Trump's tariff wars...long post.

[edstraker123]

Brian Eno tells it like it is :

 

[TimR]

59 minutes ago, tegs07 said:

In middle age people tend to look for ways of paying for their retirement. This can be via investment in assets such as property or stocks and shares ISAs, SIPs etc. As the discussion so far has illustrated there are plentiful opportunities to take money out of the hands of the taxman and into these investments.

 

...

 

Simultaneously the baby boomers are retiring, getting sick and generally drawing down on their investments.

 

And these are things "we" traditionally want people to do in the UK as it means they're less dependent on government support.

 

Not sure how that fits with the way Trump wants to run the US taxation system as he seems hell bent on not having any taxes. I don't see the general US population putting all those tax savings into investments. 

 

 

[tegs07]

Personally I think it’s got to the point that billionaires would rather side with despots and war criminals than pay taxes. And the electorate are happy to give up personal freedoms and constitutional protections to help them do this. 

[tegs07]

Just now, TimR said:

 

And these are things "we" traditionally want people to do in the UK as it means they're less dependent on government support.

 

Not sure how that fits with the way Trump wants to run the US taxation system as he seems hell bent on not having any taxes. I don't see the general US population putting all those tax savings into investments. 

 

 

Not sure that you have understood what I am trying to say Tim. The jist of the issue is that demographic change is driving poverty amongst the younger population who are reacting by voting in right wing radicals.

[Steve Browning]

15 minutes ago, tegs07 said:

Personally I think it’s got to the point that billionaires would rather side with despots and war criminals than pay taxes. And the electorate are happy to give up personal freedoms and constitutional protections to help them do this. 

Unhappily there is no other logical conclusion that I can think of. Mind you, maybe it's just jealousy! 

[TimR]

12 minutes ago, tegs07 said:

Not sure that you have understood what I am trying to say Tim. The jist of the issue is that demographic change is driving poverty amongst the younger population who are reacting by voting in right wing radicals.

 

It might be survivorship bias, but a lot of Boomers seem to be in a lot better health than their early GenXer children. 

 

I think their could be a lot of equity released in the next 10 years. In particular with climate change and new disease emergence claiming the older weaker people. 

[tegs07]

8 minutes ago, TimR said:

 

It might be survivorship bias, but a lot of Boomers seem to be in a lot better health than their early GenXer children. 

 

I think their could be a lot of equity released in the next 10 years. In particular with climate change and new disease emergence claiming the older weaker people. 

Equity will be released to fund retirement and health provision sure but the point is this doesn’t lead to economic growth. Retirees are not investing in the economy or paying large amounts of tax in the same way as people who are in the early stages of their careers. They are not the demographic that drives the economy forward. 

Edited Monday at 09:36 by tegs07

[TimR]

3 minutes ago, tegs07 said:

Equity will be released to fund retirement and health provision sure but the point is this doesn’t lead to economic growth. Retirees are not investing in the economy or paying large amounts of tax. They are not the demographic that drives the economy forward. 

 

Not if they're dead.

[tegs07]

Just now, TimR said:

 

Not if they're dead.

Again how does this drive growth? Sure if they die with massive amounts of money (which due to longevity is becoming less and less common) relatives and the state get some cash but it’s hardly the basis for a booming economy.

[TimR]

1 hour ago, tegs07 said:

Again how does this drive growth? Sure if they die with massive amounts of money (which due to longevity is becoming less and less common) relatives and the state get some cash but it’s hardly the basis for a booming economy.

 

I thought you were concerned with the demographic change creating inequality and disenfranchisment. The money won't all go to the government. Most of it will go to the young. 

 

The US is unlikely to grow, the rest of the world have a massive advantage with global trade and a global market of 7bn potential customers. The US have 330m customers and that's it. 

[Obrienp]

1 hour ago, tegs07 said:

Equity will be released to fund retirement and health provision sure but the point is this doesn’t lead to economic growth. Retirees are not investing in the economy or paying large amounts of tax in the same way as people who are in the early stages of their careers. They are not the demographic that drives the economy forward. 

Do you not count pension funds invested in the markets as contributing to the economy? Some of us with SIPPs are investing directly. It is only the State and some public sector pensions that are funded by a giant pyramid scheme falling to the tax payer. Pension income isn’t exempt from tax: even the state pension now attracts some tax due to the freezing of personal allowances. Anything I draw down from my pension fund (after taking the lump sum) is liable to income tax at the same rate as everyone else. Personal pension funds are now liable for Inheritance Tax @40%, even if the tax relief received on the pension contributions to the fund was only 20%. 

[prowla]

https://www.bbc.co.uk/news/live/cq6y3my01ndt

So, it looks like Russia may be interested in a partial ceasefire limited to the areas which suit them.

[tegs07]

28 minutes ago, Obrienp said:

Do you not count pension funds invested in the markets as contributing to the economy? Some of us with SIPPs are investing directly. It is only the State and some public sector pensions that are funded by a giant pyramid scheme falling to the tax payer. Pension income isn’t exempt from tax: even the state pension now attracts some tax due to the freezing of personal allowances. Anything I draw down from my pension fund (after taking the lump sum) is liable to income tax at the same rate as everyone else. Personal pension funds are now liable for Inheritance Tax @40%, even if the tax relief received on the pension contributions to the fund was only 20%. 

Yes they contribute to the economy. Pensioners booking cruises contribute to the economy. They don’t DRIVE economic growth in the same way as the younger demographic though. This is why demographics are vital for growth. Too many people in the 50 to 80 demographic and too few in the 20 to 50 demographic is not great for growth. For example China in the last 3 decades and what is likely to happen to China in the next 2 decades.

Edited Monday at 11:41 by tegs07

[Agent 00Soul]

re: the brain drain.  There is an article about that today and the ideology that is leading people to leave is more insidious than I thought. It’s very Orban or Putin-esque 

 

https://www.theguardian.com/commentisfree/2025/mar/24/french-university-scientific-asylum-american-talent-brain-drain

[TimR]

Tate Brotehrs are back in Romania and have reported in to the police as required.

 

That's an odd one.

[Agent 00Soul]

48 minutes ago, TimR said:

Tate Brotehrs are back in Romania and have reported in to the police as required.

 

That's an odd one.

Andrew posted that they are going back to officially clear their name. He seemed to imply that it was a done deal and that they just had some formalities. Not sure how he knows this. 

[Obrienp]

2 minutes ago, Agent 00Soul said:

Andrew posted that they are going back to officially clear their name. He seemed to imply that it was a done deal and that they just had some formalities. Not sure how he knows this. 

Friends in high places made a deal for them?

[tauzero]

11 minutes ago, Agent 00Soul said:

Andrew posted that they are going back to officially clear their name. He seemed to imply that it was a done deal and that they just had some formalities. Not sure how he knows this. 

 

Trump's bought a few Romanian judges?

[TimR]

Maybe.

 

https://www.theguardian.com/world/2025/mar/10/romania-pro-russia-presidential-candidate-calin-georgescu-to-fight-election-ban

 

[Pseudonym]

5 hours ago, tegs07 said:

Yes they contribute to the economy. Pensioners booking cruises contribute to the economy. They don’t DRIVE economic growth in the same way as the younger demographic though. This is why demographics are vital for growth. Too many people in the 50 to 80 demographic and too few in the 20 to 50 demographic is not great for growth. For example China in the last 3 decades and what is likely to happen to China in the next 2 decades.

 

I would say that the primary issue in the situation you describe is what kind of investment is bolstered by incentives, and what kind is being hampered by disincentives. Investment can certainly drive economic growth if, for example, it accelerates research and development in industries that have direct employment benefits domestically. Insofar as there are arguments in favour of any tariff policies -- and there are a few, with the caveat that they need to be carefully targeted and executed -- several of the best arguments recognise that the US has (a) a potential glut of investment capital, but (b) a long-stagnant manufacturing sector, the decline of which exacerbated chronic social ills.

 

It is not intrinsically stupid, for example, to reduce long-term capital gains taxes (or, perhaps better, raise thresholds) on smaller retail investors so that the risk-reward calculation for investment in growth companies (such as major tech companies) encourages people to buy, say, 1000 shares of WidgetTech rather than an additional 1000 square feet of residential space that they don't really need, but property values blah blah blah. If WidgetTech then finds it wise to build a manufacturing plant in western Pennsylvania rather than overseas, because even with higher US wage costs the unit cost of a widget will be comparable, then there are political, social, economic and security advantages to the US. There is nothing to stop WidgetTech also operating overseas, but an incentive to have significant manufacturing activity -- rather than just management and intellectual-property development -- within the US is perfectly sensible.

 

If this kind of thing is adequately thought through, the adjustment of long-term capital gains tax rates might be revenue neutral (if, for example, more retail investors decide to realise their gains and thus pay tax they would otherwise defer indefinitely, and that compensates for the decrease in the number of taxpayers in the higher band). If the net result is a stable level of tax revenue, but a greater incentive for more individuals to invest their savings in the stock of companies that can build new manufacturing facilities in the US, there is a pretty direct relationship between older people with some disposable income and savings, and the opportunities available to the younger demographic that you mention.

 

Conversely, if too much money is stuck in property investments and comparable asset classes, there are ways to make such investments less appealing to buy, or to hold, or to sit unused, or whatever. They do not need to be punitive measures to be effective, merely thought about in different terms (such as expanding tax breaks on sales of houses when there is a shortage of housing.) If there is a problem with people hogging unproductive assets, make it more appealing to liquidate those assets and put the money somewhere more productive.

 

Of course, these things are wildly complex scenarios that require deliberation, cogent analysis, and disinterested assessment of risks. Oh, well.

Edited Monday at 17:06 by Pseudonym

[Steve Browning]

I don't know figures, but suggest that the bulk of share dealings are in 'second hand' shares and so no income goes to the issuing company. I would be inclined to tax share dividends at a lower rate in the hands of the original purchaser but they follow normal rules for subsequent 'investors'.

[SteveXFR]

It always seems that when the economy improves, it makes no difference to workers, wages still don't rise. 

A strong economy only ever benefits those at the top while the rest of us continue to get worse off but we still get told we have to be nice to the rich people who screw us with below inflation wage growth, worsening contracts, increased workload & responsibility and the expectation of unpaid overtime.

 

[tegs07]

20 minutes ago, Pseudonym said:

 

I would say that the primary issue in the situation you describe is what kind of investment is bolstered by incentives, and what kind is being hampered by disincentives. Investment can certainly drive economic growth if, for example, it accelerates research and development in industries that have direct employment benefits domestically. Insofar as there are arguments in favour of any tariff policies -- and there are a few, with the caveat that they need to be carefully targeted and executed -- several of the best arguments recognise that the US has (a) a potential glut of investment capital, but (b) a long-stagnant manufacturing sector, the decline of which exacerbated chronic social ills.

 

It is not intrinsically stupid, for example, to reduce long-term capital gains taxes (or, perhaps better, raise thresholds) on smaller retail investors so that the risk-reward calculation for investment in growth companies (such as major tech companies) encourages people to buy, say, 1000 shares of WidgetTech rather than an additional 1000 square feet of residential space that they don't really need, but property values blah blah blah. If WidgetTech then finds it wise to build a manufacturing plant in western Pennsylvania rather than overseas, because even with higher US wage costs the unit cost of a widget will be comparable, then there are political, social, economic and security advantages to the US. There is nothing to stop WidgetTech also operating overseas, but an incentive to have significant manufacturing activity -- rather than just management and intellectual-property development -- within the US is perfectly sensible.

 

If this kind of thing is adequately thought through, the adjustment of long-term capital gains tax rates might be revenue neutral (if, for example, more retail investors decide to realise their gains and thus pay tax they would otherwise defer indefinitely, and that compensates for the decrease in the number of taxpayers in the higher band). If the net result is a stable level of tax revenue, but a greater incentive for more individuals to invest their savings in the stock of companies that can build new manufacturing facilities in the US, there is a pretty direct relationship between older people with some disposable income and savings, and the opportunities available to the younger demographic that you mention.

 

Conversely, if too much money is stuck in property investments and comparable asset classes, there are ways to make such investments less appealing to buy, or to hold, or to sit unused, or whatever. They do not need to be punitive measures to be effective, merely thought about in different terms (such as expanding tax breaks on sales of houses when there is a shortage of housing.) If there is a problem with people hogging unproductive assets, make it more appealing to liquidate those assets and put the money somewhere more productive.

 

Of course, these things are wildly complex scenarios that require deliberation, cogent analysis, and disinterested assessment of risks. Oh, well.

All true. My main point though was as we get closer to retirement we become more risk averse (as a generalisation - as we get less time to make up for risky investments and decisions).

 

So the under 50s are more likely to invest in the next potential WigetTech. They are more likely to form the next WigetTech and work for WigetTech,  where as us older guys might be more likely to stick with investing in and working for Apple and buying a property in the best area we can afford. 

Edited Monday at 17:25 by tegs07

[Pseudonym]

5 hours ago, Steve Browning said:

I don't know figures, but suggest that the bulk of share dealings are in 'second hand' shares and so no income goes to the issuing company. I would be inclined to tax share dividends at a lower rate in the hands of the original purchaser but they follow normal rules for subsequent 'investors'.

 

Broadly speaking, I would agree, although there are all kinds of complexities involving the relationships between stock price, buybacks, dividend rates, ability to raise capital and the terms involved, etc etc ad nauseam. The scenario I describe in my post is very broad, but it illustrates the kind of policy attitudes that can be adopted. Taking your excellent point, a tax incentive to realise long-term gains and put the proceeds into IPOs could work if it were not too onerous to administer.

Edited Monday at 22:40 by Pseudonym

[Pseudonym]

7 minutes ago, tegs07 said:

All true. My main point though was as we get closer to retirement we become more risk averse (as a generalisation - as we get less time to make up for risky investments and decisions).

 

So the under 50s are more likely to invest in the next potential WigetTech. They are more likely to form the next WigetTech and work for WigetTech,  where as us older guys might be more likely to stick with investing in and working for Apple and buying a property in the best area we can afford. 

 

Breadhead.