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AIBU?

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AIBU Income Tax rise.

627 replies

H202too · 30/10/2025 09:56

To be panicking about income tax rise.

Things are tight and to loae even £30-60 a month will be difficult.

I know people are talking about the mansion tax being a no go. But I would prefer this than taxing the workers as per usual.
The tax free rate should be put up. What a mess.

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222days · 30/10/2025 15:23

EasternStandard · 30/10/2025 10:55

Or maybe someone who remembers this

Labour's manifesto is, "fully funded and fully costed - no ifs, no ands, no buts… no additional tax rises."

"I have been very clear that every policy we announce, and every line in our manifesto, will be fully costed and fully funded."

“Nothing in our plans requires any additional tax to be increased.”

“We’ve got the Office for Budget Responsibility now… You don’t need to win an election to find out [about the public finances].”

“I don’t believe that fiddling around with tax rates is the best way to grow the economy.”

It was me who posted these quotes, that you have copy and pasted here.

Reeves was clearly lying. Everybody with half a braincell knew she was lying at the time. It was repeatedly pointed out by every reputable economic organisation of which I’m aware. However, voters prefer to believe in free cake than to face reality which is why: a) why she made these clearly false claims in the first place (although this was actually quite stupid because the Conservatives had behaved so appallingly in office that Labour would have won anyway and, arguably, they might have been better off winning with a slightly smaller majority without some of the slightly more extreme and incompetent candidates becoming MPs and therefore causing difficulty now in power to pass sensible legislation which would have been easier to pass with a smaller majority but fewer extremist MPs); and b) why she is now handicapped from doing what needs to be done to fix things. She has sufficient economic education to know that what needs to happen is for income tax to rise, but alongside large-scale reform of the tax system to restore the social contract as I’ve said on other threads, but she is being torn between the economics and reality, and political and optics issues caused by these plainly absurd promises made pre-election which cannot be kept and should never have been made in the first place but Labour MPs do not want to be broken because they know that it will be fuel for future election campaigns to claim that nobody can trust a word they are saying.

It’s quite astonishing that in a situation where it would have been almost impossible for them to lose the last election they made these ridiculous and unnecessary pledges, goaded by the Conservatives’ claims that they’d raise tax, when they didn’t need to do so in order to win. We can see that by the fact that they managed to win without putting forward any economic policies at all of any substance beyond not raising taxes (which it was clear ANY Government was going to have to do, as was pointed out repeatedly pre-election).

They fell straight into the trap and now we’re all suffering the consequences with lots of “small” but for the specific groups to which they apply very significant and economically damaging tax rises being made instead, causing this doom loop, because politicians will not level with the public and state the plainly obvious fact which is unequivocal which is that if they expect the level of services available in continental Europe then our lower and middle earners must pay far more tax than they are doing. This is a mathematic fact: there is no other way to fund it and milking higher earners (but who are not wealthy) has already reached its limit and passed the peak of the Laffer curve some time ago. HMRC data demonstrates this, with bunching below each threshold, falling tax revenues when taxes are hiked further, highly skilled people cutting working hours or retiring early or emigrating, resulting skills shortages requiring more immigration, productivity falling etc.

We have an extremely top-heavy system with our higher PAYE earners paying some of the very highest tax rates in the world and receiving third-world services in return or, indeed, being excluded from receiving many of the services that they fund at all. They are voting with their feet. There is no faster way to destroy the country’s future or any prospect of future growth than to convince its most talented and high-potential young people to leave. Meanwhile they cannot tax the actually wealthy properly because the UK investment prospect is now so poor through decades of underfunding and underskilling and poor infrastructure that FDI - upon which we’ve become reliant - needs them not to make yet more of these people run for the hills.

A European model of Government with state services that people in the UK expect requires low and middle earners to pay far more than they are. Politicians need to level with them and tell them that this is the choice: pay a fair share (clearly still much, much lower even proportionately than higher earners are paying) OR accept far fewer services and keep your low taxes. The top-heavy tax system has been pushed to its limit and the social contract broken and the effect of continuing that path further will be a further acceleration in decline.

We need actual leaders who can articulate a plan for the future, give people some hope that these supposed “hard decisions” actually have a purpose and WILL lead to an improvement, but no it won’t be immediate. Otherwise the cakeists will continue to rise and the decline will get even steeper and become a freefall from which there is no way out.

Sadly much of the electorate prefer to vote for promises that it’s quite clear cannot and will not be kept than to face reality, so politicians will continue to serve them what they demand: promises that they’ve articulated no credible way whatsoever to keep. A lot of the electorate prefer this to a credible plan which might not be nice in the short term but actually WILL lead to a long-term improvement. Even better if you can chuck some scapegoats in (immigrants, disabled children etc) to blame when your never-credible promises are broken. Nigel Farage is the caricature of this on steroids which at one point would have been so ridiculous it was beyond a joke but now a significant number of voters are, unbelievable,. actually taking him seriously when quite obviously electing Reform would be 100 times worse and make the doom loop of falling living standard a sheer drop at terminal velocity, very obviously much worse and faster than the incompetence we’ve seen from Labour and the Conservatives.

This Labour Government are as disappointing and economically illiterate as the Governments for the last few decades so there is little hope in my opinion, because they electorate are served what they demand and they demand incompetent leadership promising them unicorns which will never arrive. There are steps that could be taken to start to improve things - the only way of doing so being to take the steps needed to increase productivity - but not one political party has anything resembling a leader who is prepared to try to articulate this to the electorate and the electorate do not want to hear it and would prefer to spend their time fighting over the division of the remaining, mouldy-looking cake crumbs. So expect more of the same, and ongoing decline.

EasternStandard · 30/10/2025 15:21

silverbirchjuniper · 30/10/2025 15:04

But @Legolava and @notaweddingdress - we are talking about a small percentage of people here. It seems mad that a consultant doctor earning 110k is paying roughly the same rate of tax as a banker earning 5 million.

And I don't really buy the 'tax the ultra rich and they'd all leave the UK.' I have a friend who earns a good few million a year. If his earnings on over a million a year were to be taxed at a significantly higher, he wouldn't actually be changing his current lifestyle - he'd just be sticking far less into his private pension and savings that he'll then be passing onto his kids. He wouldn't be uprooting his life and family here to move somewhere else just to have more money to squirrel away...

But hit the people who are low and middle earners, and that's when people start thinking 'well, it doesn't make financial sense for me to strive to earn more' or even earn at all, in some cases.

Well no one wants it to be them. Which is why Reeves and Starmer should have avoided stuffing up and needing more taxes.

DorothyCrowfootHodgkin · 30/10/2025 15:16

Applesonthelawn · 30/10/2025 14:08

She really needs to get young (and old) able bodied people back into full time productive work on which they will pay tax, and with a mindset that promotes excellence so they consider it a necessity for their mental health rather than something they sacrifice for the sake of work/life balance. Nobody seems to enjoy work or take pride in it any more in spite of all the efforts to make workplaces more flexible, inclusive, etc. And tbh, it's not even surprising.

Nobody seems to enjoy work or take pride in it any more in spite of all the efforts to make workplaces more flexible, inclusive, etc. And tbh, it's not even surprising.

Could it be because the more you earn, the more you're taxed?

Puzzledandpissedoff · 30/10/2025 15:16

You can’t keep taking from such a small base. It’s already at the stage these issues are losing the treasury money. Many of their studies have told them this. They won’t fix it though because of this kind of disillusion that higher earners are not doing enough despite subsidising the whole country
Awkwardly, it’s the middle and lower earners and jobless not paying their fair share

You're right of course, @Legolava, but this doesn't suit the kind of narrative based largely on envy and spite

Labour try to persuade us that we've not got whatever-it-is because the rich bast**ds are taking it all, Tories pretend it's because of asylum seekers and single mothers, and meanwhile they all lavish wasted billions on their preferred demographic, so really it's pick your poison

dressinggowns · 30/10/2025 15:13

So more tax for the same or poorer services is what we're going to get.

Yes & with the ageing population it will be more taxes for the future.

thatsmyhouse · 30/10/2025 15:13

Spoken like a true socialist. Aww, thanks, 😇

Higher earners already do put in disproportionately more Of course they do, because the whole thing is built on disproportion, but lower earners can't pay what they can't afford. And, while you may get higher earners and/or the extremely wealthy leaving the country and/or finding ways to avoid tax, the same type of thing happens lower down the scale too. Shall I up my hours a bit but lose my UC/pay more tax, or wouldn't I be better off staying as I am? And lower down the margins are tighter and it may be less of a choice and more a case of people really not being able to afford being worse off.

But I don't disagree that overall we should have a more honest discussion about tax and what it is for to make more people accepting of paying a little bit more, instead of all the infantile references to 'the tax man,' that people endlessly trot out.

Bruisername · 30/10/2025 15:13

silverbirchjuniper · 30/10/2025 15:10

Also @dressinggowns - people work at what they're qualified to do. Bankers and lawyers will keep on being bankers and lawyers and will always be highly paid. But I don't think any of them would go 'hey, my take home pay is now 'only' 750k as oppose to a million, I'll give it all up and become a gardener'.

Equally, all this 'people deserve to be rewarded for their hard work' - trust me, the lawyers are not working harder than the nurses!

They’ll keep working as a banker or a lawyer but they’ll do it in Paris or New York or Singapore

and when the fee earners start to leave and Europe finally get the coveted number 1 financial centre then the knock on effect to the economy will not be good

Bootsies · 30/10/2025 15:13

SushiForMe · 30/10/2025 14:23

You are « absolutely not happy to pay anything extra » … well, nobody wants to pay anything extra so what do we do?
You say you earn just above MW and work part time, so you barely pay any tax as it is and you must take quite a good amount from « the pot » : schools for your two DC, any UC?, NHS and social care as you mention special needs, Child Benefit… council housing? that would mean your rent is subsidised.

So to sum up, you already contribute less than you take but want others to pay even more than they already do? Right.

Oh yes, I forgot, I don't pay much in so I don't deserve much. and all the benefits I am supposed to get. DH earn too and we are just above the cut off for UC. so we don't get any cent. We pay a mortgage for which we do no get help and my childs PIP goes on their various disability related needs and doesn't cover it all so we top it up. But thank you. Some people almost sound jealous when I say DC is disabled. All the money we must be getting!!!

I contribute about 80h of care per week. If DC would be in care, it would cost the government 3-4k per week. If anything, I am saving the state a bombe!

dressinggowns · 30/10/2025 15:12

@silverbirchjuniper but they aren't going to work for free so as I said many will just reduce their hours or retire early. Investment banking isn't really a career for longevity!

TenGreatFatSquirrels · 30/10/2025 15:12

DorothyCrowfootHodgkin · 30/10/2025 15:05

So you're saying that those people must work hard to subsidise those who don't? Or who choose not to and therefore earn less? Some people work hard because they want to earn X in order to afford Y, and there is nothing wrong with that. If they want an expensive car, a home abroad, or a Rolex, that's their prerogative, provided they earn the money to pay for them. It's nobody's right to tell them they shouldn't want those things if they are not going to rely on anyone else to buy them.

I never said they must do anything. If people choose to allow their society to decay around them that’s their choice. Meanwhile they’re not just subsiding others… they’re paying for the roads THEY drive on and the police and fire and ambulance they will use if required, and the schools their kids and grandkids use (usually) etc.

taxguru · 30/10/2025 15:10

tupils · 30/10/2025 10:21

If things are so tight for you I imagine you can’t pay for private healthcare?
If you have children, I guess they go to local schools?
You probably don’t have your own security team?
If so, surely improved public services are in your best interests?
You will be a net beneficiary, not a net contributor.

Edited

Tax rises aren't for better services. They're to start to plug the deficit. We already pay far too little tax for the crap services we have to endure. Tax rates would have to increase significantly for there to be any money for improvements, which won't happen. So more tax for the same or poorer services is what we're going to get.

silverbirchjuniper · 30/10/2025 15:10

Also @dressinggowns - people work at what they're qualified to do. Bankers and lawyers will keep on being bankers and lawyers and will always be highly paid. But I don't think any of them would go 'hey, my take home pay is now 'only' 750k as oppose to a million, I'll give it all up and become a gardener'.

Equally, all this 'people deserve to be rewarded for their hard work' - trust me, the lawyers are not working harder than the nurses!

DorothyCrowfootHodgkin · 30/10/2025 15:10

Bluegrassdfly · 30/10/2025 13:46

Yes! The Wild West of widespread tax avoidance died in the 1990s. I’m so sick of this ‘the wealthy are dodging tax’ arguments when the vast, vast majority aren’t. It’s tiresome and obscures the fact that if we want better public services we all have to pay for them.

So many people confuse tax avoidance with tax evasion.

dressinggowns · 30/10/2025 15:09

@thatsmyhouse

If you have more you put more in. It's that simple

but this is what happens.

Bootsies · 30/10/2025 15:08

Bumblebee72 · 30/10/2025 14:28

Since when did looking after your family become providing social care support on behalf of the government?

My child is an adult with very complex needs. If an adult in your family would need round the clock care, would you be able to afford a living without earning an income?

TenGreatFatSquirrels · 30/10/2025 15:07

BadgernTheGarden · 30/10/2025 14:35

There is also the ability for a high earning husband/wife to pass some of their income to their spouse for tax purposes to make best use of tax thresholds.

That only works if it’s money from shared assets or if you can ‘employ’ your spouse in your company.

If you’re a high paid employee as far as I know all you get is marriage allowance which is pretty paltry. If you are married or in a civil partnership and one of you earns less than the Personal Allowance (£12,570 for the 2025/26 tax year), they can transfer £1,260 of their unused allowance to their partner. This is only possible if the receiving partner is a basic-rate taxpayer, and it can reduce their tax bill by up to £252 per year.

Hardly saving a fortune is it? My husband can’t do it either because I’m currently a student rather than working.

DorothyCrowfootHodgkin · 30/10/2025 15:05

TenGreatFatSquirrels · 30/10/2025 14:48

… because if nobody works hard and pays for things the public uses then we lose out on schools, hospitals, police, ambulances, good roads etc and become a crappy unsafe country with crappy productivity and everyone is left in poverty. Is that not obvious?

So you're saying that those people must work hard to subsidise those who don't? Or who choose not to and therefore earn less? Some people work hard because they want to earn X in order to afford Y, and there is nothing wrong with that. If they want an expensive car, a home abroad, or a Rolex, that's their prerogative, provided they earn the money to pay for them. It's nobody's right to tell them they shouldn't want those things if they are not going to rely on anyone else to buy them.

silverbirchjuniper · 30/10/2025 15:04

But @Legolava and @notaweddingdress - we are talking about a small percentage of people here. It seems mad that a consultant doctor earning 110k is paying roughly the same rate of tax as a banker earning 5 million.

And I don't really buy the 'tax the ultra rich and they'd all leave the UK.' I have a friend who earns a good few million a year. If his earnings on over a million a year were to be taxed at a significantly higher, he wouldn't actually be changing his current lifestyle - he'd just be sticking far less into his private pension and savings that he'll then be passing onto his kids. He wouldn't be uprooting his life and family here to move somewhere else just to have more money to squirrel away...

But hit the people who are low and middle earners, and that's when people start thinking 'well, it doesn't make financial sense for me to strive to earn more' or even earn at all, in some cases.

EK27 · 30/10/2025 15:03

millymollymoomoo · 30/10/2025 13:05

@EK27 im
aware if the % and labour desire to raise it to 0.7%

I object to £193m given to Syria Islamist govt, the £101m given to Gaza, the £171m to Afghanistan and my many more, while supporting terrorist govts

I suppose, when I see images from Gaza, Syria and Afghanistan I find it hard not to think we should give at least some humanitarian aid to people (often children) caught up in catastrophes totally outside their control. People are suffering so much and this is going towards providing the basics and the money goes via NGOs rather than directly to governments. I'd happily return aid to 0.7% of public spending but I get that's not popular. Don't see it happening under this government though

DorothyCrowfootHodgkin · 30/10/2025 14:59

When it's not their money being taken, people are quick and loud in saying taxing more is right and fair. When it's their money, suddenly they change tune. How many people who inherit or win lots of money keep just enough and give the rest away? How many people pay 'excess' tax under the government's voluntary scheme? Exactly.

SpaceRaccoon · 30/10/2025 14:58

silverbirchjuniper · 30/10/2025 13:16

What I don't understand is why they don't do something about the uber high earners? About 20,000 people in the UK earn over a million pounds a year. Why not just slap an extremely high tax on earnings over 500k, for example? No-one needs that much money. Perhaps I am naive, but it seems appalling when there are so many families living in poverty.

Because they'd leave. Someone with that level of income is highly mobile. Look up the Laffer curve.

Legolava · 30/10/2025 14:51

thatsmyhouse · 30/10/2025 14:47

Awkwardly, it’s the middle and lower earners and jobless not paying their fair share.

But how do you define 'fair share'? Many in that bracket have barely any disposable income left at the end of the month - how can they pay more? And they also contribute to the economy with discretionary spending. If they can no longer afford their treats - cinema/takeaways/coffess/new clothes now and again, that has a detrimental impact on th economy too. You can't bleed people dry and those shifting money around/planning escapes to Dubai etc are really not being bled dry, they're just not seeing their bank balances go up as much as they'd like. Boo hoo. If what you are paying means you can cover everything and have a decent amount left over for non-essentials then what's the issue really? Feeling aggrieved because you've only got £700/£2k/£1k leftover at the end of the month and you feel it should be more and, hey, it's not fair because everyone else gets free cars for being anxious?

If you have more you put more in. It's that simple. Refusing to accept that is greed, entitlement and self-pity.

Spoken like a true socialist. Comparatively, the middle and lower earners earners don’t pay enough. The higher earners pay huge amounts comparatively to the point it is harming tax take. This is been proven time and time again by government economists.

Higher earners already do put in disproportionately more. The electorate don’t understand that which is why the government finds it difficult to change. You need to tax a much wider base because taxing a small base heavily isn’t enough. As we can see.

Time for everyone to pay up. People want Scandi style spending but aren’t willing to fund it like they do. Signed a basic rate tax payer.

TenGreatFatSquirrels · 30/10/2025 14:48

BananaPeels · 30/10/2025 10:34

I do sometimes wonder why I worked so hard to get good grades and took on student loan debt and paid thousands towards my professional qualifications and CPD etc if all I am seen as is a cash cow to be milked. Why should children work hard at school so they can aspire to earn more money, only to be told they have to pay for everything. I honestly feel like such a huge weight on my shoulders with all these tax rises. My husband and I for the first time have talked about transferring to Dubai just to get away from it all for a few years.

… because if nobody works hard and pays for things the public uses then we lose out on schools, hospitals, police, ambulances, good roads etc and become a crappy unsafe country with crappy productivity and everyone is left in poverty. Is that not obvious?

thatsmyhouse · 30/10/2025 14:47

Awkwardly, it’s the middle and lower earners and jobless not paying their fair share.

But how do you define 'fair share'? Many in that bracket have barely any disposable income left at the end of the month - how can they pay more? And they also contribute to the economy with discretionary spending. If they can no longer afford their treats - cinema/takeaways/coffess/new clothes now and again, that has a detrimental impact on th economy too. You can't bleed people dry and those shifting money around/planning escapes to Dubai etc are really not being bled dry, they're just not seeing their bank balances go up as much as they'd like. Boo hoo. If what you are paying means you can cover everything and have a decent amount left over for non-essentials then what's the issue really? Feeling aggrieved because you've only got £700/£2k/£1k leftover at the end of the month and you feel it should be more and, hey, it's not fair because everyone else gets free cars for being anxious?

If you have more you put more in. It's that simple. Refusing to accept that is greed, entitlement and self-pity.

dressinggowns · 30/10/2025 14:44

@silverbirchjuniper your example doesn't make sense. Why would someone work to lose so much income? You would just reduce your working hours and spend more time not at work.