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

[Psycho Sonny]

Presumably by having everyone on the same tax bracket you could set it lower than 40% but have the Personal Allowance around the £20k mark. That's easily enough for people to live on and then tax everyone at 30% beyond that.

That isn't a bad idea however it would actually mean less money going to the treasury. So it wouldn't work. Simply because that means everyone is now paying less tax. Regardless of income.

It would need to be 45% tax with a £20K personal allowance to work.

 

[Psycho Sonny]

Alternatively, the government can cut public spending and start paying off it’s debts.

not sure if serious.

what do you think they have done for the past 12 years?

 

[Psycho Sonny]

Absolutely this. We know quite a few people who send their kids to private schools. Most of them make huge sacrifices to do so and struggle to get by. If they raise taxes on the fees then some will simply have to put their kids back into the state system. Similarly a lot of private school parents travel a long distance daily to get their kids to such schools. If they are converted back to state schools then they will again just put them into local state schools instead. Their idea is ridiculous.

They are in the minority then. Most folk who go to private schools tend to have parents that are minted. I mean £25K per year per child isn't exactly affordable to someone scrimping along on a £30K a year average wage.

I doubt someone earning £50K a year could afford it either.

 

[Seearbe]

Is it not due to teacher shortages?

I mean private schools have far more teachers per number of pupils because they pay them more. By removing them you will have more teachers to go around.

It would never work like that:

1) Private school teachers (a word I momentarily couldn't spell) might not want to work in the public sector
2) If private school teachers get paid more, they wouldn't want to take a pay cut (or there would be disparity in pay)
3) The current schools budget wouldn't be big enough to deal with the cost of hiring all those additional teachers

I do think it's an envy thing - bring everything down to the lowest common denominator rather than allow as many people to succeed as possible.

I was not educated in a private school. Far from it.

 

[Raikiri]

Presumably by having everyone on the same tax bracket you could set it lower than 40% but have the Personal Allowance around the £20k mark. That's easily enough for people to live on and then tax everyone at 30% beyond that.

30% is far too low. 40-50% Would work fine, I'd have no issue with that but it's actually no different to having marginal tax bands, Someone earning 25K pays 6% tax, someone earning 100k pays 24%.

 

[Seearbe]

2008-09 £445,531m
2009-10 £414,920m
2010-11 £453,957m
[...]
2016-17 £467,716m
2017-18 £591,648m
2018-19 £619,367m

I'm going to quote my own post here because I'm still incredulous about what I have found.

£174,000,000,000 increase in annual tax revenues in the last decade. Where the hell has it all gone!? Or am I missing something?

 

[Psycho Sonny]

A major issue that many have with tax at "perceived" high income is that it then stacks on top of other taxes that also ratchet up quickly, and of course there is no mechanism in income tax to adjust for cost of living variances across the country which makes it far from equitable.

Someone earning 80k in Burnley, where you can buy a three bed house in cash (with no SDLT if FTB) with your year's take home, pays the same amount of income tax as someone who lives in zone 1 or 2 London on the same salary, who needs 20x that plus a huge SDLT bill. 80k in Burnley is objectively a high income, 80k in Zone 1 or 2 is definitely not.

Considering SDLT more, as one of these stacking taxes, with a more real-world breakdown. First time buyer in say Plymouth could can comfortably get a 4 bedroom detached with a double garage for 375k and pay £3,750 in SDLT. In Zone 2, a "normal" 2 bedroom apartment that sells for £750,000 would attract £27,500 in SDLT for a first time buyer. Nearly 7.5x as much tax for something only twice the price. So even if that person earns double (let's say 50k and 100k), under the Corbyn proposed tax regime, in the year that the property is purchased the person on 100k would have paid 28.5k in income tax and 27.5k in SDLT, and the person on 50k would've paid 7.5k in income tax and 3.5k in sdlt. 56k vs 11k. More than 5x the amount of tax for earning double, and getting a much smaller property. Is that REALLY equitable?

People will just say "well don't live in London then". In which case they earn less for the same thing. Which means they then pay WAY less tax, which doesn't work for the socialist agenda....

Lot of waffle tbh.

London is London.

Compare it to Los Angeles or Vancouver. It's nothing. You could be earning £200K in Vancouver yet never be able to afford a detached home unless you live 2 hours drive away. LA has places where homes are all above £20 million, etc.

Nobody cares, you choose to work there because you get paid more. You get paid more because everything is more expensive there. It's how it works. A few people win (the big earners). As they can afford to buy nice things. Yet everyone else loses as a result.

Your best bet in London is to buy whatever you can interest free mortgage or long mortgage. Work there for 20 years. Sell up and then move somewhere a lot nicer like up North.

 

[Selekt0r]

not sure if serious.

what do you think they have done for the past 12 years?

They have been trying to reduce the deficit in order to start paying off the country's debts (rather than increasing it every year). Sadly, it has been continuing to increase over recent years, despite the austerity measures in place https://www.ons.gov.uk/economy/gove...how-much-is-the-general-government-gross-debt

 

[Psycho Sonny]

I'm going to quote my own post here because I'm still incredulous about what I have found.

£174,000,000,000 increase in annual tax revenues in the last decade. Where the hell has it all gone!? Or am I missing something?

Brexit. Do you have any idea how much resource has gone into it? Also the DUP got a large slice of that money too.

 

[Kenai]

not sure if serious.

what do you think they have done for the past 12 years?

Increased public spending year on year in absolute terms and slightly slowed the rate at which our debt continues to grow.

 

[nitram100]

Brexit. Do you have any idea how much resource has gone into it? Also the DUP got a large slice of that money too.

Yawn

 

[eviled]

You're missing the point. No-one is allowed to be aspirational, no-one is allowed to make something of themselves, no-one would own private property if Labour had their way everyone should have everything supplied to them by the State from cradle to the grave and no-one should expect to be better off than anyone else. Thats socialism, comrade.

that was the whole point of starting this thread was.... why can’t people aspire to contribute to an improving society. That is socialist, but not communist.

As this has become about if we pay too much tax or not, here is an interesting comparison of tax on 25k, 40k and 100k in different countries, which I found interesting

https://www.theguardian.com/money/2017/may/27/tax-britons-pay-europe-australia-us

 

[rG-tom]

Lot of waffle tbh.

London is London.

Compare it to Los Angeles or Vancouver. It's nothing. You could be earning £200K in Vancouver yet never be able to afford a detached home unless you live 2 hours drive away. LA has places where homes are all above £20 million, etc.

Nobody cares, you choose to work there because you get paid more. You get paid more because everything is more expensive there. It's how it works. A few people win (the big earners). As they can afford to buy nice things. Yet everyone else loses as a result.

Your best bet in London is to buy whatever you can interest free mortgage or long mortgage. Work there for 20 years. Sell up and then move somewhere a lot nicer like up North.

Way to completely miss the point. La and Vancouver are completely irrelevant to a discussion about increasingly punitive tax in the UK

 

[Raikiri]

Way to completely miss the point. La and Vancouver are completely irrelevant to a discussion about increasingly punitive tax in the UK

If you earn more you take home more. You may pay a higher % of total tax but you aren't being punished for earning more, you're still better off. That is not punitive.

There may certainly be a case of diminishing returns, but then if you're in the position to be earning enough that you reach that point then it's up to you to decide if it's worth the extra effort. Obviously for most people, it is, otherwise, nobody would bother earning over £100k.

 

[rG-tom]

If you earn more you take home more. You may pay a higher % of total tax but you aren't being punished for earning more, you're still better off. That is not punitive.

There may certainly be a case of diminishing returns, but then if you're in the position to be earning enough that you reach that point then it's up to you to decide if it's worth the extra effort. Obviously for most people, it is, otherwise, nobody would bother earning over £100k.

Taxation on those at this level of income is increasing constantly, by income tax changes, erosion of personal allowances, removing of benefits such as tax free child care, tapering of tax free pension contributions, increasing SDLT etc.

These changes are almost all aimed at the still moderate 80-130k salary range that don't necessarily have (m)any assets yet, rather than the "actual" rich earning 7 figures via dividends, or with huge landholdings etc. Too 5% of income is far from top 5% of wealth.

I find it hard to see the arguement that paying 5x as much tax on only double the income isn't punitive, reasonable ratcheting makes sense but it is too aggressive at too low a point.

Of course people have to make a decision as to if it's worth it with these salaries and London prices etc. It's easy to see why affected people are unhappy about policy stacking, and year on year changes only materially increasing takings from the same income bracket, and it's all too easy to turn "low" income people against this with constant rhetoric about top 5%

 

[Hades]

They are in the minority then. Most folk who go to private schools tend to have parents that are minted. I mean £25K per year per child isn't exactly affordable to someone scrimping along on a £30K a year average wage.

I doubt someone earning £50K a year could afford it either.

You would be surprised how many parents strive to get their kids to such schools even withoit being minted. Granted they aren't going to be on a low salary. But quite a few are only just managing it. It would push some over the edge.

 

[Raikiri]

Taxation on those at this level of income is increasing constantly, by income tax changes, erosion of personal allowances, removing of benefits such as tax free child care, tapering of tax free pension contributions, increasing SDLT etc.

There has to be a cut-off point for state aid, I'd prefer it happened at a lower income if anything.

These changes are almost all aimed at the still moderate 80-130k salary range that don't necessarily have (m)any assets yet, rather than the "actual" rich earning 7 figures via dividends, or with huge landholdings etc. Too 5% of income is far from top 5% of wealth.

£80,000 is not ****ing moderate, Tom. £80,000 puts you in the top 3-4% of earners. There's nothing moderate about that. Those that are in the top 0.1% etc. should be paying a higher rate and should be punished for finding loopholes and evading taxes.

I find it hard to see the arguement that paying 5x as much tax on only double the income isn't punitive, reasonable ratcheting makes sense but it is too aggressive at too low a point.

At what point do you pay 5x as much tax as someone earning half what you do? I'd like to see the numbers behind that please.

Of course people have to make a decision as to if it's worth it with these salaries and London prices etc. It's easy to see why affected people are unhappy about policy stacking, and year on year changes only materially increasing takings from the same income bracket, and it's all too easy to turn "low" income people against this with constant rhetoric about top 5%

You're right that the top 5% aren't really the issue, it's the top 1% and above but again, there has to be a cut off point. Raising that cut off point only aids to further increase wealth inequality. Ideally the super rich would simply pay their taxes and it wouldn't even be an issue.

 

[shadow_boxer]

Its starting to get on my **** that some families/single women can opt to breed as many children as she likes and the state picks up the fiscal pieces. I.e. I/we pay for it. Lat year I earnt as a locum/contractor (and wont again for 7 years) £8.5k a month and saw £4.5k a month after tax, student loan and NHS pension. Yet someone could make a million pound profit on their main residence and pay no tax or CGT is 28% at most. So not only do those who earn by selling there time pay more, but they pay for people who misuse the system. I would gladly by a house and have kids right now but realise i need to be in a fiscally secure place and being a junior doctor I've been ****** out of stable living conditions for half a decade more.

That’s a pretty good salary you had as a junior doctor locuming. Knowing what rates most trusts pay their juniors that must have been a hell of a lot hours. Was that full time locum or a core training post then trust locum on top? Locums as junior doctor were a right pain in my experience, generally a right faff with medical staffing, getting time sheets signed and chasing consultants around post nights etc. I personally avoid locuming as a junior as the basic pay was around the threshold back then for higher rates and I loathed the thought of paying 40p on the pound for slogging through nights of locums and generally being treated like ****. Of course if you need the money that’s different.

You would be surprised how many parents strive to get their kids to such schools even withoit being minted. Granted they aren't going to be on a low salary. But quite a few are only just managing it. It would push some over the edge.

Completely agree. My Mum was on a minimum wage and I know how much my parents had to sacrifice to send my brother and I to a private school.

 

[Trusty]

You're right that the top 5% aren't really the issue, it's the top 1% and above but again, there has to be a cut off point. Raising that cut off point only aids to further increase wealth inequality. Ideally the super rich would simply pay their taxes and it wouldn't even be an issue.

There is a 5% gap between what the government expect and what they get in taxes. So it's only a tiny tiny minority of wealthy people not paying the taxes they should btw

 

[Raikiri]

There is a 5% gap between what the government expect and what they get in taxes. So it's only a tiny tiny minority of wealthy people not paying the taxes they should btw

Does this take into account tax avoidance, like claiming income through an offshore company etc.? The government wouldn't expect that as technically, the transactions never took place here (even if it's very obvious they should have).