Taxation vs Subsidy

[Bletchleyite]

Moderator note: split from this thread

https://www.railforums.co.uk/threads/should-tfw-ditch-the-230s-and-buy-more-197s.222777/

Well it should be - otherwise there isn't a viable business case.

No, it absolutely shouldn't. A cost-benefit analysis should certainly be completed, but it is not a case of simple remunerability. Again, but for a different reason, if it was then Merseyrail should be closed in its entirety, having as it does the highest per passenger mile subsidy in the country.

 

[A0]

No, it absolutely shouldn't. A cost-benefit analysis should certainly be completed, but it is not a case of simple remunerability. Again, but for a different reason, if it was then Merseyrail should be closed in its entirety, having as it does the highest per passenger mile subsidy in the country.

I disagree - and adding more and more routes which just hoover up even more subsidy merely exacerbates matters. Each new line or service should stand on its own two feet - if it doesn't then it shouldn't be progressing, otherwise all you're doing is committing the taxpayer to ever more subsidies with no reasonable chance of ever seeing a sensible return.

 

[Bletchleyite]

I disagree - and adding more and more routes which just hoover up even more subsidy merely exacerbates matters. Each new line or service should stand on its own two feet

Absolutely not. I cannot possibly disagree more with that statement.

- if it doesn't then it shouldn't be progressing, otherwise all you're doing is committing the taxpayer to ever more subsidies with no reasonable chance of ever seeing a sensible return.

The purpose of public transport is most explicitly not "to see a return". The only mode that will ever achieve that consistently is the bus, and only then because it doesn't pay its full share of infrastructure costs nor full fuel duty.

But if that's your view, why apply it only to new routes? Why not close existing unremunerative ones? Such as the entire Welsh network other than maybe GWR to Cardiff?

 

[A0]

Absolutely not. I cannot possibly disagree more with that statement.



The purpose of public transport is most explicitly not "to see a return". The only mode that will ever achieve that consistently is the bus, and only then because it doesn't pay its full share of infrastructure costs nor full fuel duty.

But if that's your view, why apply it only to new routes? Why not close existing unremunerative ones? Such as the entire Welsh network other than maybe GWR to Cardiff?

Fine - disagree. But when the subsidies just keep growing they become an economic drain until such time as it becomes unsustainable - which is exactly where we arrived in the 1960s. So adding routes which will never even come close to washing their face - as I suspect this one won't - just makes matters worse. Somebody, somewhere has to pay for this somehow - are you up for a tax increase to give somebody from Shotton, Heswall or Neston a direct train service to Liverpool just because they don't like changing ? I'm not. As I pointed out both Heswall and Neston have close access to the Chester line which has frequent services - and they are closer to those stations than I am to either of my local stations - and their fares are subsidised to a much higher level already.

 

[Bletchleyite]

Fine - disagree. But when the subsidies just keep growing they become an economic drain until such time as it becomes unsustainable - which is exactly where we arrived in the 1960s. So adding routes which will never even come close to washing their face - as I suspect this one won't - just makes matters worse. Somebody, somewhere has to pay for this somehow - are you up for a tax increase to give somebody from Shotton, Heswall or Neston a direct train service to Liverpool just because they don't like changing ?

Yes, I am happy for tax increases for the provision of high quality and high coverage of public transport as one might find, for example, in Germany.

 

[A0]

Yes, I am happy for tax increases for the provision of high quality and high coverage of public transport as one might find, for example, in Germany.

Fine - you can tell somebody on an average salary of ~£ 30k that they are going to be paying £ 200 / month more in tax just to fund your whims. Good luck.

 

[Bletchleyite]

Fine - you can tell somebody on an average salary of ~£ 30k that they are going to be paying £ 200 / month more in tax just to fund your whims. Good luck.

You have, presumably, costed the proposal, and already determined that that is the necessary sum for this specific service and it was going on the basic rate of income tax rather than the many other options such as higher rate, property taxes, Council tax etc.

 

[A0]

You have, presumably, costed the proposal, and already determined that that is the necessary sum for this specific service and it was going on the basic rate of income tax rather than the many other options such as higher rate, property taxes, Council tax etc.

As ever the weaseling starts when somebody points out the reality of increasing taxes to meet German or Swedish levels of public spending.

The average German worker on a salary of ~ £30k is paying about 28% of their income in tax, the same worker in the UK is only paying 20%. https://www.uktaxcalculators.co.uk/world/tax/compare/united-kingdom/against/germany/

So IF you want Swedish or German levels of tax revenue, you have to follow their models of taxation - Sweden's is even higher, with much lower personal allowances as well. Oddly enough, the advocates of increasing taxes tend to gloss over this and instead pretend either there's a magic money tree, or a pool of "rich" (i.e. anyone with more than them) who is just sitting waiting to be milked by HM Treasury and all will be well. So let's cut the crap and start being honest - if you want German levels of public spending, fine, but you go out and be honest with those on average salaries what that means - don't pretend it can all fall on somebody else and they just get the benefits when that's a blatant lie.

 

[Bletchleyite]

The average German worker on a salary of ~ £30k is paying about 28% of their income in tax, the same worker in the UK is only paying 20%. https://www.uktaxcalculators.co.uk/world/tax/compare/united-kingdom/against/germany/

So IF you want Swedish or German levels of tax revenue, you have to follow their models of taxation - Sweden's is even higher, with much lower personal allowances as well. Oddly enough, the advocates of increasing taxes tend to gloss over this and instead pretend either there's a magic money tree, or a pool of "rich" (i.e. anyone with more than them) who is just sitting waiting to be milked by HM Treasury and all will be well. So let's cut the crap and start being honest - if you want German levels of public spending, fine, but you go out and be honest with those on average salaries what that means - don't pretend it can all fall on somebody else and they just get the benefits when that's a blatant lie.

I don't know about Germany, but a while ago there was the possibility of me relocating to Switzerland (another country with excellent public services) and so I worked out what the costs of taxation would be. When you added on the compulsory but separate medical insurance, it worked out about the same as the UK for me.

But yes, as I said I do support higher taxation for the provision of quality public services, and as a higher rate taxpayer and homeowner this would certainly fall on me to no short measure.

 

[A0]

I don't know about Germany, but a while ago there was the possibility of me relocating to Switzerland (another country with excellent public services) and so I worked out what the costs of taxation would be. When you added on the compulsory but separate medical insurance, it worked out about the same as the UK for me.

But yes, as I said I do support higher taxation for the provision of quality public services, and as a higher rate taxpayer and homeowner this would certainly fall on me to no short measure.

Switzerland has very low rates of personal taxation - lower than the UK - it also has a small population (8 million people, so less than London) and an economy focused on services with relatively low manufacturing output.

I'm not sure you'd get too many takers on remodelling the UK economy along Swiss lines. It also has much higher rates of local taxation.

 

[najaB]

So let's cut the crap and start being honest - if you want German levels of public spending, fine, but you go out and be honest with those on average salaries what that means - don't pretend it can all fall on somebody else and they just get the benefits when that's a blatant lie.

High taxation paying for high-quality public services? Sounds okay to me, where to I sign up? There's a reason that Scandinavian countries are reliably at the top of the human development/happiness surveys.

 

[A0]

High taxation paying for high-quality public services? Sounds okay to me, where to I sign up? There's a reason that Scandinavian countries are reliably at the top of the human development/happiness surveys.

They also have small populations and largely homogenous populations - perhaps we could aspire to those as well?

 

[Starmill]

They also have small populations and largely homogenous populations - perhaps we could aspire to those as well?

What's this got to do with taxation?

 

[najaB]

They also have small populations and largely homogenous populations - perhaps we could aspire to those as well?

Neither a small population (many island nations) nor a largely homogenous population seems to be the way to a happy population.

 

[DynamicSpirit]

Fine - you can tell somebody on an average salary of ~£ 30k that they are going to be paying £ 200 / month more in tax just to fund your whims. Good luck.

Wow, that's quite a steep tax rise! Given that for someone on £30K, less than £20K of their income is taxable, you're talking an income tax rise of > 10%, which is obviously absurdly high to fund any reasonable level of public transport investment.

Of course, the calculation isn't that simple anyway: Better public transport improves quality of life for a lot of people, it will enable some people to do without the expense of maintaining a car. It also gives a lot of people more freedom in where they can live and work, which again may have financial benefits.

I sympathise with you to the extent that there does need to be some cost control and you should always be aiming to keep subsidies as low as you reasonably can consistent with good public transport provision [1], but I'd also fall in the camp of being happy to pay at least slightly more tax if it means more people can get around more easily without clogging up the roads.

[1] Since this thread split from another thread that I wasn't following, I don't know what particular suggestion triggered this discussion or whether I'd consider it reasonable.

 

[A0]

What's this got to do with taxation?

A response to comment # 11 "There's a reason that Scandinavian countries are reliably at the top of the human development/happiness surveys."

The implication was it was due to their high tax regimes, I was merely pointing out there are other socio-economic factors which may be relevant, though funnily enough when you point those out they tend to be less popular....

== Doublepost prevention - post automatically merged: 30 Sep 2021 ==

Neither a small population (many island nations) nor a largely homogenous population seems to be the way to a happy population.

Yet it's true of the Scandinavian countries, so you can't simply discount it and say happiness in Scandinavia is due to high taxes to fund public services.

 

[Dr Day]

you should always be aiming to keep subsidies as low as you reasonably can consistent with good public transport provision

Absolutely. However, 'good public transport provision' does not necessarily need to be a train - in some cases a bus/tram with appropriate priority measures, combined with appropriate integrated fares etc, can provide a very good service for far lower operational cost hence subsidy. Again without knowing the context of the OP hard to argue in that instance whether the level of subsidy would be worth paying for for a train over other cheaper forms of transport, but in some cases a very carefully controlled and committed long term transfer of that subsidy to other modes could even result in 'better' overall public transport provision. Even potentially better overall rail provision if capacity is freed up for the types of services where rail is the more appropriate/cost effective mode to meet overall transport needs, without expensive capacity enhancement schemes.

 

[A0]

Absolutely. However, 'good public transport provision' does not necessarily need to be a train - in some cases a bus/tram with appropriate priority measures, combined with appropriate integrated fares etc, can provide a very good service for far lower operational cost hence subsidy. Again without knowing the context of the OP hard to argue in that instance whether the level of subsidy would be worth paying for for a train over other cheaper forms of transport, but in some cases a very carefully controlled and committed long term transfer of that subsidy to other modes could even result in 'better' overall public transport provision. Even potentially better overall rail provision if capacity is freed up for the types of services where rail is the more appropriate/cost effective mode to meet overall transport needs, without expensive capacity enhancement schemes.

Well to add the context, this thread got spilt off from one where the conversation had moved to the Bidston-Wrexham service being extended into Liverpool with the justification being offered by one poster of improving services to Heswall, Neston and Shotton. And the first two of those are less than 4 miles away from alternative stations on the Merseyrail Chester line which has much higher frequencies already. So rather cheaper than trying to extend Merseyrail services to those would be a dedicated DRT bus running between Heswall and Neston to Hooton and Spittal. For Shotton the journey time saving of a direct service to Liverpool is marginal against via Chester.