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

Does it reduce productivity to have consultants working really long hours where the probability or mistakes shoots up?

It's unlikely to increase demand as most people are planning to start cutting back on spending with the huge cost of living increases, having some people able to carry on using small businesses and supporting local businesses could be what keeps them going rather than having to shut down.

How will this be funded?

Giving a bit extra cash to the top 5% of earners ( the 80k poster below) isn't going to keep businesses open that rely on lots of people through the doors like pubs and cafes

@midgetastic I don’t know. I doubt it - they aren’t surgeons, they work in oncology. The initiatives (that now won’t happen) are clinic-based.

A more apposite question might be: would you rather your relative start chemotherapy promptly after their cancer diagnosis or a few months down the line?

I think the thresholds should be increased yes. Not by as much as you've suggested though
I think both the basic rate threshold and the higher rate should be increased by say 5 to 6 thousand
I also think the child benefit cut off should be increased
However, like everything I wonder where the money would come from to pay for these things?

I would rather we trained more oncologists

And made working conditions good so that they all stayed

Whenever any extra help is proposed for the poorest, the question is always raised of how this will be funded.
No one is talking about how a tax break for the well-off will be funded.
Our government has massive debt. So what do we cut to fund this tax break?
Close some hospitals?
Cut libraries?
Cut welfare benefits?
Or is this tax cut going to be funded by piling more debt onto our children?

Well obviously, but that takes time and in the short term there’s a need. Financial incentives are immediate.

@NCHammer2022 it takes 10 years postgrad to become an oncologist. Cancer rates are growing at a phenomenal
rate, we don’t have enough and the shortage will get worse before it gets better. (Not helped by the BMA lobbying to limit med school places in order to preserve doctors’ pay and status!)

In the meantime, getting oncologists into clinics is the only way to get people with cancer treated in an acceptable timeframe. Especially since many are waiting longer to be seen in primary care and TWR referrals can take much longer.

Sorry, that was to @midgetastic

I completely agree with you. And if that means financial incentives then so be it.

Also - unpopular opinion alert - they should bin the 60% marginal rate for >£100k. DH is a consultant trying to organise a waiting list clearing initiative post-pandemic. No consultants want to give up half their weekends to take home 40% of the headline money on offer. I wouldn’t either. It absolutely influences people’s productivity.

That's not a tax issue though is it

A few one here have mentioned being in the over 50K bracket so don't get child benefit, although it is faff as you have to do a tax assesment and pay it back please don't cancel it it can impact your pension later in life. arthurboyd.co.uk/why-you-should-still-register-for-child-benefit-even-if-you-are-a-high-earner/

"(Not helped by the BMA lobbying to limit med school places in order to preserve doctors’ pay and status!)".

"BMA says increased medical school places are welcomed but funding must be found for extra clinical placements
by BMA media team
Press release from the BMA.

Location: England
Published: Friday 6 August 2021

Press release icon
Responding to the announcement that extra medical school places will be available this year, Dr Mary Anne Burrow, co-chair of the BMA medical academic staff committee, said:

“We welcome the news that there will be extra funding for medical school places as this desperate need for more doctors in training is a recommendation that we made in our Medical Staffing in England report, which we issued last month.

“However, this increase in student places must not come at the expense of extra funding for the existing workforce or reductions in funding in future years, because tackling the waiting lists and backlog are going to require sustained investment over many years. And the government must make clear that there will be sufficient clinical placements for all those who succeed at medical school.

“We don’t have enough doctors, those that are working are exhausted and burned out. Finding the money to train doctors of the future is therefore essential but must be matched with the right investments in medical educators and clinical placements to ensure that this leads to a sustained increase in the medical workforce.”

@izimbra yes and in the year DH (current oncologist) went to med school, their position was....

www.bmj.com/content/337/bmj.a748

And @purplebells - if no consultants (from a large tertiary cancer care centre) will work because tax, then yes it's a tax issue.

This isn't correct. You don't lose your personal allowance all in one go, you lose it gradually on a sliding scale. (The PA is reduced by £1 for every £2 that you earn over £100k.)

This does mean that the marginal tax rate is very high at just over £100k, but it simply isn't true that you would earn less.

Also, people earning e.g. £104k are in the kind of position where they can easily just bung £4k in their pension and keep their full PA

You are technically correct @Octomore but if I’m giving up half my weekend to work then I’d prefer extra cash in my pocket to “jam tomorrow” in my pension. 6 days a week for no extra take home pay is a shit deal. Loss of PA even when tapered is absolutely punitive and impacts disproportionately on those hovering above the threshold (cf those who comfortably exceed £125k).

I’d rather the government look at household income rather than individual income. My DH is the sole earner in our house and earns 55k and is therefore a ‘high earner’. I’m a disabled sahm and he has to support me and my DS out of his income. We already lose half our child benefit, and we only just got the property ladder last year at the age of 43. We’re not wealthy by any means and it doesn’t seem fair that two people each earning 45k and bringing in a joint household income of 90k pay less tax than us and allowed to keep all the child benefit if they have children. The government need to recognise that some ‘high earners’ have caring responsibilities and have disabled people in their household they need to support.

@Deguster but the reason more oncologists are needed in the first place is not a tax problem. So the solution shouldn't be a tax solution.

Also justifying a wide ranging tax policy that has implications for all sectors of society to target a very specific and real problem which needs a very specific and real solution is just daft

I earn more than £50k and I object to being called a "rich bastard". Just what exactly gives you the right to call me that, @Beachbreak2411 ?

Since as a nation we decided to fund the NHS through a national insurance / taxation scheme then funding more oncologists is a tax issue

Why on earth not @purplebells ? I get it's inconvenient for the left, but the consequences of consultants not working more hours affect us all. There are already people with cancer waiting months to be seen. There is no pool of idle oncologists. It's the ones we have now - or wait interminably while your illness progresses. And they won't work more if they are taxed punitively for doing so.

Yes I agree that there's a massive problem
but the necessary solution is not a tax solution. It's to train more oncologists and to shore up the NHS so we don't have the problem in the first place - or on the interim more simply, just pay them what they deserve!

What you are suggesting is using a very blunt instrument where a more targeted solution is needed

@midgetastic but she's not suggesting increasing taxation to fund training more oncologists is she? She's advocating more tax cuts to deal with the problem!