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AIBU?

Share your dilemmas and get honest opinions from other Mumsnetters.

To actually not mind paying tax?

166 replies

Squareplate · 05/07/2024 11:34

I'm sick of hearing about how Labour will increase tax (they will, they'll have to, after the mess they've been handed) at the same time as demanding better services.

I quite like what Clement Attlee said
"Charity is a cold grey loveless thing. If a rich man wants to help the poor, he should pay his taxes gladly, not dole out money at a whim"

And yet I know loads of people who do great work for charity at the same time as doing whatever they can to hide their money from the tax man. They'll say taxes are wasted or there's corruption etc, but that happens in the charity sector too.

FWIW, I'm a higher rate taxpayer and my parents estate will likely be subject to significant inheritance tax, but I still think that's right and fair.

I don't understand why paying your taxes isn't seen as a social duty.

OP posts:
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Elsvieta · 07/07/2024 19:35

My income tax and NI seem reasonable (increasingly crap NHS aside). I don't object to paying my fair share for public services, I just think we're perhaps entitled to have some of them (well, health) be better than than they are.

I do object to only getting 25% off my council tax for living alone. Two people take up half the resources of one - it should be 50%! (And I don't have a large / valuable property). And, again, there's a bit of a feeling that I should be getting a bit more for it. Too many damn potholes round here.

nearlylovemyusername · 06/07/2024 22:25

Absolutely. Also those who have a choice to work full time, part time or not at all are normally higher contributors so it would make a lot of sense to keep them motivated to work for longer.

Re double taxation - VAT leaves a choice of what to buy and when, other taxes don't, only to work or not, invest or not etc

user09090909E · 06/07/2024 22:14

There comes a point when taxation is too high and it disincentivises people from working. Laffer curve.

Think of it this way - if taxation was 100% for 100% of people no one would be bothered to work and the government would get 0 taxation.
If taxation is 0% the government gets 0 taxation.

You need a point between those two but the higher it gets, the more people stop working.

en.wikipedia.org/wiki/Laffer_curve

Circe7 · 06/07/2024 21:12

nearlylovemyusername · 06/07/2024 20:52

Not exactly - we pay whatever marginal rate on earnings and than 40% of IHT on over 500k. Means if you're on higher (not even highest) tax band, out of every £ earned you pass 20p to your kids. More harsh IHT and people will start assessing how much they need to leave for remaining years and then resign early. What's the point in continuing working if this all goes to taxman?

I know how IHT works. I just mean there’s a large nil rate band which means very large sums of money can be passed on tax free.

You could scrap IHT and have a gifts tax of receipt of inheritance and other gifts example. So the liability falls on the recipient.

IHT does involve double taxation but then so does pretty much all tax - you pay VAT out of taxed income for example.

I think there are significant issues with raising IHT in terms of incentives to work longer etc. But I also think there are issues with a tax system which relies so heavily on employment taxes which do, regardless of whether some people are willing to pay more, disincentivise work.

Alaimo · 06/07/2024 21:09

I wouldn't mind paying a few percentage points more income tax. Also; inheritance tax. My parents are not in the UK, and I know whatever I inherit from them will be subject to 20% tax. I'd have no issue if the UK also implemented a similar or more stringent inherit tax (which would affect DH and therefore me too).

nearlylovemyusername · 06/07/2024 20:52

Circe7 · 06/07/2024 13:41

Increasing VAT is generally avoided because it’s regressive in that low income people also pay it. Increasing VAT also lowers consumption.

Also Labour’s election pledge includes not increasing VAT other than on private schools.

If you look at the election pledges they have committed to not raising taxes on working people. That leaves it open to increase capital gains tax e.g to match income tax. However that won’t raise much as people have control over when they realise gains.

Labour did produce a policy paper about funding HMRC better. This seems really sensible as HMRC could collect a lot more tax if they were better resourced and have faced cuts recently. There is a lot of really good anti-avoidance law that they just can’t enforce. Or just taxpayers who have no idea that they even owe tax.

Personally I think a model where we mostly tax labour is not working well in the modern economy because hours worked is not really where wealth is generated any more. I think the main reason we emphasise taxing employment income so heavily is that it’s relatively easy to tax. You can receive a £500k windfall tax free from inheritance yet if you make that in salary you lose half. Inheritance taxes are controversial even on the left and also really hard to design so that they can’t be avoided. But in principle taxing inheritance more heavily could raise a huge amount of revenue and prevent wealth being entrenched over generations without hitting productivity in the way income taxes do.

Not exactly - we pay whatever marginal rate on earnings and than 40% of IHT on over 500k. Means if you're on higher (not even highest) tax band, out of every £ earned you pass 20p to your kids. More harsh IHT and people will start assessing how much they need to leave for remaining years and then resign early. What's the point in continuing working if this all goes to taxman?

JustPleachy · 06/07/2024 20:11

Myblindsaredown · 06/07/2024 18:58

Are you not in the uk? In the uk everyone does, and the actual amount is directly linked to your earnings,

I’m not sure which bit you are not understanding. Of course the amount is linked to earnings. However PP was asking why people don’t pay additional tax voluntarily (i.e. more than the amount that is linked to earnings). The analogy was therefore to voluntarily running an extra mile in a marathon.

Myblindsaredown · 06/07/2024 18:58

JustPleachy · 06/07/2024 18:40

You know, you can be proud of running a marathon, but still not want to run an additional mile by yourself at the end.

The idea is that everyone contributes.

Are you not in the uk? In the uk everyone does, and the actual amount is directly linked to your earnings,

JustPleachy · 06/07/2024 18:40

CranfordScones · 06/07/2024 18:19

Good for you. You do realise that you can pay additional voluntary tax to HMRC if you want? Off you go then. Or do you 'pay enough', like the rest of us???

You know, you can be proud of running a marathon, but still not want to run an additional mile by yourself at the end.

The idea is that everyone contributes.

EasternStandard · 06/07/2024 18:25

Itisjustmyopinion · 06/07/2024 18:02

I had a Tory at my door canvassing a few weeks back and he kept coming out with £2k figure and you will pay more tax under Labour.

When I said you say that like it’s a bad thing he didn’t know how to reply. It was quite an amusing conversation seeing him get all flustered as he couldn’t compute that there are people that are happy to pay tax as long as it’s used appropriately and not to pay off their mates

What proportion of your income would you like to pay in tax?

CranfordScones · 06/07/2024 18:19

Good for you. You do realise that you can pay additional voluntary tax to HMRC if you want? Off you go then. Or do you 'pay enough', like the rest of us???

Itisjustmyopinion · 06/07/2024 18:02

I had a Tory at my door canvassing a few weeks back and he kept coming out with £2k figure and you will pay more tax under Labour.

When I said you say that like it’s a bad thing he didn’t know how to reply. It was quite an amusing conversation seeing him get all flustered as he couldn’t compute that there are people that are happy to pay tax as long as it’s used appropriately and not to pay off their mates

Igmum · 06/07/2024 17:52

I always feel that it's a blessing to have a high income and to be able to pay tax.

Maty34 · 06/07/2024 14:31

Suppose it depends what your financial situation is, many people are paying a lot of tax but find themselves struggling and are frustrated when they slog it out to try and earn a bit more to make their life more comfortable to find after tax, childcare, communities and SLC they’re still struggling almost as much. Everyone’s situation is different and can imagine if you're not struggling, feel secure about your future, pension etc and doing work you enjoy doing regardless of the net income then you’ll not be so bothered

sixthvestibule · 06/07/2024 14:23

I am happy to pay tax, but in return I’d like a vote, access to public funds if needed, and access to NHS services without paying - none of which I have as a foreigner on a work visa.

Circe7 · 06/07/2024 13:41

Squareplate · 06/07/2024 13:04

I'm not keen, I just know that they'll have to increase tax to balance the books, even without increasing spending (as whoever won woukd have had to).

Personally I'd put it on VAT, a truly marginal tax and difficult to avoid.

Increasing VAT is generally avoided because it’s regressive in that low income people also pay it. Increasing VAT also lowers consumption.

Also Labour’s election pledge includes not increasing VAT other than on private schools.

If you look at the election pledges they have committed to not raising taxes on working people. That leaves it open to increase capital gains tax e.g to match income tax. However that won’t raise much as people have control over when they realise gains.

Labour did produce a policy paper about funding HMRC better. This seems really sensible as HMRC could collect a lot more tax if they were better resourced and have faced cuts recently. There is a lot of really good anti-avoidance law that they just can’t enforce. Or just taxpayers who have no idea that they even owe tax.

Personally I think a model where we mostly tax labour is not working well in the modern economy because hours worked is not really where wealth is generated any more. I think the main reason we emphasise taxing employment income so heavily is that it’s relatively easy to tax. You can receive a £500k windfall tax free from inheritance yet if you make that in salary you lose half. Inheritance taxes are controversial even on the left and also really hard to design so that they can’t be avoided. But in principle taxing inheritance more heavily could raise a huge amount of revenue and prevent wealth being entrenched over generations without hitting productivity in the way income taxes do.

Squareplate · 06/07/2024 13:04

EasternStandard · 06/07/2024 12:56

You and others who are keen to have these inevitable tax rises which tax do you pay that you want to increase?

I'm not keen, I just know that they'll have to increase tax to balance the books, even without increasing spending (as whoever won woukd have had to).

Personally I'd put it on VAT, a truly marginal tax and difficult to avoid.

OP posts:
EasternStandard · 06/07/2024 12:56

Squareplate · 06/07/2024 12:50

Whoever got in there will be tax rises, an extra £20bn is needed just to stand still, such is the state it's all been left in. They've said no income tax or NI rises, not no tax rises.

You and others who are keen to have these inevitable tax rises which tax do you pay that you want to increase?

Squareplate · 06/07/2024 12:50

EasternStandard · 06/07/2024 12:42

inevitable tax rises

Wasn't it there won’t be tax rises under Labour just a couple of days ago

Has that changed?

Whoever got in there will be tax rises, an extra £20bn is needed just to stand still, such is the state it's all been left in. They've said no income tax or NI rises, not no tax rises.

OP posts:
rumnraisins · 06/07/2024 12:49

LumiB · 06/07/2024 12:02

Well I am talking about 10 yrs ago when it happened but no I'm not going to ever allow myself.to think there is a safety.nrt for me from.the government despite paying my taxes. I've finally saved enough to cover me for 6 months if I ever lose my job again. Except.labour see anyone woth savings as rich even if those savings are a safety net

This is true.

I feel penalising people for working hard and saving is perverse. There will be a point when there just aren’t enough net contributors to sustain the massive state machine and it will fall regardless. Because most of the people who bore the financial burden of the ever expanding state will have either left the country or can’t be bothered anymore.

Of course there should be a safety bed for everyone but this isn’t how the system works now.

Penalising those who can see it coming for trying to secure their own future is immoral.

P.S. It’s likely that you were gatekept.

EasternStandard · 06/07/2024 12:42

MrsSkylerWhite · 06/07/2024 12:16

Yep, completely agree. We don’t fear the inevitable tax rises and are optimistic for public services for the first time in many years.

inevitable tax rises

Wasn't it there won’t be tax rises under Labour just a couple of days ago

Has that changed?

MrsSkylerWhite · 06/07/2024 12:16

Yep, completely agree. We don’t fear the inevitable tax rises and are optimistic for public services for the first time in many years.

LumiB · 06/07/2024 12:02

rumnraisins · 06/07/2024 11:58

You should be entitled to the ‘new style’ JSA if you’ve worked long enough. It’s contribution based. Perhaps you’ve been gatekept?

www.gov.uk/guidance/new-style-jobseekers-allowance

Well I am talking about 10 yrs ago when it happened but no I'm not going to ever allow myself.to think there is a safety.nrt for me from.the government despite paying my taxes. I've finally saved enough to cover me for 6 months if I ever lose my job again. Except.labour see anyone woth savings as rich even if those savings are a safety net

MimitteAndElsaGoToSwitzerland · 06/07/2024 12:01

I'd pay more if I knew I was actually getting something for it.

It seems a cheek now that people may be paying less, but are then left to die because there are no ambulances.

rumnraisins · 06/07/2024 11:58

LumiB · 05/07/2024 23:42

I am after being made redundant and not even being allowed JSa (at the time) when I should of been entitled to it.

Yet everyone wants more and I end up stumping up for it and handing over more of my money because people say they need more help and want more handouts and i get fuck all for it, not even a safety net if i fall on hard times. So how about there is enough help and how about people saying we shouldn't being tapping up others for more money it isn't fair.

Oh and what taxes are paying for me? I have private health care, private dentist, I don't have children so no childcare no need to use state education. I have my own private pension so I don't need to rely on state pension incase it ends up being means tested. I'm trying to use what disposable income I have to put away to cover my care costs when I'm older as I won't have children to rely on.

Edited

You should be entitled to the ‘new style’ JSA if you’ve worked long enough. It’s contribution based. Perhaps you’ve been gatekept?

www.gov.uk/guidance/new-style-jobseekers-allowance