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

Training more oncologists will have zero impact for at least 10 years. Unless by "more targeted solution" you mean "invent a time machine" your suggestion will achieve the square root of fuck all.

There are people dying on waiting lists now.

Would you work for 40% of your pay on your day off @purplebells?

or on the interim more simply, just pay them what they deserve!

Yep, they've also thought of this - took a lot of negotiating but the rate on offer is a significant uplift on the usual NHS rate for a PA.

It still falls over when the "but I'll actually only get 40% of that" penny drops!

@midgetastic to add to that thought, yes I guess in a wider sense it is a tax issue in that MORE tax is needed to address the issue, but this goes against deguster's point. My point is the real problem is the underfunding of the NHS (which, as you suggest does link back to tax)

That's not their position now is it?

That's from 15 years ago.

I don't think in 2008 we could have predicted the damage 10 years of Conservative government was intending to inflict on the health of the nation - which is why we are where we are with the NHS, from a high point of 70% satisfaction with the service in 2010, to the 36% now.

@izimbra Yes, but the current crop of consultants were going to medical school at a time when the government was acceding to the BMA's demands to limit places. And we now have insufficient numbers. The BMA has since changed its position completely, but increasing medical school places now will only deliver consultants in 10 years time.

It's naïve to suggest that the solution is more doctors. It's about as sensible as saying that the answer to child poverty is "Father Christmas". Yes, it would be lovely, and impossible to argue to the contrary, but it's not actually going to help anyone...

That's why I said "in the interim" and 40% of a bigger pie is still a bigger slice (so just increase the pie until the slice is sufficient)

Also it's not just about training more staff ... it's about controlling attrition which is skyrocketing because of the ridiculous conditions NHS staff are asked to work under

And my point is really that they shouldn't have to be working on their days off in the first place because the system is so utterly broken to begin with

And we still need to solve the problem so that in 10 years time we're not still in the same damn hole

Also I regularly work evenings and weekends (for actually no extra pay)

I have always been against the current tax system. When you talk about the 'rich' they aren't the rich. I think Gov likes to get people riled up so it's a middle class v working class argument rather than looking towards the 1% who are polluting the environment, getting massive payouts and avoiding tax.

20% of 80k is a lot more than 20% of 30k. I hate that tax increases as you earn more. Remember that a household income might just be that person on 50k rather than a single person or two people earning that.

I grew up in poverty and so i've seen both sides. I think the tax system needs an overhaul any way and I disagree any changes like the one OP claims is rumoured would help the lower earners, but it should still change. I now earn six figures and I know that's wealthy and classed as 'rich' - but honestly, the taxes, the higher interest I accumulate on my Student Loan - it's not a rewarding system.

Meanwhile, as someone in finance, I have seen the people earning millions per year having the financial ability to hire the best accountants to avoid paying as much tax as you and I.

This shouldn't be about the 'rich' on 80k but the rich on £1m plus. Oh and then bloody transfer pricing - the amount we lose to that fun loophole.

Yes, we do need more doctors and some specialities are massively overworked. Oncology is not really one of them - at consultant level it's largely 9 to 5 with a very low level of on-calls. Most of the senior doctors would willingly work if they were not being taxed punitively - not least because the lack of capacity means planned clinics in the week overrun, patients get worse and treatment is less effective. Nobody wants that.

The point is, there are unintended consequences when tax is wielded as a populist weapon, of which the unfair tapering of the tax threshold is one example. The fact that the £150k plus tax raised bugger all and was quietly scrapped. The fact that the top 10% of earners already pay 60% of all IT. It is naïve to assume tax rates do not influence productivity and behaviour.

So how do we pay for the reduction of taxes in the middle class?
You do know the government debt is pretty astronomical after the pandemic?
Are we really asking our children to pay in the future for the middle class now to have less tax?
Our children are going to have a hard enough time anyway once they are adults. How is this proposal fair?

And people are saying it is not worth working extra hours, because after you reach a certain level of income, it needs a massive increase to really make a difference to your lifestyle. That is the same with or without higher taxes.

I agree. As a teacher, I used to take on exam marking every summer to earn some extra cash to pay for a holiday. It was a huge amount of work but just about worth it for the money. Now I am on the cusp of paying higher rate tax, it’s no longer worth my while as after paying 40% tax on the extra, I would probably end up doing all those extra hours for what works out as considerably less than minimum wage.

Having said that, I would prefer to see the personal allowance increased as this would benefit far more people and spread the help much more fairly in my eyes.

I agree retention is key. My DP left the NHS where he was paid more, but the working conditions became intolerable. He would still be paid more if he returned, but there is no way I would want him to.
They need to improve working conditions so they retain staff.

Yep, good points
:(

Increasing the personal allowance helps people as well who do not earn much.
But i still want to know how all this will be paid for?

It's a great idea. £80k is pretty high, but the current 40% threshold is too low.

People earning £37,701 are not the rich.

If the tax cuts are paid for by taxing the mega rich extra then I could possibly be on board but I don't think that's going to happen (and even then I think it should be tackled by raising the tax free threshold not targeting it at the higher earners only (bearing in mind that those higher earners would still benefit from the raise in the tax free threshold))

On a personal level this is good news for our household but I still don't agree with tax cuts, especially now.

I would like to see tax loopholes permanently closed and everyone apart from the very worst off in society pay more tax. I would then like to see an accessible and easy to understand breakdown on where this tax is going to it is easy to hold governments/ministers accountable.

I think good public services for all is more important than more money for the wealthiest in society and better health/education will benefit the country more as well. I would also like to see more people take personal responsibility for their health by maintaining it to the best of their ability so our public services can cope better.

I agree with this, more money for lower earners

Also in Scotland and higher rate tax payer.
The rate of income tax never enters my mind in terms of deciding whether or not to go for a job/ take a pay rise as
I am still earning receiving the extra portion that isn't taxed so I am still better off.
I take the point about child benefit, that's harder to take. But tax rate, no I don't think it is a motivator.
In fact, I like the idea of paying a bit more into society to help people who haven't been as lucky as me

20% of 80k is a lot more than 20% of 30k. I hate that tax increases as you earn more. Remember that a household income might just be that person on 50k rather than a single person or two people earning that.

But 20% of £30k is £6k. £24k is pretty hard to live on. It’s a big jump,
20% of 80k is 16k. £64K is much easier to live on and less of a jump.

So it’s fairer to have proportionate increases. It makes sense to let the less well off have more of their money to live on because relatively speaker money loses value the more you have.

Wow how rude! There’s nothing wrong with part time.

You do realise most young people are paying an extra 10% as well in student loans tax.

So yeah sure. You have your 20% on 55k. Whilst a youngster on 25k is paying 30%.

Thats besides the point as that’s not you problem.

But your being selfish IMO. No one wants to pay tax. But the threshold has to be somewhere. If your so incensed why not raise the PA. That’s the same to you with more in your pocket but helps everyone else too.

"So it’s fairer to have proportionate increases. It makes sense to let the less well off have more of their money to live on because relatively speaker money loses value the more you have."

If you want decent public services they have to be paid for.

There are lots of wealthy people in the U.K. who genuinely don't care about inequality or deprivation because it doesn't impact on their lives and they don't care about the people whose lives ARE damaged by them.

It's Thatcher's 'there's no such thing as society'.