Tax.... what is everyone’s problem with it?

[Seearbe]

I think a different way of explaining my frustration is this.

I am in the top 5% of earners (£>80k)
I am therefore already in the top 5% of taxpayers.
The amount of tax as a top 5% earner is already disproportionately higher than the average earner
At higher levels of income (£100-125k (Top 3%), >£150k(Top 1%)) the marginal rate of tax is disproportionately higher than everyone below that level

A further increase in rates doesn't stack up against this.

 

[Seearbe]

This is a bit disingenuous though. Most people who bought a flat in Greater London under right to buy in the 80s probably have a 'net worth' of well over £1m at this point and considering Corbyn has lived in North London for god knows how many years a meaningless net worth figure being so high is unsurprising. As for Corbyn 'claiming' over £3m from the state, he's earned that by working as an MP. Or are we now saying that I 'claim' my salary each month for my hard done by employer?

The "claimed from the state" is a bit misleading I agree. I was just copying the full quote.

The point however is that he has current wealth and a pension pot that my generation can only dream of. Yet he says I should be the one to pay more tax.

To add further insult, what bothers me more is that my tax rates should increase to fund the care costs of the elderly who are allowed to retain their wealth (houses) and pass it on through inheritance. So I pay tax to allow others to get rich.

 

[dowie]

A further increase in rates doesn't stack up against this.

Of course it doesn't, I think the answer to the OP is that it isn't necessarily fair. Just because someone can afford to pay more or because X amount is seen as "a lot" etc.. doesn't make it right.

In reply there have been the derp responses of "hey guys, guess what, this is a really simply example of how tax works"... or the arguments of "its only X amount more" per month... well those can apply regardless of the starting point... you could have an 80% rate and a proposal to add another 5% and use the exact same arguments of "its only another X amount per month" and 100k is a lot of money already etc..etc..

Thing is you could say the same re: increasing the lower bands - "it's only an extra x amount per month" though that wouldn't be so popular and might constrain them into making any tax rises more conservatively.

While I don't think a flat tax is the answer I do wonder if tax increases had to apply across the existing bands and the personal allowance wasn't eroded then some labour supporters might not be quite so enthusiastic about wanting to write a blank cheque. I mean it certainly works better if it is just targeted at others....

Also explains the mentality behind additional claimed revenue from things like a misguided "financial transaction tax" as though 8 billion a year can just be skimmed off the markets with no effects.

 

[rainbowGuy]

Yes you do. There is always a benefit.

what benefit do you get from paying more tax?

 

[VincentHanna]

If the next government were to increase income taxes at the levels Labour are touting, it would have a serious impact on my financial situation. Increasing taxes at the £80k threshold is not the answer because that really is the "squeezed middle" point.

This is the QT Guy argument all over again.

You are not in the "squeezed middle", you are in the top 5%.

 

[chroniclard]

what benefit do you get from paying more tax?

Earning more money.

 

[rainbowGuy]

Earning more money.

i hope you are joking - i am not going to even bother replying to that statement!

 

[VincentHanna]

i hope you are joking - i am not going to even bother replying to that statement!

You only pay more tax as you earn more money

ergo the benefit you get from paying more tax, is that you are earning more.

 

[Pudney]

You only pay more tax as you earn more money

ergo the benefit you get from paying more tax, is that you are earning more.

I think paying more tax in this context is in relation to an increase in the rate of tax. So paying more tax wouldn't necessarily mean earning more money.

 

[RxR]

I find the tax on a million disturbing. Its a harsh wonder.

https://www.netsalarycalculator.co.uk/1000000-after-tax/

 

[VincentHanna]

I think paying more tax in this context is in relation to an increase in the rate of tax. So paying more tax wouldn't necessarily mean earning more money.

You ALWAYS will earn more money than somebody below you paying less tax.

If Labour suddenly increase the tax on people earning 80K+ from 40% to 45%, then a person earning £81,000 will still earn more than somebody earning £79,999

Because the 45% tax rate will only be on the £1001.

 

[FishFluff]

I find the tax on a million disturbing. Its a harsh wonder.

https://www.netsalarycalculator.co.uk/1000000-after-tax/

I know right, how can anyone be expected to live on only £2k per day.

 

[chroniclard]

i hope you are joking - i am not going to even bother replying to that statement!

Which parts are you struggling with?

 

[dowie]

You ALWAYS will earn more money than somebody below you paying less tax.

If Labour suddenly increase the tax on people earning 80K+ from 40% to 45%, then a person earning £81,000 will still earn more than somebody earning £79,999

Because the 45% tax rate will only be on the £1001.

honestly... can people just stop with the derp replies like the above^^^^

Pudney is a tax professional even and Vincent seems to genuinely think he's somehow adding something here by completely missing the point and then giving a schoolboy explanation of how marginal tax rates work yet again.

 

[Deleted member 66701]

. Increasing taxes at the £80k threshold is not the answer because that really is the "squeezed middle" point.

Sorry, but 80k is in no way the 'squeezed' middle.

You sound like the guy on QT that argued his 80k didn't even put him in the top 50%, let alone the top 5%.

 

[Sheff]

I find the tax on a million disturbing. Its a harsh wonder.

https://www.netsalarycalculator.co.uk/1000000-after-tax/

I don't, you still take home more than half and daily take home is more than most people take home in a month (and more than a large proportion earn before tax in a month). Each year you receive a letter showing you how your tax was spent that year and every few years you get to vote for a representative who will help decide how that tax should be spent.

It's a price worth paying for a civilised society, which educates its people, has decent infrastructure etc. which businesses can utilise in order to function. I wonder what people advocating a reduction in taxes suggest we replace the current system with (UBI and a flat rate would still result in quite a high rate of income tax), and how this would be of benefit to them when taking the system as a whole into account.

 

[VincentHanna]

honestly... can people just stop with the derp replies like the above^^^^

Pudney is a tax professional even and Vincent seems to genuinely think he's somehow adding something here by completely missing the point and then giving a schoolboy explanation of how marginal tax rates work yet again.

Well what are we discussing then?

Somebody already earning 85K will earn less under labour, because they will pay more tax. I agree.

 

[Seearbe]

Well quite. U

This is the QT Guy argument all over again.

You are not in the "squeezed middle", you are in the top 5%.

Let me try again.

Have a look at post-tax income rather than pre-tax income. https://en.wikipedia.org/wiki/Income_in_the_United_Kingdom#Post-tax_household_income

You'll note that the difference in post-tax income between the 50th percentile and the 95th percentile is not massive in absolute terms; let's say £20k vs £50k. Yes, in relative terms is significantly higher (150%), but this is where the statistics start to portray a very different picture from reality - £30k gets eaten up very quickly. Like I'm not claiming to be poor but the top 5% are not as wealthy as is made out.

Then look at what is above the 95th percentile and how the 99th percentile can't even be plotted. There is a hugely disproportionate amount of income and wealth hidden in there. And remember that the 99th percentile is one person in a hundred - with a population the size of the UK, that's actually a huge number of people.

So actually, yes the "squeezed middle" are those that have the greatest burden when it comes to taxes, access to benefits, personal and social needs etc.

 

[Seearbe]

You sound like the guy on QT that argued his 80k didn't even put him in the top 50%, let alone the top 5%.

He made a good point badly. The crux of his point was that he doesn't feel like he's wealthier than 95% of people and there are a lot of people who have more money but pay no tax because they have latent wealth. So to tax those who are working and starting to get their head above water isn't tackling the problem.

 

[Basher]

Well what are we discussing then?

Somebody already earning 85K will earn less under labour, because they will pay more tax. I agree.

We were discussing the benefit of paying more tax ...