When people say ‘the rich should pay more taxes’ who exactly are they talking about and how much extra should they pay?

[Ollyscarecrow]

Do most people think of celebrities, footballers, and a few exceptional entrepreneurs as ‘the rich’. Or is £100k household income in the UK ‘rich’?

If your household income is £100,000 (take home £60kish) that puts you in the top 10-14% of earners in the UK, and the top 3% globally.

If your household income is £30,000 (net pay £23k)then that puts you at the bottom of the middle 1/3 in the UK (you earn more than 35% of the population) but in the top 15% globally.

The Norwegian historian Rutger Bregman (who’s comments at Davos went viral) talked about ‘the rich’. Whilst he mentioned tax avoidance, he also talked a lot about the rich paying their fair share (which was up to 91% for the very richest) When you look at the figures above, and consider ‘the rich’ in global terms, most of the population of the UK is ‘rich’. So if we want a fairer UK who should be paying more and how much? If we want a fairer world then almost all of the UK should be paying a bit more tax. However, having mentioned this to a few friends/ colleagues (with a wide variation in earning) it seems that no-one actually wants to pay more tax either for UK or world benefit, and ‘the rich’ seems to apply to anyone that earns slightly more than they do. Thoughts please.

Those earning over £150k should pay more income tax

When Labour introduced the 50% tax rate on those earning over £150k tax take fell. When the coalition reduced it to 45%, tax take increased.

When you hit someone's "pinch point", they take action, such as reducing their working hours (GPs and dentists!), putting more into pensions, or emigrating. The end result is less income is taxed at any rate, i.e. lower tax take.

Interesting thread.

I was at a presentation a few years ago on social care in Scandinavia. The speaker said she was shocked at how people in the UK viewed tax - there was a real resentment about paying it. In Sweden, there was more appreciation of the value people received in return, so people were less unhappy about paying their tax bill.

I do think we don't recognise what the tax take is for in the UK, and don't see that there is a cost to education, How often do we read on these boards "my parents paid in all their lives and now have to sell their house my inheritance to pay for care". In reality, most people take out way more than they put in.

Having said all that, I think corporate tax avoidance dwarfs personal taxation.

The speaker said she was shocked at how people in the UK viewed tax - there was a real resentment about paying it.

Perhaps in Sweden there is less waste and inefficiency in their public services?

^^ so where do you see the waste and inefficiency? or is that a soundbite?
public services have been slashed to the bone regardless of government spin and statistics

so where do you see the waste and inefficiency?

Basically every time I use a public service!

Spending £300k on our village library (mood lighting, outside seating/decking area) and then announcing it's closure less than a year later and sale of the entire site for £250k!

Having to have another specialist/expensive (they told me they can only do it once per year because it costs hundreds!) blood test for a cancerous condition because they lost the first sample taken. Of course, they had to wait until the consultant appointment itself, so not only wasted their money, they also wasted consultant time and my time/money. Any efficient organisation would have realised it had gone missing and cancelled the consultant appointment, given it to someone else instead!

Standing outside a derelict bus station that the local authority built less than 10 years ago which they closed 5 years ago and didn't bother protecting/securing, so it is now badly vandalised.

NHS diabetic eye screening cancelled all appointments for one day because the van that they carry their equipment broke down - as if the NHS don't have another van or couldn't hire one! No, it suits them better just to have a day off instead!

Local authority spend millions installing displays on all bus stops in the region to show destinations/times of next buses. Just 3 years later, they turned it off and now the screens aren't used anymore.

I think everyone should pay more tax tbh. More so for higher earners, but I think even those on low incomes should pay a small amount, and most benefits shouldn't be means-tested - I think it creates a societal divide and lots of resentment between "people who pay" and "people who use".

Re Sweden, a Swedish friend told me that at home, despite generally higher levels of taxation, everybody pays - albeit a small amount, for GP and A&E visits, prescriptions (even her dad who was over 90) and the 'board' element of hospital stays.

Though there is an annual cap on prescription costs for those who need a lot.

Maybe this is one reason why they can afford e.g. heavily subsidised childcare.
But imagine the outcry if any government tried introducing the same here.

If companies like Amazon paid their taxes instead of using every trick in the book to avoid paying & more tax loopholes were closed then there would be more money in the pot to go round. In this day & age even earners of £100k aren't really rich, just comfortably well off. There needs to be a super tax for extreme high earners, the footballers earning £100k a week, CEO's of massive companies etc. HMRC spend too much time investigating & penalizing small to medium earners & companies because they are easy wins, the massive companies have solicitors & accountants working to cut their liability & avoid paying corporation tax. Like a previous poster said the National Insurance system needs overhauling, the low earners are paying a higher proportion of their earnings in NI than the top earners.

Gosh we have so many tax experts on this thread.

It's a wonder the Government haven't snapped you all up as consultants for your amazing ideas that will of course be a piece of cake to implement across the board, and which are guaranteed to immediately boost HM Treasury coffers by billions.

the footballers earning £100k a week

HMRC had to do a deal with footballers otherwise they threatened to play in other countries instead. The UK premier league is massive and brings in huge amounts of money to the UK - HMRC/Treasury obviously took the decision that it was too great a risk to charge full tax on the players in case they didn't come and the Premier League lost popularity.

In the same way they gave concessions to Olympic athletes who threatened to boycott the London Olympics if they ended up having to pay UK taxes. There'd have been widespread condemnation of HMRC if Mo Farrer and other top athletes refused to come because of the UK tax regime wouldn't there? The UK needed the Olympics to be a success for the wider economic benefits - major athletes not turning up would have ridiculed the UK.

How about all the pop stars who move to Switzerland for "artistic reasons" - nothing to do with lower tax then? Or the pop groups that time their worldwide tours precisely to ensure that they don't stay anywhere long enough to become liable for tax? Can you imagine the outcry if the top pop stars refused to do UK in their worldwide tours? How about if the top actors refused to come for the premier and award events?

Unfortunately, we're in a global market-place. The ability to pay little or no tax in another country is a massive problem. Steps are being taken to work with other countries to establish some global tax rules but it's all too little too late. The UK, like other countries were found to be asleep on the job when the internet started expanding and are now having to play catch up.

Come now kazzyhoward, don't be so sensible.

It's far easier to just shout out some angry uniformed comment about Amazon, footballers or "the rich" paying more tax to fix everything, than to actually try and understand reality.

If companies like Amazon paid their taxes

You do realise that a huge amount sold on Amazon isn't sold by Amazon themselves and that they're just intermediaries. It's not just items on the Amazon marketplace that are obviously sold and posted by other firms. Even items "sold" directly by Amazon via Amazon Prime etc which come in Amazon packing are often from third party sellers, so Amazon just take a cut for their selling fees and handling costs. Lots of Amazon sellers send their stock to be held at Amazon warehouses so Amazon can sell them "as if" they were Amazon items. Most of those sellers are legitimate UK businesses paying full UK taxes on their sales/profits. So, a large proportion of what is sold via Amazon will be fully "tax paid". And yes, I understand that Amazon themselves are a foreign company using international transfer profit arrangements, so they're not squeaky clean, but some of the crazy comments about how they're avoiding paying squillions of tax are frankly ridiculous as they're usually based on sales, not Amazon's own
actual profits.

This thread reminds me of a conversation I had with a former colleague a few years back. We were just discussing about who we would vote for in the next election, she said she couldn't possibly ever vote for a party that would put Tax up for her husband as they simply do not earn enough to warrant paying further taxes, she said they felt like they were scraping by already. Intrigued I asked her how much her DH was on (already knew she was on about £45k part time) and she informed me he earned over £100k not including his bonus... I simply asked her how did she think me and my husband survived on a combined income of £40k? Needless to say she looked shocked and said she didnt know.

It's far easier to just shout out some angry uniformed comment about Amazon, footballers or "the rich" paying more tax to fix everything, than to actually try and understand reality.

Yep, I see the actual reality of the behavioural effects of the "tax the rich" soundbites, like the way that GPs and dentists are reducing their working hours to avoid the penal 62% tax rate.

Unfortunately lots of people are too young to remember the stupidly high tax rates of the 70s when huge numbers of people, like book authors, beggared off abroad to avoid paying crazy tax rates on their book royalties.

Also people can't do the Maths. Even if you charged 100% tax on the incomes of the few hundred millionaires who stayed in the UK after such a tax, it's still not enough to make up for charging just a percent more on the millions of average earners. All it would do is make people feel smug that "the rich" were being penalised - i.e. punish them for their success!

Getting At the presentation I attended, the presenter was saying that everyone who uses social care, whether at home or in a care facility, paid the equivalent of £200 pcm. Taxation funded the rest. This enabled not only the standards of care to be higher than in the UK, but also allowed for care workers to be paid reasonably well. There was recognition that social care provides employment opportunities for people who would find securing flexible jobs a challenge.

They do have private health care in Sweden but I think it's only about 10% and is not seen as superior to publicly provided services.

I dare say, Olly. However it's not necessarily a social care Utopia.

My Swedish friend (living here) was tearing her hair in Stockholm, over arranging suitable care for her dad, who was over 90, living alone, nearly blind and barely mobile. Their social services were extremely reluctant to find him a suitable place - until she said she'd hold them entirely responsible if anything happened to him. Apart from anything else he was at a huge risk of falls.

Cant wait for the 40% tax bracket to change in April. Will save me a few quid.

Put vat up on non essential items, technology etc. This is much fairer.

My dh is in the most annoying tax bracket earning £104k. When we moved to our area we didn’t really plan on having dc so didn’t research schools, then had dc and realised schools were utterly dire in our area (hardly anyone spoke English at one I went to and we only speak English so couldn’t see us integrating ok) so ended up with dc in private school, live in a small house we bought in south east and I work pt because we have no childcare.

We have hardly anything left at the end of each month. The government also tax me further by not allowing me to receive any benefits or tax free childcare because my dh earns £100k+ so we are effectively much much poorer than two earners at £49k each. It’s a daft system. If the government taxed my dh anymore we would just move abroad. No questions we would just pack up and find somewhere with a better quality of life and I’m sure a lot of qualified people would as well so it doesn’t really work that well.
In the very least make sure huge corporations are paying full taxes.

Put vat up on non essential items, technology etc. This is much fairer

For whom? It will reduce the incentive for producers. If the have any sales divisions of production plants on the country they will withdraw. If cost of their product is going up further through tax they simply put it up more by factoring in the import costs too.

So the item will become hugely unaffordable, jobs will be lost, and the taxes on their wages, and a large amount of corporation tax revenue gone.

For the sake of another 10% on an end user product? Making, marketing, selling, make more taxes.

My Swedish friend (living here) was tearing her hair in Stockholm, over arranging suitable care for her dad, who was over 90, living alone, nearly blind and barely mobile.

Guess it would be difficult organising this remotely no matter what countries you live in. Sweden is recognised as having one of the most effective care systems in the world - because it is well funded by a high tax economy.

And that's the choice. If you want good public services they have to be properly funded and managed.

Olly, she wasn't organising it remotely - she was taking several weeks off work to be in Stockholm with him - and was still tearing her hair over social services' reluctance to accept the level of care he needed.

I will admit that I was shocked to hear the trouble she was having, given my pre-conceived notions about the socialist Utopia of Sweden.

@netflixcrazy

My sister is in the same position, they are contemplating moving abroad.

Tax is theft.

Tax isn't theft. Tax is what pays for so much of the stuff around you.

Roads, police, education, healthcare, fire service, social welfare, need i go on?

I think if people want fairness, no one should be allowed get out more than they put in and there should be a time limit on benefits - with the exceptional of disability. Far too many feel they are entitled to everything but contribute little to nothing.

You’d be scuppered if you arrive in this world via caesarean section and a stay in NICU. No schooling until you had worked enough to pay enough tax to get you back in credit. Or if you have a cancer diagnosis needing eye wateringly expensive treatment. I don’t have children, or cancer, but I certainly don’t begrudge my tax/NI going to those that do regardless of their contribution.