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What caught my eye this week.

A regular listener to the ThisIsMoney podcast, I’ve been waiting for Simon Lambert and his team to get stuck into the election manifestos for three reasons.

First, they’ve been trailing it for weeks and they were clearly ready to go.

Second, I am as curious as any other concerned citizen / consumer / tax-payer / wage slave.

But most importantly, I said I wasn’t going to opine about this election. I wanted to give myself – and Monevator – a break from politics.

Well, I’m half back-pedaling that today. (Hey, that’s politics.) It keeps coming up in the Weekend Reading comments, and, well, it’s obviously something of a big deal.

But I’m still not going to write about it… because ThisIsMoney and the Financial Times have done the job for us:

  • The general election and your finances [Search result]FT
  • What the general election means for your money – ThisIsMoney

Both papers do deep non-partisan dives into the various manifestos. Read them and you’ll quickly get up-to-speed on the personal finance angle of the general election. For me that’s a sideshow with this vote anyway; your view may vary.

What’s that? You want some spice?

Well ThisIsMoney editor Simon Lambert takes on the strange anomalies on the tax bands that produce very high marginal rates:

Labour plans a new 50 per cent ‘super rich rate’ of income tax above £125,000 but high earners will have to pay an even higher rate of 67 per cent before they get there.

A combination of the 45p tax rate threshold dropping to £80,000 and the removal of the personal allowance means that those earning £100,000 to £125,000 would effectively pay 67p in income tax for every extra pound they earn.

Despite outlining a radical revamp of income tax, Labour confirmed to This is Money that it would not remove the quirk in the tax system that sees the marginal rate of tax rocket for those lucky enough to see their earnings go above £100,000. […]

An income tax system where the marginal rate goes 20 per cent, 40 per cent, 60 per cent, 40 per cent, 45 per cent is clearly daft.

Clarifying and simplifying the tax system shouldn’t be controversial, but back in the real world it’s radioactive. Labour told Simon they have no plans to change the system, while the Conservatives didn’t even bother to give (or risk?) a reply.

Meanwhile over at the FT the still mostly wonderful (Brexit cheer-leading!) Merryn Somerset-Webb notes that before we soak the rich, we need to figure out who they are.

Yes, Merryn has plenty of sympathy for the devil – aka £80,000-man:

In fact, his take home earnings are not as much higher than the average as a first glance suggests.

The top quintile of earners in the UK are on an average of about £88,000.

The bottom quintile are on more like £7,900. Add in tax and benefits, and those numbers fall to about £65,500 and rise to £19,000.

That means the top fifth take home, on average, 3.4 times as much as the bottom fifth. That’s significant, but much less significant than the 11-fold difference in pre-tax pay.

It’s a point well-made. With that said, as I wrote a half-a-dozen times last week, I’ve no problem with anyone advancing the argument that he’s taxed enough already.

My despair was over his Blimp-ish reality distortion field. I think it was a man earning £80,000 shouting “liar!” at an MP while claiming he was in the bottom 50% of earners on his £80K that set people off, not the technicalities of wealth distribution.

This is the Weekend Reading to debate the financial aspects of the election, if you’re so-minded. But please keep it civil and as constructive as possible, and ideally focused on personal finance. Have a great weekend!

From Monevator

Help! Analysis paralysis is stopping me from investing – Monevator

The lifetime allowance for pensions – Monevator

From the archive-ator: How to live off investment income – Monevator


Note: Some links are Google search results – in PC/desktop view you can click to read the piece without being a paid subscriber. Try privacy/incognito mode to avoid cookies. Consider subscribing if you read them a lot!1

Last-minute surge in help-to-buy Isa applications reported by banks – Guardian

House price growth has been running below 1% for the past year, says Nationwide – BBC

HMRC warns over failing to declare annual allowance charges on self-assessment forms [Search result]FT

City investors urge leading UK firms to pay workers living wage – Guardian

Contemporary art delivers returns to rival bonds, says Citigroup report [Search result]FT

UK ‘has particularly extreme form of capitalism’, says author of British Academy report – BBC

How Europe’s installed capacity per energy-related technology is forecast to grow – Octopus IPO prospectus from AJ Bell via DIY Investor

Products and services

Paragon Bank is now the fifth firm to launch a cash Lifetime ISA; interest rate is 1.15% – Paragon Bank

European investors have been slower to move to passive than US counterparts, McKinsey finds – Institutional Investor

Ratesetter will pay you £100 [and me a cash bonus] if you invest £1,000 for a year – Ratesetter

The Royal Mint is selling a 1g gold bar as a £65 ‘stocking filler’ – ThisIsMoney

American Express teams up with Vitality to offer 3% cashback to the fit and active – ThisIsMoney

Five homes for upside down living [Gallery]Guardian

Comment and opinion

All-time highs are both scary and normal – A Wealth of Common Sense

Is the growth of passive investing increasing volatility? – The Evidence-based Investor

The best investment you can make – Of Dollars and Data

Monte Carlo Analysis: Understanding what you’re dealing with – Oblivious Investor

One-year and ten-year FIRE anniversaries – Retirement Investing Today

Passive investors, are you destroying your children’s world? – Simple Living in Somerset

30 selected quotes from 30 of Morningstar’s Long View podcasts – Morningstar

Naughty corner: Active antics

Looking for opportunities? Here are four bear markets you can buy today – Fortune

Capital Gearing Trust: playing ultra-defensive – IT Investor

Cryptocurrency will not die – GQ

“Are we there yet?”: General Election and Brexit

YouGov polls predicts 68-seat majority for Conservatives in general election – Mirror

Brexit MP questions economic nous of economics professor in European Parliament – Channel 4 via Twitter

A late surge in registrations hints at general election ‘youthquake’ – Wired

In the wake of Brexit, Amsterdam is the New London – Fortune

How does Boris Johnson not melt with shame? – Marina Hyde

Kindle book bargains

How to Win Friends and Influence People in the Digital Age by Dale Carnegie & Associates – £0.99 on Kindle

The Wealthy Retirement Plan by Vicki Wusche – £0.99 on Kindle

Radical Candor: How to Get What You Want by Saying What You Mean by Kim Scott – £0.99 on Kindle

RESET: How to Restart Your Life and Get F.U. Money by David Sawyer – £0.99 on Kindle

Off our beat

How online troll factories work to distort our view of the world in 2019 – Rolling Stone

This 32-minute morning routine can make your day more happy and less stressed – Country Living

Elastic thinking for a constantly changing world – Farnham Street

Climate emergency: World may have ‘crossed tipping points’ – Guardian

An artificial intelligence predicts the future – The Economist

The bus ticket theory of genius – Paul Graham

And finally…

“Compare yourself to who you were yesterday, not to who someone else is today.”
Jordan Peterson, 12 Rules for Life: An Antidote to Chaos

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  1. Note some articles can only be accessed through the search results if you’re using PC/desktop view (from mobile/tablet view they bring up the firewall/subscription page). To circumvent, switch your mobile browser to use the desktop view. On Chrome for Android: press the menu button followed by “Request Desktop Site”.

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