To think the basic income tax rate should be raised

[ReallyTired]

These sort of cuts are dispictable. I feel that tax payer in the country should pay more tax rather than have cuts to disabled people on this sort of scale.

www.bbc.co.uk/news/uk-england-somerset-20178096

Prehaps the mumnetters who whinge about cuts to child benefit should count their blessings. For them losing child benefit means fewer meals out, or a slightly less exotic holiday. Cuts to the support that disabled people get can cause suicide and REAL unhappiness. What is shameful is that Dave Cameron had a severely disabled son and should understand the living hell these families go through.

Before anyone starts, these autistic people and their families are probably taking out far more out the system than they will pay in tax. However there needs to be a level of compassion.

[CogitoErgoSometimes]

£260k may be the average house but, by the time they pop their clogs, plenty of people have got that extra £65k+ in the form of life savings, insurance policies and so on. Remember all those pensioners lining up when Northern Rock was in trouble? The threshold for IHT hasn't budged since 2009 which means that, every year, more and more quite ordinary people's estates go over the threshold.

[Iggly]

The average house price is £260k odd. Well below the IRT threshold. So most of us wouldn't be paying it.

[laughtergoodmedicine]

Well tax rises are not thought to play well with voters. So any government would have to do it soon after being elected. I think tax evasion/avoidance is
ripe for a blitz

[CogitoErgoSometimes]

"They aren't mates with the likes of us."

Since inheritance tax kicks in at 40% for anything left in an estate over the threshold of £325,000, 'the likes of us' represent a bigger and bigger proportion of the people who are paying it. It's not Earls and Dukes with landed estates and wealthy portfolios any more, it's ordinary people in a modest suburban semi with a few savings put by from a lifetime of work. Anyone can, and is well advised to, put money into trust for dependants.

[ReallyTired]

"I reckon taking a 40% slice of all these massive landed estates, and wealth portfolios, as they change hands could raise some serious dosh."

There aren't many large landed estates to tax. The super rich would just move abroad or take their assests abroad. This idea would not work.

[MrsBethel]

noviceoftheday
"Changes to Inheritance tax won't make a dent in the fiscal budget and neither did whacking up the top rate."

Agree the top rate raises little.

But I reckon changes to inheritance tax could have a bigger impact. Rich people effectively pay no inheritance tax - they put the juicy stuff in trust (they can afford to) and pass it on with nil deductions.
I reckon taking a 40% slice of all these massive landed estates, and wealth portfolios, as they change hands could raise some serious dosh.

The govt won't do it because they are mates with the people it will affect. They aren't mates with the likes of us.

[BrandyAlexander]

I agree with you, but unfortunately the Labour cuts to the rate between 1997 and 2007 have basically made the whole idea a political impossibility. The average voter will just see the "poor" being taxed more while the "rich" get a tax break so it won't happen as it would be political suicide. Those 350,000 are mostly Tory voters so the Tories would be accused of looking after their mates (as happened when cut from 50% to 45% was announced) and there is no political gain for Labour to pander to that group. Politics come above what is good for the country.

[Peachy]

'MRC reckon it will only cost them £100m'

You see, s someone who is both a parent carer and involved in the professional side of disability, to me that 'only' translates as a hell of a lot of challenging lives transformed.

DS1 attends a specialist AS Base with 2 places a year and 200 appropriate applications: you could fund another 8500 children to go there (!) with that, knowing that those kids who are lucky enough to go there have much better outcomes in academic and long term employment and financial productivity themselves (all children who attend are able to function that way but are not doing so at the time of application)- so effectively, an investment.

[Peachy]

I'd argue that surestart is an essential- when PROPERLY run. I used to work for a charity based in the SureStart office and they were amazing, really changed the lives of children in a particularly hard to access area (think deprivation index area in a very rural county- double whammy). However I've read a lot about surestarts where things are not so good so do attach that caveat: we had a HN who specialised in teens, a fathers worker who did a great job of working with a very hard to reach sector- young dads, and engaging them with servvces; a DV worker; some of the funding was also used to support local charities- my post for HomeStart was part funded, giving me both the most confusing job title ever (home start sure start organiser) and a unique position to access the community and actually help people.

I;d agree with most of the above list, though. Google translate won;t cover all eventualities- for example someone with a MH disorder needs access to support in their own language, but living in a non Welsh speaking area I wonder how much they could cut down on official postage by just sending me only documents in the language I actually use (indeed, ask people to opt early on in any system- not hard).

And living in an area with a rep as high unemployment now, I do get so annoyed when I see crap like fancy blue lights under the motorway bridge (don;t tell DH I said that, Lighting Designer ) yet know that there is no respite available locally, and 30k people in need of housing.

Tax credits end next year but they've been the delivery system for many other things for a while- such ads any benefit payments for children (means tested ones such as IS ) and also the payments disabled families get.

[ReallyTired]

I would put up the basic rate of income tax to 25% and raise the personal allowance. That way the working poor would not need tax credits. The amount of means testing would be reduced and there would be less of a benefits culture in the UK.

Rather than having measured designed to be popular ie. soaking the rich we need to raise revenue.

[BrandyAlexander]

Changes to Inheritance tax won't make a dent in the fiscal budget and neither did whacking up the top rate. They tried it at 50% and it just encouraged avoidance (which is legal). HMRC reckon it will only cost them £100m when the rate comes down to 45% in April. If you throw in NIC, it makes UK residents earning over £100k more heavily taxed than in the US, Singapore, HK and Japan. You might think "so what"? But the vast majority of these jobs that attract these salaries are mobile and in the financial services industry. Remember only 350,000 earn more than £150k. This very small group (out of 30.4m taxpayers) contributes more than 27% of income taxes so a small shift in this small group has a sizeable impact on our coffers. Upping the top rate tot 50% was politically popular but fiscally and economically moronic.

[MrsBethel]

ReallyTired
I'd say caring for people with disabilities and palliative care are the essentials. I'm shocked that the charity sector is expected to carry so much of the burden there.

Things that are not:
A massive army,
A massive navy,
A nuclear 'deterrent',
HS2,
Half of the civil service,
Sure Start,
Fuel payments for the rich retired,
Arts funding,
Civic 'art' installations,
Translation services (google translate is free),
The Olympics (gone but not forgotten),
The royal family,
Public funding for things like the Pope's tour,
Armed guards for ex-PMs,
Public 'branding' expenditure,
etc

I'd whack up the top rate, whack up inheritance tax, make inheritance tax apply to assets in trust, and base benefits at a level where they can pay for a basic basket of goods (which would mean small families would get more money, while large families would get less).

[ReallyTired]

Back to the OP: a basic rate of 40% is quite high enough IMO. I'd rather shrink the state. Just let them do the essentials.

So basically you can't give a shit about disabled people not getting respite. Or someone dying of cancer not being washed. It shocks me how calcous some of the peopel are on this thread. Basically all they care about is themselves in the short term.

What would you cut? I feel that cutbacks to disabled adults are are hideous as cuts to disabled children.

I agree that tax loop holes need to be closed but that is not going to be easy to do in the short term.

[bureni]

No, we already pay far too much in income tax and national insurance but see little for out money, plus we pay an additional 20% on our income tax in the way of VAT as well as other hidden stealth taxes.

[Viviennemary]

No I don't think the basic rate of tax should be reaised. I think they should find something else to cutback instead of cuts to disabled children. What about making sure that companies like Starbucks pay there way instead of hiding behind a scam. Because as far as I'm concerned saying they make no profit in the UK is a scam.

[MrsBethel]

When Labour took power in 1997 the basic PAYE rate was 23%, but national insurance was 10% paid by the employee plus an extra 10% paid directly from the employer. Compounding all that, the total effective basic tax rate was 39.1%.

When Labour left office in 2010, basic PAYE was down to 20%, but national insurance was up to 11% plus 12.8% respectively. The total effective basic tax rate was 38.8%. So pretty much the same.

Now, to take the biscuit for myself, the current rates are 20% PAYE, 12% employee's NI, 13.8% employer's NI. And the total effective basic tax rate is 40.25%.

Back to the OP: a basic rate of 40% is quite high enough IMO. I'd rather shrink the state. Just let them do the essentials.

[BrandyAlexander]

Wasabi, I completely agree. While very popular, it is clear that the significant tax cuts that we had under Labour were not sustainable. We have never had rates so low as the are right now but the fiscal need so high. Given two of the other options (increase income base, close tax gap) produce immediate results, the Government have focused on cuts because it is more politically palatable than increasing the basic income tax rate. Instead we will limp with death by a thousand cuts while each group looks at the next group and says "hang on, what about them?".

I don't participate in the CB debates on mumsnet because it is quite clearly an emotional topic for many. The bottom line is that as a country we have backed ourselves into a fiscal corner and there aren't many choices. It's really down to cuts or a rise in the basic rate of tax.

[wasabipeanut]

Income tax came down massively under Labour though. I think it was about 25p in the pound when they came in and 20p when they left. I know they plugged some of the gap with indirect taxes (arguably are far less equitable way of going about it as they hit the poorest hardest) but really, a drop in tax revenue of that magnitude was never going to be sustainable.

It's been said before that we seem to expect European style public services for US levels of tax. It can't happen but no politician of any party appears to have the balls to say so.

[MrsBethel]

BoulevardOfBrokenSleep
Good spot, I was. The hidden income tax.

IMO it has to be included. I mean, suppose they set PAYE and employee's NI to zero, but just loaded up employer's NI to compensate. We wouldn't really believe the tax rate was 0%.

[sweetkitty]

Weren't labour going totalise NI by 1p and the Tories shot it down saying it was a tax on Jobs.

Right now with all the cuts it seems like a bloody good idea. I don't believe for one minute the depth of these cuts are necessary and are not in line with Tory policy anyway ie the shrinking of the Welfare state and the NHS.

As for exotic holidays and meals out, my DC have never been abroad and I cannot remember the last meal we had out.

[BrandyAlexander]

From memory, there was an Institute of Fiscal Studies report a couple of years ago (I think) which modelled the impact of raising the basic income tax rate by 1% and its conclusion was that it would have a disproportionate effect on higher income earners and raise significant income without causing behavioural issues (ie where people try and evade both legally and illegally).

[wasabipeanut]

I think YANBU in the sense that as a country we need to balance the books by paying in more and/or taking out less. YABU if you think most people think they should pay more tax. Most us feel pretty well rinsed by the Exchequer already.

I wish it was as easy as just making people pay up their fair share. There seems to be a popular view, especially on MN, that we could have a generous and bountiful welfare state funded purely by the top 5% of earners. I'm not wholly convinced that this is the case.

[wasabipeanut]

I think YANBU in the sense that as a country we need to balance the n

[Peachy]

We do claim, for two of the three although they are severe enough to need special schools which means using some of the money to run a car so I can access those for a start. DH earns very little, but used to earn quite a lot before being made redundant (now self employed). I pay because it helps me I think, it's a dignity thing. Many years of working, coming from a working class old fashioned ethic family made it difficult to pack it in and be a carer even when my options dwindled to zero. it's probably guilt tbh.

[BoulevardOfBrokenSleep]

MrsBethel, the way you've phrased that question sounds like you're counting employer's NI too?