During the most recent Budget, the Chancellor of the Exchequer scrapped the 50% tax rate. Analysis carried out by HMRC indicates that, as theorised previously, the income from this tax rate is below that expected by the government. Continue reading “Reducing the disincentive”
Disincentivising high incomes
A 50% tax rate was introduced to the UK in April 2010, to apply to all earnings over £150,000. This high tax rate was devised to raise additional income for the treasury by increasing the payments made by the highest earners, therefore increasing the Robin Hood effect of income tax.
However, it is likely that this higher tax rate is unlikely to increase tax receipts to the degree that the government would like. Continue reading “Disincentivising high incomes”
Is free too cheap?
At the beginning of February, Google lost a court case in France where a competitor – Bottin Cartographies – has accused them of anti-competitive pricing. The story has been reported by Forbes and CNET with some confusion over what exactly has been discussed.
The basis of the case appears to be that Bottin Cartographies has alleged that Google is giving away its maps service for free, which is a move designed to ensure that nobody else can compete and are driven out of the market. Once Google has no competition, it will be able to raise its price and abuse its market power. Continue reading “Is free too cheap?”
The continuing relevance of the Phillips curve
The Phillips curve is an indication of the relationship between unemployment and inflation. The curve is named after AWH Phillips, who discovered the existence of this relationship when looking at UK data between the years 1861 and 1957. The curve shows that as unemployment rises, the rate of inflation can be observed to be lower, and vice versa. The relationship was similar for other developed countries. Continue reading “The continuing relevance of the Phillips curve”
The importance of confidence
A simplistic business model sees goods or services running one way through a vertical chain, and cash running the other. For example, a baker makes a loaf, passes it on to a retailer, who passes it on to the customer. The customer pays the retailer, who pays the baker. Continue reading “The importance of confidence”
Prices of electronic books
A quick browse of Amazon shows that many books available through the Kindle are priced around the same level as the physical product. The cost of provision of these electronic books is much lower, however: printing costs, distribution costs, and even the margins to retails are either non-existent or significantly reduced. Why, then, is there this equivalence in pricing? Continue reading “Prices of electronic books”
Piracy and the lack of a stick
The issue of piracy on the Internet has particularly high visibility, with Wikipedia, Reddit and WordPress blacking out their sites in response to the US government’s plans for legislation to ban links to pirated material. The key issue is that the government’s plans aren’t attacking the pirates directly, but are instead attacking anyone who runs a site which may carry or link to copyright material. A similar issue exists in the UK, with the last government’s pressing through of the Digital Economy Act 2010; under a strict interpretation of the act, ISPs could be forced to block access to Google if it were shown to link to pirated material. Continue reading “Piracy and the lack of a stick”
Are we paying for their pensions?
The media like to state that the private sector are the ones who pay for the public sector’s pensions. This isn’t entirely true.
The issue is that, unlike the private sector, public sector pensions are funded from general taxation. The public sector pension pot doesn’t really exist – it just all goes into and comes out of the overall budget. Continue reading “Are we paying for their pensions?”