Liz Truss to raise income tax thresholds?

[GreenLunchBox]

There are rumours that she's going to increase the higher tax threshold to £80k. I think this is a good idea and will increase productivity. Sunak keeping the threshold frozen was a sneaky stealth tax. In this time of rampant inflation it's unfair for people to receive a small payrise and find themselves significantly paying more tax than before

It will also help with the rental property shortage as it will help to mitigate the unfavorable tax changes for landlords so less will be likely to sell up

Ive never understood people’s thinking on tax - woman at my work works 3 days a week, there’s an opening for the other 2 days I asked if she’s going to apply “oh no I’ll be taxed then it won’t be worth my while” I don’t get that mindset yes you’ll pay tax but you’ll still keep your personal allowance, every pound over that you will only pay what 24p in tax and NI so you will make 76p so say you made an extra £76 that’s better than not making it IYSWIM.

same applies when you go over the 43K mark (we’re in Scotland) so for every £100 you make over that you will effectively lose £40 or another way of looking at it is you gain £60. I think it would be mad to never accept promotions or pay rises to stay under the threshold

Those same people refusing roses, promotions and paying in to a pension to avoid tax are likely the same types moaning that Amazon avoids tax and that poor people don't pay enough tax..

But the threshold or barrier as you wish to refer to it as; has to be somewhere.

And yes I don’t get it. Fair enough if your working part time and so the added hours of work don’t match what you believe is worth spending your time on. (I do this myself as work part time).

However if your full time what difference does it make? So what if you earn 50k and get x or earn 55k and get x (ie. no better off/ no worse off in take home). It doesn’t actually make any difference to you - except that you give back more to society. How awful.

I wonder if people know the median salary in the UK. Not in the Home Counties.

But in the UK?

Clue - it's not £50,000.

I mean someone else will come and take those jobs anyway so it doesn't really matter. I'd lower the threshold

Without googling, I think it's around 25k..

But it could be nearer 30k now.

inews.co.uk/news/politics/liz-truss-considers-cutting-taxes-for-top-10-of-earners-by-raising-tax-threshold-to-80000-1832740

So in my situation, the next job up isn't worth it to me because, for the pay rise post tax, the additional responsibility isn't worth it. I'm not taking on a load more shit for so little extra in the bank. I'll stay on a pay band below my abilities and have a better work life balance. The trade off for upsetting my work life balance is a hell of a lot more than what the net pay rise is.

I now realise why there are no threads on this. I think we need to take ourselves off to other forums to debate it.

Yeah I get it, but so what. The solution is you don’t take the job because you don’t want it. Not ‘the whole country has to reclassify their taxes because I am stuck on a border.

If she did raise it are you really saying that the meanial amount of extra tax your paying would suddenly make it worth it. Very much doubt it.

This is a terrible idea. It will cost a fair bit of money and have no positive impact on the economy or the problems the country faces.

The published figures are not that accurate as it excludes the poorest paid - those on part-time work and those part of the gig economy and on zero-hours contracts.

Given NI drops down when it goes up there increase is only really 30% to 40%. I’d be delighted if they were both merged. It works be a whole lot clearer and simpler and rich pensioners works pay a bit more too. They should get rid of employers NI over time too.

Any tax cuts should be to help the low paid, not the well-paid. I agree with a pp that raiding the personal allowance to £20-25000 would be a much better plan.

So how will this be paid for?

Only on MN is it “awful” not to want to pay 43% tax on what you earn and lose child benefit

You crack on with your part time dear

I'd raise the personal allowance to minimum wage and to track that going forward, benefits everyone earning above the threshold. Whatever decides the minimum wage, increase the higher threshold annually in line with that. Merge income tax and NI into one tax.

She is talking about unfreezing the personal allowance too right? Otherwise any low income earners getting a deceny pay rise to help survive the cost of living don't get the same rise when it comes to their take home pay.

Yep :(

Ah so the rich get richer? Fucking stupid idea. Tax those rich bastards more and help prop up our failing NHS etc.

By increase productivity, do you mean 'well off people will be able to spend more'?

We can't have it all ways. We can't have tax cuts while also helping people with the energy crisis. That's just a recipe for disaster. What services should be cut to pay for it?

Would be better to just reinstate child benefits for over £50k, that was never a very fair move, especially as they kept the pensioner benefits for all like the winter fuel payment

I actually do think the higher level threshold should be raised, it’s lost pace with where it was supposed to be when it was brought in and brought far more people into the bracket than it should have. But it’s definitely not a priority for now. Tbh any tinkering with taxes doesn’t make a massive amount of difference to people at an individual level but makes a huge difference at the total level in terms of how much is available to fund public services. A tax change that left me £100 a month richer would cost billions but would still be swallowed up in general price rises so wouldn’t change any of my behaviour as a consumer.

Is that your Liz??