be dying, you wait a long time. And I don't think that, I think, you know, I want a system where I can walk in and get fixed quite quick. And it's missing all of its targets now in a way that, you know, it was getting worse in the years up to the pandemic. But post-pandemic, it's got much, much worse, despite the fact actually we're spending more and more on it. And a bigger and bigger fraction of the total amount we spend is going on the health service.
11:33And there's a bit of a mystery, actually. Since 2019, we're employing loads more doctors and nurses and spending much more. We actually aren't doing any more. And we don't really understand why that is. And that's why the waiting lists keep going up. So I want to talk about waste in a second. And I would like to pin that point and come back to it because I think we can have an interesting conversation. there. Before we get to that, you say in your book, government needs to be brave and so do we. So I encourage people to listen to this with an open mind because that's what I had to do. Because like I said, I came into this going, I'm paying way too much tax.
12:08But you set out in the book, your logic of why we will need more tax going forwards because of problems that are on the horizon slash already here. Could you just outline what you think the challenges are that face the country going forwards in terms of why we need more tax? Yeah, I mean, I should say, you know, there are always choices here. So we could decide to cut the health service or make people pay for their own sixth form or dramatically cut pensions or what have you. So there are always choices. But if we're not going to make those sorts of choices, then there are, I think, two or three big things that are going to happen over the next 20 or 30 years, which are going to mean, even though we've got the highest taxes ever at the moment, I think they may well go up further.
12:49One is the population is getting older. And there'll be something like a tripling in the fraction of people who are over the age of 80 and a big increase in the number of people over age 65. And that's expensive because those are the people who use the health service a lot. And, of course, they get paid pensions. Health service is much bigger, actually, than pensions, but both of those and social care. So all of those things. And, of course, on average, they pay less tax than people who are in work. So all of those things will have an upward pressure on spending and therefore on tax. Second thing, of course, is climate change.
13:22And we're committed, quite rightly, to get to net zero by 2050. That's a big issue to get to net zero by 2050. We're all going to have to replace our gas boilers in our houses, for example. That's expensive. And that's not the only thing by any means. That's an extra, let's say,$20 billion a year of government spending, as well as a lot of private spending. and over the last so that's two things over the last decade to say we've had record cuts in spending on social care on local government spending on spending on the police on spending on the justice system all of those things have had really big cuts and at most i can't see more cuts coming there and you can see the pressures everywhere for more spending we we've had to stop sending people to prison because they're full.
14:10We've had strikes by barristers because legal aid is so poor. We're spending no more per pupil in schools than we were 15 years ago, first time that's ever happened. So the pressures everywhere are up. And the bit of public spending, which until 15, 10, 10 years ago, we could always squeeze, which is defence. Well, the government at least, has promised to raise that for the first time in generations. And you can see why, with what's going on in Ukraine and the problems in the Middle East and those sorts of things. So put all of those things together, then it seems to me, unless we're willing to say, look, we're going to really ration the NHS even more than we are, or we're going to means test access to the NHS, or we're going to stop providing free school post-16.
15:01So all of the pressures seem to me to be upward. Yeah. And to counter that then, as an individual, as I go about my day, it feels like I get taxed on absolutely everything. Bar breathing, right? And - That will come. Yeah. Yeah. Yeah. Penny per breath. So let's look at the roads as an example. I pay road tax and then the roads are just a mess. There's potholes everywhere. And I know it's a simple example, but it just seems like a lot of money goes into the system and nothing is right. Is there waste? Are they just burning money? Well, there's certainly some waste. Interesting what you say about road tax.
15:41Of course, petrol duty has been coming down year on year on year on year for the last 13 years. And as we move to electric cars, then petrol duty will go altogether. And that's more than 30 billion quid the government is going to lose. So that's sort of by the by. But, you know, it's really hard in the whole public sphere to say how much waste is there. We've all seen that things could be more efficient. I mean, you go to – there's lots of inefficiencies in the NHS, partly because they haven't invested in decent computer systems and decent buildings and decent equipment over a long time. And that partly reflects the fact it always seems to be in an emergency.
16:21So the money for the long-term stuff that might save money goes into the day-to-day stuff that just keeps you alive, as you're saying in the short run. I mean, there has been waste in bits. I mean, so local government, for example, has had huge cuts after 2010. And I say this quote in the book. I mean, in about 2011 or 2012, I was talking to a chief executive at one of the big local authorities. And he said to me, before 2010, quotes, we were pissing money against the wall, unquote. So there were clearly, in a sense, was too much money sloshing around at that point. But they've really, I mean, they've cut like one pound in five of their spending over the last 15 years.
17:03It's pretty hard to think there's a lot of waste in there, at least things they could easily change. But right across the system, there are ways that this could be done better. It's really, really hard sitting in Whitehall to then sort of wave a wand or make a law, which makes these things more efficient. That's really tough. So on that inefficiencies point, are there any areas that you can see that are obvious or quick wins that we could change? There's nothing big. There's nothing of a scale which would really help us sort out the kinds of problems that we're talking about. There have been mistakes for sure.
17:43I mean, we are part of the reason that the NHS doesn't work very well at the moment is we were not investing beforehand in the kinds of equipment and buildings and so on, which would make it work better at the moment and indeed in training the staff. And we know that we need better management in the NHS. We know we need better IT infrastructure and so on. But that's actually going to cost money up front. If I look right across the public sector, is there a sort of£10 billion budget where I can see, well, we just don't need that? It's obvious. No, not really. Politics. For the last few years, just get rid of all of them.
18:20Let you run the country. You and T, hash it out. Just hash it out. Chance the exchequer over here. You can be my chancellor. Good God.
18:34Last time we recorded, Tomei, and you were having some real dramas with your accountant. So how's that been going, mate? They're sacked. So drama sorted. They're a big corporate firm. they didn't really reply to my emails very quickly like took a week or two at times and they charged me way too much i mean i've got pretty simple taxes and yeah they were charging me thousands they saved me some money but yeah i had to move on slow and expensive pretty much yeah this is one of the reasons that we're really happy to be partnering with tax app it's a tech platform that makes self-assessment simple whether you're self-employed like me a freelancer or a director like demo big dog instead of sending endless emails bills and spreadsheets to your accountant, you just connect your bank, answer a few questions that are only relevant to you, and your tax return can be ready in as little as 15 minutes.
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21:59Everyone wants to pay less tax. So do you think they think about it in practice or they just think this is a good idea, let's have a coffin nail tax? Yeah, I mean, I think right across the piece, there isn't that sort of engagement with real life and real people. I mean, in all sorts of ways. I mean, when you talk about how they changed the NHS, they don't seem to engage with patients. I mean, we've all wasted huge amounts of our lives not waiting around in hospitals or if you've ever done jury duty, She is basically spending two weeks waiting. So there's no sort of sense of actually caring very much about people's time.
22:33But on the tax side, you're absolutely right. I mean, there are so many ways, and I go through some of them in the book, where it's just obvious today. It's kind of big signs up saying, please avoid tax here. It's, you know, if you think that saving in a pension, you'd want to use your money for a pension. But there's a huge inheritance tax loophole, which means that it's the easiest way of avoiding inheritance tax is to put money into a pension. that if you, depending on, you know, the reason that companies like Uber and so on would love the drivers to be self-employed is because you pay a lot less tax if they're self-employed.
23:07If you're a partner in a, you know, massively well-earning partner in a law firm, you pay less tax as a fraction of your income than if you're an employee. So there are so many ways in which just little changes in behavior kind of change the tax that you pay. And of course, there is therefore, I mean, It's a modern-day equivalent of the brick tax that you were talking about. You change this way in your behavior, this way in how your income looks, and you pay a different amount of tax. And not surprisingly, people make a lot of effort to do that. And big companies, I mean, kind of incredibly complex things in order to achieve that.
23:39But you seem to explain it really well in your book. Can't the government just listen to your advice? It seems like you make it sound really simple and like common sense. At least you can see the problems. Maybe you don't have the solutions. Well, I think I do have the solutions. The problem, and this is what I was saying about being brave earlier, is that all of these solutions involve someone getting worse off. Because if there's currently something which says that if you declare yourself a company as opposed to an employee, you pay less tax. High off 85. You have to increase tax. I mean, council tax is appalling tax and very regressive.
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24:15But if you change it, people with expensive properties will pay more and they complain, obviously. And we see that. I mean, it's some time ago that George Osborne tried to put VAT on hot takeaway pasties. And that was a tiny change. I remember that. That sort of approbial. Yeah, we did that. Damien loves his greggs. He was definitely hit by that. Even little changes are sort of really unpopular. And throughout the system, we know that if we really cared about sort of young people and housing and economic growth, we would loosen the planning laws, for instance. But, of course, that makes people who have got nice houses in the countryside worse off.
24:57And they're the people who seem to have the power. So I think the truth is that government knows a lot of this stuff but is scared to make the change because there are almost no changes that you can make which just make everyone better off. Most of them will make someone worse off, and they tend to shout quite loud. You spoke about tax reforms, was it the 80s or 90s, that were actually sensible, and the government lost power as a result of them because people just don't like change in – they don't like to hear that tax is a change, and even if it will benefit them or is good for the country. Yeah, there's lots of examples of that.
25:34I mean, okay, this is where I'm going to lose the audience completely. So back in the 1990s, the then government tried to put VAT at its full rate on gas and electricity. Now, at the moment, most things have 20 % VAT, gas and electricity have 5%. That's another way of saying that we want to get to a net zero, but we're actually subsidizing people using gas. And obviously, rich people use a lot more gas than poor people. So you could put VAT on it and increase benefits for people on lower incomes and cut taxes, exactly what the government of the day said they would do, make people on low incomes on average better off and people on high incomes on average worse off and stop subsidizing us burning gas.
26:21it was possibly it's about the most unpopular policy ever didn't happen it was one of the reasons the government became incredibly unpopular and that's just one example of how hard it is to change something at the moment we effectively subsidize people who spend an enormous amount of money on gas and electricity now part of the problem is of course i said on average you can compensate poor people people on low incomes you can't completely compensate all of them so there will be some people on low incomes who got very hard to heat houses or who have a particular medical needs, which mean that they have to keep their house very warm.
26:58So it will make some people worse off. But at the moment, because we're spending so much on this, we're making lots of people worse off because we're raising taxes in other ways. It's tax to shape behavior, which is the beard tax and things like that. Everyone shaves. Actually, the use for tax is to shape behavior and push people ways. Because like you say, if you tax over here, they'll move over there. So if you want to go to net zero, you have to tax gas usage and maybe incentivize electric on the other side. So that behavior moves that way. The one takeaway that I took from the book, though, is we talk about beer tax and all of that.
27:31None of them really matter. There's three taxes that move the needle. Can you just explain to us what those taxes are? Yeah. So we raise about a trillion pounds, just under a trillion pounds a year. That's a big number in tax. And about two thirds of that nearly is just from three taxes. There's income tax, national insurance contributions, and VAT. The next big as well is corporation tax. So between those, that's more two-thirds of the... Excellent. We're very grateful. He said you are welcome. You are welcome. But you would think corporation tax would be a bit higher. It's quite high. No, no, no.
28:10Leave it alone. So we get whatever is a$250 billion or something from income tax and getting on for 200 billion from national insurance and VAT. Corporation tax actually going up quite a lot. And by international standards, it's really quite high. That surprises people in terms of what we get in the UK, but it's still only less than about a fifth of what we get from income tax, a bit more than a fifth. So it's those three big ones, national insurance, which you pay on your earnings, income tax you pay on your income, VAT you pay when you buy stuff. those are the three big ones. Income tax at the moment, people may not realise this, income tax at the moment is going up by the most it has ever gone up.
28:55Fiscal drag. Fiscal drag. So what that means is the point at which you start to pay income tax is being held at the same level in cash terms for six years when inflation is really high. So that drags more and more of your income into tax. The point at which you start to pay higher rate tax, just over£50 ,000, is also being held for six years. And that's doubling the number of people are going to be higher rate taxpayers. And the point at which you start to pay 60 % tax, which you do between 100 and 125 ,000 pounds and 45 % tax over 125 ,000. All of those are being held. And that's probably a 50 billion pound tax rise.
29:29Now, that's one of the biggest tax rises in history. But you don't kind of notice it because it's just holding things the same in cash terms. Yeah, it's this point of being a higher rate taxpayer used to mean something. now you can actually be in poverty as a higher rate taxpayer. You could not be able to afford to live and still be in the higher rates. Well, I think, yeah. Again, this is one of the funny things about tax. I mean, if you are a single person with no children, small housing costs obviously£50 ,000 a year and you're really well off. If you're a single earner with a mortgage and two or three children, £50 ,000 really isn't very much.
30:09And of course, the tax system doesn't take account of those differences. So you'll pay the same amount of tax either way. It punishes people in certain circumstances. Your book highlighted, I would like you to explain it, but if you, say, have three children and you're going from 50 to 60K in income, you're paying, is it like 68 % or something? Something like that. You're paying really high. So the reason is that your child benefit, which you get if your income is below 50 ,000, is taxed away between 50 ,000 and 60 ,000 pounds. So if you've got two or three children, that's a reasonable amount of money which you gradually lose as your income goes up between 50 and 60 ,000.
30:46And that can take your marginal tax rate. So the amount you lose for every pound that you earn is well above 60. And if you've got enough children, 70%. So you're saying to us that an aging population is an issue, but we're disincentivizing people to have children in a common income bracket. I mean, you're probably going to just say, yeah, but shouldn't we be incentivizing people to have children then instead and not? impacting that because they'll make financial decisions. People will say of our generation, I'm not going to have kids because it's too expensive. And that's a reflection of that, isn't it?
31:16Well, I think it is. I mean, I think the bigger issues there are around housing costs and so on. I mean, yeah. And if you look, I mean, 25 years ago, the large majority of middle income people in their 30s who had children were owner occupiers. Now, a big fraction of them are private renting. And private renting, as everyone will know, is really expensive and has all sorts of other downsides. And it's definitely one of the things that makes it, you know, when you make that calculus, how am I going to have a kid? How many kids am I going to have? The housing cost is really important. The childcare costs are really important.
31:50And, you know, possibly the child benefit, but that's not, you know, that's actually quite small probably relative to your housing costs and your childcare costs. But all of those things matter. And the number of kids that we're having is dropping really quite fast. I mean, it's about one point. So the way that we measure this is how many children per woman in their lifetime. And you need 2.1 to just keep the population stable if you ignore immigration. We're only having 1.6 at the moment, which probably is the lowest ever. And the only reason that the population is reasonably stable at working age is because we've got quite a large number of immigrants.
32:29Yeah. I mean, you've just had a kid. I'm not having any more. Congratulations. You've got one. When I grew up though, I thought - I mean, I'm a steak out four. But I come from a big family. So I thought when I grew up, I'm like, oh, I want to have twin boys. Twin boys, you can't specify that. I did, I did. I know what I want, I go for it. I've got twin boys. You see, there you go. Shoot to kill. Shoot to kill. Put it out there. But yeah, I always thought I had like two twins and then like a couple of others. So at least three or four kids. I've had one. I'm like, no, I'm done. Done. It just changes your life.
33:01But it's more expensive now to have a kid than it was before. not even talking about school fees, just like maintenance and food and like nursery and everything. It just costs - Try having a, yeah, 10 years old is an expensive age. Yeah, my son, like, you know, they don't get cheaper. I'd say that when they're a baby - Well, I got to a university at the moment. They're blooming expensive. Yeah, yeah, yeah. Yeah, so yeah, keep having kids, people. Even university used to be free. Like, yeah, when we were growing up, university was - Well, the loan doesn't cover the - Yeah, it was free. And then - The loan doesn't cover the costs is the problem.
33:32So, you know, you have to supplement your child or they have to work, don't they? Because the grant and the loan isn't enough to even pay the accommodation. Where before you could just go and have fun and party and not worry about it. Now it's like, I need some money parents. I need a loan. I'm still, I just paid off my student loan, thankfully. But yeah, it's just a lot of work. Not the one that you've defaulted on.
33:53It was like, yeah, but now they don't charge interest on it. Yeah, because they stopped charging interest after you stopped making the payment. When you defaulted. It was my second degrees. So I took a private loan. I'm old enough not to have had to pay anything. It's that lack of investment in the future. It's that short-term mindset that we're not investing in kids' educations. We charge loads for university, straddling people with debt. It all seems backwards, doesn't it, the thinking? Well, I think the big, you know, one of the things, again, I say in the book is that the biggest thing that worries me about COVID is what's happened to kids' education.
34:31I mean, a lot of kids lost a lot of education. And we know that there's particularly poorer kids not going back to school full time in the way that they used to. So I think all of the rest of it will pass. I mean, the sort of the health issues and the economic issues and so on. But the effect on that generation of young people, and particularly those from particular backgrounds who aren't going back to school properly, and the government's invested very, very, very little in sort of dealing with that. That, I think, might be the biggest cost that we see in 10, 20 years' time. Yeah, so just the intelligence cost or the education cost.
35:09Loss of education. We know that having a good – the most important thing for any individual and for the country is that we have a good education system. People get the skills and the education, the literacy and the numeracy and all those things. And if you lose that, I mean, we know this just from research. You can actually see it in the data that if you don't get that education, and then you'll end up worse off and the country will end up worse off. We know that the three biggest taxes, income tax, VAT, we know that everyone's paying more at the minute. Can we just tackle the thing that I know everyone's screaming at home is, why don't we just tax the wealthy more?
35:43Yeah, so it's always great, isn't it? Don't tax me, don't tax you, don't tax me. Tax that man behind the tree. Someone else, always tax someone else. Tax tea, that's it. Yeah, tax tea.
36:03Well, we can do a bit more of that, but I think there's some things that's really worth keeping in mind. Because if you look at income tax, 1 % of people pay 30 % of income tax already. So we're getting a lot of tax from people on high incomes. That's partly because their incomes are pretty high, but we get a lot. And we get more actually than most European countries from the people at the top. Again, partly because people at the top are quite well off. 1%, we're talking about incomes over$160 ,000 or something before tax. That's the top 1%. The top 0.1%, they've got incomes over about$650 ,000.
36:38There's about 50 ,000 people in that group. They're paying, just 0.1 % are paying about 6 % or 7 % of all income tax. You mean taxable income, so like a wage, basically, or a salary? Or income from self-employment or whatever. Okay, yeah. So that's a huge number. I mean, not very many people earn that amount of money, but they pay an awful lot of tax. Although one of the things that is frustrating in a sense is that they're much more likely to get their money from sources which are less highly taxed. So they're more likely to be self-employed or they're more likely to be company owner managers or what have you.
37:13And they pay less tax than wage slaves like me who just pay income tax and national insurance. Second thing about that group is that about a third of them were born abroad. So I never used to think this was a real issue, but we now – so they could leave, and that would be expensive for us. So that's the first thing. We get a lot from people on high income. They could go. They could go. If we do, yeah. I mean, there's lots of things we could do to chase them away, like leaving the European Union or what have you. In terms of wealth, so that's income. So that's people on high incomes. We get a lot from them, but we probably get a bit more, but not enough to move the dial.
37:53In terms of wealth, I think that's where we could look. So wealth has become much more important relative to income over the last 20 or 30 years. House prices have gone up, asset values have gone up. An older generation is sitting on quite a lot of wealth, and wealth is much more unequally distributed than income. And we don't have a sort of specific wealth tax. But more importantly, we don't, the wealth taxes we do have work really badly. So inheritance tax, for example, doesn't raise very much money, partly because if you're really rich, it's really easy to avoid it. A trust. A trust or just buy shares in the AIM market, in the sort of small company market.
38:32Or farmland. Any of those things. And so I've got a little quote in there from this great tax lawyer called Dan Needle. He says, you go to your advisor, how do I reduce my inheritance tax? And you expect to kind of be a 30-page thing. and you just come back saying, sell the assets you've got, buy some shares on the AIM market, live two years, that's it. No inheritance tax. And so the result is that the average level of inheritance tax on a£2 million inheritance is double what it is on a£10 million inheritance. And if you've got billions, you pay almost none. So you can do a lot to fix that. Council tax, you highlighted as a wealth tax.
39:13And this was the first time I'd thought about it, but can you just explain that, please? So council tax is a tax based on the value of your property that you live in, but the value as it was in 1991, so more than 30 years ago. And the amount that you pay is a higher fraction of that value, the lower the value of your house. So if you've got a really cheap house, mostly in the north of England, you pay three times as much as a fraction of the value of your property as if you're in a quite expensive house in London, say. And because there's a cap on the amount you pay, if you're in a 10, 100 million pound mansion, you pay the same as someone who's in a sort of standard, well, in London, at least, standard million pound house.
39:59That didn't used to be the case. Under the old rate system, there was no cap on it. And you had sort of the amount directly related to the value of the property. So I think this is the only tax we've got, which I think is deliberately regressive in the sense that the wealthier you are, the less you pay as a fraction of your wealth. And it could be a genuine, easily enforceable wealth tax. Because one thing about wealth, like to argue the other side, someone like Elon Musk hasn't got billions in the bank. It's tied up in stock value. So if you're saying, oh, I want 10 % of your wealth, what does he do?
40:33Does he dump 10 % of Tesla stock on the open market? I mean, he lost more than 10 % buying Twitter, didn't he? Yeah, yeah, yeah. He does a good job of burning his own cash. I mean, I say that, the guy's worth a lot of money, so he does a good job of earning it. But with council tax, it's like, oh, you're living in a 15 million pound house, you've got to pay, you know, 100 ,000 pound a year to live in it. That seems quite fair. It's crazy that I pay more council tax than some people who live in Mayfair, you know, living up north in where I live. Yeah, it's completely crackers. And there are actually still places where the council tax in cash terms today is less than the rates were, which is what preceded council tax, 35 years ago.
41:16And so if you're in a really expensive place in central London, you're paying, I don't know, two or three thousand pounds a year. Actually, the US, which is hardly the hotbed of socialism, most areas in the US have property taxes, which are much, much bigger than that on really expensive properties. You use an example, is it Hartlepool, where the person pays like 1 % or 2 % of the value of their home every year? Yeah, and in Westminster, it's 0.1%. So it impacts 10 times heavier on Hartlepool than it does on Westminster. That's madness. That's wild. Are there any other taxes like that where you think this could be an easy fix?
41:51Well, capital gains tax. Again, it doesn't raise huge amounts, but it raises a significant amount. It's a tax as you'd want. So if you buy something and it becomes more valuable and then you sell it, then you pay some tax on that gain. Actually, historically, that was one of the reasons 20 years ago when Gordon Brown unaccountably really cut capital gains tax. People in private equity were able to pay 10 % tax, whereas other people were paying 40 % tax. And they were able to claim, I mean, this was in the press at the time, I pay a lower rate of tax than my cleaner. And this is kind of multimillionaires.
42:30that's not quite as bad as that anymore but there's only a 10 % capital gains tax on business disposal up to a million pounds that benefits a small number of very wealthy people and if you hold on to something until you die there's no capital gains tax at all and that does mean that a lot of people who would you know probably benefit from selling their second home or their shares or what have you just hold on to them to avoid the tax and then when it's passed on, there's no tax. That's both unfair and actually economically inefficient as well. You had a good analysis of corporation tax. You said companies like Amazon or Apple, they might have their R &D in America and then they build everything in China, but then they sell the iPhone in London.
43:17But because you can't really say it's a tax on the profit they make, right? So you can't really say where the profits actualize. But you said that instead of taxing, So a lot of companies will choose, oh, we'll pay the tax in Ireland or somewhere where it's cheaper. Do you think it would just make more sense if everyone just said, okay, if you sell in England, you have to pay tax in England. Would that work? Or do you think all the corporations would be like, no, we want to keep paying. Naturally, we want to keep paying our tax in Ireland or Singapore, wherever it's cheaper, where we make the product.
43:46I think in the long run, a move in that direction is probably the way to go. The problem is exactly as you describe it. Corporation tax is supposed to be a tax on profits. But when you're looking at Apple or Amazon, where is the profit made? And the corporation tax system is an international system, and it was sort of still based on rules made in the 1920s, so 100 years ago, when that wasn't so hard. I mean, you didn't have internet companies and these incredibly complex supply chains. So it's exactly right. And that's why lawyers and accountants and international sort of bodies, there are tens of hundreds of thousands of people making a lot of money out of determining where profits are made.
44:27And there's no correct answer to where the profit is made. As you say, is it just because of the R &D? Is it where it's sold? Is it where it's made? so you could sweep all of that away and say look actually we're just going to tax you according to where the sales are because we can see where the sales are of course that needs some international agreement and of course some companies countries would win and some countries would lose and that's why that's quite hard to achieve it hasn't been reformed since 1920 hasn't been updated it's been up i mean there's been lots of effort into sort of fixing holes and updating it and making it more and more and more complex.
45:04But the basis of it is still the same. Yeah, because America's incentivized to keep the system as it is because they benefit, these massive corporations, a lot of them are American, aren't they? And they're selling themselves. The biggest ones are. And so there are some reforms going ahead. And the Americans essentially are saying, if we can, if everyone in the world will at least ensure there's a 15 % minimum corporation tax rate, then we will allow you to tax a little bit more of some of these American companies' profits in your own country. So that's the sort of quid pro quo. They want to make sure, you know, that they get rid of the sort of more egregious sort of tax havens.
45:44And if you do that, then some countries can charge a little bit more tax. But this is, you know, they've been negotiating this for 10 years and it's still not in place. So this leads me on to another question I'd like to ask you, you're talking about, you know, agreements internationally, which kind of makes me think about policing of the tax system as well. In the sense of, another YouTuber friend of mine has just had the tax man all over him and there was a month long discussion about a coffee maker. But then the government have recently said about furlough and all the fraud that exists around there.
46:18We're just going to wipe that. How do you view the policing of the tax system? And So, that's a really complicated area. I mean, it's extraordinary, isn't it, that thing about the furlough. So, through COVID, the government spent vast amounts of money, I mean, hundreds of billions of pounds, I mean, in a way that's never happened before. And actually, the British government spent more than most other governments. And Rishi Sunak, when he was Chancellor, seemed to be very proud of that. Obviously, we needed to spend a lot, but it's pretty clear in some ways we spent too much. So, Furley went on for longer than it should have done.
46:55For example, we wasted a lot of money on PPE, personal protective equipment, for example. But the fraud mostly appears to occur where loans were made to businesses, things called bounce-back loans. They're made through the banks. But the government told the banks, look, essentially, lend to whoever you want and we'll pay you back. And quite a lot of people got rich off the back of that. Quite a lot of that. Billions and billions. is, you know, government admits was fraud and appears to have effectively given up on trying to get it back. And actually, they were warned at the time about some of these loans that they were giving, but that's by the by.
47:35I mean, if you've got a tax system, you need to police it. And again, one of the things I quote in there was one, I think one of the, you know, one of the many mad things that Kwasi Kwarting did when he was chancellor was to essentially say, we're going to stop policing whether it's self-employment income or whether it's earned income. That's the IR35. IR35, exactly. And the Treasury said, well, that'll cost you$2 billion a year. That was the Treasury's estimate. But if you've got a tax, I mean, the answer really is to tax everyone the same and you wouldn't need all these rules. But if you've got these rules, then you need to police it.
48:13Yeah. So we were speaking off camera before and I told you that I worked in accountancy and I actually worked for contractor-based accountancy. So I oversaw the transition of IR35. I saw it get undone. I saw it transition again, and then I seen them threaten to undo it. And just to give people context on what that was, it's a perfect example as well of you saying before that people get hurt and they don't like it. But people, we would have cleaners who are contractors or doctors working in the NHS, working through a limited company and not paying high levels of tax, maybe 10%. But then a full-time member of staff next to them doing the exact same job was paying 30%, 40%, whatever.
48:52So the IR35 rules tried to close that loophole where people who were just employees were contractors working through limited companies. It was really unfair because what was the incentive to be full-time employed when you could just - Yeah, yeah. And this is why people like Gary Lineker have spent years in the courts fighting with HMRC about whether they were an employee of the BBC or whether they were doing it through their own company. And I think he's recently won that case. But I mean, for people like that, there's lots of money at stake. And it's just a kind of small legal technicality. Depends on that, whether you're paying millions more tax or not.
49:29You can see immediately that that's a crackers tax system. Yeah. So I still think it's a hard message to swallow in terms of we're all going to pay more tax or we all need to pay more tax. Do you have a positive way of reassuring people that that's a good thing or that it's going to be okay? Well, look, we all want to pay less tax, don't we? I mean, I'd much rather pay less tax than more tax. I mean, I suppose one answer is you go to places like Denmark where they've got much higher taxes than us, and on average they're pretty happy about that because that does seem to pay for sort of social equity and good public services and so on.
50:10I think the problem here is exactly as you were saying earlier on is that these high tax levels seem to pay for pretty rubbish public services at the moment. And whilst that continues, then I think people are going to continue to be a bit unhappy. Also, when it just looks unfair. I mean, we've talked about how super rich people tend to avoid inheritance tax. You can use capital gains tax to avoid income tax. You can, you know, partners in law firms pay less tax than employees. So part of the answer is if you're going to have more tax, it's even more important to sort of tidy up the tax system so that it's fair and it works efficiently and it's not too complex and all of those sorts of things.
50:52I mean, all those things matter anyway, but the more that you rely on tax, the more that it's going to matter for economic growth as well as people feeling that it's fair. Speaking of growth, how does growth in the UK impact this taxation point? And is growth an answer? Well, we certainly need growth. So one of the reasons that we're in the position we are at the moment is that incomes and growth have been so poor over the last 15 years. I mean, one of the extraordinary things, if you look at earnings growth, the last 15 years have probably been the worst 15 years since Napoleon. I mean, going back to when we, you know, income taxes first.
51:31So literally the worst 15 years for 200 years in terms of earnings and income growth, which is just extraordinary. And of course, if they're not growing, then tax revenues aren't coming in. And the less money we have as a country, the less money we've got to spend on health and education and so on and so on. So more growth matters in all sorts of ways. It's also one of the reasons why we've got this sort of intergenerational inequity that sort of older people who owned their houses 15 years ago have done so much better than younger people because very low interest rates, which reflects the very poor growth, and earnings haven't gone up.
52:08So all of those things matter. So going forward, economic growth is important for us feeling better about the world, but also in order to be able to pay more tax for the better public services. And actually, if you've got the same tax as a fraction of national income buys you more if there's more national income. Yeah. Yeah. So like you point to Scandinavian countries and they earn a lot more per capita or by on average than say we do, don't they as well? Yeah. So they've got lots more to spend on their public services. I mean, obviously, if you've got more income as a country, you have to pay your doctors and nurses and teachers and policemen and so on more because you can't have them falling further and further behind.
52:51So it's not all a win in terms of things just get easier, but it obviously helps. So how do we grow? A phrase I use in there is there's a dirty little secret in Whitehall, which is that they know how to do it and don't do it. So we know how to get growth in the long run. And that's a political problem because you can't do stuff today, which will make a difference in a year's time to growth in a way that's sustainable. But you can do stuff over the next three years, which will make a big difference in 10 years. So that's the political problem because politicians don't tend to have that sort of time span.
53:29But what are the things we could do that we know would be good for growth? well one is reform the planning system so we can actually build houses where they're needed and build roads where they're needed and so on and governments have continually bottled out of that the last time infrastructure investment so HS2 infrastructure investment as well I'm not so sure about HS2 but we can come back to that southerners southerners you get on that train that Avani West Coast train you sat next to the toilet and tell me we don't need more capacity on that line more capacity perhaps or whether HS2 is the best way of doing it Yeah, my kids are at University of Manchester, so I'm on that train quite a long way.
54:05I went there. So you end up standing on a Sunday, you stand there with like no seats. Well, that's the best bit of the train. And then go, you know, regional in, you know, go to like, you know, barrowing finesse. But that's why, anyway, that's why you need to, you definitely need infrastructure across the north and across the Midlands. So one of the things outside of London, our cities are much worse served by transport than in Europe. So European cities have much better public transport and American cities have much better roads and we're stuck. So that means that Birmingham, Manchester and so on effectively, they're serving a much smaller labour market than they could because people can't get in to work.
54:44So that's one thing that really matters. Planning, infrastructure investment, and we cut spending on investment dramatically in the early 2010s and we're paying the costs of that. Education, we know really matters for growth, particularly, and this is a real sort of bugbear of mine. people between 16 and 21 who aren't doing A-levels and going to university, which is about half, we really cut spending on that. Policy has been totally changing all of the time. And our 15-year-olds actually compare quite well internationally. Our 21-year-olds are disastrous internationally. And that's telling you something really serious about what's going wrong between 16 and 21, particularly for people doing vocational.
55:25So higher education and apprenticeships, is that what you mean? Further education and apprenticeships, yeah. We have very few people doing higher level apprenticeships. So lots of people do degrees and lots of people sort of stop at sort of GCSE or A level. Almost nobody does stuff in between. Actually, one of my sons did a sort of higher level apprenticeship doing really well. And we know that there are big gaps in skills at exactly those levels. So that will be good for growth. We know that. We've talked about reforming the tax system in ways that would be good for growth. We know that's important.
56:00And there's all sorts of things we need to do with trade with Europe. I mean, we know that making trade more expensive with our biggest, nearest and richest trading partner is bad for growth. So, the closer we can get to the single market, the customs union, the better. And then there's lots of issues around competition law and regulation and getting all of those right. So, we kind of know the broad outline of things that we need to do to get growth going. But each one of those things is either expensive or it's bad for people who've already got houses somewhere, or it's a bit difficult when it comes to education, or it makes some people worse off when it comes to tax.
56:36And so there are always trade-offs. And if there's one theme of my book, it's there are always trade-offs. There are not very many things you can do, which makes everyone better off. But my view is that we've made the wrong trade-offs for a long period of time, which is partly why we're in the position we're in. Do you think Brexit made this a lot worse? Or not in the grand scheme of things? It certainly had an effect. So we're probably 3 % or 4 % worse off than if we hadn't, or will be, than if we hadn't gone through Brexit. Now, that is a decision you can make. I mean, we're a rich country, despite everything we've just been saying.
57:12And if you, you know, and then there are, you know, it genuinely means we can control our immigration, for example, in a way that we couldn't within the European Union. So again, there are trade-offs. There are arguably benefits, but there are costs, and the costs are economic ones, because we can see that our trade intensity has fallen a lot, and we could see immediately after the referendum that investment fell off. So we know that there are economic costs, and you have to weigh those against any political benefits that you might see from it. And one of the huge frustrations of referendums, both that one and the Scottish one, actually, is that both Both sides made out that everything will be best on one, but there are just all – sorry, just to go on about it – there are always trade-offs.
57:54No nuance to the debate. It's like, it's all good over here or it's all good over there. Do you have much confidence that the political system will, you know, make the changes that we need for growth? Or can they? Because people are not brave, like you said. Well, I think it is possible. We have seen over history changes that have been made. I mean, there have been good changes to the tax system over time. We have had reforms to taxation of mortgages, to capital gains and so on over time. We have had some efforts to change planning. We have had periods. Actually, now is a period when investment spending is quite high.
58:27So there are things that people have done. I think what you need and one of the problems is we're doing this in 2023. And certainly between 2016 and 2022, there was just no space. I mean, you talked to cabinet ministers at the time for four years after the 2016 Brexit vote, no one thought about anything on the Brexit in government. You couldn't do anything. And then we had the chaos of COVID and we've had sort of, you know, Johnson and Corbett and all this kind of stuff. It does feel to me like we're getting, despite all of the, we're speaking on the day that, you know, we're having a reshuffle and Suella Braverman has just been sacked and so on.
59:04So you get all, there's lots of excitement in politics. But despite all of that, it does feel to me like we're returning to a sort of more stable world. It only took five, six years, or however long it's been. And actually, one of the things that is absolutely necessary for economic success and growth is to have stable politics. So when you've got, you know, whatever we had, four chancellors in a few months and three prime ministers, and actually also when you've got prime ministers saying, you know, fuck business and trying to undermine the Bank of England and all of those kinds of things. That might feel it's fun from a political point of view.
59:46That is economically damaging. So actually having stable politics is not enough, but it's absolutely necessary for having economic growth. And hopefully we'll return to a period of more stable politics. So just to summarize everything you've said there, there are big challenges that the country face. And I think there are important challenges that everyone acknowledges we need to address, age and population and climate change. In order to do that, it's going to cost money and we will need to pay more taxes. The main levers for tax are really the three big ones and everything else like inheritance tax and that.
1:00:20We can tweak it and move it to make the system fairer, but they're not going to pull the levers like we need the big three. and really your book says that if we're going to fix these issues long term that we probably will all pay more tax over the next 10 years do you think that's fair yeah and and we can do better with all the spending that we're doing we do better with the education spending especially but also we need to get the economy growing and there are things that we can do to do that but actually that's going to take not just politicians to be brave that's also going to to say us to be brave and actually accept that if you're going to make big choices, we made them make in the long run.
1:00:58Let me say it again, there are trade-offs and none of this is straightforward. I don't want to speak on behalf of the nation, but I think people could probably get behind the idea of paying a bit more tax as long as the system is fairer and we close off the silly loopholes which penalize people for having more kids and stuff. and we aggressively go after fraud and we tax businesses more and we make sure that the wealthy, the 0.1 % pay their share, then maybe we could all pitch in and get tea on that as well. Chance of the extract of tea. Your book is fantastic. You're even better in person. Honestly, I've loved this chat.
1:01:36I'd encourage everyone to get a copy of the book or the audio book. And if there's one key takeaway from it as well is if you're going to get a pet, get a rabbit because you can eat it. so there's no VAT on it. Absolutely. When he's on a bagel, mate, when's Floppy pops his clothes you just spread him on a bagel. Please remember, this is not financial advice. Like we say a lot on the podcast, investments can fall and rise. In fact, it's pretty much a guarantee. Past performance is no guarantee of future results. So your money is at risk with investing and other fees may apply. As with everything financial, please do your own research.
1:02:11We really encourage that because no one cares more about your money than you. I'm Damo I'm T This was an episode of Making Money from Our Company Most It was filmed and edited by the team at Flow Spire Jack and Ben It was produced by Ruth Edwards And brought together by Will Stollerman What about Ruth and Tiffa's a dog? Yeah, shout out them too
From the publisher
*This episode was published in December 2023*
It feels like we pay a lot of tax in the UK but is that really true? Where do our taxes actually go? Are they wasted? And are we going to have to pay more in the future? Paul Johnson is the Director of the insanely well respected Institute for Fiscal Studies and in this episode he explains how we’ve got into this pickle, how we can get out of it - and why our feelings about paying too much tax might not be rooted in reality.
Paul’s book Follow The Money: https://amzn.to/41aOqXa
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This is not financial advice. The reason it’s not financial advice is because it’s not tailored to you. We explain the principles of building wealth but if you want personalised advice, it’s worth speaking to a financial advisor. As with everything financial, please do your own research. We really encourage that because no one cares more about your money than you and if you learn the basics then it will change your life.