Should the Lower Rate of Income Tax be 40%

[ChilledOut79]

I have read so many posts over the recent Months regarding adding VAT to education provision & Labour tax plans.

All these posts seem to have recurring theme to tax "someone else" more, so the net contributors (who already subsidise net recipients through tax take), have to pay even more in the name of funding the NHS/state schools etc.

It seems to me, If funding services are that much of a priority, we should increase the base rate of income tax to 40% for everyone.

This would fund all vital services and ensure all mainstream tax payers have the same skin in the game.

No Rachel, I don't think that would go down too well 🤣

Ok what about no tax under £50000/year and a flat rate of 20% on all income above that?

So clueless - private schools are not losing charity status.

We’d end up with inflation increasing even more and essential services workers striking again because they’d need their pay increased to compensate.

Sadly not @Qwertys I own a bunch of residential properties let out....so guess that makes me worse on MN as a Landlord!

40% of £100k leaves a person 60k to live on, which is still an absurd amount of money. 40% of a full time minimum wage salary (for the over 21s) would leave a person £12,000 to live on, which is difficult to impossible depending on a person's housing situation. That's why we have progressive tax bands.

It should not be impossible in this country for a person working full time to be able to live a normal life - it's not equitable and if the moral argument doesn't mean anything to you it also wouldn't work, it would lead to massive wage inflation and society would collapse.

People need a certain amount of money to cover the basics. Over a certain amount then the balance gradually tilts more in the direction of “wants” but obviously up to a point it has to be more “needs”.

I’d like income inequality to be less, this would shift the tax burden off the richest in society as the distribution of income would be more balanced and therefore tax payments would be too.

I think vat on private fees is just the tip of the iceberg, and an increasing proportion of middle earners are going to be facing tax hikes under Labour. Mostly to fund a welfare state that is simply unsustainable. They forget how shallow their mandate is - if they continue along this vein it will be a one term majority for sure.

It’s pointless with a distorted housing market & shit wages we have here. We will be taking on the one hand and giving back.

No it shouldn’t.
40% tax plus national insurance would mean if wouldn’t be worth getting out of bed to go to work for lower earners.
It would increase the reliance on benefit top ups.
Taking it in tax just to have to give it back in top ups makes no financial sense.

I would suggest increasing the tax free allowance to £15k which would benefit those on low income proportionately more.

After that a universal rate of 30% of income thereafter.

Many people have been dragged into the 40% tax bracket and aren't wealthy. On MN the overwhelming majority seems to think these people have some sort of moral responsibility to fund everyone else proportionately more.

I would happily pay 40% basic rate if you get rid of national insurance, employers contributions, student loan repayment, and ALL VAT.

In a heartbeat! That’s a great deal.

100% agree.

It's unsustainable for middle earners to keep paying more & more.

That's the real point I was hoping to get across here.

I'm simply demonstrating that the majority are happy to abdicate their tax responsibility onto anyone else.

I don't think they are. You're advocating those on minimum wage paying 40% tax. I think everyone universally thinks this is ridiculous and would mean many many many more people relying on UC. Whereas keeping the threshold the same rather than index linking it is fine (fiscal drag).

And as it goes I'd be quite happy to pay more than 20% and 40%.

40% of £100k leaves a person 60k to live on, which is still an absurd amount of money

60k is not an absurd amount of money. Did you think 30k in the early 00s was absurd, that’s a similar amount allowing for inflation. And so much of that 60k is eaten up in housing costs.

More equitable and shared across society....instead of a minority group.

lol. Just be clear - by minority you mean the wealthy!

Before I hit the 40% tax threshold I had no idea
NI fell to 1% at around that level. I was assuming It was +20% tax and NI and was surprised to find it was only +10% when the drop on NI was taken into account.

The problem is a shrinking tax payer base.

That's my point!!!

You assume those in the 40% bracket are wealthy!! They aren't!

Well you obviously are as you have paid for 3 through private school!

You would honestly want to pay 6.5k more in tax rather than the 4k you may pay for the vat on private school? Where is your thinking?

People should have some sort of inducement to get ahead, though. The marginal rate of tax at £100k is insane when you factor in the loss of other benefits. It stifles productivity and drives ambitious people out of the country, which isn’t good for anyone.

2 of my 3 kids are at Uni, (1 in their 1st year & the other in their final year before hospital placement).

When I consider their student loans, and their hope to be aspirational and carve out a successful career, I wonder whether I should have steered them towards not bothering and becoming another entitled person who expects others to pay their share.

I would happily pay more if I felt 1) the burden was shared across society and 2) it would actually make a difference. Current policy stance feels punitive, and for vat specifically is likely to cost more than it takes to implement.

I’m a teacher.
I’d pay 30% if it meant schools were funded properly. I probably pay the 10% difference on stuff for school anyway.