September 12, 2010

General Musings for the week 12th September 2010

I see that the design for the new US Grand Prix circuit has been released. Once again it appears to be a Hermann Tilke design and as such will go down in history alongside other boring tracks such as Turkey, Bahrain and Shanghai which provide excellent facilities and spectator views but produce little excitement in terms of driving. It's no concidence that the three most exciting tracks on the Grand Prix circuit today are old style tracks that have survived the onslaught of modern design. Silverstone, Spa and Monza are three classic tracks, beloved by drivers and spectators alike, that produce classic racing, exciting finishes and memorable drives. One of the most spectacular races I can remember was the 1998 Belgian Grand Prix which started with a 13 car pile-up and got more exciting from there, eventually being won by Damon Hill in a Jordan. Can you think of a classic race that has been run at one of the sanitised modern race tracks? The new track at Korea - scheduled to be ready for the race in October - also suffers from the same Tilke design touches - short straights, sharp corners and unexciting layout, all of which handicap the cars and lead to boring, processional racing. In my opinion.

Tallulah Rendall Update. You may remember from earlier posts that I have been 'biggin-up' Tallulah Rendall. Her effort to raise money to master her second album was successful and the album will be released early next year. The first single 'Ghost On The Water' is released on September 27th 2010. You can see the video for it here. I'm looking forward to receiving my original signed version of the album as a reward for pledging to the cause. If you like the song please spread the word. You can still pledge here. Her previous album Libellus is available on iTunes.

I've spent this week struggling with PAYE and NI legislation (That's income tax and National Insurance for my non UK-based readers). I have a 'starter pack' from the Inland Revenue - or HMRC as they are known now - which is a whizzy little application that steps me through the process of setting up employees and working out tax. But then it asks a question such as 'Which class of NI are you in?'. In order to answer that question you have to follow a link to a web site, download a document, read it through and work out your circumstances. Then you go back to the application to fill in the detail. There are numerous examples of this throughout the app. It's so close to being a great little helper. At the moment it's about 80% there...

On the subject of tax I'm wondering if there is an easier way of making this work. Think about it: At the moment I have my own company. It has income and it pays tax on that income. On what's left I earn dividends. That income is taxed. When I put what's left in the bank I earn interest. That money is taxed. When I take the money out of the bank and buy something with it I pay a sales tax or VAT on that. The things that I buy become part of my estate and when I die my estate value is then taxed. Theoretically a single pound sterling (or US dollar) could be taxed up to 5 separate times. This number increases to 6 or 7 if I use the money to buy goods which are subject to a government duty such as alcohol and tobacco. Surely that's not efficient? But the question is would I rather pay less income tax and have higher taxes elsewhere or would I rather have a higher income tax and lower taxes elsewhere? The assumption is that the overall tax burden would be the same or similar. I think that psychologically I would want a lower income tax rate. Back in the days of the Labour government in the late 1970's the income tax rate was 83p in the pound plus an additional 15p tax on income which was earned from dividends etc. That was obviously taking the taxation burden to an extreme. But it does illustrate that people would not like that much of their income to be taken out immediately. When the Conservative government won the election in 1979 the immediately slashed the top rate of income tax down to (I think) 60p in the pound. As I write this I am reminded that the VAT rate is increasing in January 2011 to 20% from 17.5%. Sigh.

I was in London earlier this week and narrowly managed to avoid the tube strike. Apparently it was chaos. But what really made it more galling for me was Bob Crow the RMT Union leader going on the radio and saying 'We do apologise for the strikes'. Well I'm sorry Bob, but if the strikes were mooted by you, organised by you and managed by you then being 'sorry' is a little like the executioner dropping the guillotine and apologising to the head in the basket. It rings very hollow.  Striking and affecting the public as a way of asking for demands to be met is a ludicrous way of solving the situation. If I am working with a client and they don't pay me I can refuse to work for them as a means of protest. It affects the client - who doesn't get work done, and they pay. But if I am a tube driver (or a member of cabin crew, or a nurse, or a policeman) and I go on strike it does not affect the people who are responsible for paying me. It affects the public. The paying public. The same paying public who put wages in your pocket. The same public who will then - particularly in the case of the airlines - take their business elsewhere or find alternatives. This will result in lower revenues for the company and your next pay review will be lower than before. What are you going to do then - strike again? 'Cos it worked so well last time. Unions., tch! Don't get me started. (Soapbox /dismount)

Ryder Cup Update: It appears that Cory Pavin - the American Ryder Cup Captain has given a captain's pick to Tiger Woods. The pundits all seem to agree that this was a good and proper thing to do. But I have a different take on this: You've given a spot to a player who not only doesn't like playing the Ryder Cup, but has never played to his potential in it, was on the losing team on 4 of his 5 appearances, and is currently experiencing the worse run of form he has had in his many years as a professional. That makes good sense doesn't it? Time will tell.....

Video of the week: The Ikea store in Wembley let 100 cats loose in it's store overnight and filmed the results, Manic.

More next week.

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