If we are all in this together, what cuts have the rich suffered?

[Grennie]

I know mumsnetters seem to be better off than average. So just want to point out that in 2012 the mean national average wage is £29,900. The median was £20,000. And only 10% of people earned £50,500 or above.

So what cuts have this 10% of people suffered?

The only grain of truth in that analysis is where people are wildly overpaid for what they do. An example might be that enquiry into the overpaid compensation to all those BBC staff who left. I don't think those overpayments did much for the economy and they did come out of public funds.

And I do agree with the living wage, of course.

But generally, that was fascinating. I do agree that people doing their own caring for the elderly, disabled or young children are doing a useful job that deserves our respect. I can't extend that into an argument that a life wholly or largely on benefits is exactly equivalent to a life earning, so far as the country's economy is concerned.

Happybubblebrain i agree as a society we do over value some people (e.g. a carer for a family member with a disability) and overvalue others (e.g. BBC senior management, footballers etc.)

but these are the exception not the norm. lets look at one area of work:

in a school you have:

1. TAs 2)teachers
2. senior management

each job is important for the school to function correctly and everyone deserves respect their part - but not all their parts are equal:

1)the TA has least training, least responsibility, shortest hours
2) the teachers have a PGCE, responsibility for a whole class' success
3) the senior management have responsibility for the success of the whole school, the longest hours and in many cases more training than the teachers.

why would you bother doing a harder job if you didn't get paid more for it? surely choosing the easier job would make sense for most people then they could spend more time with their family and things they enjoy outside of work?

oh dear this i agree as a society we do over value some people (e.g. a carer for a family member with a disability) should read Happybubblebrain i agree as a society we do undervalue some people (e.g. a carer for a family member with a disability)

Why does it matter what losses they have suffered??? I am sick and tired of people saying that high earners should pay more to subsidise everyone else. Not everyone of course but most people I know that earn £50k+ have worked bloody hard for that!! They have jobs where they work beyond their finish time, the stress is unbelievable and their families probably hardly see them! They already pay ridiculously high amounts of tax.

Almost 30% of the uk's income tax revenues are contributed by just 300,000. That's out of a country of 60m people. About half of these people live in London and work in the Financial Services sector in the City which is a global industry in which London competes intensely to attract and retain those 150,000 people (who contribute more than 15% of taxes). It's also worth remembering that because London does attract the talent in that industry, a sizeable proportion of those 150,000 are foreigners with ties elsewhere. People on mumsnet talk a lot about taxing "The Rich" without understanding that the country is very heavily reliant on 300,000 people who are mobile and happy to up sticks. Saying tax them more is at best naive.

Also, those 300,000 people largely don't use the NHS or the state education system which are the biggest expenditure of GDP so yes, they put in the most and take out the least.

Once again I don't advertise this but;
DH and I both earn 40-50 k per year. TBH we are not interested in earning more although we both could as due to the loss of cb and HRT it just wouldn't be worth it.

There is already a massive disincentive to work harder and earn more.

Exactly. I think a lot of the posts on here come from one of two points of view:

1. the rich are everyone who earns over £50k, and in doing so they are lucky, and should share the luck.

2. the rich are a very tiny minority, who have at least to some extent got there by hard work and are already taxed adequately and will leave if squeezed any further.

My "exactly" was to Novice's very well made point.

To be clear we couldn't earn 150 + ( well possibly DH could one day). But could possibly earn 60-80 ish each.We have decided that given the amount we would pay out in tax/loss of cb/ childcare, it's just not worth the added stress/loss of work/life balance we currently have. We are of course lucky to have the choice.

A large number of MN posters will be SAHM or working PT. Its not surprising that they have more immediate experience of and sympathy with the issues of lower pay/benefits. We all agree I think that being a SAHM when the kids are young (exactly how young often becomes a point of debate) is a valuable job. A smaller number of us also care for DC with disabilities.

I have seen, though, that this respect for the caring roles, and the wish not to offend people doing it, can be extended into some quite strange views on working and earning. I read the posts about how pensioners dont deserve all their benefits (WFA and bus pass) in all cases and should stop being so entitled and greedy. Then I go to other posts and see younger people encouraged to claim WTC and HB that they have managed fine without "because you are entitled to it", or someone saying she wants to get a Council house because it will be hers forever, whereas HB and private rental might not be.

One of my DC has a lifelong disability that will prevent him ever earning, or indeed being left alone. The other is less disabled and I am expecting her to want to work, somehow, doing something. Probably this skews my views, but I do think that benefits ought to be a temporary part of someone's life, not part of the permanent structure, unless they have a serious disability.

So the idea that if you work hard and earn well, you are somehow the enemy of all right-thinking people, and the money you earn comes from the same money tree as benefits and is no different... I think that is very dangerous.

william - unfortunately yes they do think like that.....my ILs from ex mining community for starters.

I put these sorts of arguments into the context that I know. What I don't understand is why happy thinks my husband should subsidise my BIL by paying a much higher rate of tax. Husband has always worked hard...at school, uni (when he could have been earning money) and then paid employment. Doing stressful jobs away from home. BIL has never worked hard in his life and refuses to commute more than 10 mins or take any promotion/responsibility. I see the same in some of my kids - 2 work hard, the other doesn't. its obvious which ones will earn more money as they will be successful.

YouAreMyFavourite why would you bother doing a harder job if you didn't get paid more for it? surely choosing the easier job would make sense for most people then they could spend more time with their family and things they enjoy outside of work?

Why, to fit in with the champagne socialism simplistic mindset of course! Don't you know that the only high earners should be those who earn an unfathomable amount of money for pedalling this sort of stuff to lower earners!

Passing exams, getting into competitive vocational university courses, more exams, holding down jobs while studying, facing up to the standards required in high level jobs on a daily basis - dontchaknow that doing all this and not giving even more of your salary away than you already do in tax makes you BAD!!!

Speak the propaganda language too - high earners = rich, which is another word for Evil.

Never was a nickname more apt happybubblebrain. I am astonished that people are actually stupid enough to think that way.

where do most of these wages comes from? it is still from the same pot as everything else usually

What pot is that then? Who puts the money in the pot? Our invoices get paid by a large management consultancy firm - are they taking money out of this mystery 'pot' in order to pay them?

Alibabaa - firstly I think picking on someone's name is a bit playground.

Secondly. A high number of UK employees are public sector and paid by the public purse - I think it's around 20%, so at least their wages are paid for by the 'pot'.

Thirdly. The way I see things there is a limit that can be spent on wages, whether its in the private or public sector; and if people at the 'top' are getting paid more the rest have to be paid less. Not rocket science. Obviously there are exceptions to this, but in general that is what happens.

If you want a fair society where everyone is valued you need to make the gap between the rich and poor much less than it is. You also need to pay people properly, rather than top up their wages in 'handouts'. The scale is ridiculous and only breeds resentment. Things are very unhealthy the way they are.

JessicaLundge - suppose The Rich get pissed off with this and take their riches elsewhere? Then what?

In most cases their riches aren't doing anyone any good anyway, they're just sitting on their piles of money, wasting some of it on lifestyles you can only begin to imagine. They don't care about you.

I would think good riddance to those with their piles of money that they are hoarding. Go hoard elsewhere and stop blackmailing us that you might leave. Just leave.

If the rich pissed off out of London, for instance, maybe someone else would be able to afford to buy a house, or working people afford to pay rent without resorting to HB.

While it is not literally the case that there is one pot that all incomes are paid out of, it is the case that money is relative rather than absolute (that is, what matters is what you can buy with it, not the number on your pay slip) so in a sense it is as if it is the same pot. If you live in the same place as a substantial tranche of people who get paid a lot more than you, market forces dictate that you can't afford much when you come to pay for housing, transport, childcare, basic things that you need to live and work. So if they got paid less - or just fucked off, boo hoo - you would find yourself apparently "richer".

But of those public sector employees, a very small percentage are earning over £50k. A vanishingly small number are paid £150k+, and you could probably count on your fingers and toes the numbers who are genuinely 'rich'. Those who are have very likely got private income of some sort.

Why do you perceive there to be a limit on what wages can be paid? Any given organisation will have a limit depending on what profits it is generating, of course.

What needs to happen is that tax credits are scrapped. All they have done is subsidise wages over the last ten years or however long they've been around.

happybubblebrain
They may not care about you but they are net contributors to the income tax pot so if they piss off elsewhere they also stop paying tax here. They also stop employing people here, buying food here, going out here, buying cars, furniture and clothes here etc.

Do you remember when bankers threatened to go elsewhere when there was talk of putting a cap on salaries? The same bankers that brought our country to its knees.

Over the past ten years or so we have had the rise of the super rich in London. Whether those people are wealthy people arriving from overseas or people working in banking, they have brought a new level of personal wealth to the picture. Undoubtedly they have ruined prime central London as a place for normal people to afford to live.

But the vast majority of people in work and earning more than the average national wage are what they always were- doctors, senior teachers, people running small businesses, solicitors, barristers. Some of those categories of jobs are more loved than others but I dont think anyone is seriously arguing that they dont work for their money or do anything useful at all.

Conflating the two means that your GP gets accused of being a rich selfish bastard we'd all be better off without. Which is clearly not the case.

I know a lot of people work for the public sector. That's probably one reason the national average wage is fairly low- public sector is not a big payer for most people. But even so, there is a difference between a city planning officer working a 40 hour week for £20k a year, helping to make her city a safer and more comfortable place, and someone in receipt of benefits of whatever £20k per annum is after tax, NI and pension contributions. There is a period in someone's life when those benefits are absolutely the right thing and they are doing something extremely useful. But for the whole country to be run on that basis, as if there is no difference between the two- there I disagree.

"The Rich" whoever they might be, don't keep their wealth at home under the floorboards. It's invested, and then taxed. The tax goes back in the public purse, and their wealth is managed by, well, wealth managers who invest it in various pots and funds, some of which will be in the UK. Just their being in the country and spending here in the uk contributes to the economy. You can see that can't you?

And you reckon 20% of earners are public sector. That means. 80% aren't. So why is there a limit on what their wages can be? Surely that depends on how their employers' organise their business?

I agree with happybubble that the gap between the very rich and the lower earners needs to be narrowed. Too much inequality can be v destructive to a society. This gap has been growing and growing in the UK over the past couple of decades.

This argument for not taxing the rich more because they will leave is always wheeled out to hold a gun to everyone's head.
I'm not sure what the immediate solution is but I don't like this argument.

Yes, the super rich pay v significant amounts of tax, as they should, but they (some individuals and financial organisations) have also caused a lot of destruction to the economy by their greed and dishonesty.
The massive rises in property prices in the country has also been fuelled by these super rich (UK citizens and lots of foreigners) who can afford to pay any price for properties, forcing the prices totally out of the reach of normal UK citizens.

happybubblebrain to take you back to your post yesterday:
I don't understand the posters who argue that the rich put more in and take less out - sorry, but they take more out in wages to start off with, where do most of these wages comes from? it is still from the same pot as everything else usually. They don't receive benefits because they don't need them.

Here you're saying "most" yet today it's only 20% drawing on the public purse.
But no matter. You seem to be suggesting capping top level public sector wages - top paid medics, teachers etc. What do you think might happen then, if you don't pay a rare to attract them from the open market place? Don't you think they might just head on over to where 80% of earners are (your figures) and leave the public sector in a worse state?

"Thirdly. The way I see things there is a limit that can be spent on wages, whether its in the private or public sector; and if people at the 'top' are getting paid more the rest have to be paid less. Not rocket science. Obviously there are exceptions to this, but in general that is what happens.

If you want a fair society where everyone is valued you need to make the gap between the rich and poor much less than it is. You also need to pay people properly, rather than top up their wages in 'handouts'. The scale is ridiculous and only breeds resentment. Things are very unhealthy the way they are."

On the first point- I think it is John Lewis that has a miximum differential between the highest and the lowest paid member of the firm? and I think it is 100 times but that might be wrong. Within a given company the first point could be true, because it depends on how well the firm overall is doing as a collective entity. OUtside a given firm, the link ismuch more tenuous and probably doesnt hold, because there are too many factors.

On the second point- I agree with a living wage and no WTC/HB for people in work. I think it is an unacceptable subsidy of low wages by our taxes. You could have the same subsidy by reducing corporation tax, but without the social harm that widespread benefits do.

I also agree that there is a gap between weirdly rich people and the rest of us. But I dont agree that there is an unsustainable and unfair gap between people on average wages and people on £50k.

On the superrich- I disturbingly find myself agreeing with something George Osborne is doing which is an international set of agreements to prevent tax avoidance. If all those enjoying living in the UK paid their fair shout (by which I dont mean the legal bare minimum as currently set up, but income tax on all their income and all their CGT and stamp duty, after due allowance for double tax relief) then I think we could afford to forget a number of these cuts.