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.

[BrandyAlexander]

The problem is that we are at the point where the Government has very little to room for manoeuvre. The government has 4 choices - it either needs to increase the "income base", increase the tax rates or close the tax gap (difference between what it ought to collect and what it actually collects), or reduce the amount of money it needs (Cuts). Each of these has its own challenges.

Increase the income base - stimulating the UK economy which is a small cog in the global economy is challenging. We are now very dependent on the services sector which is very mobile and the competition is hot.

Increase the tax base - if you increase indirect taxes you increase the cost of living, if you increase the direct (corporate) tax rates you become less attractive as a place to do business and which only leaves personal taxes. Increase rates at the top end, well most of those jobs are in that mobile services sector and there is a flight risk of jobs (eg a lot of people in financial services sector would happily do their job in HK, Singapore or NYC, all with lower rates than the UK). This leaves the bottom end, and why the OP's post actually makes sense.

Close the tax gap - people spend years and years fighting their corner in the Courts so doesn't solve the immediate problem. However here the Government is foolishly cutting resources at hmrc which makes it harder to close the gap.

All of the above leads you to the only viable option which has an immediate impact which is to reduce the fiscal requirements.

[MrsBethel]

Pop quiz: within the basic rate tax band, what proportion of the cash that leaves your employer's bank account is whisked away by the state before it reaches your account?

A biscuit to the first correct answer.

[Abra1d]

YABU. Raising taxes in France is causing a brain drain and reducing all kinds of revenues as those who create jobs and revenues relocate.

[Iggly]

20% after your personal allowance and any other tax deductible expenses like pensions and student loan payments.

[Prarieflower]

Exotic holidays,meals out pmsl!!!!

Utterly fed up with the way those of us in the middle losing CB are lumped in with the rich.

No I don't think the basic rate should be increased as yet again those on one income will dip out and those on dual incomes get even more.

[MrsBethel]

It's more than 20% because of National Insurance.

[BrandyAlexander]

France didn't increase their equivalent of basic rate tax, they have raised the tax on income above €250k to 45% (fair enough) and income above £1m to 75% which is why the rich are making plans to flee the country and good news for the countries closest to France (including UK)

[CogitoErgoSometimes]

"I feel that increasing income tax is the best way of increasing revenue without hurting companies"

However you claw in tax, someone somewhere has to pay and therefore gets hurt. Whether it's VAT, income tax or corporation tax, it doesn't really matter. So, with that in mind, I vote to double the price of cigarettes.... that should swell the coffers and who can argue against it?

[Peachy]

My Uncle died Wednesday, from meningitis as a result of cancer.

Why is this relevant?

He lived in Somerset. For his last few months his care package was withdrawn as he was able to wash from the waist upwards, he lived alone. His only living daughter works and has a family, and nobody else lived in his town- his sister (my Aunt) shares care of my Grandad and has care of her MIL who has alzheimers; Mum does most of the stuff for Grandad and helps me out sometimes with my disabled boys. Neither drive anyway.

I;d love to go back home to Somerset, I daren't..

I'd pay a bit more income tax I think, but only after those who do not pay their due are chased up and made to pay up.


The current system won't reduce fiscal requirements though: cases like that in Somerset will make it impossible for people to be cared for without being admitted to care homes that cost £££££££££. I don't for a minute think middle earner means well off- certainly not, been there done that- but we need long term options, which means properly financing carers so they don;t have to revert to residential care; ensuring early availability of MH and health services so cases can be picked up and dealt with BEFORE families reach the stage of collapse. The cost of emergency housing, failed educational chances from insecurity in childhood, poor health outcomes is horrendous but overlooked by short term policy making.

[Peachy]

Oh and we GET nothing in help above DLA / carer's and SN Placements: granted they cost a lot, but absolutely, I will put up my hand and say when we realised our third child had disabilities as well (as yet undiagnosed, suspected ASD but also some genetic stuff going on) I considered ending everything. luckily I have a fantastic GP but with one very violent child already and one vulnerable one I did not know how I would cope.

God bless citalopram. I would not be here without it.

[Iggly]

Oh yes I forgot about NI

[BrandyAlexander]

Peachy sorry for your loss.

I think the problem is that everyone is happy to pay more when everyone else pays up. Unfortunately, the government aren't devoting resources to chasing up the non-payers/evaders and it takes too long so they take short term views.

[Peachy]

Yes, there is a definite sense of why should I when the big boys can do pretty much as they wish.

I pay more NI than I need to- in fact I need pay none, my business is dormant and I could simply close it until things settle. I choose to contribute but equally when starbucks et al do what they do, there may as well be a sign above my head saying 'MUG'

[NoMoreMarbles]

The way I see it is, I earn very little on the grand scale of things as does my husband. My DD has a disability albeit not a severe life limiting condition and we do not claim benefits of any sort for this as there are others who are more entitled and need the money more.

We are entitled to very little by way of benefit support to our income and oddly nothing if either me or DH were to be out of work

We both work extremely hard for every penny we bring home and both pay tax and national insurance. Neither DH or I are entitled to claim any expenses etc I get the bus, make our own dinners, we haven't had a holiday in 5 years, it took us 7 weeks and a loan (from family) to save up £700 to buy a 'new' car as ours died and we couldn't afford to have it fixed. We wear layers as gas is so expensive we can only afford to use the heating twice a day. Our weekly shop is limited to tesco value/smart price and savvy use of vouchers.

If I were to pay more tax, what on earth makes you think that would be of benefit to anyone? The benefit money would still be cut. The tax deficiencies are paying for the parliament members' second homes, cars and £135000 per year salaries. I think the money can be found a lot closer to the governments door than mine.

[BoulevardOfBrokenSleep]

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

[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.

[wasabipeanut]

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

[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.

[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).

[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.

[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%.

[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.

[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.

[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.

[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.