Tax and privilege

[howcometoday]

This might be a bit of a clumsy question, but I’d love to understand different perspectives on taxation/economic models. I’m not a high earner, so I am mindful that my own situation shapes my view.

To me, higher taxes on higher salaries feel fair. For example, if a CEO makes £15k a month and a train driver makes £3.5k, both are contributing to society in different ways. While the CEO has of course worked hard in education and putting in long hours, high earning ability often relies on a mix of luck, privilege, and opportunities that aren't available to everyone.

Personally I think using tax to level the playing field so everyone can live a decent, comfortable life is a positive thing. Surely a CEO doesn't objectively work 'harder' than a nurse or a cleaner?

I wonder if the resentment towards high tax comes down to a lack of collective responsibility (eg "why should I support random strangers?") or frustration that the dream of keeping wealth isn't being realised?

I'm trying to understand beyond my own thoughts and the people around me- so I welcome some gentle educaiton!

@elliejjtiny The manager of a care home or nursery will not have put their home up as a guarantee for a business loan. The MD is responsible for all staffing,financial and legal matters. It is they who need to have the business strategy and vision and are ultimately responsibility for the success or failure of the business.

A manager has a responsibility but there is an owner of that business. The manager can move to another business if they choose. Personally I consider it a huge difference.

It’s already having a measurable effect. I know people who work admin whose depts have been cut by 40% and more to come. People who work in marketing, law and all the junior starter jobs are gone. People who work in radiology - AI reads the scans better than humans can now. It’s going to be a far bigger change than global warming and arrive a lot faster.

I was quite pleased to hear that the London mayor rejected Palantir for the Met Police as that’s what’s decimated the NHS jobs but at the same time I’d selfishly rather deal with a competent reliable AI than a fallible forgetful human so I’m as much part of the problem.

My husband and I are both high earners and happy to pay tax- I understand why people aren't as happy- I do hate our government! I think ultra high earners should pay even more tax. Having worked with billionaires and multi multi millionaires for many years, I know for a fact that it gets to a point where you just have too much money. Hoarding wealth is revolting.

Because of their wealth they paid you and your husband.

Elon Musk is the reason so many working physical laborious jobs became millionaires and got to pay off their mortgages. Their money is not your money.

The 100k cap on ‘free’ hours is ridiculous.
It’s a regressive policy, it reduces the number of women returning to work after maternity leave, increases the gender pay gap and means less women in senior leadership roles. It’s Fiscally unsound, many studies show funding childcare for all would have a net positive impact due to tax receipts.

This! I think the tax scales in this country need re-structuring. I think being taxed 40% on anything over 50K to, is it £100K? I might be wrong but there’s a huge difference in salaries there… it should be more proportionate.

I would reduce my tax bill if I could

The UK tax system is just about the most complicated in the world by all accounts. However first thing is that income tax is a percentage therefore the more you earn the more you will pay. Thereafter, whether you are a high-earner or low earner might be a matter of one's value to a/the company (or society), the level of training in order to do the job, or the difficulty it would be to replace you.
It's interesting you picked on a CEO and a train driver as examples. I'm not entirely sure how one compares them but let's take a tube driver and a junior doctor. Why does a tube driver get paid more than a junior doctor? As my son said to me the other day (he's been a doctor for 6 or 7 years or so) "I bet I would make a better attempt at driving a tube train than the tube driver would at being an anaesthetist!" I think I probably agree with him.

Overall I think we should all see paying tax as a civic duty and if you earn a lot of money you should be prepared to pay more tax. Imo, benefits should be reserved for those that really need them and it shouldn't be a matter of choice but a matter of need but I guess I'll be criticised for saying so.

The challenge in your point here about highly paid workers taking early retirement etc is it should be opening opportunities for others to get promoted so one could argue more should do that. The other side of the coin though is, it seems to me, that there is little regard (amongst many) for the notion of "sufficiency", and they want more and more £, or bigger house and bigger car.

But one thing is clear, we cannot afford to have so many people in the UK not working and relying on benefits as a matter of choice.

But who's going to pay for it or, put another way, what should we give up to pay for it?

@MyObservations

But one thing is clear, we cannot afford to have so many people in the UK not working and relying on benefits as a matter of choice.

That's the crux of the matter. Not enough people working and too many not working enough hours. Not just benefits either, we now have far too many people not working and not claiming benefits, i.e. early retirees and economically inactive middle agers etc. The latter groups may not be claiming benefits, but they're not contributing to the economy either. We need to find ways to change that, especially when there are staff shortages in some many trades/professions these days - it's insane to have trained/qualified people retiring a decade before state pension age or giving up work in middle age. And I'll add in part time working to that too, especially the likes of doctors and dentists cutting down their working hours to avoid the £100k cliff edge, and sole traders/self employed deliberately reducing working hours etc to stay under the £90k VAT threshold. All these things are putting brakes onto the UK economy.

@Badbadbunny I tend to agree with but there is still a voice out there saying there's not enough "decent jobs" to be had. If the system was working properly, where someone decides to retire early, this should generate a/some promotions and a vacancy/vacancies at the lower end of the ladder. This can be very beneficial in a number of sectors, bringing in fresh blood and fresh ideas. I have more difficulty with those who are not contributing to society but are a burden on it rather than those who have contributed but choose to finish early without being a burden but I do take your point.

The universal question!! I don't have the answers, if I did I'd be throwing my hat in for PM.

It was more just a point that childcare subsidies are an excellent example of where higher earners are penalised.

Well, I am probably one of the older contributors here with some pretty old-fashioned views but I do wonder why we (as a society) are quite prepared for other people to bring up our dear little ones rather than a parent doing so. I'm not as familiar with the tax system as I ought to be but is it possible for one of the parents to stay at home and look after children while the other parent has 2 tax allowances. Child minders, it seems to me, are very badly paid anyway and yet nursery owners seem to do pretty well out of it. My mum gave up work until me and my siblings went to primary school and then she went back to work. I appreciate it was a different era but I can't see any sense in bringing children into the world and not being prepared (or able) to look after them in their formative years before school.

in some countries in europe you can be taxed as a household or as an individual
in Germany it is as a family in France there is an allowance for each adult and 0.5 of an allowance for eac child but tax is complicated in most places currently you can only transfer a very small amount of tax allowance in UK but it could be bigger especially if child under 3
I would allow a new mother to transfer all of her allowance not used by maternity pay / benefit to spouse/ partner, half of the allowance when chold between ages 1 and 3 and a quarter from 4 -5 after that the standard 10% I think it is

If one parent is a higher earner, then you can't claim marriage allowance (I presume that's what you are meaning by claiming 2 tax allowances?). Plus if that partner is earning 80k or over, then you also can't claim child benefit. Even though a couple earning 79k and 50k (for example) can claim it.

We are in this situation as I am a SAHM and my partner earns well over the 100k mark. I'm not remotely claiming poverty but pointing out that the system is fundamentally very unfair.

@PeriPeriMayo Thanks for pointing out those details. I wasn't aware of them 🙏

I'm pretty sure it would be covered by the tax take from a load of people not cutting hours or maxing pension during the childcare years because they have more money if they qualify than if they earn another £50k or so and have to pay.

Plenty of people are very happy to contribute to society.

But, over and above that, they are living their own little lives. They want to be able to move into a house big enough for their children. They want to buy nice things. They want to be able to go on holiday.

No matter how altruistic they are, their own life is more important. And that’s not a problem. Communism was a lovely and idealistic thing to try. But it didn’t work because it sapped all the motivation out of everybody. At the end of the day, people really work for their own benefit, not for some vague concept of the common good. They want the common good but more than that they want to make their own lives good.

And I don’t really see that as a problem. My son is working on a farm and has discovered that being active and outdoors has a wonderful effect on his mental health. But he would never go and slave away all day weeding if he didn’t get paid for it. Work has many side benefits but actually doing the work is a bit of a hassle. Which is why money is a great and useful motivator. And taxi g too much of it takes away the motivation,

On the tax cliff at £100k it's not just you get taxed more, if you have kids in childcare at all you can effectively be taking a paycut. Who's going to choose more work and pressure for less money?

Not read thread but in answer to your question - does a CEO work harder than a nurse. A nurse has great responsibility at work, while they are there. When they’re done from their shift, generally they’re free to go home. They may work long hours. But the entire running of the hospital is not on their shoulders. A CEO is responsible for sometimes millions of people in terms of livelihood, the share price of their companies and the impact on pension funds, plus the safety and quality of their products or service.

I think doctors work harder than nurses. Might sound rude, but I see a nurse complaining and think "well if you had tried harder maybe you'd be a doctor". And CEO Vs nurse. It's skill and revenue brought in. Also nurses in America get paid a lot more, think about why that is.