to wonder why many people assume that rich people don't pay tax

(89 Posts)
Redpipe Thu 10-Oct-13 11:43:40

when the figures today show that the top 0.5% of earner actually pay a third of all tax collected.

I have seen many posters here immediate jump to the assumption that the rich don't actually pay tax in debates about taxation or about government cuts.

AIBU to think that people who claim the rich don't pay enough or that many of them evade tax are actually talking about a tiny percentage of top earners and that the vast vast majority of top earner pay their share.

Redpipe Thu 10-Oct-13 14:19:04

sorry that's 1% not 0.5%

Dahlen Thu 10-Oct-13 14:33:52

I suspect this will probably derail quite quickly, but here goes...

I think most people draw a distinction between those in paid employment and those who take payment in shares and bonuses, etc. When people talk about the rich not paying tax, they are often in mind of big corporations rather than salaried individuals, and the shareholders of the former have found many perfectly legal but arguably immoral ways around paying tax on some of their income.

Sometimes, this means that the person earning 150,000 a year (nearly 6x more than the average salary in the UK and 7x more than a typical salary) is unfairly lumped in with the likes of Amazon, Google and Vodafone in the eyes of some people. Not fair, I agree.

However, when you look at indirect taxes (e.g. VAT) and add those to people's tax spend as a proportion of salary, the picture is very different and the poorer of society actually lose more of their income in tax than the richer.

It's a complicated picture, with some people at either end of the spectrum suffering from unfair prejudices. Ultimately, it comes down to your own personal feelings on the merits of wealth redistribution.

Personally, while I think hard work and talent should be rewarded, it's a myth to think we live in a proper meritocracy. It remains the case that your socio-economic group is the biggest influence on your future earning potential. Networking counts. Some people break out of those confines and good for them, but they are very much a minority. Also, not everything of monetary value is 'good', whereas lots of 'good' things have little or no monetary value (e.g. caring for the elderly). I find it reprehensible that some can have huge bonuses for selling stuff while people are queuing for food from foodbanks simply because they have a partner who needs a level of care that prevents them from working. With that in mind, why is it wrong that those who have most contribute most?

Snoopingforsoup Thu 10-Oct-13 15:32:56

I agree with some of what you say there Dahlen.

OP, I hear you. The papers skewed a lot of facts during the start of the economic downturn and now anyone who earns anything working for a bank must be a tax dodging millionaire. Sod the true facts that the majority of high earners are PAYE.

You're more likely to dodge tax if you have your own business in reality!

Mintyy Thu 10-Oct-13 15:35:26

I've been here for years and years and I don't think I have ever seen anyone suggesting that the rich don't pay tax. Funny op.

NoComet Thu 10-Oct-13 15:52:19

I'd love to see a graph of one vs two earner house holds with and with out DCs against total tax paid and services received.

We win on education and free school transport (shit though it is), but lose on having only on income and DH commuting, so higher rate tax, no CB and vast amounts of petrol duty to the lovely exchequer (no public transport, running two cars is a given). largish morgage so we don't have spare for tax efficient savings and investments and that I think is the point.

I think everyone upto the middle income point that can seriously think of saving think we pay too much tax and people with ISAs and second homes pay too little.

Some where in the middle are those with nice houses, nice cars and DCs at private schools, some of whom I know budget to the last 1/2p and others who I'm sure could pay more tax.

Dahlen Thu 10-Oct-13 16:04:46

I think any form of taxation is going to be fundamentally unfair, because income is not the same as disposable income.

Yes, to some extent people make choices - don't moan about the lack of cash if you have a mortgage on a 7-bed house in Richmond for example grin, but some costs incurred by people on good incomes are unavoidable. If you work in London, for example, any savings you make by living further away will be swallowed up in increased commuting costs and it may not be possible to do your job anywhere else.

It's hard for someone on £150 a week to empathise with someone on £1500 a week, but both families can be faced with a choice between heating or food. It remains the case though that you are far more likely to be facing that choice if you earn less.

eurochick Thu 10-Oct-13 16:14:33

I think the super rich (a much smaller group than the 1%) can often arrange their financial affairs so they end up paying very little in tax.

But most people in the 1% will just be normal folks paying a lot of income tax and not getting (or expecting) much of anything in return.

HMRC makes a similar assumption though. If you earn over £100k, you have to fill out a tax return every year. Even if you pay tax via PAYE and have no other reason to fill out a tax return. They seem to assume you must be squirrelling away piles of cash (rather than living in a 3 bed semi in a somewhat edgy area of South London, and being comfortable). I'm not saying £100k is not a lot of money, but most people earning such a sum are paying their taxes like everyone else, so I'm not sure why HMRC singles them out.

squirrel996 Thu 10-Oct-13 16:20:50

My dad has a friend who is a high court barrister and his tax bill for 1 year was £90k!

KellyElly Thu 10-Oct-13 16:41:24

My ex was a contractor and he legally avoided paying as much tax as someone employed by a company by setting up a limited company and being paid a very low salary and taking a large amount in dividends. I don't know if people can still do this or not. He and many of his fellow contractors were certainly not paying the level of tax they would usually. I wouldn't apply this to all the rich, but some people can legally avoid paying the same taxes as a saleried employee.

Yes very often people do run their contracts through a limited company take their earnings out as dividends and not salary.

A huge number of them aren't rich though. All sorts of people are contractors. It is a legitimate means of tax planning. Also a lot of those companies who employ contractors prefer to deal with a limited company or a LLP and won't employ a contractor who isn't set up that way. If they don't do it they don't get the contract.

And in response to the OP yes I do think most people pay the tax. I think it is a small minority of people who can tax plan in such a way they drastically reduce their tax bill. They tend to be seriously rich though.

sparechange Thu 10-Oct-13 16:52:59

I think it is because you hear of people like Jimmy Carr having been part of tax avoidance schemes, which leads to an assumption that employing an accountant = trying to avoid paying tax
And then idiots like Duncan Bannatyne pop up trying to get more attention for himself by taking a pop at non-doms, without having a clue what it actually means, and further gives this myth that everyone at the top of the tree is doing their best to find ways to wriggle out of paying their fair share.

Plus I'm sure very rich people moan about paying tax, and this occasionally gets reported (Adele comments for example) which further adds to the impression that people with loads of money resent paying tax and try to do their damnest not to, which people with no money think the rich should be paying more because they don't pay enough.

It isn't just here though - during the US elections last year, both candidates had to publish their tax returns to refute allegations they were avoiding tax

TheFallenNinja Thu 10-Oct-13 16:53:34

It's the politics of envy, nothing more.

ThingsThatMakeYouGoHmmmmmmmmm Thu 10-Oct-13 17:38:44

eurochick

" I'm not saying £100k is not a lot of money, but most people earning such a sum are paying their taxes like everyone else, so I'm not sure why HMRC singles them out."

Its because investment income is usually taxed at the basic rate (bank and building society interest, for example) and has to have an additional slice of leviedfor higher rate tax payers.

Redpipe Thu 10-Oct-13 18:20:48

Sorry only just got back online.

I have enjoyed reading the replies and they make a lot of sense.

Mintyy I will trying and find some examples but I find it hard to believe that you have not noticed in debates as soon as the rich are mentioned in regard to paying large amounts of tax several posters will claim the rich don't pay tax because they can afford to pay people to avoid it.

Redpipe Thu 10-Oct-13 18:32:37

Mintyy

I have just advanced searched "rich" and "tax" and the site is littered with posts generalising and condemning the rich for not paying enough tax. I haven't cut and paste because I don't want to take something out of context and equally don't want to cut a whole thread.

ch1a Thu 10-Oct-13 19:21:20

Most tax evasion I come across is committed by owner managed businesses and consultants. Not necessarily making masses of money each year. I work in tax investigations acting for clients who are suspected of serious tax fraud.

The tax interest and penalty bill is high enough for the cases I deal with to be generally classed as serious fraud and dealt with through code of practice 9 but often this is the cumulation of many years of evasion and not masses of income being diverted in any one year.

ch1a Thu 10-Oct-13 19:26:05

I should add that isn't to say all consultant structures are evasive in nature at all - just that this type of set up is open to abuse and diversions ( many of which are investigated by hmrc) much more easily.

ch1a Thu 10-Oct-13 19:28:20

I should add that isn't to say all consultant structures are evasive in nature at all - just that this type of set up is open to abuse and diversions ( many of which are investigated by hmrc) much more easily.

ch1a Thu 10-Oct-13 19:28:50

So much so I added it twice. Apologies.

Redpipe Thu 10-Oct-13 19:36:30

interesting ch1a

NotDead Thu 10-Oct-13 19:48:54

dudes..ponder this. .. a percentage salary increase s ounds fair yes?

say everyone's salary goes up 1% a year? fair?

sounds 'fair' but when 1% is a hundred quid and another's 1% is 1000.. think about what happens after 10 years and how much more money those at the top have.

well if you look at it pr op erly that means that inequity is magnified every year.

so when salaries at the top are going up many times faster than that..sometimes tripling when junior salaries are going up 2% PLUS the sheer numbers.. 1, 000k = city bonus on top of salary means 100 people can be employed annually on that persons 'spare' money..or toput it another way one yyear's increase on big salaries can pay for 100 years of increase for someone on a low income.

so paying 50% tax is not even scratching the issue of 'fairness' downwards..

Redpipe Thu 10-Oct-13 19:56:12

notdead

But salaries for the vast majority of the top 1% of earners have gone down not up.
I am not talking about the super rich here, just people on £160'000 bracket. many of their salaries have been cut.

NotDead Thu 10-Oct-13 19:59:06

btw its not envy its powerlessness. people with a lot of spare money and economic power can influence t h e game to give them more freedom..without realising thatthe best economic outcomes are achieved with opportunity maximised in the whole system.. which means less inequity. .. but when selfishness is rewarded.. and the 'most selfish' are also the policymakers tasked with managing the game..um you end up with a 'maxselfish' game rather that a 'maxoutput' game..ie an economy where x is much richer than y in britain, but both x and y slip economically against the global picture.. This is why inequity always destroys empires..the more content the empire..the more passive the population and the greater the advantage taken by maxselfish policymakers... it hapoened in rome, french, british empire and holding on to those behaviours led to the US empire... and so forth.. chinese and indian economies are spreading opportunity downwards at the moment...

SeaSickSal Thu 10-Oct-13 20:10:41

But as a proportion of their income how much tax do they pay? Paying £5 million pounds tax is not that much if you have another £100 million to play with.

And to them road tax, TV licence, council tax and VAT on food and suchlike will be water off a ducks back.

But if you are a family on £30k year these things take up a massive proportion of your income.

It's the proportion of the income, not the amount.

Also as that figure is actually about those who pay tax it doesn't take into account those who've avoided it.

Redpipe Thu 10-Oct-13 20:14:47

seasickgirl

You have proved my point! You know the top 1% bracket starts at £160K earnings don't you? So someone earning that amount would pay around 80k in tax and ni so would be left with 80k not millions!

AuntieMaggie Thu 10-Oct-13 20:30:55

Tax fraud counts for something like 45% (including tv licenses, etc) compared to benefit fraud (which we hear loads more about) of the 20 billion it costs the public sector each year. In my simple logic that's almost like people robbing essential public sector services (I do realise its not that simple and not all of this money would go towards that)

NotDead Thu 10-Oct-13 20:36:05

its not the proportion at all! Do you get charged less for a loaf of bread based on your income?

a loaf of bread to me is 2% of my weekly income. To someone taking home 100k a loaf of bread is 0.01%

a loaf of bread is massively more expensive to the poor than to the rich ..proportionally. .

Redpipe your premise on a £160k earner is wrong. They pay no tax on the first £10k, then 20% tax on the next £25k, 40% on the next £115k and 50% on the rest (or thereabouts), in other words, on a £160k wage you would pay £56k in tax not £80k, however I agree that there is a misconception about people paying tax. On the other hand, many contractors for large companies DO avoid paying teh full rate of tax by setting up their own limited company. It's not illegal and is a perfectly valid way of doing things, it may not be the most moral thing ever, but it's up to the government to close the loophole allowing it to happen.

Redpipe Thu 10-Oct-13 21:58:46

notdead

Of course a loaf of bread will be proportionately more to a lower earner. You're stating the obvious. My post is about people believing that the majority of high earners get out of paying tax when in reality it is the minority.

ivykaty44 Thu 10-Oct-13 22:05:37

Phil Collins
Tracy Emin
Jenson Button
Lewis Hamilton
Sir Philip Green
Sir Mick Jagger
all the above are tax exiles

Sir David Rowat Barclay and Sir Frederick Hugh Barclay are worth roughly £2.35 billion in 2013 are also accused of being tax exiles and there address is also in Monaco

This is why I end up believing that these rich people just avoid paying tax like the plague

Rothemere owner of the daily mail is another tax exile - he is worth roughy £1,3 billion

Perhaps my view is stilted - but I wonder if you went through the times rich list of say 350 people - how many are avoiding avidly paying tax by being tax exiles

utreas Thu 10-Oct-13 22:17:38

YADNBU without the wealthiest people in society we would be substantially worse off as a country.

Redpipe Thu 10-Oct-13 22:20:03

ivykaty

But you are talking about the times rich list. They are the minority of the 1%.
It;s the assumption that if you're a high earner you have means to evade tax when in reality it's just not the case for the majority.

In answer to your OP, the reason people believe it, is because it's printed on the front page of the tabloids on a regular basis.

Redpipe Thu 10-Oct-13 22:23:20

justforlaughs

You are right but the people who believe this shite are the same people who belittle people for believing other sensationalist front page headline grabbers

ivykaty44 Thu 10-Oct-13 22:31:39

to wonder why many people assume that rich people don't pay tax

that was the question you asked

followed by

when the figures today show that the top 1% of earner actually pay a third of all tax collected.

that statement

I answered the question

and you come back with this

But you are talking about the times rich list. They are the minority of the 1%.

woudl that be the same 1% that you were talking about in your first OP?

Redpipe Thu 10-Oct-13 22:37:03

No ivykaty

I am talking about the 300'000 who are in the top 1% of earners which comprises a minority of super rich people but is made up of a majority of earners who pay tax and earn a lot less than a million a year.

NotDavidTennant Thu 10-Oct-13 22:40:56

Where are your statistics from? How are earnings calculated? What taxes are covered? (I'm assuming it's just income tax).

Many of the mega-rich are not domiciled in this country for tax purposes, or are able to arrange for their earnings to paid in ways other than as taxable income, so would they even appear in your statistics?

Also, just because the statistic you have seen refers to the top 1% why do you assume that that is the same group as people are referring to as 'the rich'? I'm pretty sure when people talk about 'the rich' avoiding taxes they're not talking about people on £160k. They're talking about the top 0.1% or maybe even the top 0.01%. They are talking about people who are earning millions.

ivykaty44 Thu 10-Oct-13 22:42:12

thing is I gave a list of people who are tax exiles OP - so they don't pay any tax and therefore can't be including in the top 1% earners paying tax

Redpipe Thu 10-Oct-13 22:43:28

notdavidtennant

Would you say some one earning £160'000 a year was rich?

Redpipe Thu 10-Oct-13 22:47:24

basically the top 1% of earners pay nearly 30% of all income tax collected by the government in this country.

NotDead Fri 11-Oct-13 05:32:49

um yes..but people in the top 1% of households in terms of income aren't the super rich. You 'only' need a combined net income of about 100k to be in the top 1% of household incomes.

WhenDoISleep Fri 11-Oct-13 07:05:27

JustforLaughs

A person on £160k has no tax-free personal allowance, so they pay tax on every £ earned.

A rough calculation puts their income tax paid at approx. £58k and National Insurance at £6.4k - ignoring any pension contributions, etc.

ivykaty44 Fri 11-Oct-13 08:58:00

redpipe - no the top 1% of earners do not pay nearly 30% of all income tax

the top 1% of tax payers pay 30% of all income tax collected by this government

A wage of £160k

pays

£58098 in income tax
£6414 in National Insurance

Where as someone earning £50k

pays

£9822 in income tax
£4214 in National Insurance

so they would earn £110k less but pay £2k less in NI

Redpipe Fri 11-Oct-13 09:12:00

ivykaty

I really don't understand why you wrote
"redpipe - no the top 1% of earners do not pay nearly 30% of all income tax

the top 1% of tax payers pay 30% of all income tax collected by this government"

The official figures state that they do?

ivykaty44 Fri 11-Oct-13 09:16:02

redpipe

the top 1% of earners and the top 1% of tax payers is different, it is not the same thing

Redpipe Fri 11-Oct-13 09:16:12

notdead

This is exactly my point. The top 1% earners are often flippantly referred to as tax avoiders when in reality the majority are not tax avoiders and in fact pay 30% of all taxes collected by the government.
You have stated exactly what my OP is about.

ivykaty44 Fri 11-Oct-13 09:23:11

redpipe - the top 1% of tax payers doesn't include the top earners that are avoiding paying tax - that whole 1% are paying tax and not avoiding so it can't be a majority of them - it is all of them

Redpipe Fri 11-Oct-13 09:23:15

But putting aside the few (absolute minority) super rich/rich in this country who avoid or evade tax the top earners are also the top tax tax payers.

My OP is about people immediately jumping on 'the rich' saying "oh they don't pay enough they can get out of paying tax when in reality the majority of rich people in this country do not avoid tax and in fact pay 30% of all tax collected.

if you're not tax resident in the UK, then you aren't avoiding tax, you're just not paying tax that isn't due. If it's not due, you don't owe it, therefore don't need to pay it.

However, if you don't like the rules about tax residency, then that's what you should be complaining/campaigning about, not that people are doing something legal. And a further point, non UK tax residents are generally paying income tax somewhere else (ie to the country where they are tax resident). It's not up to the UK to unilaterally decide to whip a slice of another country's tax take.

But on the third hand wink, there is a lot of murkiness surrounding the whole area, and IME tax advisers would welcome it all being sorted out and made more transparent.

ivykaty44 Fri 11-Oct-13 09:32:49

69 billion is lost in tax in the Uk each year by tax avoiding

154 billion will be raised in income tax

so roughly 51 billion is paid by the top 1% of tax payers

69 billion is lost by none paying

so that is more than is lost than the top tax payers pay

The problem really is defining what is rich. Earning £160k to me is not rich. A lot of MN think it is. It is extremely well off, of course it is. It is much, much more than a lot of people are earning, but it is isn't seriously, properly rich.

People earning £160k are often salaried and paying their taxes through the usual PAYE. If they are not they pay through a limited company. They don't get to evade tax that easily.

Redpipe Fri 11-Oct-13 09:41:10

ivykaty

Is that 69 billion lost in corporation tax or personal income tax?

BrokenSunglasses Fri 11-Oct-13 09:42:34

I agree with you OP.

It's just another way for the inverse snobbery to out itself on MN. Some posters are very small minded and think that if you are a higher rate tax payer you must be immoral and going out of your way to avoid taxes. It's no better than the assumption that everyone who claims benefits is a scrounger.

In reality, I expect a lot of tax evasion that goes on is done by people who earn around average. People like the teachers that will do a little tutoring, or plumbers and tradesmen that won't bother to put their smaller jobs through the books, music teachers that teach from a room in their home, cleaners that don't declare all of the jobs they do, and I'm sure I could think of plenty of others.

Not all of the lost revenue from tax avoidance or evasion will be from the rich.

Redpipe Fri 11-Oct-13 09:53:24

Only 0.1% actually earn over 1 Million a year.

So there are around 300,000 of the 308,000 top earners, earning between £160-£999K a year. I don't think anyone can argue that these people would be considered rich on here and through society. Most of this group of rich people will be paying tax.

It seems wrong to read so often that 'the rich' get away with paying tax, that "the rich are getting richer" which is bandied about so often.

Just as it's wrong to generalise about people on benefits it's wrong to generalise about the rich.

WilsonFrickett Fri 11-Oct-13 09:55:19

My DH is close to the top bracket and he pays loads of tax. I have my own business and my attitude to tax is that I am happy to pay what I owe on the money I make (according to my accountant this is a refreshing attitude sad). We pay in a lot and are happy to do it.

So yes, it does fuck me off mightily when people assume everyone earning over 100k has some sort of hotline to a tax haven.

racmun Fri 11-Oct-13 10:03:03

DH got stung by the self assessment requirement even though he's PAYE. It's not very well
Advertised and HMRC levied a £3k fine. Fortunately they saw that it was a genuine oversight and wiped the fine.

Apparently it's to do with the loss of the personal allowance over £100k they can't sort the tax code out to do it properly so you then get an extra bill despite paying nearly £3k a month tax. It's a fucking joke!!

The problem with the top 1% of earners category is that includes people earning £150k and £10m - there is a bigger gap at the top than the bottom.

BrokenSunglasses Fri 11-Oct-13 10:12:25

When rich bashing, it's worth remembering that while 'the rich' may pay less income tax in terms of percentage of income, they are also likely to pay more in tax and into the economy in other ways.

They are more likely to pay a high amount of stamp duty, council tax, inheritance tax, and they are the ones that keep cleaners, gardeners, nannys, childminders, laundry services etc in business.

The fact that they take significantly less out of the system counts for something too, as does the fact that they often make charitable donations.

NotDead Fri 11-Oct-13 10:35:11

you can still pay 30% of all taxes and be tax avoiders you know!

Redpipe Fri 11-Oct-13 10:42:25

notdead

Have you read my posts?

dialpforpizza Fri 11-Oct-13 11:25:53

I agree there is a lot of unhelpful stigma at both ends.
The total value of tax estimated to be avoided at each end is more relevant - does anyone know what that is? (I don't)

dialpforpizza Fri 11-Oct-13 11:27:43

And actually not just at each end. The total estimated within each tax category to be avoided would be interesting to know.

The OP is nonsense. No one says the top 1% of earners pay "no tax".

The point people make is that they don't pay their fair share of tax. The OP neglects to mention what share of income the top 1% have. According to this it is 14%.

Well, that all seems quite fair doesn't it? The top 1% get 14% of income but pay 30% of the tax? Well no, something isn't quite right actually. It is fair to assume that the figure of 14% doesn't take into account the amount of income reduced by various mechanisms which, although quite legal, are immoral, as they enable people to avoid the taxes that Gvt policy suggests they should fairly pay. If the very rich were declaring and paying their taxes like lesser mortals, I expect the proportion of income would rise to more like 30%. What that would mean is that despite the massive disposable income the rich have, they would be paying on a flat rate percentage basis. Not fair at all.

Redpipe Fri 11-Oct-13 12:23:33

Toadinthehole

Firstly I am not talking 'nonsense'
Secondly I did not neglect to mention, I did not have the figures
Thirdly you are right people don't say "the top 1% of earners pay "no tax""
but they do generalise about rich people (which most people would agree are the top 1% of earners) getting out of paying tax.
This in my view is a lazy generalisation that is factually incorrect and is as bad as people generalising that all benefit claimants have never paid in etc etc!

Redpipe Fri 11-Oct-13 12:36:47

toadinthehole

"If the very rich were declaring and paying their taxes like lesser mortals"

This kind of language (lesser mortals) is exactly the kind of sarcastic commentary I hear/read in regard to the rich. It makes the assumption that the rich think themselves above doesn't it?

I hear people all the time foaming at the mouth generalising about 'the rich' not paying their share (which obviously SOME aren't) and yet the same people have, in their life, paid cash in hand for a builder or got paid cash in hand and not declared it. But hey it's ok for them because it's peanuts compared to 'the rich'. And yet many/most of the top 1% of earners pay their fair share and don't complain.

eurochick Fri 11-Oct-13 12:42:56

The thread has moved on but I wanted to reply to this.

ThingsThatMakeYouGoHmmmmmmmmm I get that, but at current investment rates, that makes a difference of about a fiver a year for me, if that, and is more than balanced out by tax relief on charitable donations. I suspect it costs HMRC more than that to do the admin. I just don't see how it is worthwhile for people on PAYE, regardless of the level of PAYE. Also, the higher rate point would apply to all higher rate tax payers, so many under the £100k cut off at which HMRC automatically requires a return.

NotDead Fri 11-Oct-13 12:48:01

Wealthy people DO think they are above others - they very often equate the choices they are able to make with positive character values they see in themselves, instead of the reality which is that they are able to afford to make discerning and sensible choices.

I see this even in my friends 'who would eat at wetherspoons for a night out' - er people who can't afford £40 a person.. who would dress from ASDA .. er people who can't afford £80 jeans.. who would let their car run into the ground like that/not be repaired .. er people who can't afford a new one/comprehensive insurance/garage fees.. Who would drink at home from cans .. er people who can't afford more than two quid on a night in... etc etc.

'The rich' or more accurately anyone over the median, completely blind themselves to the fact that most 'value choices' and many 'character values' - eg max honesty are often only a reflection of structural issues, not personal values.

The mistake is then carried forward into 'the reason they are poor is because they made bad choices' when the reality is 'they make bad choices because they are poor'

Take for example a case close to me (me!) I know my best choice would be to do an MBA, but I can't afford to, so I am working in jobs I am more than capable to do, because I can't afford the keys to the castle - no matter what choice I make, it is limited by finance. My friends who are wealthier cannot understand why I don't have a nicer house 'you choose to live like this?!' - I have tired of explaining the barriers because they say 'you need to be more positive' yet their positivity also comes from having choices (and massages, nice hair dos, better clothes, more holidays newer computers, better sofas, nicer mattresses .. etc etc etc.)

YouAreMyFavouriteWasteOfTime Fri 11-Oct-13 12:59:45

notdead - I don't understand your list. in your view are they bad things you are listing or good ones?

Redpipe Fri 11-Oct-13 13:08:05

"Wealthy people DO think they are above others"

Notdead you are just proving my point over and over again! Can you not see the irony. Change wealthy for poor and see how you sound!

sparechange Fri 11-Oct-13 13:13:45

NotDead With all due respect, we aren't talking about people who spend £40 on dinner and £80 on jeans
These are people who spend £400 on dinner and £8k on a handbag...

Redpipe Fri 11-Oct-13 13:14:58

Not dead "The mistake is then carried forward into 'the reason they are poor is because they made bad choices' when the reality is 'they make bad choices because they are poor'"

Really? Are you for real? Do you honestly think that rich people have never tried to do any charity work or have empathy for others. Or set up schemes for less fortunate or less lucky? Your generalisations are insulting.

hermioneweasley Fri 11-Oct-13 13:16:06

If you aren't resident in this country then how is it wrong to live somewhere else and pay tax in your country of residence? People leave the UK in their thousands every year, should they all pay UK tax just because they grew up here?

And it slightly undermines the argument that high earners won't leave the UK due to high tax rates.

I know several high earners (six figures, not Times Rich List) who travel a lot for work and have done just that.

Wellwobbly Fri 11-Oct-13 13:17:17

The people who pay the most tax proportionately, is the low paid, which is outrageous, disgusting and immoral. [Please note: they are also the biggest pool. You can raise a lot of money from the poor].

Who happily and gladly keep voting Labour, who instituted this tax regime, because they bribe them with credits and God knows what else.

Since the government term of 1997 - 2010, I have become increasingly disenchanted with democracy. Most people are simply not informed enough to vote, and that they were bribed with some nice words and a honey smile (Tony Blair)... In the words of Black Adder, 'Oh, God'.

I think Plato was on to something.

bachsingingmum Fri 11-Oct-13 13:23:14

Parliamentary Material - Tax Avoidance

House of Lords - Fair Share and Beer (from Lord Courtown,s blog)
Beer and who pays for the visit to the pub.
I have always been partial to a pint of ale and I particularly welcomed the action of My Right Honourable Friend, the Chancellor of the Exchequer, when he reduced the tax on beer. Something I hope will allow moderate enjoyment for many and also help the pubs and inns that are finding life tricky at the moment. The piece below, with thanks to Professor David K Kamerschen Phd and Professor of Economics, links beer drinking with higher rate tax payers.

THE TAX SYSTEM EXPLAINED IN BEER

Suppose that once a week, ten men go out for beer and the
bill for all ten comes to £100.

If they paid their bill the way we pay our taxes, it would
go something like this..
The first four men (the poorest) would pay nothing.
The fifth would pay £1.
The sixth would pay £3.
The seventh would pay £7.
The eighth would pay £12.
The ninth would pay £18
And the tenth man (the richest) would pay £59.

So, that's what they decided to do.

The ten men drank in the bar every week and seemed quite
happy with the arrangement until, one day, the owner caused
them a little problem. "Since you are all such good
customers," he said, "I'm going to reduce the cost of your
weekly beer by £20.” Drinks for the ten men would now cost just £80.

The group still wanted to pay their bill the way we pay our
taxes. So the first four men were unaffected. They would
still drink for free but what about the other six men? The
paying customers? How could they divide the £20 windfall so
that everyone would get his fair share? They realised that
£20 divided by six is £3.33 but if they subtracted that from
everybody's share then not only would the first four men still be
drinking for free but the fifth and sixth man would each end up
being paid to drink his beer.

So, the bar owner suggested that it would be fairer to
reduce each man's bill by a higher percentage. They decided
to follow the principle of the tax system they had been
using and he proceeded to work out the amounts he suggested
that each should now pay.
And so, the fifth man, like the first four, now paid nothing (a 100% saving).
The sixth man now paid £2 instead of £3 (a 33% saving).
The seventh man now paid £5 instead of £7 (a 28% saving).
The eighth man now paid £9 instead of £12 (a 25% saving).
The ninth man now paid £14 instead of £18 (a 22% saving).
And the tenth man now paid £49 instead of £59 (a 16% saving).
Each of the last six was better off than before with the
first four continuing to drink for free.

But, once outside the bar, the men began to compare their
savings. "I only got £1 out of the £20 saving," declared the
sixth man. He pointed to the tenth man, "but he got £10"

"Yes, that's right," exclaimed the fifth man. "I only saved
£1 too. It's unfair that he got ten times more benefit than me"

"That's true" shouted the seventh man. "Why should he get
£10 back, when I only got £2? The wealthy get all the
breaks"

"Wait a minute," yelled the first four men in unison, "we
didn't get anything at all. This new tax system exploits the
poor" The nine men surrounded the tenth and beat him up.

The next week the tenth man didn't show up for drinks, so
the nine sat down and had their beers without him. But when
it came time to pay the bill, they discovered something
important - they didn't have enough money between all of
them to pay for even half of the bill.

And that, boys and girls, journalists and government
ministers, is how our tax system works. The people who
already pay the highest taxes will naturally get the most
benefit from a tax reduction. Tax them too much, attack them
for being wealthy and they just might not show up anymore. In fact,
they might start drinking overseas, where the atmosphere is
somewhat friendlier.

David R. Kamerschen, Ph.D.
Professor of Economics.
For those who understand, no explanation is needed.
For those who do not understand, no explanation is possible.

BrokenSunglasses Fri 11-Oct-13 13:23:46

Wealthy people DO think they are above others

This really is just proving the OP right.

There are wealthy people that are arrogant and think they are better than others, but then there are poor people who are equally arrogant and think they are better than others.

Lots of the very wealthy people I meet are very down to earth and you can see that they appreciate what they have, even when they have worked extremely hard and made sacrifices to earn it. They are often vey compassionate, because they aren't so self involved with their own worries that they can't be open minded to a bigger picture. They are often in a position where they can dedicate a lot of time and money to causes they care about, they aren't immune to the feel good factor you get by showing kindness and altruism.

NotDead Fri 11-Oct-13 13:25:41

I would love to set up a charity or make big tax deductable contributions to charity or get paid 10k to be the 'face' of a charoty otlr 60k to frontnout an ad campaign for one.

I don't have the choice many wealthy people do have the choice and don't do anything selfless with their money. Agai prpportionally the lower waged give much more time and money.

btw to be in the top 10% of earners in the third wealthiest economy in the world?! how rich do you want to be? ??

NotDead Fri 11-Oct-13 13:28:31

yes but don't you see that inequity of wealth means that the 'nice Roch people's ypu know' are not tied uo in their own selectors because they have phenomenonal safety nets and freedoms to make choices. .. but as a group resent those freedoms being given to the majority

NotDead Fri 11-Oct-13 13:30:00

wondering how many 'people who know nice rich people' are suffering from the Fawlty effect

BrokenSunglasses Fri 11-Oct-13 13:36:19

What?

You are making a whole lot of assumptions there NotDead.

Redpipe Fri 11-Oct-13 13:37:37

"I would love to set up a charity or make big tax deductable contributions to charity or get paid 10k to be the 'face' of a charoty otlr 60k to frontnout an ad campaign for one. "

Seriously notdead listen to yourself. You really do despise wealthy people don't you. I suspect you are one of the people my OP is about.

You make sweeping personality generalisations based upon someones wealth. Dear God!

Dahlen Fri 11-Oct-13 13:38:06

bachsingingmum - The problem with your oft-repeated analogy is that it fails to take into account how the rich person in the scenario achieved their wealth in the first place. Wealth redistribution is based on the argument that people accumulate wealth at the expense of others. To use another analogy, capitalism is a pyramid, with more at the bottom than at the top, but take away the bottom blocks and the top will come tumbling down. The whole tax them too much and they'll bugger off argument can be turned on its head to say treat the poor too badly and they'll revolt.

To me, it's all about fairness. And that applies to rich and poor. I would not make sweeping generalisations about any group of people based on one defining factor. Some people are selfish arses. They can be poor or rich.

However, to play devil's advocate, research consistently shows that the better off someone becomes, the less of their income they donate to charity proportionally...

Redpipe Fri 11-Oct-13 13:41:32

notdead

Google Chuck Feeney or is he just giving his money to good causes to avoid tax?

Scholes34 Fri 11-Oct-13 13:41:55

Yes, a lot of rich people do pay tax. Mr Dyson is a very good example from a business and, I would therefore assume, a personal point of view.

I'm always amazed at the number of students I know whose parents are accountants who get a full maintenance grant. No doubt, their tax returns are based on similar information. I guess they're either very good or very bad accountants.

we're an example of that Scholes - set up a specialist accountancy practice, ask for Current Year Assessment for Student Finance England, despite business taking off, can't get out of CYA system till next year, so DD gets loan + grant for three years based on our first year of a new business. Nothing to do with sharp practices, dodgy accountancy or a desire to avoid/minimise tax. Lots to do with SFE being generally rubbish though.

bumbleymummy Fri 11-Oct-13 14:50:11

OP YANBU.

I dislike the way people think that it's ok for people who earn more to be paying a higher percentage of their income. Too many people have the attitude of 'oh, they still have much more after tax than I have therefore they can afford to pay even more' . Little appreciation of the fact that they are paying considerably more in tax and probably benefitting very little from it - just more 'we don't have what they have so they shouldn't have it' mentality.

IMO a much fairer tax system would be based on a higher 'no-tax' threshold which people on the lowest incomes would benefit from and a fixed rate for everyone else. Yes, some people will have more after they've paid their taxes but why shouldn't they?

I like the drinks in a pub analogy.

Nickynackynoodle Fri 11-Oct-13 15:22:39

I earn £115k. I pay about £40k a year tax, I'm effectively taxed at 60% on everything over £100k because of the loss of personal allowance. I don't think I'm better than anyone, in fact I'm pretty confident that most people are better than me.
Most people don't even understand the tax system well enough to be able to judge who does and doesn't pay enough tax to be honest.

notdead honestly, you are really offensive.

Dahlen Fri 11-Oct-13 15:24:57

Most people don't even understand the tax system well enough to be able to judge who does and doesn't pay enough tax to be honest.

Including HMRC I sometimes feel. grin

Redpipe Fri 11-Oct-13 19:20:54

I'm disappointed notdead hasn't come back on to hear how her last few posts have been received.

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